Energizer Resources, Inc. (Form: 10-Q, Received: 05/14/2014 12:56:55)

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2014

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 000-51151

ENERGIZER RESOURCES INC.

(Name of registrant in its charter)

Minnesota		20-0803515
(State or other jurisdiction of Incorporation or organization)		(I.R.S. Employer Identification No.)

520 – 141 Adelaide Street West, Toronto, Ontario M5H 3L5

(Address of principal executive offices)

_______________________

(Issuer’s telephone number)

_______________________

Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act: Common Stock, $0.001 par value per share

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.

Large accelerated filer	o	Accelerated Filer	o
Non-accelerated filer	o	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of May 12, 2014, there were 266,127,603 shares of the Registrant's common stock issued and outstanding.

Transitional Small Business Disclosure Format Yes o No x

Energizer Resources Inc.

PART I - FINANCIAL INFORMATION

Item 1.	Consolidated Financial Statements (unaudited) including:	3
	Consolidated Balance Sheets	5
	Consolidated Statements of Operations and Comprehensive Loss	6
	Consolidated Statements of Cash Flows	7
	Notes to the Consolidated Financial Statements	8
Item 2.	Management Discussion & Analysis of Financial Condition and Results of Operations	17
Item 3	Quantitative and Qualitative Disclosures About Market Risk	40
Item 4.	Controls and Procedures	40

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	41
Item 1a.	Risk Factors	41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	49
Item 3.	Defaults Upon Senior Securities	50
Item 4.	Mine Safety Disclosures	50
Item 5	Other information	50
Item 6.	Exhibits	51

CERTIFICATIONS

Exhibit 31 –	Management certification

Exhibit 32 –	Sarbanes-Oxley Act

FINANCIAL INFORMATION

As used in these footnotes, “we”, “us”, “our”, “Energizer Resources”, “Energizer”, “Company” or “our company” refers to Energizer Resources Inc. and all of its subsidiaries.

ITEM 1. INTERIM CONSOLIDATED FINANCIAL STATEMENTS AND NOTES

The accompanying reviewed interim unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q. Therefore, they do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders' equity in conformity with generally accepted accounting principles applicable in the United States of America. Except as disclosed herein, there has been no material change in the information disclosed in the notes to the consolidated financial statements included in our Company's annual report on Form 10-K for the year ended June 30, 2013. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the period ended March 31, 2014 are not necessarily indicative of the results that can be expected for the year ending June 30, 2014.

All references to “dollars”, “$” or “US$” are to United States dollars and all references to “CAD$” are to Canadian dollars. United States dollar equivalents of Canadian dollar figures are based on the exchange rate as reported by the Bank of Canada on the applicable date.

ENERGIZER RESOURCES INC.

(An Exploration Stage Company)

Unaudited Condensed Consolidated Interim Financial Statements

For the nine month period ended March 31, 2014

(Expressed in US Dollars)

Energizer Resources Inc.

(An Exploration Stage Company)

Unaudited Condensed Consolidated Interim Balance Sheets

(Expressed in US Dollars)


	March 31, 2014			June 30, 2013
	(Unaudited)			(Audited)

Assets
Current Assets:
Cash and cash equivalents	$	5,299,715		$	825,100
Amounts receivable and prepaid expenses (note 4)		271,942			209,520
Loan to related party (note 4)		50,716			136,999
Marketable securities (note 5)		79,409			10,000

Total current assets		5,701,782			1,181,619
Equipment (note 6)		20,179			38,817

Total assets	$	5,721,961		$	1,220,436

Liabilities and Stockholders' Equity
Liabilities
Current Liabilities:
Accounts payable and accrued liabilities (note 4)	$	2,079,924		$	803,130
Deferred premium on flow-through shares (note 8)		100,538			-

Total liabilities		2,180,462			803,130

Stockholders' Equity
Common stock, 450,000,000 shares authorized, $0.001 par value,
266,127,603 issued and outstanding (June 30, 2013 –
175,604,320) (note 9)		266,127			175,604
Additional paid-in capital		85,575,786			75,357,442
Accumulated comprehensive loss		22,021			(62,849	)
Donated capital		20,750			20,750
Accumulated deficit during exploration stage		(82,343,185	)		(75,073,641	)

Total stockholders' equity		3,541,499			417,306

Total liabilities and stockholders' equity	$	5,721,961		$	1,220,436

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

Going concern (note 1)

Mineral Properties (note 7)

Commitments (note 13)

Subsequent Events (note 14)

Energizer Resources Inc.

