Exhibit 99.2
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CANADA
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PROVINCE OF ONTARIO
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TO WIT:
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I, France M. Tenaille,
a Notary Public in and for the Province of Ontario, and a lawyer licensed by the Law Society of Upper Canada, by Royal Authority
duly appointed, residing in the City of Pickering, in the Province of Ontario, DO CERTIFY AND ATTEST as follows:
1. that
I speak and write fluently the Spanish and English languages at a professional level, Spanish being my mother tongue as I was born
and raised in Caracas, Venezuela, and I also studied and graduated as a lawyer in Venezuela;
2. that
the paper-writing attached to this certificate is a redacted copy of a document in English titled “Mining Exploitation Agreement”
entered into by and between Metalurgica Reyna, S.A. de C.V. and Minera Camino Rojo, S.A. de C.V.; and
3. that
such document was originally prepared in the Spanish language and has been translated to English, and that the English text in
the document attached to this certificate is a true and accurate translation from Spanish to English of the document as redacted.
IN
TESTIMONY WHEREOF I have hereto subscribed my name and affixed my Notarial Seal of Office at Toronto, Ontario, this
31st day of December, 2020.
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(signed/sealed) France M. Tenaille
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France M. Tenaille
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A Notary Public in and for the Province of Ontario
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This document is a true and accurate English
translation of the original Spanish version. In the event where the interpretation of certain words or phrases may differ between
the English and Spanish versions, the Spanish version supersedes the English version and should be relied upon.
MINING EXPLOITATION AGREEMENT ENTERED
INTO BY AND BETWEEN METALÚRGICA REYNA, S.A. DE C.V. (“THE CONCESSIONAIRE”), ON THE ONE HAND, REPRESENTED BY
<personal information redacted>, AND, ON THE OTHER HAND, MINERA CAMINO ROJO, S.A. DE C.V. (“THE OPERATOR”)
REPRESENTED BY <personal information redacted>, TOGETHER “THE PARTIES,” WHICH SHALL BE SUBJECT TO THE
FOLLOWING RECITALS AND CLAUSES:
REPRESENTATIONS
I. The
Concessionaire represents as follows:
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(a)
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It is a mining company legally incorporated, existing and currently in good standing under the
laws of the United Mexican States, as stated in Public Deed No. <confidential information redacted>, granted
before and witnessed by <personal information redacted> of Mexico City, whose first authenticated copy was registered
in the Public Registry of Commerce of Mexico City on page No. <confidential information redacted> of the
Mining Companies Book of the Public Registry of Mining, dated <confidential information redacted>, and with sufficient
capacity and authority to be bound by the terms of this agreement, to be the holder of its property, and to perform its activities
as they are performed as of the date of this Agreement, and that it is a subsidiary of Fresnillo Plc.
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(b)
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Its legal representative has the necessary powers and authorizations to enter into this agreement,
as provided in the Public Deed indicated in paragraph a) above, which as of the date of execution of this agreement have not been
revoked, limited, or modified in any manner.
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(c)
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Its Federal Taxpayer Identification Number is <confidential information redacted>.
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(d)
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Except for the authorization of the Federal Commission of Economic Competition, it has all legal
corporate powers and authorizations required to execute and fulfill its obligations under this agreement and, as of the date of
this agreement, it does not require any third-party consent or authorization from any third party or from public authority, whether
administrative or judicial, government official or entity, organisms, agencies, authorized representatives of the State or local
governments within the United Mexican States to enter into this agreement.
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(e)
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The entering into and execution of this agreement by the Concessionaire and the performance of
its obligations hereunder, do not violate (i) any law, regulation, ruling, order, decree, decision or other regulation issued
by any authority or court that is applicable as at the date of this agreement to the Concessionaire or to the concession that is
the subject-matter hereof, or (ii) any provision in the bylaws of the Concessionaire, or (iii) any agreement, contract
or covenant to which the Concessionaire may be a party or is bound in any manner, or that affect the mining concession hereunder.
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(f)
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It is not subject to any cause for dissolution, liquidation, bankruptcy or creditors’ reorganization
proceedings generally, nor is it subject to any reorganization agreement or financial protection arrangement, and it has neither
filed nor does it intend to file, on its own behalf, a request for dissolution, liquidation or bankruptcy, or any agreement or
petition for reorganization of its business or assets.
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(g)
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It is the sole holder of the rights to the mining concession referred to as “Guachichil D1”
described below, hereinafter “the Concession,” with title number 245418, a photocopy of which is attached hereto as
Annex 1:
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Title Number
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Name
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Surface in Ha
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Location
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245418
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Guachichil D1
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782
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Mazapil,
Zacatecas
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(h)
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The Concession is in good standing, free of any encumbrance, charge or ownership limitations and
up to date in the performance by the Concessionaire of all of the obligations that the Mining Act and its Regulation imposes on
it as holder, and that to its knowledge: (i) there are no orders or petitions that are outstanding relating to the Mining
Act and its Regulation, or under any other applicable law, or related to environmental matters for which any remediation, repair,
work, construction or expense is requested with respect to the Concession, nor has it received any communication relating to the
foregoing, nor it is aware of any basis for assuming that such orders or petitions could be issued; and (ii) in general, except
as provided in Representation III.(c), it is not aware of any act, activity or situation whether with government authority or with
third parties that could affect or limit the rights granted under the Concession.
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(i)
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The Concession grants to the Concessionaire the exclusive right to explore, mine and sell for its
sole and exclusive benefit all of the minerals and mineral products that may exist and be obtained within the Concession area.
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(j)
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All of the minerals located in the Concession area, whether on the surface or underground, are
free of all encumbrances, charges, royalties, payment obligations, ownership limitations or other interests in favor of third parties
or authorities, except for those established under applicable law, and that to the date of this Agreement, the Concessionaire has
not entered into any verbal or written agreement, contract or option relating to or affecting the Concession in any manner, or
that involves the transfer of rights in all or part of the Concession in any manner or the minerals located in it, other than as
provided for in this document, nor has it performed any act with regard to the Concession that may limit in any manner the rights
that it holds over the Concession.
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(k)
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Pursuant to this agreement, it wishes to grant to the Operator the right to develop and exploit
solely a portion of the mining lot covered by the Concession, consisting of a volume whose upper side on the surface of the property
is formed by a rectangular polygon with dimensions of 218 meters wide by 1000 meters long, and with maximum depths per area at
an elevation of 1850 meters above mean sea level (hereinafter "msnmm"), 1790 msnmm and 1770 msnmm, according to the location
within such polygon, as set out in Annex 2. This volume, which is a portion of the mining lot covered by the Concession, is specifically
identified in the plan and section, which form part of this agreement as Annex 2 and which hereinafter shall be referred to as
the “Layback Zone.”
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(l)
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In accordance with the terms of the Mining Act and its Regulation, it has the power to grant to
the Operator the right to exploit the Layback Zone in accordance with the terms of this agreement and that once this agreement
has been signed and ratified before Notary Public, the Operator will have the right to exploit the minerals contained within the
Layback Zone, as set out in this agreement.
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(m)
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It has in good faith provided to the Operator the information, data and studies carried out in
the Layback Zone or which may be related to or which make reference to the mineral resources located therein, as well as their
metal content and oxidation levels, among other parameters, but it does not make any guarantee whatsoever with regard to the accuracy
of that information or its suitability for the purposes of the Operator.
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(n)
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As of the date of execution of this Agreement, the Concessionaire has only carried out exploration
activities and no exploitation activities in the Layback Zone, such activities being the source of the only environmental impact
that it has made on the area and it is not aware of any other type of environmental impact.
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II. The
Operator represents as follows:
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(a)
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It is a mining company incorporated, legally existing and currently in good standing, initially
under the company name Minas Achuras, S.A. de C.V., pursuant to the laws of the United Mexican States, as stated in <confidential
information redacted>, granted before and witnessed by <personal information redacted> for the Judicial District
of Morelos in the City of Chihuahua, whose first authenticated copy was registered in the Public Registry of Commerce of the City
of Chihuahua on page <confidential information redacted> of the Mining Companies Book of the Public Registry
of Mining, <confidential information redacted>. The company is a subsidiary of Orla Mining Ltd., a Canadian company.
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(b)
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By means of the Minutes of the Extraordinary Shareholders’ Assembly held on May 16,
2017, the change of its corporate name to “Minera Camino Rojo S.A. de C.V.” was approved. These Minutes were notarized
by <confidential information redacted>, granted before and witnessed by <personal information redacted>,
acting Notary Public in the absence of the incumbent Notary, <personal information redacted> for the Judicial District
of Morelos in Chihuahua City, Chihuahua.
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(c)
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Its legal representative has sufficient powers to execute this agreement, as provided in the Public
Instrument indicated in paragraph b) above, and these powers have not been revoked, modified, or limited in any manner.
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(d)
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Its Federal Taxpayer Identification Number is MAC060428H71.
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(e)
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Except for the authorization of the Federal Commission of Economic Competition, it has all legal
corporate powers and authorizations required to execute and perform its obligations under this agreement, and in any other agreement
or instrument referred to or covered by this agreement, and as at the date of this agreement, it does not require any consent or
authorization from third party or from any authority to enter into this agreement.
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(f)
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The entering into and execution of this agreement and the performance of its obligations hereunder
do not violate (i) any law, regulation, ruling, order, decree, determination, or other restriction that has been issued by
an authority or court, applicable to the Operator, (ii) no provision contained in the bylaws of the Operator, and (iii) no
agreement, contract or covenant to which the Operator is a party.
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(g)
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It is not subject to any cause for dissolution, liquidation, bankruptcy or creditors reorganization
proceedings generally, nor is it subject to any reorganization agreement or financial protection arrangement, and it has neither
filed nor does it intend to file, on its own behalf, a request for dissolution, liquidation or bankruptcy, or any agreement or
petition for reorganization of its business or assets.
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(h)
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It is the sole holder of the rights to the mining concession referred to as Camino Rojo, as described
below, with title number 230914, a copy of which is attached hereto as Annex 3, hereinafter the “Camino Rojo Concession,”
which borders the Concession on the north, as described below:
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Title Number
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Name
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Surface in Ha
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Location
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230914
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Camino Rojo
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8,340.7905
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Mazapil, Zacatecas
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(i)
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That the Camino Rojo Concession complies with the applicable legislation and regulations and that
to the date of this Agreement the Operator is in compliance thereof.
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(j)
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In the coming months, it is planning the construction and development of the project known as “Camino
Rojo”, which is located within the Camino Rojo Concession, based in whole or in part on the Feasibility Study on the
Camino Rojo Oxide Project dated June 25, 2019 and other studies that may be made in such regard, and that such Camino Rojo
project will consist of an open pit from which oxide and transition minerals containing gold and silver will be extracted. The
mining and processing of minerals from the Camino Rojo project will be carried out through open-pit mining with minerals transported
via conveyor belt to the leaching pads, where a low-concentration sodium cyanide solution will be used, the gold- and silver-bearing
solution will be processed at the Merril-Crowe plant, and doré bars will be produced.
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(k)
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It wishes the Concessionaire to grant to it the right to explore and mine exclusively within the
limits of the Layback Zone, in order to be able to expand the stope of the Camino Rojo project into that area to: (i) access
and extract oxide and transition minerals, including gold and silver, located at depth within the Camino Rojo Concession, and (ii) have
the right to mine oxide and transition mineral resources, including gold and silver, located exclusively within the Layback Zone.
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(l)
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It has reviewed the information provided by the Concessionaire and it is aware of the site conditions,
which has no operation carried out by the Concessionaire, and fully acknowledges such conditions.
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(m)
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It knows and accepts what is declared by the Concessionaire in Representation I. literal (n) of
this agreement, and therefore receives the Layback Zone without any visible trace of exploitation or environmental contamination.
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(n)
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It has both the technical and financial resources to perform its obligations under this agreement.
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III. The
Parties make the following representations:
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(a)
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They mutually acknowledge the legal capacity with which they execute this agreement.
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(b)
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They wish to enter into this agreement as being in their respective interests.
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(c)
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That in 2018 the Operator carried out a request for the Camino Rojo 7 Exp.-93/34867 mining concession,
on a supposed free land between the southern limit of the Concession and the northern limit of the Camino Rojo concession that
was rejected by the competent authority. Likewise, the Parties, in 2020, became aware of mining concession applications from third
parties regarding the existence of supposed free land between the southern limit of the Concession and the northern limit of the
Camino Rojo Concession, which are the applications for the mining concession Rojo Exp.-93/35177, Rojo 1 Exp.-93/35179 and La Presa
Exp.- 93/35187 (collectively, the “2020 Concession Applications”).
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(d)
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This agreement is entered into in accordance with the Mining
Act and its Regulation, and it is an instrument valid and binding upon the Parties in accordance with its terms.
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(e)
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Any agreement made between them prior to the execution of this agreement concerning the terms and
conditions hereof, is null and void as of the execution hereof.
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(f)
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That after the signing of this agreement, they will notify the Federal Economic Competition Commission
of the operation provided for therein, the approval of which will be a condition precedent for its effectiveness in accordance
with the provisions of Section 37 of this agreement.
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Having made the above representations,
the Parties agree as follows:
TERMS AND CONDITIONS
Section 1. PURPOSE.
The Concessionaire grants to the Operator
during the term of this agreement, the right to explore and exploit exclusively the Layback Zone that is part of the Concession
area, in order to mine only the oxide and transition minerals and materials, including gold and silver, located in such area, which
once extracted will be the property of the Operator.
The exploration and exploitation rights
in the Layback Zone referred to above consist of the right to carry out operations and works for the preparation and mining development
of the area that comprises the mineral deposit located solely in the Layback Zone, as well as those required to identify and extract
the mineral products or substances located in the Layback Zone, in the understanding that this agreement grants the Operator such
rights exclusively within the terms and scope of the Mining Law and its Regulation, and as a result, it is the obligation and for
responsibility of the Operator to obtain from individuals and authorities, all permits, authorizations and superficial accesses
that are necessary for such purposes.
SECTION 2. CONSIDERATION.
The Operator shall pay to the Concessionaire,
as consideration for the right to develop and exploit the Layback Zone as set forth in this agreement, in legal currency of the
United States of America (hereinafter "Dollars"), the amount of US $33,540,000.00 (thirty-three million five hundred
and forty thousand Dollars 00/100), which shall be paid by the Operator to the Concessionaire as follows:
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(a)
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US $ 11,878,000.00 (eleven million eight hundred seventy-eight thousand Dollars 00/100), within
the next 3 (three) business days after the fulfillment date of the Condition Precedent (as said term is defined in Section 37).
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(b)
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US $ 8,595,000.00 (eight million five hundred and ninety-five thousand Dollars 00/100) within a
maximum period of 12 (twelve) months from the date of Commencement of Commercial Operation, or, no later than December 1,
2022, whichever occurs first.
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For purposes of this section, the
term “Commencement of Commercial Operation” means the date on which one of the following two events first occurs: (i) 6
(six) months from the date on which doré with gold was first produced from the heap leach operation of the Camino Rojo project,
or (ii) Orla Mining Ltd. makes a public statement that commercial production haws commenced from the heap leach operation
at the Camino Rojo project.
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(c)
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US $ 13,067,000.00 (thirteen million sixty-seven thousand Dollars 00/100) within a maximum period
of 24 (twenty-four) months from the date of Commencement of Commercial Operation, or, no later than December 1, 2023, whichever
occurs first.
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(d)
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In the case of subsections b) and c) both of this section, the amounts of the above-mentioned consideration
shall accrue interest at a rate of 5% (five percent) per annum based on a year of 360 (three hundred and sixty) days. Such interest
shall accrue as of the date in which the Condition Precedent is met. Interest shall accrue until the date of payment of such amounts
and will only be applied to the principal owed, being simple interest. Interest accrued in the period between the date the date
in which the Condition Precedent is met and July 1, 2021 shall be paid by the Operator to the Concessionaire, on July 1,
2021. From July 1, 2021, any interest accrued in the subsequent periods shall be calculated and paid by the Operator to the
Concessionaire, on a quarterly basis, on the following dates: September 30, December 30, March 30, and June 30
of each year. Notwithstanding the foregoing, when any of the amounts in subparagraphs b) and c) of this Section is paid, on
that same date accrued and unpaid interest on such amounts must be paid.
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(e)
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Any payment of the amounts mentioned in this Section is considered final and may not be reimbursed
to the Operator for any reason.
