ARRANGEMENT OF SECTIONS

     SECTION

PART I
Preliminary

                1.         Short title

                2.         Interpretation

PART II
Ownership of Minerals and Acquisition of Mineral Rights

                3.         Ownership of minerals vested in Republic

                4.         Act not to apply to petroleum

                5.         Acquisition of mineral concession

                6.         Restriction on acquisition of mineral concession

PART III
Administration

                7.         Power of certain officers to enter upon prospecting areas, etc.

                8.         Power to require production of records

                9.         Indemnity of officers

               10.         Recovery of fees, etc.

               11.         Retention of cores and samples

               12.         Preference for Botswana products, etc.

PART IV
Prospecting Licences

               13.         Application for prospecting licence

               14.         Consideration of application for prospecting licence

               15.         Notification of grant or rejection

               16.         Form and content of prospecting licence

               17.         Duration and renewal of prospecting licence

               18.         Discovery of minerals not included in prospecting licence

               19.         Size of prospecting area

               20.         Rights of holder of prospecting licence

               21.         Obligations of holder of prospecting licence

               22.         Amendment of programme of prospecting operations

               23.         Transfer of prospecting licence

               24.         Removal and disposal of minerals

PART V
Retention Licences

               25.         Who may apply for a retention licence

               26.         Other holders to be notified of application

               27.         Grounds to be considered in application for a retention licence

               28.         Notification of grant or refusal

               29.         Form of retention licence

               30.         Duration and renewal of a retention licence

               31.         Rights conferred by a retention licence

               32.         Obligations of holder of a retention licence

               33.         Surrender of information on expiry

               34.         Third party access

               35.         Application for mining licence by authorized third party

               36.         Transfer or assignment of a retention licence

PART VI
Mining Licences

               37.         Who may apply for a mining licence

               38.         Application for a mining licence

               39.         Grant of a mining licence

               40.         Government investment

               41.         Form and content of mining licence

               42.         Duration and renewal of mining licence

               43.         Amendment of programme of mining operations

               44.         Rights conferred by mining licence

               45.         Obligations of holder of mining licence

               46.         Wasteful mining and treatment practices

               47.         Suspension of production

               48.         Export of radioactive minerals

               49.         Trading in mining areas

               50.         Transfer or assignment of mining licence

               51.         Negotiations over mining licence for diamonds

PART VII
Minerals Permits

               52.         Application for a minerals permit

               53.         Permits for industrial minerals

               54.         Demarcation of area covered by a minerals permit

               55.         Duration, renewal and termination of a minerals permit

               56.         Rights under a minerals permit

               57.         Duties of holder of a minerals permit

               58.         Special rights with regard to industrial minerals

               59.         Transfer or assignment of minerals permit

PART VIII
Mineral Concessions and Surface Rights

               60.         Restriction on exercise of rights under a mineral concession

               61.         Right to graze stock, etc.

               62.         Acquisition of exclusive rights by holder of mining or retention licence or minerals permit

               63.         Compensation for disturbance of rights, etc.

               64.         Compulsory acquisition of land

PART IX
Environmental Obligations

               65.         Rehabilitation, reclamation etc

PART X
Financial

               66.         Royalties

               67.         Remission of royalties

               68.         Deferred payment of royalty

               69.         Prohibition on disposal of minerals

               70.         Annual charges in respect of prospecting and retention licences

               71.         Annual charges in respect of mining licences and minerals permits

               72.         Interest on overdue payments

               73.         Security for compliance

PART XI
Withdrawal of Applications, Surrender and Termination of Mineral Concessions, etc.

               74.         Withdrawal of applications

               75.         Surrender of area or part thereof covered by mineral concession

               76.         Minister's power to suspend or cancel a mineral concession

               77.         Assets on termination

               78.         Delivery of documents on termination

               79.         Pending applications

PART XII
Regulations

               80.         Regulations

PART XIII
Offences and penalties

               81.         Imposition of penalty on holder of mineral concession

               82.         Offences

               83.         Penalties

               84.         Summary imposition of penalties

PART XIV
Records and information

               85.         Records to be maintained by Minister

               86.         Certain records supplied to Minister to be confidential

               87.         Savings

                            First Schedule - Forms

                            Second Schedule - Fees

Act 17, 1999,
S.I. 54, 2005,
Act 19, 2007,
S.I. 126, 2010.