(An Exploration Stage Company)

Unaudited Condensed Consolidated Interim Statements of Operations and Comprehensive Loss

(Expressed in US Dollars)

	March 1, 2004 (date of inception) to			For the nine months ended March 31,						For the three months ended March 31,
	March 31, 2014			2014			2013			2014			2013

Revenues	$	-		$	-		$	-		$	-		$	-

Expenses
Mineral exploration expense (note 4 & 7)		31,219,335			4,290,899			3,194,788			2,706,609			906,431
Stock-based compensation
(notes 4, 9 & 10)		24,856,963			681,419			1,470,678			439,600			1,059,640
Impairment loss on mineral
properties (note 7)		11,358,637			-			-			-			-
General and administrative (note 4)		8,786,367			911,273			831,968			317,538			306,236
Professional and consulting fees (note 4)		8,731,206			1,567,387			1,571,547			977,434			495,720
Depreciation (note 6)		105,287			18,638			16,664			6,671			4,951
Donated services and expenses		18,750			-			-			-			-
Foreign currency translation gain		(1,237,551	)		(236,661	)		(71,764	)		(146,555	)		(80,893	)

Total expenses		83,838,994			7,232,955			7,013,881			4,301,297			2,692,085

Net loss from operations		(83,838,994	)		(7,232,955	)		(7,013,881	)		(4,301,297	)		(2,692,085	)

Other Income / (Loss)
Investment income		1,255,805			27,260			305,938			19,860			10,376
Other income		303,853			-			-			-			-
Impairment of marketable securities (note 5)		(63,849	)		(63,849	)		-			-			-
Net Loss		(82,343,185	)		(7,269,544	)		(6,707,943	)		(4,281,437	)		(2,681,709	)
Unrealized (loss)/gain from investments in
marketable securities		(47,672	)		21,021			(7,513	)		16,582			2,000
Recognition of other than temporary
loss (note 5)		63,849			63,849			-			-			-

Comprehensive loss	$	(82,327,008	)	$	(7,184,674	)	$	(6,715,456	)	$	(4,264,855	)	$	(2,679,709	)

Loss per share - basic and diluted (note 12)				$	(0.03	)	$	(0.04	)	$	(0.02	)	$	(0.02	)

Weighted average shares outstanding -
basic and diluted (note 12)					212,067,742			160,757,292			229,488,978			164,199,726

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

Energizer Resources Inc.

(An Exploration Stage Company)

Unaudited Condensed Consolidated Interim Statements of Cash Flows

(Expressed in US Dollars)

	March 1, 2004			For the nine months ended
	(date of inception) to			March 31,			March 31,
	March 31, 2014			2013			2012
Net loss	$	(82,343,185	)	$	(7,269,544	)	$	(6,707,943	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		105,287			18,638			16,664
Gain on sale of marketable securities		(4,545	)		(4,545	)		-
Donated services and expenses		20,750			-			-
Non-cash proceeds received		(74,000	)		-			-
Dual currency deposits		71,680			-			-
Impairment loss on mineral properties		11,358,637			-			-
Stock-based compensation		24,856,963			681,419			1,470,678
Issuance of shares and warrants for services rendered		168,100			-			-
Impairment of marketable securities		63,849			63,849			-
Change in operating assets and liabilities:
Amounts receivable and prepaid expenses		(271,942	)		(62,422	)		228,907
Accounts payable and accrued liabilities		2,080,750			1,276,794			(565,137	)
Tax credits recoverable		(245,186	)		-			-
Non-cash portion of marketable securities		366			-			-

Net cash used in operating activities		(44,212,476	)		(5,295,811	)		(5,556,831	)