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Payments referred to in this section shall
be made in Dollars, plus Value Added Tax, by wire transfer to the following account:
<confidential information
redacted>
For purposes of making any payment under
this agreement, “business day” is defined as the day when banks located in Mexico and banks located in Vancouver, Canada
are open to the public. For all other purposes of this agreement, a “business day” will be such day in which banks
located in Mexico are open to the public. In the event that the date of payment coincides with a non-business day, such payment
shall be made on the following business day.
The Concessionaire will deliver to the
Operator the corresponding invoices for each payment. Invoices shall meet the requirements established by the tax regulations of
the United Mexican States and shall be for the amounts received in accordance with this section, this instrument serving as the
most effective receipt applicable by law.
The taxes arising from the payments mentioned
in this section shall be paid by the Party that causes it in accordance with applicable tax laws.
Default on any of the payments referred
to in this section by the Operator shall entitle the Concessionaire to rescind the agreement immediately without the need of a
court order, provided that the Concession is in force and that the right granted to the Operator to carry out the works and activities
in the Layback Zone as set out hereunder has not been suspended by competent authority for causes attributable to the Concessionaire
and/or its affiliates.
The consideration amounts indicated in
this section shall be payable even if and when this agreement has been rescinded or terminated for any reason, and therefore this
Section shall survive the termination of this agreement on the terms set out above, unless such rescission or termination
is for causes attributable to the Concessionaire, in which case the respective payment obligations shall be extinguished.
SECTION 3. TERM.
This agreement will be in force and effect
for 15 (fifteen) years from the date of fulfillment of the Condition Precedent in accordance with the provisions of Section 37,
unless otherwise agreed in writing between the Parties. The term of validity established herein may be extended as a result of
force majeure events as provided in Section 24 of this agreement.
Upon expiration of the term of this agreement,
the Operator, if it has legal access to the surface of the Layback Zone, consequently, it will be able to carry out, subject to
applicable regulations, operation closure activities that do not involve in any case mineral extraction.
As of the termination date of this agreement,
the unfulfilled obligations of the Parties will remain in effect in accordance with the terms of this agreement, including the
indemnification obligations of the Parties contained in this agreement.
SECTION 4. Quarterly
technical reports.
Commencing 6 (six) months following the
execution of this agreement, the Operator shall deliver to the Concessionaire every 3 (three) months a technical report which shall
contain the information that is listed in Annex 4 of this agreement, hereinafter the "Quarterly Technical Report". If
the information provided by the Operator in accordance with Annex 4 is insufficient or inadequate to enable the Concessionaire
to verify the Operator's compliance with Section 1 and Section 8 subsection (a), and / or for the calculation of taxes
and duties applicable to the exploitation of the Concession, the Operator and the Concessionaire shall meet in good faith and make
every reasonable effort to agree on amendments and / or include additional information so that such Annex 4 will meet the objectives
set forth in this paragraph.
The Operator will deliver the Quarterly
Technical Report to the Concessionaire within the first 5 (five) business days after the end of each quarter. During the pre-operational
stage, the Operator will provide only the information in Annex 4 that is applicable. Any question that the Concessionaire may have
regarding such report, in whole or in part, must be clarified by the Operator in writing within 10 (ten) business days after receiving
a written request from the Concessionaire. The Operator agrees to keep strict records to be able to determine, without any doubt,
the volumes and characteristics of the mineral coming from the Layback Zone, as well as the other information described in Annex
4, and to use all reasonable effort possible to clarify any doubts raised by the Concessionaire.
The Concessionaire will have the right
to object to the information provided by the Operator by means of a written notice addressed to the Operator, including specific
reasons for the objection and including any document that may be necessary to justify such objection, within a period of 30 (thirty)
calendar days from receipt by the Concessionaire of the Quarterly Technical Report. Likewise, the Concessionaire will have the
right, by means of a written notice sent no less than 48 hours in advance and within a schedule of 8:00 a.m. at 6:00 pm, to
audit the accounts and records of the Operator relating to the calculation of the Quarterly Technical Report in question, during
a period of 30 (thirty) calendar days after the Operator has received the notice making the respective objection.
If the audit determines that there has
been a difference of more than 5% (five percent) in the volumes and / or figures reported, the necessary adjustments will be made
in the accounts of the Operator and if such differences persist with respect to the information provided by the Operator and that
obtained by the Concessionaire, the issue will be decided by a third-party expert in the matter. For this, the Concessionaire will
propose three third-party experts with experience in the mining industry and in the determination and calculation of the matters
that are under objection. The Operator must select one from among them (hereinafter the "third-party expert"), within
5 (five) business days after receiving the list of experts from the Concessionaire. In the event that the Operator fails to select
the expert within the specified time period, the Concessionaire may select the third-party expert from the same list. The Operator
shall make reasonable efforts to give the third-party expert access to the information it requires to carry out its assignment
as soon as possible.
If the result of the third-party expert
falls between the results of any of the Parties, or coincides with either of the two, then the result of the third expert will
be considered as the final report. Otherwise, the result of the party closest to the third expert will be considered as the final
report.
The appointment of a third-party expert
cannot be accepted if that expert has a commercial relationship with either of the Parties, either as a representative or who has
performed a service related to this agreement.
The cost of the third-party expert will
be assumed by the Party whose result is furthest from the third-party expert’s result, and in case the result is within the
exact medium between the results of the Parties, then the cost shall be borne by the Parties in equal parts.
The reporting obligations set forth in
this section and in this document refer exclusively to the portion of the work related to the Camino Rojo Mining Project carried
out in the Layback Zone.
SECTION 5. RIGHT
TO INSPECTION VISITS
The Concessionaire shall have the right
to carry out inspection visits to review the work performed by the Operator in the Layback Zone, and to verify that it is complying
with the obligations set out in this agreement. The visits shall be carried out at its own expense and risk and shall comply with
industrial safety policies established by the Operator, in the company of the Operator's personnel, between the hours of 8:00 am
and 6:00 pm, and without obstructing in any manner the work of the Operator. For this purpose, the Concessionaire shall send written
notice to the General Manager of the Operator, 5 (five) business days prior to the scheduled date of the visit, indicating the
estimated time of the visit, which may also be carried out on the day and time mutually agreed upon by the Parties. The Operator
shall respond within a period of 2 (two) business days after receiving the request, and shall not refuse the visit without reasonable
cause. The Concessionaire shall have the right to visit once every 3 (three) months. The Operator shall cooperate and make every
reasonable effort to enable the Concessionaire to carry out during the visit all of its work and measurements to verify compliance
by the Operator of its obligations set out in this agreement. If reasonably necessary, the Operator shall allow the visit of the
Concessionaire to be extended so that it can complete its work, or shall allow the Concessionaire a new visit to complete its work
within the following 30 (thirty) days. For greater certainty, such new visit to complete the work and measurements shall not count
as a quarterly visit to which the Operator is entitled under this paragraph.
The Concessionaire shall indemnify the
Operator and any of its affiliates, employees, contractors and agents from any harm suffered either directly or indirectly by any
of them, which may be caused by the Concessionaire, its affiliates, employees, representatives and agents during any visit to the
Layback Zone.
SECTION 6. TAXES
and duties.
The Operator shall be responsible for the
payment of all amounts relating to taxes, tariffs and/or duties imposed or levied as a result of the exploitation and extraction
of minerals from the Layback Zone, including but not limited to the following or any replacement thereof (hereinafter referred
to as "Exploitation Taxes and Fees"):
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(i)
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The "extraordinary duty on mining" applicable to the production of precious metals extracted
from the Layback Zone;
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(ii)
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The "special duty on mining" payable on income derived from the extraction of minerals
from the Layback Zone; and
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(iii)
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Any other taxes or duties (federal, state or local) that may be imposed in the future by the Mexican
authorities with respect to any activity, process or product in the mining industry related to the exploitation and extraction
of mineral from the Layback Zone.
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While the tax authority is consulted as
mentioned hereinafter in Section 6, the Operator will directly make the payments corresponding to the Exploitation Taxes and
Fees before the respective public authorities.
The Operator shall provide the Concessionaire
with all necessary documentation to verify that the payments of the Exploitation Taxes and Fees have been made in a due and timely
manner, no later than 5 (five) business days after having made such payment. The Concessionaire may request additional information
thereof in writing, and the Operator must provide it as soon as possible using commercially reasonable efforts.
In the event that the Concessionaire is
judicially or administratively required by the competent authorities to pay the Exploitation Taxes and Fees, or by reason of any
legal provision or administrative act regarding breaches of obligations of the Operator established in this Section 6, the
Concessionaire shall give written notice to the Operator as soon as possible, and in any case within 5 (five) business days following
receipt of the respective notice including a copy of the notification and other documents received from the respective authority.
The Operator shall immediately and directly pay the required amounts directly to the respective authority, including interest and
penalties, as appropriate and if applicable, after such payment, it may oppose and submit to the corresponding authorities, with
copy to the Concessionaire, any judicial or administrative actions that may be applicable, keeping the Concessionaire informed
and copied of all and any such actions and communications.
If there is a breach of the obligations
of the Operator in accordance with this section, the Operator will pay the costs, expenses and damages that this causes to the
Concessionaire, which will be determined by the corresponding judicial authority.
Notwithstanding the foregoing, if the Operator
does not proceed to pay directly and within the respective terms to the competent authority the amounts due, then where the lack
of payment may cause the affectation or cancellation of the rights of the Concessionaire and the Concession, in such cases the
Concessionaire may make such payments directly to the respective authority, in order to avoid the commencement of any procedure
for the cancellation of the Concession, and the Operator shall be obliged to pay the expenses that this causes to the Concessionaire
within 10 (ten) business days after receiving the written notice from the Concessionaire attaching proof of such payments. To this
end, the Concessionaire must maintain constant communication with the Operator in order to coordinate such payment and avoid duplication
of the respective payments.
The ordinary mining duties relating to
the Concession, including the Layback Zone, will be paid directly by the Concessionaire, at no charge to the Operator for that
concept, and the Concessionaire shall provide a copy of such payments to the Operator within 10 (ten) business days following such
payments.
Any of the Parties may consult the tax
authority to confirm that the Operator shall be responsible for making directly before the respective public authorities the payments
of the Exploitation Taxes and Fees, as well as consulting the tax effect, for the Concessionaire that may be caused by receiving
the funds pursuant to subsection (b) of this section. If as a result of such consultation, or if the legislation, regulations
and / or tax criteria change during the term of this agreement so that the tax authority indicates that the Concessionaire should
be responsible for making such payments directly before the public authorities, the Parties shall execute an amendment agreement
to this agreement and/or carry out such additional actions within their possibilities, which are reasonable and necessary to give
full effect to the conclusions issued by the public authorities with respect to the consultation, and/or to adapt this section
to the changes in the legislation, regulations and/or tax criteria, keeping the agreement between the Parties that the Operator
is responsible for the Exploitation Taxes and Fees. In such case, the Parties will use reasonable commercial efforts to provide
for a clear and efficient structure in accordance with their respective legal, fiscal and regulatory requirements, and while the
amending agreement is executed and / or the additional actions mentioned in this paragraph are taken, the Parties will proceed
according to the following:
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(a)
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The Operator shall provide to the Concessionaire with the estimate of the amount of the Exploitation
Taxes and Fees to be paid, as well as all necessary documentation to make such payment in a due and timely manner, at least 30
(thirty) calendar days prior to the expiration date of the term for payment to the respective authority, as well as to use commercially
reasonable efforts to provide as soon as possible any additional information that the Concessionaire may request in writing;
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(b)
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The Operator shall transfer to the bank account of the Concessionaire or its affiliates (as agreed
between the Parties and as directed in writing by the Concessionaire), the funds necessary to cover the entire amount corresponding
to the payment of the Exploitation Taxes and Fees, at least 10 (ten) days prior to the expiration date of the term for their payment
to the respective authority; and the Concessionaire shall provide the Operator with a copy of the relevant receipts within (10) ten
business days following the respective payment;
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(c)
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The consideration payable to the Concessionaire under Section 2 of this agreement will be
increased by an amount equal to the amount that the Operator has transferred to the bank account of the Concessionaire or its affiliates
in accordance with the provisions of subsection (b) immediately above of this Section 6. In such case, the Concessionaire
will deliver to the Operator the invoices corresponding to the payment of this increase in the price of the consideration. The
invoices must comply with the requirements established by the tax regulations of the United Mexican States and be for the amounts
received in accordance with this Section.
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The taxes derived from the payments mentioned
in this section correspond to each of the Parties that cause such payment, in accordance with applicable tax laws.
SECTION 7. COMPLIANCE
WITH THE MINING ACT.
The Operator agrees to provide to the Concessionaire
the information that is necessary to keep the Concession in good standing and up to date in compliance with the obligations established
in the Mining Law and its Regulation, including but not limited to the following obligations of the Operator:
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(a)
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From the request of registration of this agreement in the Public Registry of Mining, the first
60 (sixty) calendar days of each year, it shall deliver the information of the Layback Zone that is necessary so that the Concessionaire
prepare the annual report of verification of works and activities conducted in the Concession, as follows:
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(i)
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Before the commencement of the sale of mineral extracted from the Layback Zone, copies of invoices
paid by the Operator and that have been effectively paid during the period to be verified, for investments made in the Layback
Zone under any of the headings set forth in Article 29 of the Mining Law. In addition, they must include a geo-referenced
plan with the description and location of the works and projects executed during the period to be verified.
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(ii)
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After commencement of the sale of mineral extracted from the Layback Zone, copies of invoices issued
by the Operator for the sale of such mineral or the liquidations of such mineral, whether in concentrate or beneficiated, issued
by the first hand buyer during the year to be verified. If in any of the years to be verified no sale of mineral extracted from
the Layback Zone has been made, the provisions of subsection (i) above shall apply.
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(b)
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Submit to the competent authority, the notice about commencement of beneficiation operations of
minerals from the Layback Zone, in accordance with the provisions of the Mining Law and its Regulation, within 21 (twenty-one)
business days after such commencement, and deliver a copy to the Concessionaire of such notice within 10 (ten) business days after
its submission.
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(c)
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During the first 15 (fifteen) business days of each year, the Operator must deliver to the Concessionaire
the official form of the Ministry of Economy duly filled in to comply with the statistical report on the production, beneficiation
and destination of the minerals or allowable substances extracted from the Layback Zone, with a geo-referenced map marking the
places of exploitation during the reporting period. The Concessionaire will use such form to present the "Statistical report
on the production, beneficiation and destination of the minerals or allowable substances" of the Concession to the General
Mining Directorate, and will deliver a copy to the Operator within the following 10 (ten) business days after submitting such report.
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(d)
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Provide the Concessionaire with information and a copy of the necessary documentation for the designation
of the certified engineer responsible for monitoring compliance with the safety regulations of the works and activities carried
out within the Layback Zone, and the changes of the designated engineer that may be made during the term of this agreement, within
10 (ten) business days following such designation or changes. The foregoing, in order to allow the Concessionaire to provide notice
to the General Mining Department and subsequently provide a copy of the notification to the Operator within 10 (ten) business days
following such event.
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(e)
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Cooperate with the Concessionaire by providing information of the Layback Zone necessary for the
preparation of statistical and accounting reports regarding the Concession, under the terms and conditions established in the Mining
Law and its Regulation.
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Each of the Parties agrees to collaborate
with the other Party in order to address and resolve any request that may be issued by any governmental authority in connection
with the performance of the obligations set forth in this section. The obligations of the Parties arising from this section shall
remain for 5 (five) years following the date of termination of this agreement for any reason.
In the event that the Concession is terminated
due to causes attributable to any of the Parties, including but not limited to the negligence or failure to comply with its obligations
in accordance with this agreement, the Party in breach shall pay any damages that this causes to the other Party, which shall be
determined by the relevant judicial authority.
SECTION 8. OBLIGATIONS
OF THE OPERATOR.
In addition to the other obligations set
forth in this agreement, the Operator shall have the following specific obligations:
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(a)
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During the term of this agreement, the Operator agrees not to explore, mine or carry out any activity
on the Concession outside the limits of the Layback Zone without prior written authorization of the Concessionaire, and this obligation
shall extend to its affiliates, contractors or any person receiving instructions from the Operator, considering the surface and
depth thereof to be as defined and indicated in Annex 2 herein.
