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During the meeting of the Board of Directors (the "Board") of NiHAO Mineral Resources International, Inc. ("HiHAO") held on March 5, 2012, the Board approved the execution, delivery and performance of a General Contractor Agreement (the "Agreement") between NiHAO and Geogen Corporation ("GEOGEN").
Under the Agreement, NiHAO was appointed as GEOGEN's general contractor over the latter's mineral property consisting of a total area of 2,391.4081 hectares (excluding Area 2) located at Dinapigue, Isabela and covered by Mineral Production Sharing Agreement ("MPSA") No. 258-2007-II dated July 30, 2007 (the "Mineral Property"). The areas of mining and development shall be expanded to other areas following a Mining Plan and schedule of mining development to be prepared and mutually agreed between the parties.
Pursuant to the Agreement, GEOGEN shall pay NiHAO an amount equivalent to ninety percent (90%) of the invoice value of the nickel ore sold by GEOGEN to third parties, for and in consideration of the following general contractor services to be performed by NiHAO:
In turn, GEOGEN shall be responsible in securing the necessary permits relating to mining activities within the Mineral Property, and in the payment of all costs and expenses relating to the issuance and maintenance of said permits. GEOGEN shall likewise pay the excise tax on the nickel ore extracted from the Mineral Property, all fees relating to or arising form the occupation and operation of the Mineral Property, and the appropriate royalties to the indigenous people in accordance with the terms and conditions of the MPSA and applicable law, rules and regulations.
NiHAC shall bear, for its own account, AGP industrial Corporation's (AGP) management fees pursuant to the Management Agreement with Option to Buy executed between GEOGEN and AGP on October 14, 2011, reimburse GEOGEN for infrastructure development costs, subject to an accounting and mutually agreed amount between parties.
The Agreement shall take effect upon its executioin by the parties and continue for a term of ten (10) years, unless earlier terminated in accordance with the terms of the Agreement. The parties may mutually agree to renew the Agreement for another period of ten (10) years, subject to such terms and conditions as the parties may agree upon in writing.
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