Financing Activities
Proceeds from issuance of common stock, net of costs		51,907,720			9,732,482			4,023,113
Exercise of warrants and stock options		1,075,500			-			105,000
Government grants received		245,186			-			-

Net cash provided by financing activities		53,228,406			9,732,482			4,128,113

Investing Activities
Mineral property acquisition costs		(3,419,973	)		-			-
Purchase of property and equipment		(125,465	)		-			(9,808	)
Investment in dual currency deposits		(32,938,800	)		-			-
Redemption of dual currency deposits		32,867,078			-			-
Loan to related party		(50,716	)		86,283			88,347
Purchases of marketable securities, net of sales		(103,763	)		(103,763	)		-
Proceeds on sale of marketable securities		55,424			55,424			-

Net cash (used in) provided by investing activities		(3,716,215	)		37,944			78,539

Increase (decrease) in cash and cash equivalents		5,299,715			4,474,615			(1,350,179	)
Cash and cash equivalents - beginning of period		-			825,100			3,479,484

Cash and cash equivalents - end of period	$	5,299,715		$	5,299,715		$	2,129,305

Non-cash investing and financing activities:
Issuance of common stock for mineral properties	$	5,190,500		$	-		$	-
Issuance of common stock and warrants for services	$	5,811,125		$	-		$	-
Supplemental Disclosures:
Interest received	$	817,422		$	-		$	-
Taxes received	$	9,441		$	-		$	-

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

Energizer Resources Inc.

(An Exploration Stage Company)

Notes to Unaudited Condensed Consolidated Interim Financial Statements

For the nine month period ended March 31, 2014

(Expressed in US Dollars)

1.	Exploration Stage Company and Going Concern

Energizer Resources Inc. (the "Company") was incorporated in the State of Nevada, United States of America on March 1, 2004 and reincorporated in the State of Minnesota on May 14, 2008. The Company's fiscal year end is June 30. The Company is an Exploration Stage Company, as defined by ASC Topic - 915, "Development Stage Entities". The Company's principal business is the acquisition and exploration of mineral resources. During fiscal 2008, the Company incorporated Energizer Resources (Mauritius) Ltd., a Mauritius subsidiary and Energizer Resources Madagascar Sarl, a Madagascar subsidiary. During fiscal 2009, the Company incorporated THB Venture Ltd., a Mauritius subsidiary to hold the interest in Energizer Resources Minerals Sarl, a Madagascar subsidiary, which holds the Green Giant Property in Madagascar (see note 7). During fiscal 2012, the Company incorporated Madagascar-ERG Joint Venture (Mauritius) Ltd., a Mauritius subsidiary and ERG (Madagascar) Sarl, a Madagascar subsidiary. ERG (Madagascar) Sarl is 100% owned by Madagascar-ERG Joint Venture (Mauritius) Ltd. which is owned 75% by Energizer Resources (Mauritius) Ltd. ERG (Madagascar) Sarl holds the Malagasy Joint Venture Ground (see note 7). During fiscal 2014, the Company incorporated 2391938 Ontario Inc. an Ontario, Canada subsidiary. The Company has not yet fully determined whether its properties contain mineral reserves that are economically recoverable.

These unaudited condensed consolidated interim financial statements have been prepared on a going concern basis, which assumes that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has yet to generate revenue from mining operations or pay dividends and is unlikely to do so in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity or debt financing to continue operations, and the attainment of profitable operations. As of March 31, 2014, the Company has accumulated losses of $82,343,185. As such, there is substantial doubt regarding the Company's ability to continue as a going concern. These unaudited condensed consolidated interim financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

2.	Significant Accounting Policies

Principals of Consolidation and Basis of Presentation

These unaudited condensed consolidated interim financial statements are presented in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"), and are expressed in United States dollars. These unaudited condensed consolidated interim financial statements include the accounts of Energizer Resources Inc. and its wholly-owned subsidiaries, Energizer Resources (Mauritius) Ltd., THB Ventures Ltd., Energizer Resources Madagascar Sarl, Energizer Resources Minerals Sarl and 2391938 Ontario Inc. In addition, these consolidated interim unaudited condensed financial statements include the Company's 75% interest (see Note 14 - Subsequent Events) in Madagascar-ERG Joint Venture (Mauritius) Ltd. and its 100% owned subsidiary ERG (Madagascar) Sarl. All inter-company balances and transactions have been eliminated on consolidation.