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(b)
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Under no circumstances shall the Operator carry out activities or works in the Layback Zone that
would prevent or hinder the potential future development, exploration or exploitation of the sulfide minerals contained at greater
depth in such zone, including, but not limited to, placing in such area mineral leaching pads and / or deposits of residues from
its operations and / or any other type of material. Notwithstanding the foregoing, the activities or works in the Layback Zone
that are necessary for the development and exploitation of such area in accordance with the terms of this agreement shall not be
subject to the prohibition set forth in this paragraph.
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(c)
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The Operator is solely responsible for obtaining all necessary permits and authorizations to carry
out the subject matter of this agreement, and is solely responsible for compliance with its obligations thereof and the consequences
of any breach thereof.
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(d)
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Hold the Concessionaire free and safe from any claim presented by workers and contractors of the
Operator during any period, derived from the employer-worker relationship between them due to events that occurred during the term
and upon termination of this agreement.
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(e)
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The Operator agrees to duly comply with its obligations under this agreement and those arising
from relevant legal instruments, and shall demonstrate such compliance by providing payment receipts and any other documentation
that may be required within 5 (five) business days following receipt by the Operator of a reasonable written request from the Concessionaire.
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(f)
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The Operator has the exclusive right at all times to subcontract to third parties any works and
services necessary to explore, develop and mine the Layback Zone in accordance with the provisions of this agreement, subject to
compliance by the contractors with the corresponding obligations provided herein. Notwithstanding the foregoing, the Operator shall
be solely liable to the Concessionaire with regard to any and all obligations hereunder.
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(g)
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Under its strictest responsibility, immediately respond to the respective authorities of any claim
related to the Federal Labor Law; the Social Security Law; the Infonavit Legislation; the Fiscal or Tax Legislation or any other
legal provision in force in which the person or persons that will carry out for the Operator the mining exploitation and related
services are involved, since there shall be no individual work relationship or individual employment contract; legal subordination,
or any employer-employee relationship between the Concessionaire and the individual or individuals who will be responsible for
carrying out the mining exploitation in the Layback Zone, and therefore it is expressly provided that such individual or individuals
are workers at the service of the Operator and, therefor, the total wages or salaries, employment benefits and other benefits or
indemnities to which such individual or individuals are entitled, shall be the sole and exclusive responsibility of the Operator,
which shall be the only employer and the only party liable with regard to the aforementioned individual or individuals, given that
the Operator has its own sufficient resources to carry out the purpose of this agreement and to meet any labour obligations it
may have derived from the execution of this agreement.
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(h)
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Operate with the appropriate explosives permit.
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(i)
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It agrees to deposit any material or waste from the operation in the Layback Zone in reservoirs
and/or specific places previously authorized by the Ministry of the Environment and Natural Resources or other competent authority,
at its sole cost and expense, including but not limited to dumps, tailings dams and deposits of the waste from the leaching pads
or the Merrill-Crowe plant that the Operator establishes for such purposes; build and maintain such dumps, pads and waste deposits
and expand them, where applicable, in strict compliance with the laws and regulations in force, as well as applicable Official
Mexican Standards.
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(j)
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To comply with each and every commitment agreed with the communities of the area, in order to guarantee
operational continuity and respect for the community where the Layback Zone is located.
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(k)
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Any legal, administrative, fiscal, environmental, labour liabilities or of any other nature, derived
from acts or omissions made or incurred by the Operator in connection with the Operator’s rights and obligations with respect
to the Layback Zone, which arise after the date this agreement is signed shall be borne by the Operator, who shall be liable for
all legal consequences to the extent that they are attributable to the acts or omissions of the Operator.
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(l)
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To pay within the applicable legal timeframes the national waters extraction rights and discharges
and for occupation of national assets in charge of the National Water Commission, as provided in the Federal Law of Rights (“Ley
Federal de Derechos”) and agrees to provide to the Concessionaire the corresponding proof of payment, within 5 (five)
business days after the payment is made.
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SECTION 9. OBLIGATIONS
OF THE CONCESSIONAIRE.
The Concessionaire, in addition to the
other obligations set forth in the agreement, shall have the following obligations:
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(a)
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During the term of this agreement, the Concessionaire shall not impede, hinder or obstruct the
exploitation of the Layback Zone carried out by the Operator.
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(b)
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The Concessionaire agrees to, during the term of this agreement, not to encumber or limit in any
manner the portion of the Concession corresponding to the Layback Zone, nor the minerals located therein, nor enter into any agreement
with respect thereto, except with the Operator. Likewise, the Concessionaire agrees not to request to the authority the relinquishment
or reduction of the concession area exclusively with respect to the Layback Zone, in the understanding that with respect to the
rest of the Concession it will be free to fully exercise the rights afforded to it as a concessionaire by the Mining Act and its
Regulation.
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(c)
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The Concessionaire agrees, during the term of this agreement, to maintain the Concession in good
standing and up to date with payments and other applicable obligations with respect to mining duties and rights under the Mining
Act and its Regulation, and will inform the Operator of any notice received from any authority relating to the Concession, when
these may in any manner affect the Layback Zone and its operations, or the terms hereof. Notwithstanding the foregoing, there shall
be no breach by the Concessionaire of the obligations set forth in this section if the cause of such breach was a failure by the
Operator to comply with any obligation set forth in this agreement or negligence on the part of the Operator.
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(d)
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Use reasonable commercial efforts within the scope of its powers and exclusively in its capacity
as Concessionaire to collaborate with the Operator in the oppositions that may be applicable to the 2020 Concession Applications,
in obtaining environmental consents, authorizations, orders and approvals or of any other nature necessary and appropriate to enable
the execution of the mining operations in the Layback Zone under the terms hereof. In this regard, it is expressly provided that
the Concessionaire shall not be obligated to make any payment or incur any expense in the process of collaborating with the Operator
as set forth in this agreement, nor will it have the obligation to obtain such environmental consents, authorizations, orders and
approvals or of any other nature.
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(e)
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If under the Canadian standard identified as National Instrument 43-101 - Standards of Disclosure
for Mineral Projects of the Canadian Securities Administrators (or any instrument, standard or regulation that complements,
modifies or replaces it during the term of this agreement), the Operator must prepare and present to the regulatory authorities
of the Canadian capital markets technical reports or other information related to the resources and reserves in the Layback Zone
(hereinafter referred to as "NI-43101 Reports"), and for this the Operator requires information in addition to that provided
by the Concessionaire as of the date of this agreement, the Concessionaire shall allow representatives of the Operator access to
the information which is mentioned below, no more than 3 (three) times a year, in the understanding that it should be used exclusively
to comply with applicable legislation: (i) the drilling cores that the Concessionaire obtained from the Layback Zone and the
database of such drills, (ii) the permits obtained by the Concessionaire to carry out exploration work in the Layback Zone
prior to the signing of this agreement, and (iii) the information or reports delivered to the corresponding authority regarding
compliance with the obligations of the Concession pursuant to the Mining Act and its Regulation and that include information from
the Layback Zone. The Operator shall indemnify the Concessionaire and/or any of its affiliates, employees, contractors and agents
against any damage suffered by any of them directly or indirectly, arising from any visit by the Operator, its affiliates, employees,
representatives and agents to the Concessionaire's facilities to access such additional information. The Concessionaire shall in
good faith allow the Operator and its representatives access to the information herein before described, but shall not make any
warranty as to the accuracy of such information or its suitability for the Operator's and/or its representatives' purposes. The
Concessionaire shall have no obligation to make any payment or incur any expenditure, nor shall it have any involvement in or responsibility
for the preparation or presentation of any information or estimates, calculations or interpretations to be included in NI-43101
Reports or any liability with respect to the content of such reports, and therefore the Operator shall indemnify and hold harmless
the Concessionaire in the event of any claim by third parties against the Concessionaire for the content and/or use of such information
in the NI-43101 Reports. The information indicated in subsections (i) to (iii) of this paragraph is considered Confidential
Information and exclusive property of the Concessionaire, in accordance with the provisions of the Section 20 and Section 21
of this agreement, so prior to its publication in any NI-43101 Report, The Operator must make available to the Concessionaire those
parts of the NI-43101 Reports that refer to the Concessionaire and / or its affiliates, or that show Confidential Information of
the Concessionaire and / or its affiliates, with no less than ten (10) business days prior to the delivery of such reports
to the competent Canadian authority. If the Concessionaire does not submit any comment to the Operator within such ten (10) business
days, the report will be presented to the competent authority at the end of said period. Within such period of ten (10) business
days, the Concessionaire may make comments and / or request adjustments from the Operator regarding such parts of the NI43-101
Reports. The Operator will do everything possible to reflect the Concessionaire's comments, and will give good reasons for those
comments that are not adopted, with the understanding that the final decision regarding any change to be made to the NI-43101 Reports
will be at the discretion of the independent author (s) of the report (identified as "Qualified Person" or "QP"
under the NI-43101 standard).
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(f)
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The Concessionaire agrees to respond directly to the administrative and judicial authorities and
to address and pay any claim related to the Federal Labour Act; the Social Security Act; Infonavit Legislation; Fiscal or Tax Legislation
or any other legal provision in force that may be submitted against the Operator but that is related to the workers and employees
of the Concessionaire, given that there shall be no individual employment relationship; individual employment contract, legal subordination,
nor any employment-related rights whatsoever between the Operator and the Concessionaire and their respective employees, agents,
and contractors.
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(g)
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Cooperate with the Operator and its affiliates in good faith to meet any requirements that may
be imposed by creditors and other financing providers of the Operator under the financing agreements for the Camino Rojo Mining
Project, provided that such cooperation does not involve the need to make any payment or incur any expenditure, the rights and
obligations of the Concessionaire established in this agreement are not adversely affected and the requirements are in customary
market terms for this type of operations.
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SECTION 10.
ENVIRONMENTAL LIABILITY.
The Operator shall be liable in relation
to the operations carried out by the Operator in the Layback Zone for addressing compliance with environmental regulations, including
but not limited to, the General Ecological Balance and Environmental Protection Act, the General Act for the Prevention and Comprehensive
Management of Hazardous Waste, the General Sustainable Forestry Development Act, the National Waters Act, or any other legislation
related thereto and their regulatory provisions, as well as federal, state, and municipal environmental ordinances.
The Operator agrees to obtain the authorizations,
concessions, permits or licences from the Ministry of the Environment and Natural Resources (SEMARNAT), the National Water Commission
(CONAGUA) or any other competent federal authority, as well as from any state and municipal authorities as required, in accordance
with applicable legislation and regulations, in order to be able to mine the Layback Zone; likewise, the Operator agrees to comply
with each and every one of the conditions that any competent authority may impose, avoiding at all times damage due to contamination
of the soil, subsoil or groundwater or any other damage to the environment. The Operator shall respond directly to the administrative
and judicial authorities with respect to such compliance, whether it is questioned by the authorities themselves or by any other
individual or entity, or by the damages alleged by such individual or entity, either before the administrative or judicial authority,
even when it involves collective actions derived from the development and operation of the Camino Rojo Project.
Subject at all times to compliance with
the provisions of Section 15, the Operator shall be liable for any legal consequences arising from any claim, including remediation,
compensation, restoration or any other similar measure or the payment of penalties or fines or any other economic consequence and
shall maintain the Concessionaire harmless from any civil, criminal or administrative claim that may arise as a result of the activities
that are the subject-matter hereof, except in cases where such damage is the result of situations that are beyond the control of
the Operator, including Acts of God or force majeure, or which have not been caused by the Operator in the Layback Zone as a result
of the work done by the Operator or the breach of this agreement, circumstances which the Operator must present before the competent
environmental authority.
The Operator agrees to provide to the Concessionaire
copy of all of the environmental documents related to the Layback Zone submitted to SEMARNAT or other competent authority, including
the closing of permits, within 30 (thirty) business days after having submitted such documentation or requested the corresponding
permit, or having received notice from SEMARNAT or from the competent authority regarding the aforementioned documents or permits.
The Concessionaire declares that to the
best of its knowledge as of the date of execution of this agreement, no environmental impact, liability and/or contingency whatsoever
exists within the Layback Zone. That as of the date of execution of this agreement, the Concessionaire has only carried out exploration
and not mining activities in the Layback Zone, the only environmental impact that it has made and is not aware of any other type
of environmental impact, circumstances that are known and accepted by the Operator and that the Operator receives the Layback Zone
without any visible trace of exploitation or environmental contamination, and assumes from the date of this agreement, any environmental
liability and agrees to indemnify the Concessionaire from any civil, criminal or administrative claim against the Concessionaire
from the activities it carries out and those derived from the exploitation and development of the Camino Rojo Project.
To have greater clarity on the environmental
responsibility indicated in the immediately preceding paragraph, the Operator and the Concessionaire have carried out a joint visit
and inspection of the area comprising the Layback Zone, in order to identify the visual status of the area comprising the Layback
Zone. The Parties executed and agreed on minutes with the result of such visit.
SECTION 11. COMPLIANCE WITH LEGISLATION APPLICABLE TO THE CLOSURE OF MINING SITES.
The Operator agrees to perform all activities
required by applicable legislation and regulations, including environmental standards related to the closure of the mining unit,
as well as site remediation and restoration as required by the legal provisions or orders issued by a competent authority.
Likewise, the Operator agrees to indemnify
and hold harmless the Concessionaire for any administrative or judicial claim, whether of administrative, civil, commercial or
criminal nature, presented by third parties, whether individuals or companies, ejidos, communities or the general population, whether
from neighboring communities or not, or local, state or federal authorities, for the exploration or exploitation of the Layback
Zone that arises within 12 (twelve) years of the conclusion of the closure plan that has been approved by the Secretariat of the
Environment and Natural Resources (SEMARNAT) or competent environmental authority for the mining unit. The obligations established
in this section shall survive in the event of the occurrence of any of the causes for early termination or rescission established
in this agreement.
Likewise, the Operator agrees to fully
comply with the closure plan approved by the Ministry of the Environment and Natural Resources (SEMARNAT) or the competent environmental
authority for the mining unit and to obtain the release certificate from SEMARNAT. The Operator agrees to provide to the Concessionaire
the mine closure plan for the Layback Zone within 10 (ten) business days following receipt by the Operator of the approval of such
plan by SEMARNAT, and to provide a copy of any amendment or update to such plan within 30 (thirty) business days from the date
of such amendment or update.
SECTION 12. default interests
If the Operator does not duly pay in the
form required the amounts owed to the Concessionaire under in this agreement, it shall pay to the Concessionaire default interests
calculated on the unpaid amount(s), and until the same is (are) paid, at an annualized interest rate reviewable monthly, comprised
of 1.5 (one point five) times the sum of: (i) 5 (five) percentage points, plus (ii) the interest rate for deposits in
Dollars maturing in one month, in funds available on demand in the interbank market in London, England, published as ICE LIBOR
by ICE Benchmark Administration Limited, on the due date of such payments, or on the date of review of the interest rate if the
debt extends for more than 30 (thirty) calendar days.
If ICE LIBOR ceases to be published or
is not available, the reference rate that replaces such interest rate will be used for deposits in Dollars maturing in one month
in funds available on demand in the interbank market of London, England, or another alternative reference rate chosen by the Parties
that reasonably considers market practices for these deposits in Dollars.
Default Interests shall be calculated on
the basis of a year of 360 (three hundred and sixty) days and for the number of days actually elapsed. Accrued default interest
will be paid on the last business day of the corresponding calendar month, or on the date of payment of any portion of the amounts
due.
SECTION 13.
INDEMNITY BY THE OPERATOR
Notwithstanding the other terms of this
agreement, the Operator agrees to indemnify, defend and hold harmless the Concessionaire, its affiliates, shareholders, representatives,
officers and/or employees from any suit, claim, penalty, fine, damage and/or loss (including legal fees and expenses) that any
of them may sustain from omissions, negligence, acts or deeds attributable to the Operator and/or to its subsidiaries, and/or its
personnel and/or its contractors as a result of the development and operation activities in the Layback Zone and/or arising from
any failure by the Operator to comply with its obligations hereunder, and / or if the representations and warranties of the Operator
contained in this agreement are materially incomplete, false or inaccurate.