An Act to re-enact with substantial amendments the provisions that regulate the law relating to Mines and Minerals; to provide for the granting, renewal and termination of mineral concessions; to provide for the payment of royalties; and for matters incidental to and connected to the foregoing.

[Date of Commencement: 1st December, 1999]

[Ch6601s85]85.     Records to be maintained by Minister

            (1) The Minister shall maintain records of all mineral concessions issued under this Act in sufficient detail as to show-

     (a)     the name of the holder of the mineral concession;

     (b)     the area subject to the mineral concession;

     (c)     the date of issue and duration of the mineral concession; and

     (d)     the mineral for which the concession is granted.

            (2) Records maintained under subsection (1) shall be open to inspection by members of the public during normal Government office hours, and members of the public shall be permitted to take copies thereof.

[Ch6601s86]86.     Certain records supplied to Minister to be confidential

            Records supplied under section 21(3), 32(3), 45(2) or 57(c) shall so long as the person supplying the same or his successor-in-title retains a prospecting licence, retention licence, mining licence or minerals permit over the area to which the records relate, be treated as confidential and shall not be divulged without the consent of the person supplying the same or his successor-in-title:

            Provided that nothing in this section shall prohibit the disclosure of any confidential information-

           (i)       where such disclosure is necessary or required for the purposes of this Act;

          (ii)       for the purposes of a prosecution under this Act or any other law;

          (iii)       to any person being a consultant to or officer employed by the Government who is approved by the Minister to receive such confidential information:

            Provided further that subject to items (i), (ii) and (iii) all proprietary information supplied to the Minister or any officer under this Act shall be kept confidential.

[Ch6601s87]87.     Savings

            (1) All subsidiary legislation made under the repealed Act [the Mines and Minerals Act], and in force immediately prior to the coming into operation of this Act shall, in so far as such subsidiary legislation may not be inconsistent with the provisions of this Act, continue in force as if made under this Act.

            (2) Nothing in this Act shall affect the continued validity of any title to, interest in or right over, any minerals, of whatsoever nature, subsisting immediately prior to the coming into operation of this Act (hereinafter called "existing right"):

            Provided that a state grant of a mining lease issued and in force immediately before the commencement of this Act shall be deemed for the purposes of this Act to be a mining licence issued under the provisions of Part VI:

            Provided further that in the event of any conflict between the terms and conditions of any existing right and the provisions of this Act, the terms and conditions of such existing right shall continue to be valid and enforceable notwithstanding the provisions of this Act.

FIRST SCHEDULE
FORMS

(Section 13)

Form I
PROSPECTING LICENCE APPLICATION FORM (ISSUE/RENEWAL)

This application is in terms of section 13 of the Mines and Minerals Act (attach additional sheets or annexures where necessary)

1.  Name (and nationality where appropriate). In the case of company attach copy of certificate of incorporation

Address in Botswana

2.  Full name(s) of partners/directors/members of association

Nationalities

3.  Name(s) of shareholder who is a beneficial owner of more than 5% of the issued capital

Nationalities

4.  Details of financial status (attach bankers reference and most recent financial statements)

5.  Technical competence (attach curriculum vitae of professionals to be involved)

6.  Experience (established track record is an advantage but is not essential)

7.  Description of area applied for (attach plan and co-ordinates)

8.  Name(s) of mineral applied for

Period applied for

9.  Proposed programme of prospecting operations

Proposed minimum expenditure

Year 1

Year 2

Year 3

10.        Details of Botswana prospecting licence held within the preceding 10 years by the applicant or any person controlling, controlled by or under joint or common control with the applicant.

11.        Disclose any other information material to the application

I .................... being duly authorised, declare that the applicant and its partners/members/directors/shareholders are persons qualified in terms of section 6 of the Mines and Minerals Act to hold a prospecting licence, and that the information contained herein is true and correct.

Signed ................................................. Capacity ............................... Date ......................

Place ..................................................

Form II
PROSPECTING LICENCE

Prospecting Licence No.......................................................................................................

Issued in terms of section 16 of the Mines and Minerals Act.