Unaudited Condensed Consolidated Interim Financial Statements

These unaudited condensed consolidated interim financial statements have been prepared on the same basis as the annual financial statements and should be read in conjunction with those annual financial statements filed on Form 10-K for the year ended June 30, 2013. In the opinion of management, these unaudited condensed consolidated interim financial statements reflect adjustments, necessary to present fairly the Company's financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period.

Energizer Resources Inc.

(An Exploration Stage Company)

Notes to Unaudited Condensed Consolidated Interim Financial Statements

For the nine month period ended March 31, 2014

(Expressed in US Dollars)

3.	Recent Accounting Pronouncements Affecting The Company

The following are recent FASB accounting pronouncements, which may have an impact on the Company's future consolidated financial statements.

"Income Taxes (ASC Topic - 740): Presentation of an Unrecognized Tax Benefit when a Net OperatingLoss Carry-forward, a Similar Tax Loss, or a Tax Credit Carry-forward Exists" (ASU 2013-11) was issuedduring July 2013. FASB issued guidance on how to present an unrecognized tax benefit. The guidance is effective for annual periods beginning after December 15, 2013. The Company is currently evaluating the impact of ASC Topic - 740.

4.	Related Party Transactions and Balances

Parties are related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making operating and financial decisions. Parties are also related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. Related party transactions that are in the normal course of business and have commercial substance are measured at the exchange amount.

The following are the related party transactions as at nine month period ended March 31, 2014:

a)	The Company incurred a total of $90,000 (March 31, 2013: $89,495) office administration and rent expense from a public company related by common management, Red Pine Exploration Inc (TSX.V: "RPX").

5,370,000 (March 31, 2013: 5,275,000) stock options were issued to related parties during the period with exercise prices between $0.11 and $0.18 (March 31, 2013: between $0.21 and $0.29). These stock options valued at $513,364 (March 31, 2013: $1,051,175) were issued to directors and officers of the Company.

c)	The Company incurred $754,515 (March 31, 2013: $634,387) in administrative, management and consulting fees to directors and officers.

d)	The Company incurred $571,395 (March 31, 2013: $898,083) in charges from a mining and engineering firm for which one of the Company's directors serves as a senior officer and a director.

e)	During the nine month period ended March 31, 2014 the Company Optioned a 75% interest in the Sagar Property to Honey Badger Exploration Inc. (TSX-V: "TUF"), a public company related by common management. Refer to Note 7 - Minerals Properties for the terms of this property transaction.

The following are the related party balances as at nine month period ended March 31, 2014:

a)	Related party balances of $46,326 (June 30, 2013: $46,381) in prepaid expenses.

The Company has advanced a short-term loan to RPX totaling $50,716 (June 30, 2013: $136,999). This loan is interest bearing at a rate of 3% and is expected to be paid back in full within the next 12 months. $300,000 was originally loaned during January 2012 and represents the highest outstanding balance. $225,000 has been paid back on the loan since inception up to March 31, 2013, all against the loan's principal balance. Accrued interest due totaled $11,029 as at March 31, 2014.

c)	Of the $571,395 (March 31, 2013: $898,083) in charges from a mining and engineering firm for which one of the Company's directors serves as a senior officer and director, $415,801 (March 31, 2013: $243,907) is included in accounts payable and accrued liabilities.

d)	$325,867 (March 31, 2013: $Nil) is included within accounts payable and accrued liabilities as a committed amount due to the former Chief Executive Officer of the Company.

Energizer Resources Inc.

(An Exploration Stage Company)

Notes to Unaudited Condensed Consolidated Interim Financial Statements

For the nine month period ended March 31, 2014

(Expressed in US Dollars)

5.	Marketable Securities

Marketable securities consist of available-for-sale securities over which the Company does not have significant influence or control. $79,409 (June 30, 2013: $10,000) is invested in TSX-Venture entities. During March 31, 2014, the Company determined that $63,849 of unrealized losses were other than temporary and as such were recognized as an "other expense" in net loss and removed from accumulated other comprehensive income.