SECTION 14. INDEMNITY BY THE CONCESSIONAIRE
The Concessionaire agrees to indemnify,
defend and hold harmless the Operator, its affiliates, shareholders, representatives, officers and/or employees from any suit,
claim, penalty, fine, damage and/or loss (including legal fees and expenses) that any of them may sustain as follows:
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(a)
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If the Concession is cancelled for causes attributable to the Concessionaire, including but not
limited to the Concessionaire's negligence or failure to comply with its obligations under Section 9 of this agreement;
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(b)
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If there is a valid prior claim by a third party, or the existence of a better right, in relation
to the rights that this agreement grants to the Operator;
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(c)
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If there is any claim related to the Federal Labour Act; the Social Security Act; the Infonavit
Legislation; Fiscal or Tax Legislation or any other legal provision in force related to any claim filed against the Operator by
the Concessionaire's workers and contractors as a result of events occurring during the term of this agreement (or prior to it)
in accordance with Section 9, paragraph f);
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(d)
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If the authorities require the Operator to pay taxes or duties or any other matter, whether in
favor of the state or third parties, corresponding to the area of the Concession which is outside of the Layback Zone and which
according to this agreement is the responsibility of the Concessionaire; and
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(e)
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If the representations and warranties of the Concessionaire contained herein are materially incomplete,
false or inaccurate.
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The maximum liability of the Concessionaire
shall not exceed the value of the amounts paid by the Operator under Section 2 of this agreement.
SECTION 15.
LIABILITY PROCEDURE
The following provisions shall apply to
both Parties in the event of any request for payment or claim of alleged responsibility (hereinafter a "Claim") asserted
only by third parties either by, among others, any governmental or regulatory body or any tax or environmental authority, whether
such Claim is made directly to any of the Parties or indirectly through another Party, in the understanding that the procedure
established in this section is not applicable to payment obligations by the Operator:
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(a)
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If any person, entity or body submits a Claim to one of the Parties relating to the Layback Zone
regarding the breach of obligations of the other Party provided in this agreement, the Party that received the Claim (hereinafter
for the purposes of this section, the “Non-Responsible Party”) shall give prompt and timely notice in writing to the
other Party (hereinafter for the purposes of this section, the "Responsible Party") of such Claim as soon as possible
after becoming aware of it or receiving such notice, including a copy of the communication or notice received as well as any other
material or document or communication relating thereto. It is understood that if the Non Responsible Party fails to provide such
written notice to the Responsible Party in order for it to be able to adequately take such pertinent actions to resolve or mitigate
any damage caused or safeguard the corresponding means of defense, the Non-Responsible Party may respond directly to the request,
or, where appropriate, present the actions or challenges that deems appropriate, in order to safeguard the defense actions available
to the Responsible Party, and in such case it shall give a copy of the actions taken to the Responsible Party as soon as reasonably
possible. Notwithstanding what is stated in this paragraph (a), the obligations of the Responsible Party established in this agreement
will remain in force and will not be diminished or extinguished by the action or non-action of the Non-Responsible Party, and in
the event that the delay of the Non-Responsible Party in the notice to the Responsible Party increases the claim amount, the Non-Responsible
Party will be responsible for such increase only in the event of negligence or willful misconduct.
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(b)
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If the Claim is received directly by the Responsible Party, whether from competent authorities
or from any other person, the Responsible Party shall give prompt and timely written notice to the Non-Responsible Party of such
Claim, and such notice shall include a copy of the communication or notice, as well as any other material or document or communication
relating thereto;
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(c)
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If the Claim relates to any alleged liability of the Responsible Party to any other person including,
but not limited to, any governmental or regulatory body or any tax authority, in relation to mining rights, including without limitation
Exploitation Taxes and Fees, or where failure to pay or action may cause the impairment or cancellation of the rights of the Concessionaire
or the Concession, or that it is of such a nature that by applicable law payment must be made before the relevant procedure to
challenge the existence or amount of the alleged liability can be implemented or completed, the Responsible Party shall proceed
to make such payment directly or take the necessary action within the time frame required to do so and after such payment, will
present and shall continue its respective legal challenge or appeal process;
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(d)
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For greater certainty, the Responsible Party shall pay directly to the respective authority or
party the required amounts, including interest and penalties if applicable, and once the payment has been made, it may oppose or
defend the Claim made against it and submit, with a copy to the Non Responsible Party, those judicial and administrative remedies
that are appropriate or convenient, keeping the Non Responsible Party informed at all times, all at the expense and exclusive cost
of the Responsible Party.
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(e)
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The Non Responsible Party shall cooperate fully and make available to the Responsible Party all
relevant information and documentation that is necessary for the Responsible Party to carry out its defense. Notwithstanding the
foregoing, if the Concessionaire is the Non-Responsible Party, it will only cooperate and make available to the Responsible Party
that information and documentation that is exclusively related to its status as Concessionaire and is necessary for the Operator
to exercise its legal defense.
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(f)
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If the Non Responsible Party is also named as a party to any proceeding and is legally required
to be a party thereto, the Non-Responsible Party shall have the right to retain counsel to advise it with respect to such challenge
and the reasonable expenses and costs thereof shall be borne by the Responsible Party.
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(g)
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Unless the interests of the Responsible Party and the Non-Responsible Party with respect to such
Claim are adverse, the Responsible Party shall (i) keep the Non-Responsible Party and its attorney reasonably informed, (ii) to
the extent reasonably practicable, give the Non-Responsible Party and its attorney the opportunity to review and comment in advance
on all written communications and submissions relevant to the Claim; and (iii) consider in good faith any reasonable suggestions
made by the Non Responsible Party or its counsel or the request of the Concessionaire and its counsel to submit documentation or
to attend those parts of any meeting and proceeding relating to the Claim, provided that the foregoing cannot be deemed to represent
a waiver of any legal privilege under applicable legislation.
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SECTION 16. Limitation
OF LIABILITY
None of the Parties will be responsible
for amounts that exceed the actual damages suffered by such Party. The Parties waive any right to recover punitive, special, exemplary,
indirect, incidental, and consequential damages or for any loss of profits or loss of earnings, or amounts covered under an insurance
policy.
The Parties shall be liable to each other
for actual and effective damages suffered directly by such Party following compliance with the process set out in the previous
section and provided that a final judicial determination has been obtained from the relevant authority, which is no longer appealable,
in which case, any costs or expenses directly incurred by the Non-Responsible Party in the resolution of such Claim or the conduct
of any legal, administrative or other proceeding shall be paid and/or reimbursed as appropriate by the Responsible Party to the
Non-Responsible Party.
Neither Party shall be indemnified by the
other Party to the extent that such Party has received payment of a Claim from another source, including insurance. If a Party
makes a payment for a Claim and after such payment is made, the other Party subsequently receives a payment from another source,
including insurance, with respect to such Claim, that Party shall promptly reimburse the amount paid to the Party that initially
made the payment.
Section 17. RESCISSION
FOR BREACH.
The Parties may rescind this agreement
without the need of a court order for breach of obligations by the other Party in the following cases:
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(a)
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This agreement may be rescinded by the Concessionaire:
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(i)
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for failure to make of any of the payments set out in Section 2 of this Agreement to be made
by the Operator or for lack of payment from the Operator to any affiliate of the Concessionaire, provided that the Concession is
in good standing and the rights granted to the Operator under this agreement to carry out the works and activities in the Layback
Zone are not suspended by the competent authority for reasons attributable exclusively to the Concessionaire and/or its affiliates;
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(ii)
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if the Operator exploit and/or performs any unauthorized activity outside the borders of the Layback Zone, considering the
surface and depth thereof to be as defined in Annex 2 of this agreement;
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(iii)
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if the representations and warranties of the Operator contained herein are materially incomplete,
false or inaccurate;
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(iv)
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when, due to causes attributable to the Operator and/or its affiliates, the Concession is cancelled;
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(v)
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when, for reasons attributable to the Operator and/or its affiliates, the Camino Rojo Tit 230914
concession and/or the mining concession that grants the exploitation rights of the Camino Rojo Project is cancelled;
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(vi)
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if due to breach by the Operator of any contracts and / or agreements entered into with the Concessionaire
or its affiliates, any such agreements is rescinded;
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(vii)
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when the Operator enters into a process of creditors’ rights, insolvency, reorganization
or liquidation process, legal dissolution declared or such events are declared by a competent judge according to the applicable
law.
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(b)
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This agreement may be rescinded by the Operator:
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(i)
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if the Concession is cancelled for causes attributable exclusively to the Concessionaire and/or
its affiliates;
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(ii)
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if the right granted to the Operator under this agreement to carry out works and activities in
the Layback Zone is suspended by the competent authority for causes attributable exclusively to Reyna and / or its affiliates;
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(iii)
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if the representations and warranties of the Concessionaire contained herein are materially incomplete,
false or inaccurate;
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(iv)
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if due to breach by the Concessionaire of any contracts and / or agreements entered into with the
Operator or its affiliates, any such agreements is rescinded;
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(v)
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when the Concessionaire enters into a process of creditors’ rights, insolvency, reorganization
or liquidation process, legal dissolution declared or such events are declared by a competent judge according to the applicable
law.
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Notwithstanding the provisions of paragraph
(b) subsection (ii) of this Section, the Operator may not terminate this agreement if the suspension of operations and
works in the Layback Zone by the competent authority: (1) is temporary and does not extend for more than 30 days; or (2) it
is partial, that is, it only affects some of the operations and works and does not materially affect the extraction of ore from
the Layback Zone.
In the event of breach of obligations other
than those mentioned in paragraphs a) and b) of this section, and established hereunder, the non-breaching Party shall give written
notice to the other Party, indicating the breach incurred by the other Party. The breaching Party will have 60 (sixty) calendar
days to comply with its obligations (except for the payment obligations of the Operator, which must be fulfilled immediately).
If the breach is not cured with such period, the non-breaching Party may rescind this agreement at any time. The Party alleging
non-compliance may request to the competent jurisdictional authority to terminate this agreement and, where appropriate, to determine
and quantify damages caused.
SECTION 18.
METHODS OF TERMINATING THE AGREEMENT.
This agreement shall be deemed terminated,
and have no force or legal effect whatsoever, without the need for legal action, in the following circumstances:
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(a)
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Upon the expiry of the term set forth in Section 3 of this agreement.
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(b)
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By mutual written agreement between the Parties.
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(c)
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Upon rescission by either Party in accordance with Section 17 above.
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(d)
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The Operator may early terminate the agreement to suit its interests, by sending written notice
to the Concessionaire, delivered at least 90 (ninety) calendar days prior to the date it wishes to terminate the agreement.
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(e)
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In the event that the Condition Precedent is not met within the six months following the execution
of this agreement as established in Section 37.
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Except for the termination of this agreement
pursuant to subsection e) above, the Operator may only terminate this agreement early once the total consideration set forth in
Section 2 and the Exploitation Taxes and Fees accrued have been paid in its entirety, provided that the Concession has not
been cancelled and/or the right to carry out the works and activities granted to the Operator under this agreement is not suspended
by competent authority for reasons attributable to the Concessionaire and/or its affiliates.
SECTION 19. PROCEDURE IN CASE OF TERMINATION
In the event of termination of this agreement,
except for the termination of this agreement pursuant to section 18, subsection e) above, the Parties shall proceed as follows:
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(a)
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The Operator is obliged to abandon and leave the Layback Zone, free of any impediment or obstacle
that hinders the potential development, exploration or future exploitation of the sulfide minerals contained at greater depth in
such zone, including, but not limited to, equipment, machinery, works and constructions of a permanent or temporary nature, waste
deposits or any other type of material within 60 (sixty) calendar days following the termination of this agreement;
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(b)
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The Operator shall hand over the Layback Zone free of any encumbrance or limitation of ownership,
up to date in the performance of works or mining activities and without labour, fiscal or civil liabilities of any kind, within
45 (forty-five) business days following the date of termination of the agreement, by means of a document drawn up and signed by
the Parties as proof thereof.
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(c)
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Prior to the date of termination, the Operator shall have paid the Concessionaire the full amount
of the consideration set out in Section 2, as well as any outstanding amounts of the Exploitation Taxes and Fees and other
obligations of the Operator established in this agreement, that may have been caused prior to the termination date of this agreement.
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(d)
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Prior to the termination date, the Operator also agrees to deliver to the Concessionaire, a true
copy of the studies and exploration works that have been carried out in the Layback Zone. Also, the Operator shall provide the
Concessionaire with all information corresponding to the year in which the termination occurs and the calendar year prior to such
date, which is necessary to maintain the Concession in force and up to date in the compliance of obligations established in the
Mining Act and its Regulations, and those established in Section 7 of this agreement.
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(e)
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Once the obligations listed in the foregoing points a), b), c) and d) have been met, the Parties
shall appear before the Notary Public in Mexico City of the Concessionaire’s choosing, in order to grant or, where applicable,
ratify the legal document terminating this Exploitation Agreement. The notarial and registration expenses incurred as a result
of granting or notarizing the aforementioned agreement shall be borne by the Operator.
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SECTION 20. OWNERSHIP AND USE OF INFORMATION
All information acquired or developed by
the Operator and its agents as part of the Camino Rojo Mining Project, whether or not arising from the Layback Zone, as well as
all of the drafts and final versions of any drawing, design, engineering or other drawings, models, records, reports, notes, studies,
manuals, materials and documents and other information developed or obtained during or by reason of the mining operations conducted
in the aforementioned zone by the Operator and its agents, except Confidential Information regarding the Layback Zone that has
been provided by the Concessionaire, shall be the exclusive property of the Operator and shall be considered part of the Confidential
Information of the Operator. The Operator shall share with the Concessionaire all information submitted to the competent authorities,
as well as all necessary information for the purpose of future development of the sulfide minerals located deeper in the Concession,
and for the fulfillment of the obligations of the Concessionaire under applicable laws, which is expressly consented by the Operator.
All information acquired or developed before
the date of this agreement by the Concessionaire and its agents arising from the Concession, including the Layback Zone, and the
information developed or obtained during the term of this agreement by the Concessionaire and its agents related to their exploration
work and any other activity carried out in the Concession, excluding the Layback Zone, will be the exclusive property of the Concessionaire
and will be considered as part of the Concessionaire's Confidential Information of the Concessionaire. The Concessionaire will
not have the obligation to share such information with the Operator except in the cases expressly provided in this agreement.
In the event of termination of this agreement,
the Operator will make its Confidential Information related to the Layback Zone available to the Concessionaire so that it can
comply with its obligations under applicable laws, as well as for the future development of the sulphide minerals located deeper
in the Concession, which includes, among others, the performance of due diligence processes by third parties which must be subject
to confidentiality obligations similar to those contained in this agreement. Notwithstanding the foregoing, in the event of termination
of this agreement for causes attributable to the Concessionaire, the Operator will make its Confidential Information related to
the Layback Zone available to the Concessionaire, only so that the Concessionaire can comply with its obligations under the applicable
laws.
In any case, any information shared between
the Parties under this clause will be used by the receiving Party at its sole risk, and as a result, the Party that received the
information will indemnify and hold harmless the other Party in case of any third-party claim for the content and / or use of such
information.
SECTION 21. CONFIDENTIALITY
The Parties and their respective subsidiaries
or personnel agree to treat as confidential and maintain absolute secrecy regarding any verbal or written confidential information,
directly or indirectly related to the purpose hereof, and agrees not to reveal, disclose, or deliver such information to third
parties unrelated to the Parties. The Parties agree to take the necessary measures to ensure that persons handling the confidential
information provided to them in connection with or as a result of this agreement, do not disclose such information, and that third
parties unrelated to the Parties do not have access to such information in order to safeguard the confidentiality of such information.
For purposes hereof, Confidential Information
shall mean all information in the possession of either Party, or which they have access to, or is known by them related to this
agreement, including but not limited to the following: engineering, administrative, financial and business information, reports,
plans, projections, trade secrets (such secrets understood as any information of industrial or commercial application stored by
any of the Parties of any confidential nature, which may allow any of the Parties to obtain or maintain a competitive or economic
advantage over third parties while performing economic activities), drilling and blasting advances or outcomes, as well as any
geological, geochemical, geophysical and relating to titles, economic, legal, accounting, contractual, commercial, technical, quantitative
and qualitative formulas, manufacturing methods, analytical techniques, records, reports, diamond drilling mapping, analyses, calculations,
reviews, maps, charts, documents, as well as the analysis of working documents, compilations, comparisons and studies, and other
documents containing or reflecting such information, and any other written, oral, or drawn information in documents, electronic
or magnetic media, microfilms, films, pictures or any other means which the Parties receive from one another under or in respect
of this agreement. It is expressly acknowledged that Confidential Information shall be considered in its broadest sense, regardless
of whether it has been expressly classified as confidential or not, such that the Parties’ rights, property and ownership
regarding the Confidential Information is protected in the broadest sense, while guaranteeing absolute discretion and confidentiality.
