Мэдэгдэл: Тус агуулгыг гэрээний PDF хувилбараас текст ялган таних аргаар боловсруулсан тул эх хувиас ялгаатай байж болно. Дэлгэрэнгүй


Pursuant to Articles 20 and 21 of the Minerals Law of Mongolia and to guarantee

a long term stable activity environment, this Agreement is entered into by and

between the Government of Mongolia, represented by Minister of Finance of

Mongolia (the Minister) and Boroo Gold Company Limited (the Company) which

has been established under the laws of Mongolia, has certificate of registration

No 21/498 and the holder of the mining license No A-32, under the requirements

of Mongolian legislation.

Article 1. Subject Matter

1.1 This Agreement regulates relations with respect to legal guarantees to

provide a stable tax regime, free sale and export of products at

international market prices and free use of hard currency derived from

such sales from the entire period of mining the “Boroo” gold deposit

located in Bayangol sum of Selenge aimag of Mongolia by the Company.

Article 2. General Provisions.

2.1 The amount of the initial capital to be invested by the Company, holder of

a mining license, during the first five (5) years of the particular project on

the territory of Mongolia shall be no less then fifteen (15) million US


2.2 The Company will be exempted from the income tax for the first three (3)

years from the commencing date of its production and be entitled to fifty

(50) percent tax relief for the following three (3) years period. For the

following years, the Company will pay fifteen (15) percent tax for the

annual taxable income of up to 100,000,000 tugriks, plus forty (40) percent

for the amount which exceeds 100,000,000 tugriks. The custom duties for

imported goods shall be set at zero (0) percent and the VAT (or similar)

tax on imported and domestically sold goods shall be set at ten (10)

percent which are the rates established by the legislation effective at the

date of this Agreement.

2.3 If the Company exports its goods, the export taxes shall be set at zero (0)

percent and VAT taxes for export shall be set at zero (0) percent. If the

Company extracts gold and sells it to Mongolbank or any other

commercial bank on the territory of Mongolia, it shall pay VAT (or similar)

tax of ten (10) percent.

2.4 The royalty to be paid by the Company shall be set at the rate specified in

the Law regulating the minerals relations effective at the date of this


 2.5 In exporting its products, selling them at international market prices and

using the hard currency income derived from such sales, the Company

shall be granted the same rights and conditions as enjoyed by Mongolian

citizens and legal persons.

2.6 This Agreement will be terminated, if the Company fails to complete

performance of its obligations on investment as specified hereunder in

paragraphs 4.2, 4.3 within the period exceeding six (6) months.

Article 3. Term

3.1 The term of this Agreement is from July 6, 1998 until July 7, 2008 for ten

(10) years.

Article 4. Duties and Rights of Company (Individual)

4.1 The Company shall fully perform its obligations under this Agreement and

comply with the legislation of Mongolia.

4.2 The Company shall invest in Mongolia no less than fifteen (15) million US

Dollars during five (5) years following the signing of this Agreement.

The investment may take the forms of cash, technology, equipment, raw

materials or goods.

4.3 The investment shall be made according to the following schedule:

No Date Amount of Money In Monetary In Other

Month/Year (thousand USD) Form Forms

1 July 1999 1,000 500 500

2 July 2000 14,000 4,000 10,000



i 5

Total Amount 15,000 4,500 10,500

If the Company invests more than it has planned to invest for a particular

year, the excess amount shall be included into the next year’s investment.

4.4 Within a month following the anniversary of this Agreement, the Company

shall prepare an annual investment report for the intervening year based

on the form to be provided by the Ministry of Finance and, following its

review by the Natural Resources Authority, deliver the report to the

Minister of Finance,


4.5 The Company shall initially deposit its profits derived from the sale of its

products in an account opened at a commercial bank operating on the

territory of Mongolia.

4.6 If, as a result of the Minister’s failure to perform his obligation under this

Agreement, or the guarantees provided for in the Stability Agreement were

not honored, the Company shall be entitled to the restoration of

guarantees and to sue for damages in accordance with the procedures

specified by law.

4.7 This present Agreement does not prejudice the Company’s right to

negotiate and conclude separate operating agreements specific to the

Boroo project with relevant agencies of the Government of Mongolia.

Article 5. Duties and Rights of the Minister

5.1 The Minister shall be responsible for providing the Company with the

guarantees and conditions specified in this Agreement and aimed at

securing a long term stable investment environment for the Company.

5.2 Upon signing the Stability Agreement, the Minister shall notify Mongolbank

and other relevant organizations of the provisions of this Agreement.

5.3 If the Company fails to perform its obligations under this Agreement or it is

proved that it has seriously breached the laws of Mongolia, the Minister

shall notify the Company accordingly and unilaterally terminate this


Article 6. Other Provisions

6.1 The parties shall amicably settle any disputes arising over the

implementation of this Agreement. In case of unsettled disputes, the

relevant Mongolian laws and international treaties shall be applied.

6.2 This Agreement is made in Ulaanbaatar on 6 July 1998, two (2) copies

each in Mongolian and English language, and the parties shall preserve a

copy of each.