			Accumulated		March 31, 2014		June 30, 2013
	Cost		Depreciation		Net Book Value		Net Book Value


Exploration equipment	$	63,547	$	43,368	$	20,179	$	38,817

For the nine month period ended March 31, 2014, depreciation expense totaled $18,638 (March 31, 2013: $16,664).

7.	Mineral Properties

Molo Graphite Project, Southern Madagascar, Africa

On December 14, 2011, the Company entered into a Definitive Joint Venture Agreement ("JVA") with Malagasy Minerals Limited ("Malagasy"), a public company on the Australian Stock Exchange, to acquire a 75% interest to explore and develop a group of industrial minerals (including graphite, vanadium and approximately 25 other minerals). Malagasy retained a 25% interest. The land position covers 2,119 permits and 827.7 square kilometres and is mostly adjacent to the south and east of the Company's 100% owned Green Giant Property. The Company paid $2,261,690 and issued 7,500,000 common shares valued at $1,350,000. Malagasy has a carried interest until the Company delivers a Bankable Feasibility Study ("BFS"). Upon the delivery of a BFS, Malagasy is required to contribute its 25% interest in the development and mining operations. Should either party's interest fall below 10%, through not contributing their portion of costs post-BFS, their position will be diluted to a 2% Net Smelter Return ("NSR"). As it has not yet determined whether the property has probable or proven reserves, the Company recognized an impairment loss during fiscal 2012 totaling $3,770,129. This amount represents the cash paid, the value of common shares issued, and legal and other professional fees paid relating to the properties acquisition.

Further to the Memorandum of Understanding signed on October 24, 2013, on April 16, 2014, the Company signed a Sale and Purchase Agreement and a Mineral Rights Agreement with Malagasy to acquire the remaining 25% interest in the Molo Graphite Project. The Company agreed to make the following payments to Malagasy when certain conditions are met including within 5 business days of TSX approval: cash payment of CAD$400,000; issue 2,500,000 common shares of the Company which will be subject to a 12 month voluntary vesting period; and issue of 3,500,000 common share purchase warrants with an expiration date of five years from the signing date of the agreement at a price to be determined by taking the volume weighted average closing price of the Company's common shares during the five days immediately preceding execution of the Agreement. In addition, the Company will make a cash payment of CAD$700,000 and issue of 1,000,000 of the Company's common shares within five days of completion of a Bankable Feasibility Study (“BFS”) for the Molo Graphite Project or the formal announcement of a decision to mine; and a cash payment of CAD$1,000,000 within five days of the commencement of Molo mine commercial production. Malagasy will retain a 1.5% Net Smelter Return Royalty on all industrial minerals produced from the property. The Company also acquired a 100% interest in and to the industrial mineral rights on about 1-1/2 additional claim blocks comprising 10,811 hectares immediately to the east and adjoining the Molo Graphite Deposit claim blocks.

Energizer Resources Inc.

(An Exploration Stage Company)

Notes to Unaudited Condensed Consolidated Interim Financial Statements

For the nine month period ended March 31, 2014

(Expressed in US Dollars)

7.	Mineral Properties - continued

Green Giant Property, Southern Madagascar, Africa

During 2007, the Company paid $765,000, issued 2,500,000 common shares and 1,000,000 now expired common share purchase warrants to enter into a joint venture agreement for the Green Giant Property with Madagascar Minerals and Resources Sarl ("MMR"). The Company owned a 75% interest and MMR owned a 25% interest.

On July 9, 2009, the Company acquired the remaining 25% interest for $100,000 and terminated the joint venture. MMR retains a 2% NSR. The NSR can be purchased, at the Company's option, for $500,000 in cash or common shares for the first 1% and at a price of $1,000,000 in cash or common shares for the second 1%.

On April 16, 2014, the Company signed a Joint Venture Agreement with Malagasy, whereby Malagasy acquires a 75% interest for non-industrial minerals on the Company's 100% owned Green Giant Property in Madagascar. Energizer will own the remaining 25% and have a free carried interest through to the BFS stage. No specific consideration was received for this transaction as it was part of the Sale and Purchase Agreement and Mineral Rights Agreement as noted under the Molo Graphite Project of this note.