Each Party acknowledges and agrees that
the other Party’s Confidential Information is a commercial and/or industrial secret, is its private property, so that failure
to comply with the confidentiality obligation with respect to Confidential Information causes irreparable harm to it.
The Parties agree to immediately communicate
to the Party that is the owner of the Confidential Information any circumstance that may affect its confidentiality, so that the
owner of such information may take the measures it deems appropriate.
If Confidential Information becomes known
to third parties through fraud, negligence or bad faith attributable to either Party and/or its personnel, such Party shall be
liable for any damages caused to the other Party in accordance with the legal liabilities and penalties established by the United
Mexican States legislation the in effect, including but not limited to trade and/or commercial secrets considered herein and in
the applicable legislation.
The obligation of confidentiality provided
hereunder shall survive even after the termination date of this agreement for any reason.
The following are exempt from the obligation
of confidentiality herein agreed:
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(a)
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Any information that was part of the public domain at the time of delivery to either Party.
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(b)
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Any information that becomes part of the public domain, except as a result of a breach hereof by
either Party.
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(c)
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Any information that, without breaching this agreement, is in the possession of the other Party
at the time it is received and such can be reliably proven.
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(d)
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Information provided by a third party to either Party, provided that such third party has no obligation
of confidentiality towards any of the Parties.
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(e)
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Information independently developed by either Party and/or any of its subsidiaries, without having
knowledge of the Confidential Information of the other Party.
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(f)
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Information required by creditors, financial institutions, and financiers of any of the Parties
and / or any of their affiliates, including copies of this agreement, as long as it is in market terms and customary in the financings
of this type of activity by creditors, financial institutions and financiers of any of the Parties and / or any of their affiliates
which shall be subject to obligations of confidentiality by such parties.
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(g)
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In the event that any Party receives a request from a competent authority to disclose Confidential
Information referred to in this section, the Party shall give notice to the affected Party immediately so that the affected Party
may take such measures it deems appropriate. In this case, the Party that is legally required to disclose shall not be held liable
for breach of confidentiality.
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For purposes of this section, the term
Party or Parties includes any member of the board of directors or sole director, or any officer, executive, representative, trustee
or agent, employee, worker, shareholder, member of the board of creditors or other board, any advisor, funding source, consultant,
and/or any of its subsidiaries, ensuring that none of these persons shall use such information in any manner for their own benefit
or for the benefit of third parties.
If pursuant to securities legislation and/or
stock exchange regulations, any Party shall be obligated to disclose from time to time information related to the terms hereof,
such information may be disclosed provided that the text of any public notice or statement, including press releases that either
Party intends to release, is made available to the other Party prior to its publication and its approval is obtained in writing,
which shall not be denied without justification and delivered within a period of three (3) business days from the date it
received the text of the intended communication. For greater certainty, any other information related to the Camino Rojo Mining
Project, to the Camino Rojo Tit concession. 230914 and the production information regarding the Layback Zone, shall not require
prior approval by the Parties for disclosure, which shall be made solely at the discretion of the Operator and its affiliates.
For greater certainty, the Parties agree and confirm that in accordance with the securities legislation and / or rules of
the stock exchange applicable to the Operator and its affiliates, this agreement must be publicly disclosed through its registration
in the Canadian system called Electronic Document Analysis and Retrieval (SEDAR).
SECTION 22. TRANSFER OF RIGHTS AND OBLIGATIONS. GUARANTEES
The Parties expressly agree that this agreement
and the obligations arising hereof can not be transferred, or encumbered, in whole or in part, without the other Parties’
prior written consent, and any assignment, transfer or encumbrance made in contravention hereof shall be null and void and have
no legal force and effect.
Notwithstanding the foregoing, the Parties
hereby agree that each of them may assign or transfer, in whole or in part, to a subsidiary or legal entity member of the same
investment group to which it belongs with the same level of solvency, this agreement or the rights and obligations arising from
it, subject only to written notice to the other Party within 15 (fifteen) business days prior to the assignment, alienation or
transfer, provided that this agreement and the rights and obligations of any of the Parties are not adversely affected, with the
assigning Party agreeing to cause the assignee or the acquirer to comply with the terms and conditions of this agreement.
The Parties agree that the Operator may
assign and pledge this agreement or grant liens as applicable on the rights stipulated under this agreement, in whole or in part,
to its financing providers as required by them, provided that (i) the rights and obligations of the Concessionaire are not
adversely affected (ii) such financing is on market terms and in compliance with applicable anti-corruption laws, including
the Corruption of Foreign Public Officials Act (Canada), the Foreign Corrupt Practices Act (United States), and any other
applicable law, and to finance the Camino Rojo project, (iii) the assignee expressly accepts and adheres to the terms and
conditions of this agreement and (iv) the Concessionaire receives written notice within 5 (five) business days prior to the
assignment or grant by the Operator. In the event of non-compliance with the terms hereof, the assignment or grant by the Operator
will not be valid and will be legally null and void.
For greater certainty, the Parties agree
that the Operator may assign and give as collateral the rights and benefits derived from this agreement or grant liens relevant
to the rights established in this agreement, in whole or in part, (a) to the Finance Parties as such term is defined in, and
in accordance with, the loan agreement dated December 18, 2019 entered into among Orla Mining Ltd., as borrower, GLAS Americas
LLC, as collateral agent, and GLAS USA LLC, as administrative agent (as such agreement may be amended, supplemented, restated,
replaced, or otherwise modified from time to time, the “Loan Agreement”) and (b) in connection with any refinancing,
refunding or replacement of the Loan Agreement. The foregoing, provided that (i) the rights and obligations of the Concessionaire
are not adversely affected, (ii) the transferee expressly accepts and adheres to the terms and conditions of this agreement,
and (iii) the Concessionaire receives written notice within 10 (ten) business days after the assignment or grant by the Operator.
If there is non-compliance with the provisions of this paragraph, the assignment or grant by the Operator will not be valid and
will be legally null and void.
SECTION 23. CIVIL LIABILITY INSURANCE
The Operator agrees to deliver to the Concessionaire,
within a period of 10 (ten) calendar days from the commencement of the term of this agreement, and in each anniversary year of
this agreement, any certificates or documents proving that civil liability insurance has been contracted in the amount of not less
than US $1,000,000.00 (one million dollars 00/100 legal currency of the United States of America), in which the Concessionaire
shall be named as an additional beneficiary (“additional insured”) in the event of any risk affecting the assets
of the Concessionaire, which shall remain in force for the term of this agreement.
The insurance described in the preceding
paragraph shall cover damages in favor of the Concessionaire and third-party indemnification arising from the performance of this
agreement.
In the event that the policy does not cover
the total amount of the payment of damages and indemnification to third parties affected by the performance of works under this
agreement, the Operator agrees to pay the difference between the damage caused and the amount covered by the insurance policy.
If the Operator fails to pay this amount, the Concessionaire shall pay the corresponding amount and the Operator will be obliged
to reimburse the Concessionaire for any difference that may result, within 5 (five) business days.
The Operator agrees to process any adjustments
to the insurance policy that it has undertaken to deliver under the terms of this agreement.
Under no circumstances shall the Operator
be released from the delivery of the insurance policy referred to in this Section.
SECTION 24. ACTS OF GOD AND FORCE MAJEURE
For purposes of this agreement, acts of
God or of force majeure shall mean those inevitably affecting the ability of any Party to fulfill its obligations, including but
not limited to floods, pandemics, epidemics, national and international health emergencies, fires, explosions, wars, revolutions,
acts of sabotage and vandalism, strikes, acts of terrorism, government restrictions and orders, all established as such in accordance
with the procedures prescribed by applicable laws (hereinafter, a “Force Majeure Event”). In such cases, each Party
shall be exempt from fulfilling its obligations hereunder, that are affected by a Force Majeure Event for more than 30 days. If
the Force Majeure Event lasts more than 30 (thirty) days, the Parties must meet to, in good faith, agree on the adjustments that
may be necessary to the provisions of this agreement, including the extension or deferral of timeframes and / or the term of this
agreement, executing the corresponding amendment to this agreement, in the understanding that the term of this agreement will be
extended for the total term or terms that the Force Majeure Event(s) last that affect the performance of works and activities
in the Layback Zone during the term hereof. In no case will the payment obligations of the Parties or the obligations to keep the
Guachichil D1 Tit. 245418 and Camino Rojo Tit. 230914 in good standing will be excused due to Force Majeure Events.
If the above-mentioned assumptions occur,
the Party affected by Force Majeure Events shall notify the other Party within a period not exceeding 5 (five) business days after
it becomes aware of such Force Majeure Event, its existence and start date, as well as an estimate of its duration and proposed
mitigation measures.
If the causes of the suspension have ceased,
the Party concerned shall notify, in writing and without delay, the other Party in order to resume the obligations under this agreement.
SECTION 25.
DOMICILE OF THE PARTIES
All notices to be given between the Parties
shall be sent by letter with acknowledgement of receipt, by email with digital signature or any other reliable means, to the following
addresses:
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(a)
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To the Operator:
<contact information redacted>
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(b)
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To the Concessionaire:
<contact information redacted>
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In the event that any Party changes its
address, such Party shall notify the other Party or Parties in writing within fifteen (15) calendar days; otherwise, the notice
will be deemed to have been served to the address that appears in the representations hereof.
SECTION 26. annexeS.
The Parties agree that the Annexes to this
agreement are as follows:
Annex 1. Concession
Title Guachichil D1 T.- 245418.
Annex 2. Plan and section
views with the dimensions of the Layback Zone
Annex 3. Concession
Title Camino Rojo T.- 230914.
Annex 4. Quarterly
Technical Report.
Annex 5. Minutes of
the Environmental Inspection Visit.
SECTION 27. APPLICABLE LAW AND JURISDICTION
The applicable law for interpreting this
agreement shall be the federal legislation in force in the United Mexican States.
In the event of a claim, disagreement or
dispute regarding, arising from or in relation to the validity, interpretation, violation, breach or performance of this agreement,
the Parties shall use best efforts to resolve such dispute as soon as possible, amicably and in good faith within thirty (30) calendar
days of the date of the claim, disagreement or dispute arose.
If an agreement cannot be reached regarding
the corresponding claim, disagreement or dispute, it shall be submitted for final decision to the jurisdiction of the competent
Courts located in Mexico City, the Parties renouncing any jurisdiction that may correspond to them for any reason.
SECTION 28. ANTI-CORRUPTION
The execution of this agreement implies
taking cognizance of and agreeing to comply with the following policy of the Concessionaire and its affiliates:
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(a)
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The Concessionaire has a zero-tolerance policy with respect to corruption and bribery in any form.
This includes: (a) active bribery: offering, promising, or providing a financial or in-kind benefit to another person in order
to obtain or retain business or a benefit; (b) passive bribery: accepting, soliciting, or implying a financial or in-kind
benefit in exchange for the improper performance of a relevant role or activity.
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(b)
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It is the Concessionaire’s policy not to allow facilitation payments, understood as payments
to accelerate a routine process to which it is entitled, for example, the expediting of government procedures, customs procedures, etc.
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(c)
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The Concessionaire does not approve or give in any manner consent to its advisors, agents, contractors,
suppliers or strategic partners to directly or indirectly engage in corruption or bribery activities, or facilitation payments
for its own benefit.
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(d)
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Any party contracting with the Concessionaire shall keep a reasonable accounting system and record
to clearly identify the costs incurred on their behalf and on the use of financial or material resources for this purpose, giving
the Concessionaire the right to examine such information, with five business days constituting sufficient notice from the Concessionaire.
Furthermore, the Party contracting with the Concessionaire shall keep the above-mentioned information on file for a period of not
less than five years.
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(e)
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In the event that the Concessionaire becomes aware—or even has reasonable evidence—that
any of its advisors, agents, contractors, suppliers or partners has engaged in or will engage in any of the aforementioned activities,
it reserves the right to review and/or terminate the business relationship with its counterparty.
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(f)
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If the Operator outsources goods or services relating to the Concessionaire, the Operator shall
ensure that the third-party provider of goods or services acknowledges and complies with these policies.
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SECTION 29. EXCLUSIVITY
The rights granted to the Operator in respect
of the Layback Zone are exclusively in favour of the Operator, and the Concessionaire may not independently, directly, or through
related entities or third parties, carry out mining operations in the Layback Zone or grant rights hereunder.
SECTION 30. ACTIVITIES OUTSIDE THE LAYBACK ZONE
The Parties declare that this agreement
does not in any way restrict the ability of each of them to carry out (directly or through third parties, individually or jointly
with others) activities and business in Mexico outside of the Layback Zone or abroad, including with respect to activities and
business that directly compete with the Concessionaire and/or the Operator. Notwithstanding the foregoing, the Operator shall be
restricted from conducting such activities or business (directly or through third parties, individually or jointly with others),
in locations outside the Layback Zone that are within the Concession or any mining concession owned by Reyna and/or any of its
affiliates, as provided under this agreement.
SECTION 31. SURVIVAL OF CERTAIN PROVISIONS
Notwithstanding the termination of this
agreement by any of the Parties or for any reason, the following Sections shall survive such termination and will remain in force
in relation to any other matter related to this agreement or arising from, in relation to, or in connection with this agreement:
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Section 2 – Consideration
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Section 7 – Compliance with
the Mining Act
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·
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Section 10 – Environmental
Liability
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·
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Section 11 - Compliance with Legislation
Applicable to the Closure of the Mining Sites
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·
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Section 13 – Compensation of
the Operator
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·
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Section 14 - Compensation of the
Concessionaire
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·
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Section 15 - Procedure in case of
liability
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·
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Section 19 – Procedure in Case
of Early Termination
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·
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Section 21 – Confidentiality
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·
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Section 25 - Domicile of the Parties
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·
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Section 27 – Applicable Legislation
and Jurisdiction
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Any termination of this agreement shall
be without prejudice to the rights, duties and obligations which have accrued prior to the termination thereof and, notwithstanding
such termination, the provisions of this agreement that are reasonably necessary for the full compliance and performance of such
rights, duties and obligations shall also survive such termination for such period as may be necessary.
SECTION 32. SEVERABILITY
The provisions contained in this agreement
are separate and severable from each other such that if any part or any provision or fragment thereof is held to be inapplicable
or unenforceable in any jurisdiction, then the rest of the agreement shall remain binding upon and enforceable by the Parties in
that jurisdiction and shall be construed as if the agreement had been executed without such provision or inapplicable or unenforceable
part, to the extent that the provision or separate part does not significantly and adversely affect the rest of the agreement.
SECTION 33. SUCCESSORS
This agreement shall be binding upon the
Parties, their assignees or transferees.
SECTION 34. Originals
This agreement has been executed in four
original copies, two held by the Operator of which one will be submitted to the Mining Registry and two held by the Concessionaire,
with the same legal force and effect, with each being considered an original and collectively constituting one instrument. To prove
this agreement, it shall not be necessary to produce or account for more than one original copy.
SECTION 35. GOOD FAITH.
The Parties to this agreement agree to
act in good faith in all matters relating hereto.
SECTION 36. AMENDMENTS
This agreement may not be modified or supplemented
except by means of a written instrument signed by all Parties. Any purported amendment, modification or supplement to this agreement
that is not in writing and signed by the Parties shall be void.
SECTION 37. APPROVAL OF THE FEDERAL COMMISSION OF ECONOMIC COMPETITION, CONDITION PRECEDENT
The Parties agree that the effectiveness
of this Agreement is subject to the condition precedent (the “Condition Precedent”) consisting of the prior notification
to the Federal Commission of Economic Competition (the “Commission”) of the operation provided for in the Operation
Documents, and any of the following assumptions being verified:
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(i)
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That the Commission grants the Parties the authorization referred to in Article 86 of the
Federal Law on Economic Competition;
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(ii)
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That once the Commission has all the respective documents and any questions and clarifications
issued by the Commission have been answered, the period of sixty days referred to in article 90, section V, of the Federal Law
on Economic Competition, has elapsed without the Commission having objected to the operation contained in this Agreement, legally
deemed an affirmative response; or
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(iii)
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That through the concentration notification procedure, it is determined by such body that there
is no concentration and the respective certificate is issued.
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For greater certainty, the date of fulfillment
of the Condition Precedent will be the one on which any of the events described in paragraphs (i) to (iii) of this Section 6
first occurs.