WHEREAS ..................................................... a company incorporated under the laws of .........................................................

(hereinafter referred to as "the Holder") has made application for the right to prospect for

............................................ on land to which the Republic of Botswana holds mineral rights:

     AND WHEREAS provision is made under section 14 of the Act for the conferring of such rights by means of a prospecting licence:

     NOW THEREFORE the Minister hereby grants to the holder the exclusive right to prospect for .......................................... in the Licence area for a period of ................................ years commencing on ............................................. and ending on ..............................................

     1. The Licence area shall be the area shown on the map annexed hereto, in extent ............................... km2, located in .............................................. district(s) and more fully described in Annexure I hereto; and as reduced from time to time in accordance with the provisions of the Act.

     2. In accordance with the provisions of section 70 of the Act, the holder shall, simultaneously with issuance of this licence and thereafter on each anniversary thereof, pay to the Government at the office of the Director of Geological Survey, an annual charge equal to ........................................................................... multiplied by the number of square kilometres in the Licence area subject to a minimum annual charge of ...................................

     3. The holder shall incur the minimum annual expenditures and shall expeditiously carry out the programme of prospecting operations set out in Annexure II.

GIVEN under my hand at GABORONE this .......... day of .................................. in the year ...............

....................................................
Minister
Ministry of Minerals, Energy and
Water Affairs

ANNEXURE I

The Licence area is ............................................. km2 defined by boundary lines, which shall be straight unless otherwise stated, joining successive points at the following co-ordinates:

Point

Latitude(south)

Longitude(east)

ANNEXURE II

Programme of prospecting operations

Proposed minimum expenditure

Year 1

Year 2

Year 3

Form III
RETENTION LICENCE APPLICATION FORM (ISSUE/RENEWAL)

This application is in terms of section 25 of the Mines and Minerals Act (attach additional sheets or documents where necessary)

1.  Name of applicant (in the case of company attach copy of certificate of incorporation)

Address in Botswana

2.  Full name(s) of partners/directors/members of association

Nationalities

3.  Name(s) of shareholder who is a beneficial owner of more than 5% of the issued capital

Nationalities

4.  Details of financial status (attach supporting documents, bankers reference and most recent financial statements)

5.  Technical competence (established mining track record is an advantage but is not essential)

6.  Description of area applied for (prospecting licence number; attach plan and co-ordinates)

7.  Name(s) of mineral which it is intended to retain

8.  Period for which licence is sought

9.  Details of prospecting or other work intended to be carried out during the period of retention.

10.        Furnish copy of feasibility study as prescribed including (a) to (h) below-

     (a)      Details of mineral deposit (including all known, proven, indicated, inferred ore reserves and mining conditions)

     (b)      Technical report on mining and treatment possibilities and the applicant's intention in relation thereto

     (c)      Proposed programme of mining operations including-

            (i)       estimated date by which applicant intends to work for profit

           (ii)       estimated recovery rates(s)

          (iii)       nature of product

          (iv)       envisaged marketing arrangements for sale of mineral product(s)

           (v)       environmental impact assessment study

          (vi)       environmental management programme

     (d)      Forecast of capital investment, cashflow and details of anticipated financing plan

     (e)      Outline of proposed employment level and training program.

     (f)       Outline of proposed sources of goods and services

     (g)      Details of expected infrastructure requirements

     (h)      attach audited statement of relevant exploration expenditure incurred prior to this application on the area applied for

11.        Disclose any other information material to this application

12.        I..................................................... being duly authorised, declare that the applicant and its partners/directors/members/shareholders are persons qualified in terms of section 6 of the Mines and Minerals Act to hold a retention licence and that the information contained herein is true and correct.

Signed.........................................................Capacity ........................................................

Date ........................................................... Place.............................................................

Form IV
RETENTION LICENCE

Issued in terms of section 29 of the Mines and Minerals Act.

WHEREAS ................................ a company incorporated under the laws of Botswana and holder of prospecting licence number............................................................., and hereinafter referred to as " the Holder", has applied for a retention licence in respect of a deposit of .................................... discovered under the said prospecting licence.

     AND WHEREAS provision is made under Part V of the Act for the conferring of such rights by means of a Retention licence.