Sagar Property - Romanet Horst, Labrador Trough, Quebec, Canada

During 2006, the Company purchased from Virginia Mines Inc. ("Virginia") a 100% interest in 377 claims located in northern Quebec, Canada. Virginia retains a 2% NSR on certain claims within this property with other unrelated vendors holding a 1% NSR on certain claims, and a 0.5% NSR on other claims. For the other vendor's NSR, the Company has the right to buy back half of the 1% NSR for $200,000 and half of the 0.5% NSR for $100,000.

On February 28, 2014, the Company optioned a 75% interest to Honey Badger Exploration Inc. ("TUF"), a public company related by common management. In order to complete the transaction, TUF agrees to the following:

-	$1,500,000 within 15 days upon the earlier of the completion of a financing or nine months following theagreement's closing date and up to 9.5% of TUF’s issued and outstanding common shares ("I&O Shares")at the time of issuance to a maximum of 15,000,000 common shares.

$1,500,000, subject to receiving shareholder approval but within eighteen months from the agreement'sclosing date, and up to 15% of TUF’s I&O Shares at the time of issuance to a maximum of 35,000,000common shares (the maximum includes all common shares previously issued). If shareholder approval is not obtained, the Company will receive $750,000 and additional common shares that equal up to 9.5% of TUF’s I&O Shares at the time of issuance to a maximum of 20,000,000 common shares (the maximum includes all common shares previously issued).

Subject to meeting certain conditions, TUF is granted a three-year option (“Option”), commencing noearlier than June 1, 2015, to purchase the Company's remaining 25% interest. If exercised, the Companywill receive $1,000,000 and common shares up to 19.5% of TUF’s I&O Shares at the time of issuance to an aggregate maximum of 60,000,000 common shares (the maximum includes all common shares previously issued) within 15 days of any requisite shareholder and regulatory approval. If shareholder approval is not obtained for the Option, TUF can elect to pay $1,875,000 in lieu of shares. If the Option is not exercised, the Company and TUF will enter into a joint venture agreement consistent with industry norms for such arrangements including a standard dilution clause.

Subject to certain conditions, the Company has been provided with a first right of refusal for a period of 5 years to maintain its equity position by participating in any future private placements. The Company will retain a 2% net smelter royalty (“NSR”) on the property, of which, 1% could be purchased by TUF for $1,000,000.

Energizer Resources Inc.

(An Exploration Stage Company)

Notes to Unaudited Condensed Consolidated Interim Financial Statements

For the nine month period ended March 31, 2014

(Expressed in US Dollars)

8.	Deferred Premium on Flow-Through Shares

The premium paid for flow-through shares in excess of the market value of the shares without a flow-through feature is initially recognized as a liability. The liability is subsequently reduced and recorded in the statement of comprehensive loss on a pro-rata basis based on the corresponding eligible flow-through expenditures that have been incurred. The following summarizes the deferred premium liability on flow-through transactions for the nine month period ended March 31, 2014.

For the nine month period ended March 31, 2014

Deferred premium on flow-through shares, beginning of period	$	-
Recognized on issuance of flow-through shares		100,538

Deferred premium on flow-through shares, end of period	$	100,538

9.	Common Stock and Additional Paid-in Capital

a)	During July 2012, the Company issued 700,000 shares of common stock for consideration of $105,000. The shares were issued pursuant to the exercise of stock options.

On July 13, 2012, the Company issued 1,695,000 stock options to directors, officers and consultants of the Company at an exercise price of $0.29. The stock options were valued at $411,038 using the Black-Scholes pricing model with the following assumptions: risk free interest rate - 1.25%; expected volatility - 138%; dividend yield - NIL; and expected life - 4 years. These stock options vested on the grant date.

During November 2012, the Company closed a brokered and non-brokered private placement raising a total of $2,032,500. The Company issued 5,807,142 common stock at $0.35 per share and 2,903,571 common share purchase warrants at an exercise of $0.50 and an expiry date 24 months from the date of issue. In addition, the Company paid a fee of $119,010 and issued 340,028 compensation warrants. Each compensation warrant entitles the holder to purchase one common share at $0.35 and one half of one common share purchase warrant at an exercise price of $0.50.