Grupo Fresnillo and Grupo Orla will be
responsible for preparing and submitting to the Commission the necessary documents for the consideration by such Commission of
the operation established in the Operation Documents, as required under the concentration notification procedure established in
Federal Law of Economic Competition. Each of the Parties must notify the other in a timely and reliable manner of the fulfillment
or not of any of the above conditions, as well as of any other communications that may be carried out between the Commission and
such Party in this regard, and such notification must include copy of all the respective documentation. In the event that the Condition
Precedent is met, Grupo Fresnillo will give Grupo Orla written notice in the terms established in this Agreement, and Grupo Orla
will have 3 (three) business days to make the first payment established in Section 3 of this Agreement.
Grupo Fresnillo and Grupo Orla agree to
jointly retain the services of an external law firm expert in antitrust issues, and agree to share in equal parts, the expenses
generated by the fees of such law firm, including the payment of fees to carry out the procedure before the Commission, as well
as any other expense that is generated thereof.
Section 38. RATIFICATION AND NOTARY’S FEES.
Once the Condition Precedent is met, this
agreement shall be executed and ratified before a notary public and registered in the Public Registry of Mining, and the Operator
shall be responsible for such application and obtaining the registration, as well as the expenses derived from it.
Having read this agreement, it is signed
in agreement by the Parties involved on the [*] day of [*] 2020.
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The Concessionaire:
METALÚRGICA REYNA, S.A. DE C.V.
/s/ <personal information redacted>
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The Operator:
MINERA CAMINO ROJO, S.A. DE C.V.
/s/ Mauricio Heiras Garibay
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________________________________
<personal information redacted>
LEGAL REPRESENTATIVE
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________________________________
MAURICIO HEIRAS GARIBAY
LEGAL REPRESENTATIVE
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ANNEX 1
CONCESSION TITLE GUACHICHIL D1 T.- 245418
ANNEX 2
LAYBACK ZONE
Annex
3
CONCESSION TITLE
CAMINO ROJO T.-230914.
ANNEX 4
QUARTERLY TECHNICAL REPORT
The Quarterly Technical Report regarding the Layback Zone must
include at least the following data regarding the production of the quarter in question:
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1.
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Topographic controls to know quarterly progress in the Layback Zone
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3.
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Volume of tepetate and its destination
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4.
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Volume of mineral not deposited in leaching patios and destination of this
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5.
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Mineral deposited in leaching patios, indicating the type or degree of oxidation of the mineral
according to the classification used by the Operator. For each type of
mineral deposited (due to its degree of oxidation) provide:
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b.
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Metal laws (gold and silver)
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c.
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Metal content (gold and silver)
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d.
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In which yard was it deposited
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6.
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Reconciliation of deposited mineral vs. budgeted mineral.
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b.
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Metal laws (gold and silver)
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c.
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Metal content (gold and silver)
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8.
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Pit depth at the end of the quarter in each of the 3 zones into which the Layback Zone was
divided according to the dimensions established in Annex 2 of this Agreement:
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a.
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1850 masl, minimum elevation allowed for the bottom of the pit in this area
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b.
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1790 masl, minimum elevation allowed for the bottom of the pit in this area
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c.
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1770 masl, minimum elevation allowed for the bottom of the pit in this area
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9.
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Monitoring controls and geotechnical indicators for the
stability of the pit walls
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NOTE: As a basis for the Concessionaire to follow up and review
the Quarterly Technical Reports, the Operator will provide the following information within the first six months after signing
the Agreement:
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-
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Mining plan for the Layback area. To know when the production of this area starts and to ensure
adequate follow-up of the reports.
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-
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Geotechnical study considered in the feasibility study for the design of the pit in the Layback
area.
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-
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Hydrological study and hydrogeology considered in the feasibility study for the design of the pit
in the Layback zone. To know the stability of the pit walls.
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In the event that the mining plan, and
/ or geotechnical study, and / or hydrological / hydrogeological study, are updated by the Operator and that this implies material
changes to its previous version, it must provide the Concessionaire with a copy of the updated document within thirty days after
said document was prepared.
ANNEX 5
<commercially sensitive information redacted>
Exhibit 99.3
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CANADA
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)
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)
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PROVINCE OF ONTARIO
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)
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)
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TO WIT:
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)
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I, France M. Tenaille,
a Notary Public in and for the Province of Ontario, and a lawyer licensed by the Law Society of Upper Canada, by Royal Authority
duly appointed, residing in the City of Pickering, in the Province of Ontario, DO CERTIFY AND ATTEST as follows:
1. that
I speak and write fluently the Spanish and English languages at a professional level, Spanish being my mother tongue as I was born
and raised in Caracas, Venezuela, and I also studied and graduated as a lawyer in Venezuela;
2. that
the paper-writing attached to this certificate is a redacted copy of a document in English titled “Master Agreement relating
to the Layback Zone” entered into by and between Fresnillo PLC and Orla Mining Ltd. among others; and
3. that
such document was originally prepared in the Spanish language and has been translated to English, and that the English text in
the document attached to this certificate is a true and accurate translation from Spanish to English of the document as redacted.
IN TESTIMONY WHEREOF
I have hereto subscribed my name and affixed my Notarial Seal of Office at Toronto, Ontario, this 31st day of December, 2020.
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(signed/sealed) France M. Tenaille
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France M. Tenaille
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A Notary Public in and for the Province of Ontario
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This document is a true and accurate English
translation of the original Spanish version. In the event where the interpretation of certain words or phrases may differ between
the English and Spanish versions, the Spanish version supersedes the English version and should be relied upon.
MASTER AGREEMENT RELATING TO THE LAYBACK
ZONE (THE “AGREEMENT”) ENTERED INTO BY AND BETWEEN FRESNILLO PLC (“FRESNILLO”), METALÚRGICA REYNA,
S.A. DE C.V. (“REYNA”), <confidential information redacted> (“<confidential information redacted>”,
AND JOINTLY WITH REYNA AND FRESNILLO, THE “FRESNILLO GROUP”), ON THE ONE HAND, ALL REPRESENTED BY <personal information
redacted>, AND ON THE OTHER HAND, ORLA MINING LTD. (“ORLA”) AND MINERA CAMINO ROJO, S.A. DE C.V. (“MINERA
CR”, AND JOINTLY WITH ORLA, “ORLA GROUP”) BOTH REPRESENTED BY <personal information redacted>, IN
ACCORDANCE WITH THE FOLLOWING RECITALS AND CLAUSES:
BACKGROUND
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I.
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On March 18, 2020, Fresnillo and Orla signed a non-binding letter (the “Letter of Understanding”), whereby they established their agreements related to Minera CR’s use of a certain mining concession owned by Reyna, to expand the open pit of its Camino Rojo project to a part of such concession and to mine only the oxide and transition minerals contained therein. Such Letter of Understanding will cease to be effective following the execution of the Operation Documents (as defined below).
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II.
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The use agreed by the Parties in the Letter of Understanding consists, broadly, of the following: (i) the exploration and mining by Minera CR of a portion of the mining lot covered by the Guachichil D1 concession registered to Reyna with title number 245418 (the "Concession"); (ii) <commercially sensitive information redacted>; and (iii) the payment of the corresponding consideration to Fresnillo, Reyna, and <confidential information redacted> by Orla and Minera CR in accordance with this Agreement.
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III.
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Concurrently with the execution of this Agreement, Reyna and Minera CR entered into a mining exploitation agreement subject to a condition precedent (the “Exploitation Agreement”), which sets forth the terms and conditions for (i) the exploitation, by Minera CR, of a portion of the Concession, consisting of a volume whose upper face on the surface of the land is made up of a rectangular polygon with dimensions of 218 meters wide by 1000 meters long, and with maximum depths per area at an elevation of 1850 meters above mean sea level (hereinafter "msnmm"), 1790 msnmm and 1770 msnmm, according to the location within such polygon, as graphically represented in the plan and sections attached to this Agreement as Annex 1 (the “Layback Zone”), which forms an integral part of this document, as well as (ii) the payment of the corresponding consideration, and (iii) the respective Parties’ obligations, among other.
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IV.
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<commercially sensitive information redacted>
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V.
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This Agreement, the Exploitation Agreement <commercially sensitive information redacted> shall be collectively referred to as the “Operation Documents”.
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VI.
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After the execution of the Operation Documents, Grupo Fresnillo and Grupo Orla will notify the Federal Commission of Economic Competition of the operation provided for in the Operation Documents, the approval of which will be a condition precedent for their effectiveness in accordance with the provisions in Section 6 of this Agreement.
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REPRESENTATIONS
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I.
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Fresnillo makes the following representations:
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a)
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It is a company legally incorporated and existing in accordance with the laws of the United Kingdom, with capacity to be bound by the terms of this Agreement.
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b)
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Its legal representative has the necessary powers to enter into this Agreement, as provided in Public Deed No. <confidential information redacted>, granted before and witnessed by <personal information redacted> of Federal District, and such powers have not been revoked or modified in any manner.
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c)
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Except for the authorization of the Federal Commission of Economic Competition, it has all legal corporate powers and authorizations required to execute and fulfill its obligations under this Agreement, and, as of the date of this Agreement, it does not require any consent or authorization from any third party, or from any public authority, whether administrative or judicial, government official or entity to enter into this Agreement.
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d)
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The entering into and execution of this Agreement by Fresnillo, and the performance of its obligations hereunder, do not violate (i) any law, regulation, ruling, order, decree, decision or any other regulation issued by any authority or court that is applicable to Fresnillo as at the date of execution of this Agreement, (ii) any provision in the bylaws of Fresnillo, or (iii) any agreement, contract or covenant to which Fresnillo is a party or which binds Fresnillo in any way, or that affects the purpose of this Agreement.
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e)
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This Agreement has been duly and validly executed in accordance with the laws of the United Mexican States and this Agreement is valid and binding on Fresnillo in accordance with its terms.
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f)
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It is not subject to any cause for dissolution, liquidation, bankruptcy or creditors’ reorganization proceedings generally, nor is it subject to any reorganization agreement or financial protection arrangement, and it has neither filed nor does it intend to file, on its own behalf, a request for dissolution, liquidation or bankruptcy, or any agreement or petition for reorganization of its business or assets.
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II.
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Reyna makes the following representations:
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a)
|
It is a mining company incorporated, existing and currently in good standing under the laws of the United Mexican States, as stated in Public Deed No. <confidential information redacted>, granted before and witnessed by <personal information redacted>of Mexico City, whose first authenticated copy was registered in the Public Registry of Commerce of Mexico City on page No. <confidential information redacted>, of the Mining Companies Book of the Public Registry of Mining dated <confidential information redacted>, and with sufficient capacity and authority to be bound by the terms of this Agreement, and that it is a subsidiary of Fresnillo.
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b)
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Its legal representative has the necessary powers and authorizations to enter into this Agreement, as stated in the Public Deed mentioned in paragraph a) above, which as of the date of execution of this Agreement have not been revoked, limited and/or modified in any manner.
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c)
|
Its Federal Taxpayer Identification Number is <confidential information redacted>.
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d)
|
Except for the authorization of the Federal Commission of Economic Competition, it has all legal corporate powers and authorizations required to execute and fulfill its obligations under this Agreement, and that as of the date of this Agreement, it does not require any consent or authorization from any third party or any public authority, whether administrative or judicial authority to enter into this Agreement.
|
|
|
e)
|
The entering into and execution of this Agreement by Reyna and the performance of its obligations hereunder, do not violate (i) any law, regulation, ruling, order, decree, decision or other regulation issued by any authority or court, that is applicable as of the date of execution of this Agreement to Reyna, or (ii) any provision in the bylaws of Reyna, or (iii) any agreement, contract or covenant to which Reyna is a party, or is bound in any way, or that affects the purpose of this Agreement.
|
|
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f)
|
It is not subject to any cause for dissolution, liquidation, bankruptcy or creditors’ reorganization proceedings generally, nor is it subject to any reorganization agreement or financial protection arrangement, and it has neither filed nor does it intend to file, on its own behalf, a request for dissolution, liquidation or bankruptcy, or any agreement or petition for reorganization of its business or assets.
|
|
III.
|
<confidential information redacted> makes the following representations:
|
|
|
a)
|
It is a mining company incorporated, existing and currently in good standing under the laws of the United Mexican States, as stated in Public Deed No. <confidential information redacted>, granted before and witnessed by <personal information redacted>of Mexico City, whose first authenticated copy was entered in the Public Registry of Commerce Office of Mexico City, on page number <confidential information redacted>, with sufficient capacity and authority to be bound by the terms of this Agreement, and that it is an indirect subsidiary of Fresnillo.
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|
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b)
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Its legal representative has the necessary powers and authorizations to enter into this Agreement, as provided in Public Deed No. <confidential information redacted>, granted before and witnessed by <personal information redacted> of the former Federal District, and these powers have not been revoked or modified in any manner.
|
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c)
|
Its Federal Taxpayer Identification Number is <confidential information redacted>.
|
|
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d)
|
Except for the authorization of the Federal Commission of Economic Competition, it has all legal corporate powers and authorizations required to execute and fulfill its obligations under this Agreement and as of the date of this Agreement it does not require any consent or authorization from any third party, or from any public authority, whether administrative or judicial, government official or entity to enter into this Agreement.
|
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e)
|
The entering into and execution of this Agreement by <confidential information redacted> and the performance of its obligations hereunder do not violate (i) any law, regulation, ruling, order, decree, decision or other regulation issued by any authority or court that is applicable to <confidential information redacted> as of the date of execution of this Agreement, or (ii) any provision in the bylaws of <confidential information redacted>, or (iii) any agreement, contract or covenant to which <confidential information redacted> is a party or is bound in any way or that affects the purpose of this Agreement.
|
|
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f)
|
It is not subject to any cause for dissolution, liquidation, bankruptcy or creditors’ reorganization proceedings generally, nor is it subject to any reorganization agreement or financial protection arrangement, and it has neither filed nor does it intend to file, on its own behalf, a request for dissolution, liquidation or bankruptcy, or any agreement or petition for reorganization of its business or assets.
|
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IV.
|
Orla makes the following representations:
|
|
|
a)
|
It is a company legally incorporated, existing and currently in good standing under the laws of Canada, with capacity to be bound by the terms of this Agreement.
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b)
|
Its legal representative has the necessary powers and authorizations to enter into this Agreement, as set forth in Public Instrument <confidential information redacted>, granted before and witnessed by <personal information redacted>, Notary Public No. <confidential information redacted>, and these powers have not been revoked or modified in any manner.
|
|
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c)
|
Except for the authorization of the Federal Commission of Economic Competition, it has all legal corporate powers and authorizations required to execute and fulfill its obligations under this Agreement, and as of the date of this Agreement, it does not require any consent or authorization from any third party, or from any public authority, whether administrative or judicial, government official or entity to enter into this Agreement.
|
|
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d)
|
The entering into and execution of this Agreement by Orla, and the performance of its obligations contained herein, do not violate (i) any law, regulation, ruling, order, decree, decision or any other regulation issued by any authority or court, applicable to Orla as of the date of execution of this Agreement, (ii) any provision in the bylaws of Orla, or (iii) any agreement, contract or covenant of which Orla is a party, or that binds Orla in any way, or that affects the purpose of this Agreement.
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|
|
e)
|
It is not subject to any cause for dissolution, liquidation, bankruptcy or creditors’ reorganization proceedings generally, nor is it subject to any reorganization agreement or financial protection arrangement, and it has neither filed nor does it intend to file, on its own behalf, a request for dissolution, liquidation or bankruptcy, or any agreement or petition for reorganization of its business or assets.
|
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V.
|
Minera CR makes the following representations:
|
|
|
a)
|
It is a mexican mining company, legally existing and currently in good standing, initially incorporated under the company name Minas Achuras, S.A. de C.V., pursuant to the laws of the Mexican Republic, as stated in Public Deed <confidential information redacted>granted before and witnessed by <personal information redacted> of the Morelos Judicial District of Chihuahua City, whose first authenticated copy was entered in the Public Registry of Commerce of Chihuahua City on page <confidential information redacted>, and under number <confidential information redacted> of the Mining Companies Book of the Public Mining Registry, dated <confidential information redacted>, with sufficient capacity and authority to be bound by the terms of this Agreement, and that it is a subsidiary of the Canadian company Orla Mining Ltd.