     NOW THEREFORE the Minister hereby grants to the holder a retention licence number ............................................... to retain for future mining operations exclusive rights to deposits of ............................................. in the retention area on the plan annexed hereto for a period of ............................... years commencing on ............................................and ending on ..................................................... subject to the provisions of the Act and to the terms and conditions of this licence.

     1. The Holder shall upon issue of this licence and thereafter on each anniversary thereof, pay to the government at the office of the Director of Mines a fee in accordance with section 70 of the Act.

     2. At the expiry of the retention licence, any minerals recovered or won by the Holder during the retention period shall be disposed of in such manner as the Minister may direct.

GIVEN under my hand at Gaborone this .................. day of ................ in the year ................

....................................................
Minister
Ministry of Minerals, Energy
and Water Affairs

19 of 2007, s.4.Form V (a)
MINING LICENCE APPLICATION FORM

This Application is in terms of section 38 of the Mines and Minerals Act (attach additional sheets or documents where necessary)

1.  Name of applicant (attach copy of certificate of incorporation)

Address in Botswana

2.  Full Name(s) of Directors

Nationalities

3.  Authorised share capital and issued capital

4.  Name(s) of Shareholder who is a beneficial owner of
more than 5% of the issued Capital

Nationalities

5.  Details of Financial Status (attach supporting documents, Bankers reference and most recent financial statements)

6.  Technical Competence (established mining track record is an advantage but is not essential)

7.  Prospecting/retention/waiver/mining licence/number

8.  Description of area applied for (attach plan and co-ordinates)

9.  Name(s) of mineral which it is intended to mine

10.        Period for which licence/renewal is sought

11.        Attach parent company guarantee as in Annexure I

12.        Furnish copy of feasibility study as prescribed including (a) to (h) below-

     (a)      Details of mineral deposit (including all known, proven, indicated, inferred ore reserves and mining conditions)

     (b)      Technical report on mining and treatment possibilities and the applicant's intention in relation thereto

     (c)      Proposed programme of mining operations including-

            (i)       estimated date by which applicant intends to work for profit

           (ii)       estimated recovery rates(s)

          (iii)       nature of product

          (iv)       envisaged marketing arrangements for sale of mineral product(s)

           (v)       environmental impact assessment study

          (vi)       environmental management programme

     (d)      Forecast of capital investment, cashflow and details of anticipated financing plan

     (e)      Outline of proposed employment level and training program

     (f)       Outline of proposed sources of goods and services

     (g)      Details of expected infrastructure requirements

     (h)      Attach audited statement of relevant exploration and arms length acquisition expenditure incurred prior to this application on the area applied for

13.        Disclose any other information material to this application

14.        I.................................................... being duly authorised, declare that the applicant and its partners/directors/members/shareholders are persons qualified in terms of section 6 of the Mines and Minerals Act to hold a mining licence and that the information contained herein is true and correct.

Signed...........................................................    Capacity ..................................................

Date...............................................................   Place.......................................................

ANNEXURE I
PARENT COMPANY GUARANTEE

WHEREAS X Ltd, a company duly organised and existing under the laws of ........................................................................ having its registered office at ...................................................................... (hereinafter referred to as "the guarantor" which expression shall include its successors and permitted assignees) holds directly or indirectly a controlling interest in Y Ltd, a company duly incorporated and registered in Botswana, with its registered office at.......................................................(which company,
including its successors and permitted assignees, is referred to hereinafter as "the company");

AND WHEREAS the company is the applicant for/holder of a Mining Licence pursuant to the Mines and Minerals Act of Botswana (hereinafter referred to as "the licence" and "the Act" respectively) issued or to be issued, by the Government of Botswana represented by the Minister of Minerals, Energy and Water Affairs (hereinafter referred to as "the Government") in favour of the said company;

AND WHEREAS the guarantor agrees to guarantee the performance of the obligations of the company under the licence and its compliance with the Act;

NOW THEREFORE this Deed hereby provides as follows:

     1.       The guarantor hereby unconditionally and irrevocably guarantees to the Government that it will make available, or cause to be made available, to the company or its permitted assignees, such financial, technical, managerial and other resources as are required to ensure that the company and /or any such assignee is able to carry out the obligations of the company or any permitted assignee as set forth in the licence and under the Act.