On February 27, 2013, the Company issued 5,900,000 stock options to directors, officers and consultants at an exercise price of $0.21. The stock options were valued at $1,059,640 using the Black-Scholes pricing model with the following assumptions: risk free interest rate - 1.40%; expected volatility - 129%; dividend yield - NIL; and expected life - 5 years. These stock options vested on the grant date.

During March 2013, the Company closed a private placement raising a total of CAD$2,358,000 (USD$2,307,035). The Company issued 12,350,000 common stock at prices between $0.18 and $0.20 per share. In addition, the Company paid a fee of CAD$86,000 (USD$84,176) and issued 270,000 compensation warrants. Each compensation warrant entitles the holder to purchase one common share at CAD$0.20.

On July 9, 2013, the Company issued 1,255,000 stock options to directors, officers and consultants at an exercise price of $0.11. The stock options were valued at $117,594 using the Black-Scholes pricing model with the following assumptions: risk free interest rate - 1.25%; expected volatility - 128%; dividend yield - NIL; and expected life - 5 years. These stock options vested on the grant date.

Energizer Resources Inc.

(An Exploration Stage Company)

Notes to Unaudited Condensed Consolidated Interim Financial Statements

For the nine month period ended March 31, 2014

(Expressed in US Dollars)

9.	Common Stock and Additional Paid-in Capital - continued

Between July 26, 2013 and August 1, 2013, the Company closed a private placement raising a total of $2,043,452. The Company issued 16,950,001 common stock at prices of CAD$0.125 and $0.12 per share. The Company paid a fee of $114,087 and issued 402,000 compensation warrants at an exercise price of CAD$0.125 and 150,000 compensation warrants at an exercise price of $0.12. Each compensation warrant expires one year from the date of issue.

On September 19, 2013, the Company issued 750,000 stock options to directors, officers and consultants at an exercise price of $0.15. The stock options were valued at $96,675 using the Black-Scholes pricing model with the following assumptions: risk free interest rate - 1.25%; expected volatility - 127%; dividend yield - NIL; and expected life - 5 years. These stock options vested on the grant date.

On October 9, 2013, the Company issued 250,000 stock options to directors and officers of the Company at an exercise of $0.13 and an expiry date of October 9, 2018. The stock options were valued at $27,550 using the Black-Scholes pricing model with the following assumptions: risk free interest rate - 1.25%; expected volatility - 126%; dividend yield - NIL; and expected life - 5 years. These stock options vested on the grant date.

On December 18, 2013 the Company closed a private placement raising a total of CAD$1,566,490 (USD$1,479,023). The Company issued 11,189,215 common shares at a price of CAD$0.14. The Company paid fees of $112,067 and issued 671,353 compensation warrants at an exercise price of CAD$0.14. Each compensation warrant expires eighteen months from the date of issue.

On January 10, 2014, the Company issued 4,625,000 stock options to directors and officers of the Company at an exercise of $0.18 and an expiry date of January 10, 2019. The stock options were valued at $413,475 using the Black-Scholes pricing model with the following assumptions: risk free interest rate - 1.50%; expected volatility - 110%; dividend yield - NIL; and expected life - 5 years. These stock options vested on the grant date.

On January 15, 2014 and January 31, 2014, the Company closed a private placement raising a total of CAD$7,486,088 (USD$6,910,503). The Company issued 62,384,067 common shares at a price of CAD$0.12 and 31,192,033 common share purchase warrants with an exercise price of CAD$0.18. Of the 31,192,033 common share purchase warrants, 29,152,033 expire on January 14, 2017, 1,450,000 expire on June 14, 2015 and 590,000 expire on January 31, 2017. The Company paid fees, including commissions, legal fees and TSX fees of $488,234 and issued 3,396,744 compensation warrants at an exercise price of CAD$0.14. Each compensation warrant expires eighteen months from the date of issue.