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b)
|
By means of the Minutes of the Extraordinary Shareholders’ Assembly of May 16, 2017, the change in company name to “Minera Camino Rojo S.A. de C.V.” was approved. These minutes were notarized by Public Deed No. <confidential information redacted>, granted before and witnessed by <personal information redacted>, acting notary public in the absence of <personal information redacted> of the Morelos Judicial District, Chihuahua City, Chihuahua.
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c)
|
Its legal representative has sufficient powers and authorizations to enter into this Agreement, as stated in the Public Deed mentioned in paragraph b) above, and these powers have not been modified or limited in any manner.
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d)
|
Its Federal Taxpayer Identification Number is <confidential information redacted>.
|
Except for the authorization of
the Federal Commission of Economic Competition, it has all legal corporate powers and authorizations required to execute and fulfill
its obligations under this Agreement, and as of the date of this Agreement, it does not require any consent or authorization from
any third party, or from any public authority, whether administrative or judicial, government official or entity to enter into
this Agreement.
|
|
e)
|
The entering into and execution of this Agreement by Minera CR and the performance of its obligations hereunder do not violate (i) any law, regulation, ruling, order, decree, decision or other regulation issued by any authority or court applicable to Minera CR as of the date of execution of this Agreement, (ii) any provision in the bylaws of Minera CR, or (iii) any agreement, contract or covenant to which Minera CR is part of, or that binds Minera CR in any way, or that affects the purpose of this Agreement.
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f)
|
It is not subject to any cause for dissolution, liquidation, bankruptcy or creditors reorganization proceedings generally, nor it is subject to any reorganization agreement or financial protection arrangement, and it has neither filed nor does it intend to file, on its own behalf, a request for dissolution, liquidation or bankruptcy, or any agreement or petition for reorganization of its business or assets.
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VI.
|
All the Parties make the following representations:
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|
|
a)
|
They mutually acknowledge the legal capacity with which they execute this Agreement.
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|
|
b)
|
They wish to enter into this Agreement as being in their respective self-interests.
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|
|
c)
|
They agree to use all reasonable efforts to ensure that the Operation Documents provide for an efficient and clear structure that is compliant with the legal, tax and regulatory requirements applicable to each of them.
|
Now, therefore, considering the above background
and recitals, the Parties hereby agree to the following:
TERMS AND CONDITIONS
SECTION 1. PURPOSE
The purpose of this Agreement is to serve
as a framework agreement to formalize the general agreements between the Parties to carry out the business described in the Background
of this Agreement, as well as to describe the various Operation Documents being entered into in order to implement such agreements,
to provide for the consideration payable to Fresnillo in connection with the business described in the Background, to establish
general and particular responsibilities of the Parties and to provide for the form of payment of the various components of the
consideration that has been agreed to in relation to the Operation Documents.
SECTION 2. FRESNILLO’S CONSIDERATION
As consideration for participating in the
negotiations and facilitating the agreements required to achieve the business and transactions described in the first and second
paragraphs of the Background, so as to make them feasible, and as partial payment of the total consideration payable by Minera
CR in connection with the negotiation and execution of the Operation Documents, as provided in Section 3 of this Agreement,
Minera CR shall pay to Fresnillo the amount of <confidential information redacted>, legal currency of the United States
of America) plus Value Added Tax, as set forth in Section 3 of this Agreement.
SECTION 3. AGREEMENTS AND CONSIDERATION
The aggregate consideration payable by
Minera CR to the Fresnillo Group for its agreements under the Operation Documents shall be the amount, in legal currency of the
United States of America (hereinafter "Dollars"), of USD $62,800,000.00 (sixty-two million, eight hundred thousand
Dollars 00/100) (plus Value Added Tax only in relation to payments to be made in the United Mexican States), payable in the amounts
set forth in each of the Operation Documents, as follows:
|
Payment
Date
|
|
<commercially
sensitive information redacted>
|
|
<commercially
sensitive information redacted>
|
|
<commercially
sensitive information redacted>
|
|
Total
|
|
|
No
later than 3 business days after the Condition Precedent is met
|
|
<commercially
sensitive information redacted>
|
|
<commercially
sensitive information redacted>
|
|
<commercially
sensitive information redacted>
|
|
$
|
25,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve
months after the Commencement of Commercial Operation or no later than December 1, 2022
|
|
<commercially
sensitive information redacted>
|
|
<commercially
sensitive information redacted>
|
|
<commercially
sensitive information redacted>
|
|
$
|
15,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twenty-four
months after the Commencement of Commercial Operation or no later than December 1, 2023
|
|
<commercially
sensitive information redacted>
|
|
<commercially
sensitive information redacted>
|
|
<commercially
sensitive information redacted>
|
|
$
|
22,800,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
<commercially
sensitive information redacted>
|
|
<commercially
sensitive information redacted>
|
|
<commercially
sensitive information redacted>
|
|
$
|
62,800,000
|
|
*Amounts in US Dollars
For purposes of this section, the term
“Commencement of Commercial Operation” means the date on which one the following two events first occurs: (i) 6
(six) months from the date on which doré with gold was first produced from the heap leach operation of the Camino Rojo project,
or (ii) Orla Mining Ltd. makes a public statement that commercial production started from the heap leach operation of the
Camino Rojo project.
For payments to be made after Commencement
of Commercial Operation or no later than December 1, 2022 or December 1, 2023, as applicable, the above-mentioned consideration
amounts shall accrue interest at a rate of 5% (five percent) per annum based on a year of 360 (three hundred and sixty) days. Such
interest shall accrue as of the date in which the Condition Precedent is met. Interest shall accrue until the date of payment of
such amounts and will only be applied to the principal owed, being simple interest. Interest accrued in the period between the
date in which the Condition Precedent is met and July 1, 2021 shall be paid by Minera CR to Reyna or <confidential information
redacted>, as applicable, on July 1, 2021. From July 1, 2021, any interest accrued in the subsequent periods shall
be calculated and paid by Minera CR to Reyna or <confidential information redacted>, as applicable, on a quarterly
basis, on the following dates: September 30, December 30, March 30, and June 30 of each year. Notwithstanding
the foregoing, when any of the amounts in subparagraphs b) and c) of this Section is paid, on that same date accrued and unpaid
interest on such amounts must be paid.
Any payment of the amounts mentioned in
this section is considered final and may not be reimbursed to the paying Party for any reason.
Payments referred to in this section shall
be in full amounts and readily available funds in Dollars, plus Value Added Tax, when applicable, through wire transfer to the
accounts established in Annex 3 of this Agreement.
The relevant Parties of the Fresnillo Group
that receive payments from the Orla Group shall issue corresponding invoices to the Party making each payment. Invoices shall meet
the requirements established in the tax regulations of the United Mexican States and be for the amounts received in accordance
with this section, with this instrument serving as the most effective receipt applicable by law.
For purposes of any payment under this
Agreement, “business day” means the day when banks located in Mexico and in Vancouver, Canada, are open to the public.
For all other purposes of this Agreement, a “business day” will be such days in which banks located in Mexico are open
to the public. In the event that the payment date is a non-business day, such payment shall be made on the immediately following
business day.
Default on any of the payments referred
to in this section to be made by Minera CR on the dates provided for such payments, shall entitle Fresnillo and/or Reyna and/or
<confidential information redacted>to rescind this Agreement, as well as the other Operation Documents, immediately
and without a court order, provided that, the Concession is in force and that the right acquired by Minera CR in the Exploitation
Agreement to carry out works and activities in the Layback Zone is not suspended by a competent authority due to causes attributable
exclusively to Reyna and/or its affiliates.
The consideration amounts set out in this
section shall be payable even if this Agreement is rescinded or terminated for any reason, and therefore this section shall survive
the termination of this Agreement under the terms set out above unless such rescission or termination is for causes attributable
to Reyna and/or <confidential information redacted>or their affiliates, in which case the respective payment obligations
shall be extinguished.
SECTION 4. TERM
This Agreement will be in force and effect
from the date in which the Condition Precedent is met in accordance with the provisions of Clause Six, and until the end of the
term of the Exploitation Agreement <confidential information redacted>. Notwithstanding the foregoing and as long
as the Condition Precedent has been met (except for Sections 13 and 17), Sections 2, 3, 7, 9, 13, 14 and 17 shall remain in effect
and, in case of early termination, the payment obligations of Orla and Minera CR shall survive and remain in effect and enforceable
under the terms thereof, as well as the compensation obligations included in the Agreement, each in accordance with the terms of
their respective Agreement.
SECTION 5. TAXES
As a general principle, taxes arising from
the payments referred to in this Agreement shall be borne by each of the Parties subject thereto, in accordance with applicable
tax legislation. In addition, taxes or tax liabilities arising from the agreements and obligations of the Parties under the Operation
Documents shall be borne by the respective Parties to such agreements, in accordance with their terms.
SECTION 6. APPROVAL OF THE FEDERAL
COMMISSION OF ECONOMIC COMPETITION, CONDITION PRECEDENT
The Parties agree that the effectiveness
of this Agreement is subject to the condition precedent (the “Condition Precedent”) consisting of prior notification
to the Federal Commission of Economic Competition (the “Commission”) of the operation provided for in the Operation
Documents, and any of the following assumptions are verified:
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(i)
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That the Commission grants the Parties the authorization referred to in Article 86 of the Federal Law on Economic Competition;
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(ii)
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That once the Commission has all the respective documents and any questions and clarifications issued by the Commission have been answered, the period of sixty days referred to in article 90, section V, of the Federal Law on Economic Competition, has elapsed without the Commission having objected to the operation contained in this Agreement, legally deemed an affirmative response; or
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(iii)
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That through the concentration notification procedure, it is determined by such body that there is no concentration and the respective certificate is issued.
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For greater certainty, the date of fulfillment
of the Condition Precedent will be the one on which any of the events described in paragraphs (i) to (iii) of this Section 6
first occurs.
Grupo Fresnillo and Grupo Orla will be
responsible for preparing and submitting to the Commission the necessary documents for the consideration by such Commission of
the operation established in the Operation Documents, as required under the concentration notification procedure established in
Federal Law of Economic Competition. Each of the Parties must notify the other in a timely and reliable manner of the fulfillment
or not of any of the above conditions, as well as of any other communications that may be carried out between the Commission and
such Party in this regard, and such notification must include copy of all the respective documentation. In the event that the Condition
Precedent is met, Grupo Fresnillo will give Grupo Orla written notice in the terms established in this Agreement, and Grupo Orla
will have 3 (three) business days to make the first payment established in Section 3 of this Agreement.
Grupo Fresnillo and Grupo Orla agree to
jointly retain the services of an external law firm expert in antitrust issues, and agree to share in equal parts, the expenses
generated by the fees of such law firm, including the payment of fees to carry out the procedure before the Commission, as well
as any other expense that is generated thereof.
SECTION 7. DEVELOPMENT OF MINERALS IN SULFIDES.
Nothing established in the Operation Documents
will imply that the Fresnillo Group has no right to participate economically and be compensated for any future development of sulphide
mineral resources in the project known as Camino Rojo, owned by Orla Group, and/or the Concession, owned by Reyna, except for developments
that do not benefit or have not benefited in any form from the development and/or mining of the Layback Zone. It is understood
that “benefit” in this context means that such sulphide mineral resource developments of the Camino Rojo Project carried
out by Orla and/or any of its affiliates, successors and/or assigns, would not have been possible but for the prior development
and/or mining of the Layback Zone. If there is a development in sulfides that has benefited or it is possible due to the exploitation
of the Layback Zone, the Parties will agree in good faith the mechanism for the calculation of the consideration payable to Fresnillo
Group. This section shall remain in force after the termination of this Agreement.
SECTION 8. CONFLICTING PROVISIONS
This Agreement and the other Operation
Documents are part of the same transaction and agreement between the Parties. In the event of any discrepancy between them, the
terms set out in this Agreement shall prevail.
SECTION 9. NOTICES AND DOMICILE OF THE PARTIES
All notices to be given between the Parties
shall be made in writing by letter with acknowledgement of receipt, email with digital signature or any other reliable mean, to
the following addresses:
a. To Minera CR:
<contact information redacted>
b. To Fresnillo Group:
<contact information redacted>
c. To Orla:
<contact information redacted>
In the event that any Party changes its
address, such Party shall notify the other Party or Parties in writing within fifteen (15) calendar days; otherwise, the notice
will be deemed to have been served to the address that appears in the representations hereof.
SECTION 10. DEFAULT INTERESTS
If any of the Orla Group Parties does not
duly pay in the form required any of the payments owed to any of the parties of the Fresnillo Group in this Agreement, it shall
pay to such parties of the Fresnillo Group default interests calculated on the unpaid amount(s) and until such amounts are
paid, at an annualized interest rate reviewable monthly, comprised of 1.5 (one point five) times the sum of: (i) 5 (five)
percentage points, plus (ii) the interest rate for deposits in Dollars maturing in one month, in immediately available funds
in the interbank market in London, England, published as ICE LIBOR by ICE Benchmark Administration Limited, on the due date of
such payments, or on the date of review of the interest rate if the amount remains unpaid for more than 30 (thirty) calendar days.
If ICE LIBOR ceases to be published or
is not available, the reference rate that replaces such interest rate will be used for deposits in Dollars maturing in one month
in immediately available funds in the interbank market of London, England, or another alternative reference rate chosen by the
Parties that reasonably considers market practices for these deposits in Dollars.
Default Interests shall be calculated on
the basis of a year of 360 (three hundred and sixty) days and for the number of days actually elapsed. Accrued default interest
will be paid on the last business day of the corresponding calendar month, or on the date of payment of any portion of the amounts
due.
SECTION 11. RESCISSION FOR BREACH
This Agreement may be rescinded without
the need of a court order for breach of obligations by the Parties in the following cases:
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(i)
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For non-payment by Orla Group of any amount provided in Section 3 of this Agreement, provided that the Concession is in effect and that the right acquired by Minera CR in the Exploitation Agreement to carry out works and activities in the Layback Zone is not suspended by competent authority due to causes attributable exclusively to Reyna and/or its affiliates;
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(ii)
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In the event of rescission for non-compliance by any of the Orla Group entities of any of the other Operation Documents, in accordance with the terms thereof; and
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(iii)
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When Orla and/or Minera CR enter any creditors’ insolvency, reorganization or liquidation process, legal dissolution or such events are declared by a competent judge in accordance with the applicable law.
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(i)
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If the Concession is canceled for reasons attributable exclusively to Reyna and/or its affiliates;
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(ii)
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If the right acquired by Minera CR in the Exploitation Agreement to carry out works and activities in the Layback Zone is suspended by competent authority for reasons attributable exclusively to Reyna and/or its affiliates;
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(iii)
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In the event of termination due to non-compliance by Reyna or <confidential information redacted> of any of the other Operation Documents, in accordance with the terms thereof; and
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(iv)
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When Reyna and/or <confidential information redacted> enter any creditors’ insolvency, reorganization or liquidation process, legal dissolution or such events are declared by a competent judge in accordance with the applicable law.
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Notwithstanding the provisions of paragraph
(b) subsection (ii) of this Section, Orla Group may not rescind this Agreement if the suspension of works and operations
in the Layback Zone by the competent authority: (1) is temporary and does not extend for more than 30 days; or (2) it
is partial, that is, it only affects some of the works and operations and does not materially affect the extraction of ore from
the Layback Zone.
The Party that has the right to terminate
an Operation Document in accordance with their terms, may, through its relevant subsidiary, terminate the other Operation Documents
or any of them.
The Party whose breach causes the rescission
of any of the Operation Documents shall pay and reimburse the other Party the expenses incurred for damages caused by the termination
of the respective Operation Document due to breach of any of the obligations set out therein in accordance with the provisions
established therein.
SECTION 12. METHODS OF TERMINATION OF AGREEMENT
This Agreement shall be deemed terminated,
and have no force or legal effect, without the need of legal action, in the following circumstances:
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a)
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Termination of the Exploitation Agreement <commercially sensitive information redacted>.
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b)
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Rescission by any of the Parties in accordance with Section 11 above.
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c)
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Mutual agreement between the Parties in writing.
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d)
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In the event that the Condition Precedent established in Section 6 is not met within the six months following the signing of this Agreement.
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Except for the termination of this agreement
pursuant to subsection d) above, early termination shall not release Orla Group from its obligation to pay in full the amounts
set out in Section 3, provided that the Concession is in effect and that the right acquired by Minera CR in the Exploitation
Agreement to carry out works and activities in the Layback Zone is not been suspended by competent authority due to causes attributable
exclusively to Reyna and/or its affiliates.