     2.       The guarantor further unconditionally and irrevocably guarantees to the Government the due and punctual compliance with or performance by the company or its permitted assignees, of any obligations of the company or any permitted assignee under the licence and the Act.

     3.       The guarantor hereby undertakes to the Government that if the company, or any permitted assignees, shall, in any respect, fail to perform its obligations under the licence or commits any breach of such obligations under the licence or the Act, then the guarantor shall fulfil or cause to be fulfilled the said obligations in place of the company or any permitted assignees, and will indemnify the Government against all losses, damages, costs, expenses or otherwise which may result directly from such failure to perform or breach on the part of the company or any permitted assignees.

     4.       This guarantee shall take effect from the date of the issue of the licence and shall remain in full force and effect for the duration of the said licence and any renewal thereof and thereafter until no obligation remains outstanding and no sum remains payable by the company, or its permitted assignees, under the licence or the Act or as a result of any decision or award made in any arbitration thereunder.

     5.       This guarantee shall not be affected by any change in the Articles of Association and bye-laws or any change in the ownership or control of the company or the guarantor.

     6.       The liabilities of the guarantor shall not be discharged or affected by:

            (a)      any time indulgence, waiver or consent given to the company;

            (b)      any amendment to the licence or the Act or to any security or other guarantee or indemnity to which the company has agreed;

            (c)      the enforcement or waiver of any terms of the licence or the provisions of the Act or of any security, other guarantee or indemnity; or

            (d)      the dissolution, amalgamation, reconstruction or reorganisation of the company.

     7.       This guarantee shall be governed by and construed in accordance with the laws of Botswana.

The seal of X Ltd was hereto duly affixed by ..................................................... in accordance with its articles this ............... day of ....................................... in the year .............................. in accordance with its bye-laws and this guarantee was duly signed by ................................. and ....................... as required by the said bye-laws, they being duly authorized to represent X Ltd.

..........................................
Secretary

...........................................
Chairman and Director

...........................................
Witness:

19 of 2007, s.4.Form V (b)
MINING LICENCE RENEWAL APPLICATION FORM

(Attach additional sheets or documents where necessary)

1.  Name of applicant (attach copy of certificate of incorporation)

Address in Botswana

2.  Full Name(s) of Directors

Nationalities

3.  Authorised share capital and issued capital

4.  Name(s) of shareholder who is a beneficial owner of more than 5% of the issued capital

Nationalities

5.  Details of Financial Status (attach supporting documents, Bankers reference and most recent financial statements)

6.  Technical Competence (established mining track record is an advantage but is not essential)

7.  Mining licence number

8.  Description of area applied for (attach plan and coordinates)

9.  Name(s) of mineral which it is intended to mine

10. Period for which the renewal is sought

11. Attach parent company guarantee as in Annexure I

12. Proof that development of mining area has proceeded with reasonable diligence

     a.       Performance against production targets

     b.       Performance against financial targets

     c.       Performance against environmental targets

     d.       Performance against occupational health and safety targets

     e.       Legal compliance

13.        Attach proposed programme of mining with the following details or documentation

     a.       Details of mineral deposit (including all nown inferred, indicated,measured resources and probable and proven reserves)

     b.       Annual production rates

     c.       Estimated recovery rates

     d.       Nature of product

     e.       Annual sales volumes or tonnages

     f.       Forecast of capital investment and cashflow

     g.       Employment projections and skills development plan

     h.       Projections of value of local procurement

     i.        Environmental Management Plan including Closure Plan

14.        Disclose any other information material to this application

15. I....................................................being duly authorised, declare that the applicant and its partners/directors/members/shareholders are persons qualified in terms of section 6 of the Mines and Minerals Act to hold a mining licence and that the information contained herein is true and correct.

Signed ................................................................................
............................................................................................

Capacity .....................

Date ....................................................................................

Place ...........................

Form VI
MINING LICENCE

Mining Licence No...............................................................................

Issued in terms of section 41 of the Mines and Minerals Act.

