25. Who may apply for a retention licence

(1) The holder of a prospecting licence may, by submitting to the Minister an application as set out in Form III of the First Schedule, apply for a retention licence in relation to an area and a mineral covered by his licence.

(2) An application made under subsection (1) shall be made not less than three months prior to the expiry of the prospecting licence concerned.

26. Other holders to be notified of application

Upon receipt of application for a retention licence, the Director of Mines shall notify a holder of any other prospecting licence over the area that such an application has been made.

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

(1) The Minister shall grant a retention licence if-

(a) the applicant has carried out a feasibility study in respect of the deposit to which the application relates in accordance with good industry practice and the study has established that the deposit cannot be mined on a profitable basis at the time of the application;

(b) the approved prospecting programme in respect of the area applied for has been completed; and

(c) the applicant is not in default.

(2) Before rejecting an application for a retention licence under subsection (1)(a), the Minister shall give the applicant opportunity to make satisfactory amendments to the proposed mining programme submitted in the feasibility study.

(3) Before rejecting an application for a retention licence under subsection (1)(c), the Minister shall give notice of the default to the applicant and shall call upon the applicant to remedy such default within three months of such notification.

(4) A retention licence shall not be granted to the holder of a prospecting licence in respect of an area larger than that which would be required, having regard to the deposit to which the application relates, to carry on mining operations.

28. Notification of grant or refusal

The Minister shall cause the applicant to be notified in writing of his decision on the application and, if the retention licence is refused, the Minister shall give reasons for such refusal.

29. Form of retention licence

A retention licence, granted in accordance with section 27, shall be in Form IV of the First Schedule.

30. Duration and renewal of a retention licence

(1) Subject to the provisions of this Act, a retention licence shall be valid for such period as the applicant has applied for, which period shall not exceed 3 years.

(2) A retention licence may be renewed once only, for a period not exceeding 3 years.

(3) Subject to subsection (2) above, the holder of a retention licence may apply to the Minister for the renewal of his licence at any time not later than three months before the expiry of the licence, and provided that he has properly complied with section 32 and the deposit cannot be mined on a profitable basis, the Minister shall grant renewal.

31. Rights conferred by a retention licence

Subject to the provisions of this Act, any other written law and the terms and conditions of his licence, the holder of a retention licence shall be entitled-

(a) to retain the retention area to which the retention licence relates, for future mining operations;

(b) to carry on prospecting operations in the retention area in order to determine from time to time the prospects of mining any mineral to which the retention licence relates on a profitable basis;

(c) to remove any mineral or sample of a mineral for any purpose other than sale or disposal, from any place where it was found or incidentally won in the course of prospecting operations referred to in paragraph (b) to any other place within Botswana or, with the permission of the Director of Mines, outside Botswana; and

(d) to carry on, in order to determine, from time to time, the prospect of mining any mineral to which the licence relates, on a profitable basis, such other investigations and operations, including the erection of necessary equipment, plant and buildings, in the retention area as may be reasonably necessary for, or in connection with, any future mining operations or any prospecting operations contemplated in paragraph (b).

32. Obligations of holder of a retention licence

(1) The holder of a retention licence shall-

(a) demarcate and keep demarcated the retention area in the prescribed manner;

(b) obtain the consent of the Director of Mines to any amendment of his intended work programme;

(c) unless the Director of Mines otherwise stipulates-

(i) back fill or otherwise make safe excavations made during the course of his prospecting operations to the satisfaction of the Director of Mines;

(ii) permanently preserve or otherwise make safe any borehole in the manner directed by the Director of Geological Survey and Director of Mines; and

(iii) remove, within two months of the expiry of his licence, any camp, equipment, plant or building erected by him in the retention area, and repair or otherwise make good any damage to the surface area of the grant occasioned by such removal, to the satisfaction of the Director of Mines.

(2) The holder of a retention licence shall furnish to the Director of Geological Survey and to the Director of Mines a quarterly report covering all matters under section 31(b),(c) and (d).

(3) The holder of a retention licence shall-

(a) furnish to the Minister by submitting to the Director of Mines, as soon as they become available-

(i) the results of all studies, surveys and tests including but not limited to analytical, metallurgical, mineralogical, and geo-physical work incidental to those prospecting operations;

(ii) the interpretation and assessment of such studies, surveys and tests; and

(b) submit annually to the Director of Mines an updated feasibility study and an audited statement of direct expenditure if any, incurred in the retention area during the year.

33. Surrender of information on expiry

(1) Upon expiry of the first period of a retention licence all geological information relating to that licence and to the prospecting licences which preceded it shall be placed on open file at the Department of Geological Survey.

(2) For the purposes of this section, the expression "geological information" shall include information supplied under section 32(3)(a) but not feasibility studies or proprietary information.

34. Third party access

(1) During any renewal period of a retention licence the Minister may, on notice to the holder, authorise and the holder thereof shall permit third parties to have access to the area for the purpose of collecting samples and data required for the purpose of applying for a mining licence.

(2) Any geological data obtained by such third party by means of such access shall be promptly reported to the Director of Geological Survey.

(3) A representative portion of each core sample so obtained shall be promptly delivered to the Director of Geological Survey.

(4) A person authorized under this section shall carry out his operations in such manner as not to disturb or interfere with the operations or workings of the holder of the retention licence and shall have, in respect of his operations in the retention area, the rights and obligations of the holder of a prospecting licence in terms of sections 20, 21 and 24.

35. Application for mining licence by authorized third party

(1) A person authorized in terms of section 34(1), shall be entitled to apply for a mining licence in respect of the retention area.

(2) In the event that both the holder and the authorized third party make application for a mining licence, the Minister shall consider the applications on merit.

(3) In the event that the Minister grants a licence to the authorized third party, the rights and obligations of the retention licence holder shall be extinguished save for his rights under section 32(1)(c)(iii).

36. Transfer or assignment of a retention licence

(1) No retention licence or any interest therein shall be transferred, assigned, encumbered or dealt with in any other way without the approval of the Minister.

(2) In any application to the Minister for his approval under subsection (1), the applicant shall give such particulars concerning the proposed transferee, assignee or other party concerned as would be required in an application for a mining licence.

(3) The Minister shall grant his approval to the transfer, assignment or other dealing with any retention licence or interest therein provided the transferee is not disqualified under any provision of this Act from holding a retention licence and the Minister is satisfied in accordance with section 27.

(4) For the purposes of this section, " interest" in a retention licence shall mean in the case of a holder who is a private company, a controlling interest in such holder.

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

Form V
MINING LICENCE APPLICATION FORM (ISSUE/RENEWAL)

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:

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 - P5.00 per km2 or part thereof subject to a minimum of P500 for industrial minerals and P1 000 for all other minerals.

     (b)      Retention Licence - P5 000 per km2 or part thereof for the first year, increasing annually by P5 000 per km2 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.