The maximum liability of Grupo Fresnillo
under the Operation Documents, individually or collectively, will in no event exceed the value of the amounts paid by Minera CR
in accordance with Section 3 of this Agreement, this section having priority over the liability limit set out in the Exploitation
Agreement, which is included in such agreement for reference purposes only.
No Party shall be liable for amounts exceeding
the actual damages suffered by the other Party. The Parties waive any right to recover punitive, special, exemplary, indirect,
incidental, and consequential damages or for any loss of profits or lost earnings, or amounts covered under an insurance policy.
The Parties shall be liable to each other
for actual and incurred damages suffered directly by the other Party and provided that a final determination has been obtained
from the competent authority, which is no longer subject to appeal.
Neither Party shall be indemnified by the
other Party to the extent that such Party has received payment of a claim from another source, including insurance. If a Party
makes a payment related to a claim and after such payment is made, the other Party subsequently receives a payment from another
source, including insurance, with respect to such claim, that Party shall promptly reimburse the Party that initially made the
payment for the amount so paid.
SECTION 13. CONFIDENTIALITY
The Parties and their respective subsidiaries
or personnel agree to treat as confidential and maintain absolute secrecy regarding any verbal or written confidential information,
directly or indirectly related to the purpose hereof, and agree not to reveal, disclose, or deliver such information to third parties.
The Parties agree to take the necessary measures to ensure that persons handling the confidential information provided to them
in connection with or arising out of this Agreement, do not disclose such information, and that third parties do not have access
to such information in order to safeguard the confidentiality of such information.
For purposes hereof, Confidential Information
shall mean all information held by any of the Parties, or to which the Parties have access, or known by the Parties, in relation
to this Agreement or any other Operation Document, including but not limited to the following: engineering, administrative, financial
and business information, reports, plans, projections, trade secrets (being understood as any information of industrial or commercial
application stored by any of the Parties of any confidential nature, which may allow any of the Parties to obtain or maintain a
competitive or economic advantage over third parties while performing economic activities), drilling and blasting advances or outcomes,
as well as any geological, geochemical, geophysical and relating to titles, economic, legal, accounting, contractual, commercial,
technical, quantitative and qualitative formulas, manufacturing methods, analytical techniques, records, reports, diamond drilling
mapping, analyses, calculations, reviews, maps, charts, documents, as well as the analysis of working documents, compilations,
comparisons and studies, and other documents containing or reflecting such information, and any other written, oral, or drawn information
in documents, electronic or magnetic media, microfilms, films, pictures or any other means which the Parties receive from one another
under or in respect of this Agreement. It is expressly acknowledged that Confidential Information shall be considered in its broadest
sense, regardless of whether it has been expressly classified as confidential or not, such that the Parties’ rights, property
and ownership regarding the Confidential Information is protected in the broadest sense, while guaranteeing absolute discretion
and confidentiality.
Each Party acknowledges and agrees that
the other Party’s Confidential Information is a commercial and/or industrial secret that it privately owns, such that failure
to comply with the confidentiality obligation with respect to Confidential Information causes irreparable harm to it.
The Parties agree to immediately communicate
to the Party that is the owner of the Confidential Information any circumstance that may affect its confidentiality, so that the
owner of such information may take the measures it deems appropriate.
If the Confidential Information becomes
known to third parties through fraud, negligence or bad faith attributable to either Party and/or its personnel, such Party shall
be liable for any damages caused to the other Party in accordance with the legal liabilities and penalties established by the United
Mexican States legislation the in effect, including but not limited to trade and/or commercial secrets considered herein and in
the applicable legislation.
The obligation of confidentiality provided
hereunder shall remain in force and effect even after the termination date for any reason.
The following are exempt from the obligation
of confidentiality herein provided:
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a)
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All information that was part of the public domain at the time of delivery to any Party.
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b)
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All information that becomes part of the public domain, except as a result of a breach hereof by any of the Parties.
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c)
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All information that, without breaching this Agreement, is in the possession of the other Party at the time it is received and such circumstances can be reliably proven.
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d)
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Information provided by a third party to any Party, provided that such third party has no obligation of confidentiality towards any of the Parties.
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e)
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Information independently developed by any Party and/or any of its subsidiaries, without having knowledge of the other Party’s Confidential Information.
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f)
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Information required by the creditors, financial institutions and financiers of any of the Parties and / or their affiliates, including copies of this Agreement and any other Operation Document, provided that it is in market terms and usual in financings of this type of activity by creditors, financial institutions and financiers of any of the Parties and / or any of their affiliates, which will be subject to confidentiality obligations by such parties.
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g)
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If any of the Parties receives a request from a competent authority to disclose Confidential Information referred to in this section, such Party shall give immediate and timely notice to the affected Party so that the affected Party may take such action as it deems appropriate. In this case, the Party that is legally required to disclose shall not be held liable for breach of confidentiality.
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For purposes of this section, the term
Party or Parties includes any member of the board of directors or sole director, or any officer, executive, representative, trustee
or agent, employee, worker, shareholder, member of the board of creditors or other board, any advisor, funding source, consultant,
and/or any of its subsidiaries, ensuring that none of these persons shall use such information in any way for their own benefit
or for the benefit of third parties.
If pursuant to securities legislation and/or
stock exchange regulations, any Party shall be obligated to disclose from time to time information related to the terms hereof,
such information may be disclosed provided that the text of any public notice or statement, including press releases that either
Party intends to release, is made available to the other Party prior to its publication and its approval is obtained in writing,
which shall not be unreasonably denied and shall be delivered within a period of 3 (three) business days from the date of receipt
of the text of the intended communication. For greater certainty, any other information related to the Camino Rojo Mining Project
in the Camino Rojo Concession Tit. 230914, and the production information regarding the Layback Zone, shall not require the prior
approval by the Parties for its disclosure, which shall be made solely at the discretion of Orla Group and its affiliates. For
greater certainty, the Parties agree and confirm that in accordance with securities legislation and/or rules of the stock
exchange applicable to Minera CR and/or Orla, this Agreement and the Exploitation Agreement may be publicly disclosed through its
filing in the Canadian system called Electronic Document Analysis and Retrieval (SEDAR), and for such purposes a version
of this Agreement and the Exploitation Agreement for publication and agreed to by the Parties are attached to this Agreement as
Annex 4.
SECTION 14. TRANSFER OF RIGHTS AND OBLIGATIONS. GUARANTEES.
The Parties expressly agree that this Agreement
and the obligations arising hereof shall not be transferred, or encumbered, in whole or in part, without the other Parties’
prior written consent, and any assignment, transfer or encumbrance made in contravention hereof shall be null and void and have
no legal force and effect.
Notwithstanding the foregoing, the Parties
hereby agree that each of them may assign or transfer, in whole or in part, to a subsidiary or legal entity member of the same
investment group to which it belongs with the same level of solvency, this Agreement or the rights and obligations arising from
it, subject only to written notice to the other Party within 15 (fifteen) business days prior to the assignment, alienation or
transfer, provided that this Agreement and the rights and obligations of any of the Parties are not adversely affected, with the
assigning Party agreeing to cause the assignee or the acquirer to comply with the terms and conditions of this Agreement.
The Parties agree that Orla Group may assign
and give as collateral the rights and benefits derived from this Agreement or grant liens relevant to the rights established in
this Agreement, in whole or in part, to its financing providers as it may be required by them, provided that (i) the rights
and obligations of Fresnillo Group are not adversely affected, (ii) such financing is in market terms and in compliance with
applicable anti-corruption laws, including Corruption of Foreign Public Officials Act (Canada), the Foreign Corrupt Practices
Act (United States), and any other applicable law, and to finance the Camino Rojo project, (iii) the assignee expressly
accepts and adheres to the terms and conditions of this Agreement and (iv) the respective Party of Fresnillo Group receives
a written notice within 5 (five) business days prior to the assignment or grant by the Orla Group. In case of non-compliance with
the terms hereof, the assignment or grant by the Orla Group will not be valid and will be null and void.
For greater certainty, the Parties agree
that Minera CR may assign and give as collateral the rights and benefits derived from this Agreement or grant liens relevant to
the rights established in this Agreement, in whole or in part, (a) to the Finance Parties as such term is defined in, and
in accordance with, the loan agreement dated December 18, 2019 entered into among Orla, as borrower, GLAS Americas LLC, as
collateral agent, and GLAS USA LLC, as administrative agent (as such agreement may be amended, supplemented, restated, replaced,
or otherwise modified from time to time, the “Loan Agreement”) and (b) in connection with any refinancing, refunding
or replacement of the Loan Agreement. The foregoing, provided that (i) the rights and obligations of the Fresnillo Group
are not adversely affected, (ii) the assignee expressly accepts and adheres to the terms and conditions of this Agreement,
and (iii) the respective part of the Group Fresnillo receives a written notice within 10 (ten) business days after the assignment
or grant from Grupo Orla. If there is non-compliance with the provisions of this paragraph, the assignment or grant by the Operator
will not be valid and will be legally null and void.
SECTION 15. JOINT AND SEVERAL LIABILITY
To ensure the performance of Minera CR's
obligations under this Agreement, upon execution of this Agreement, Orla will be jointly and severally liable for each of Minera
CR's obligations under this Agreement.
The Parties and Orla agree that in the
event Minera CR fails to perform any of its obligations under this Agreement, Fresnillo may require and demand immediate performance
by either Minera CR or Orla, who shall be jointly and severely liable for such obligations in accordance with Articles 1987, 1988
and 1989 and applicable provisions of the Federal Civil Code.
SECTION 16. ANTI-CORRUPTION
The execution of this Agreement implies
taking cognizance of and agreeing to comply with the following policy of Fresnillo Group and its affiliates:
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a)
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Fresnillo Group has a zero-tolerance policy with respect to corruption and bribery in any form. This includes: (a) active bribery: offering, promising, or providing a financial or in-kind benefit to another person in order to obtain or retain business or a benefit; (b) passive bribery: accepting, soliciting, or implying a financial or in-kind benefit in exchange for the improper performance of a relevant role or activity.
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b)
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It is Fresnillo Group’s policy not to allow facilitation payments, understood as payments intended to accelerate a routine process to which it is entitled, for example: the expediting of government procedures, customs procedures, etc.
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c)
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Fresnillo Group does not approve or give consent in any manner to its advisors, agents, contractors, suppliers or strategic partners to directly or indirectly engage in corruption or bribery activities, or facilitation payments for its own benefit.
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d)
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Any party contracting with Fresnillo Group shall keep a reasonable accounting system and record to clearly identify the costs incurred on their behalf, and the use of financial or material resources for this purpose, giving Fresnillo Group the right to examine such information, with five business days constituting sufficient notice from Fresnillo Group. Furthermore, the Party contracting with Fresnillo Group shall keep the above-mentioned information on file for a period of not less than five years.
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e)
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In the event that Fresnillo Group becomes aware—or even has reasonable evidence—that any of its advisors, agents, contractors, suppliers or partners has engaged in or will engage in any of the aforementioned activities, it reserves the right to review and/or terminate the business relationship with its counterparty.
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f)
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If Orla Group outsources goods or services relating to Fresnillo Group, Orla Group shall ensure that the third-party provider of goods or services acknowledges and complies with these policies.
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SECTION 17. APPLICABLE LAW AND JURISDICTION.
The applicable law for the interpretation
of this Agreement is the federal law in force in the United Mexican States.
In the event of a claim, disagreement or
dispute regarding, arising from or in relation to the validity, interpretation, violation, breach or performance of this Agreement,
the Parties shall use best efforts to resolve such dispute as soon as possible, amicably and in good faith within thirty (30) calendar
days of the date of the claim, disagreement or dispute arose.
If an agreement cannot be reached regarding
the corresponding claim, disagreement or dispute, it shall be submitted for final decision to the jurisdiction of the competent
Courts located in Mexico City, the Parties renouncing any jurisdiction that may correspond to them for any reason.
SECTION 18. HEADINGS
The Parties agree that the headings contained
herein are only for informative purposes and for easy identification of its sections and content, and therefore, they shall not
be used for the legal interpretation of the respective section, and at no time shall such headings and definitions be understood
to limit or alter the agreement contained in the sections hereof.
ARTICLE 19. SEVERABILITY
The provisions contained in this Agreement
are separate and severable from each other such that if any part or any provision or fragment thereof is held to be inapplicable
or unenforceable in any jurisdiction, then the rest of the Agreement shall remain binding upon and enforceable by the Parties in
that jurisdiction and shall be construed as if the Agreement had been executed without such provision or inapplicable or unenforceable
part, to the extent that the provision or separate part does not significantly and adversely affect the rest of the Agreement.
SECTION 20. SUCCESSORS
This Agreement shall be binding upon the
Parties, their assignees or transferees.
SECTION 21. ADDITIONAL ACTION
The Parties shall sign such documents and
perform such additional actions as are within their power, which are reasonable and do not impair their rights or change their
obligations, and are necessary to give full effect to, and give the other Party the full benefit of this Agreement.
SECTION 22. ORIGINAL COPIES
This Agreement is executed in five original
copies, two held by Orla Group and three held by Fresnillo Group, with the same legal effect and content, with each being considered
an original and collectively constituting one instrument. To prove this Agreement, it shall not be necessary to produce or account
for more than one original copy.
SECTION 23. GOOD FAITH
The Parties to this Agreement agree to
act in good faith in all matters relating hereto.
SECTION 24. AMENDMENTS
This Agreement may not be amended or supplemented
except by a written instrument signed by all Parties. Any purported amendment, modification or supplement to this Agreement that
is not in writing and signed by the Parties shall be void.
SECTION 25. ACTS OF GOD AND FORCE
MAJEURE
For purposes of this Agreement, acts of
God or of force majeure shall mean those inevitably affecting the ability of any Party to fulfill its obligations, including but
not limited to floods, pandemics, epidemics, national and international health emergencies, fires, explosions, wars, revolutions,
acts of sabotage and vandalism, strikes, acts of terrorism, government restrictions and orders, all established as such in accordance
with the procedures prescribed by applicable laws (hereinafter, a “Force Majeure Event”). In such cases, each Party
shall be exempt from fulfilling its obligations hereunder that are affected by a Force Majeure Event for more than 30 days. If
the Force Majeure Event lasts more than 30 (thirty) days, the Parties must meet to, in good faith, agree on the adjustments that
may be necessary to the terms of this Agreement, by execution of a corresponding amendment. In no case will the payment obligations
of the Parties or the obligations to keep the Guachichil D1 Tit. 245418 and Camino Rojo Tit. 230914 in good standing will be excused
due to Force Majeure Events.
If the above-mentioned assumptions occur,
the Party affected by Force Majeure Events shall notify the other Party within a period not exceeding 5 (five) business days after
it becomes aware of such Force Majeure Event, its existence and start date, as well as an estimate of its duration and proposed
mitigation measures.
If the causes of the suspension have ceased,
the affected Party shall notify, in writing and without delay, the other Party in order to resume the obligations under this Agreement.
SECTION 26. RATIFICATION AND NOTARY’S
FEES
Once the Condition Precedent is met, the
execution of this Agreement shall be ratified before a notary public, and the corresponding fees shall be borne by Orla Group.
Fresnillo Group undertakes to cooperate with Orla Group for anything it might need in relation thereto.
Having read this Agreement, it is signed
in agreement by the Parties involved on the __ day of [*] 2020.
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METALÚRGICA REYNA, S.A. DE C.V.
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MINERA CAMINO ROJO, S.A. DE C.V.
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/s/ <personal information redacted>
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/s/ Mauricio Heiras Garibay
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LEGAL REPRESENTATIVE
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LEGAL REPRESENTATIVE
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<personal information redacted>
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MAURICIO HEIRAS GARIBAY
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FRESNILLO PLC.
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ORLA MINING LTD.
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/s/ <personal information redacted>
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/s/ Mauricio Heiras Garibay
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LEGAL REPRESENTATIVE
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LEGAL REPRESENTATIVE
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<personal information redacted>
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MAURICIO HEIRAS GARIBAY
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<confidential information redacted>
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/s/ <personal information redacted>
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LEGAL REPRESENTATIVE
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<personal information redacted>
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ANNEX 1
LAYBACK ZONE
ANNEX 2
<commercially sensitive information redacted>
ANNEX 3
<commercially sensitive information redacted>
ANNEX 4
<commercially sensitive information redacted>