WHEREAS................................................., a company incorporated under the laws of Botswana and the holder of prospecting/retention/mining licence/waiver ^[i]* number ..................., and hereinafter referred to as "the Holder", has applied for a mining licence in respect of a deposit discovered under prospecting licence number .................;

     AND WHEREAS provision is made under Part VI of the Act for the issue or renewal of a Mining Licence;

     NOW THEREFORE the Minister hereby grants to the Holder mining licence number .................................................. to mine for ......................................... in the mining licence area on the plan annexed hereto for a period of ............................... years commencing on ............................. and ending on ....................... subject to the provisions of the Act and to the terms and conditions of this licence.

     1.       The Holder shall upon issue of this licence and thereafter on each anniversary thereof, pay to Government at the office of the Director of Mines a fee in accordance with Section 71 of the Act.

     2.       The Holder shall carry out its mining operations strictly within the mining licence area and in accordance with the approved programme of mining.

     3.       The Holder shall pay royalty to Government monthly in accordance with Section 66 of the Act.

GIVEN under my hand at Gaborone this.....................day of.................in the year.................

....................................................
Ministry
of Minerals, Energy
and Water Affairs

Form VII
MINERALS PERMIT APPLICATION FORM (ISSUE/RENEWAL)

This application is in terms of section 52 of the Mines and Minerals Act (attach additional sheets or documents where necessary)

1.  Name of applicant (in case of company attach copy of certificate of incorporation)

     Address in Botswana

2.  Full name(s) of partners/directors/members of association

     Nationalities

3.  Name(s) of shareholders

     Nationalities

4.  Description of area applied for (attach plan and co-ordinates)

5.  Particulars of the minerals for which permit is sought

6.  Period for which permit is sought

7.  Attach proposed programme of working as in Annexure I

8.  Disclose any other information material to this application

9.  I ............................................................ being duly authorised, declare that the applicant and its partners/directors/members/shareholders are persons qualified in terms of section 6 of the Mines and Minerals Act to hold a minerals permit and that the information contained herein is true and correct.

Signed .................................................................. Capacity ..............................................

Date .....................................................................  Place ..................................................

ANNEXURE I
PROPOSED PROGRAMME OF WORKING

Proposed programme of working:

     (a)      Details of mineral deposit (including all known, proven, indicated and inferred ore reserves and mining conditions).

     (b)      Proposed programme of mining operations including:

            (i)       estimated date by which applicant intends to work for profit;

           (ii)       estimated capacity of production and scale of operations;

          (iii)       nature of product;

          (iv)       envisaged marketing arrangements for sale of mineral product(s);

           (v)       brief environmental impact assessment study;

          (vi)       brief environmental reclamation programme.

Form VIII
MINERALS PERMIT

Minerals Permit No ..................................

Issued in terms of section 52 of the Mines and Mineral Act

WHEREAS .........................................................., hereinafter referred to as " the Holder"  has applied for the issue/renewal ^[ii]* of a minerals permit in respect of .......................................

     AND WHEREAS provision is made under Part VII of the Act for the issue/renewal of a minerals permit.

     NOW THEREFORE the Minister hereby grants to the Holder a minerals permit number ..................................... to mine for ....................................... in the minerals permit area demarcated in the plan annexed hereto for a period of ............................................ years commencing on ..................................... and ending on .................................. subject to the provisions of the Act and to the terms and conditions of this permit.

     1.       The holder shall upon the issue of the permit and thereafter on each anniversary thereof, pay to Government at the office of the Director of Mines a fee in accordance with section 71 of the Act.

     2.       The Holder shall carry out its operations strictly within the minerals permit area and in accordance with the approved programme of working.

     3.       The Holder shall pay royalties to Government monthly in accordance with section 66 of the Act.

GIVEN under my hand at Gaborone this ...................... day of .............. in the year ..............

....................................................
Ministry
of Minerals, Energy
and Water Affairs

SECOND SCHEDULE
FEES

(section 70)

The annual charges payable under this Act shall be as follows:

     (a)      Prospecting Licence P5 per km2 or part thereof subject to a minimum of P500 for industrial minerals and P1000 for all other minerals.

     (b)      Retention Licence P5 000 per m2 or part thereof for the first year, increasing annually by P5 000 per m2 for the second and subsequent years.

     (c)      Mining Licence or Minerals Permit - P100/km2 or part thereof.

^[i] Delete where inapplicable.

^[ii] Delete where inapplicable.