On February 6, 2014, the Company issued 250,000 stock options to a consultant of the Company at an exercise of $0.18 and an expiry date of February 6, 2019. The stock options were valued at $26,125 using the Black-Scholes pricing model with the following assumptions: risk free interest rate - 1.50%; expected volatility - 107%; dividend yield - NIL; and expected life - 5 years. These stock options vested on the grant date.

Energizer Resources Inc.

(An Exploration Stage Company)

Notes to Unaudited Condensed Consolidated Interim Financial Statements

For the nine month period ended March 31, 2014

(Expressed in US Dollars)

On March 9, 2006, the Company filed a Form S-8 registration statement in connection with its newly adopted 2006 Stock Option Plan (the "2006 Plan") allowing for the direct award of shares or granting of stock options to acquire up to a total of 2,000,000 common shares. On December 18, 2006, February 16, 2007, July 11, 2007, September 29, 2009, May 3, 2011, March 1, 2012, February 27, 2013, and December 23, 2013, the 2006 Plan was amended to increase the stock option pool by a total of 35,500,000 additional common shares.

The following is a continuity schedule of the Company's stock options, all of which vest on the grant date:

	Number of			Weighted-Average
	Stock Options			Exercise Price ($)

Outstanding and exercisable, June 30, 2012		23,690,000			0.29
Issued		7,595,000			0.23
Exercised		(700,000	)		0.15
Expired		(1,695,000	)		0.15
Cancelled		(1,750,000	)		0.32

Outstanding and exercisable, June 30, 2013		27,140,000			0.28
Issued		7,130,000			0.16
Expired		(750,000	)		0.35
Cancelled		(200,000	)		0.26

Outstanding and exercisable, March 31, 2014		33,320,000			0.25

The following is a summary stock options outstanding as of March 31, 2014:

Exercise		Number of		Expiry
Price ($)		Stock Options		Date

	0.40		4,850,000	May 11, 2014
	0.30		3,700,000	July 1, 2016
	0.29		1,695,000	July 13, 2016
	0.20		1,800,000	October 24, 2016
	0.21		2,240,000	December 1, 2016
	0.28		5,850,000	March 7, 2017
	0.23		180,000	May 23, 2017
	0.21		5,875,000	February 27, 2018
	0.11		1,255,000	July 9, 2018
	0.15		750,000	September 19, 2018
	0.13		250,000	October 9, 2018
	0.18		4,625,000	January 10, 2019
	0.18		250,000	February 6, 2019

			33,320,000

Energizer Resources Inc.

(An Exploration Stage Company)

Notes to Unaudited Condensed Consolidated Interim Financial Statements

For the nine month period ended March 31, 2014

(Expressed in US Dollars)

The following is a continuity schedule of the Company's common share purchase warrants:

	Number			Exercise
	of Warrants			Price ($)

Outstanding and exercisable, June 30, 2012		43,619,695			0.55
Issued		3,513,599			0.46
Expired		(43,619,695	)		0.55

Outstanding and exercisable, June 30, 2013		3,513,599			0.46
Issued		35,812,130			0.16	*
Expired		(270,000	)		0.18

Outstanding and exercisable, March 31, 2014		39,055,729			0.16	*

* Amount represents the converted USD exercise price

The following is a summary common share purchase warrants outstanding as of March 31, 2014:

Exercise			Number of		Expiry
Price ($)			Warrants		Date

	0.11	(a)		402,000	July 26, 2014
	0.12			150,000	August 1, 2014
	0.35			340,028	November 15, 2014
	0.13	(b)		671,353	June 19, 2015
	0.13	(b)		3,396,744	July 14, 2015
	0.16	(c)		1,450,000	July 14, 2015
	0.23	(d)		2,903,571	November 15, 2016
	0.16	(c)		29,152,033	January 14, 2017
	0.16	(c)		590,000	January 31, 2017

				39,055,729

(a) The exercise price is CAD$0.125.

(b) The exercise price is CAD$0.14.

(c) On December 24, 2013, the Company re-priced and extended the term of the common share purchase warrants from an expiry of November 15, 2015 and an exercise price of $0.23 to November 15, 2016 and $0.18, respectively

Energizer Resources Inc.

(An Exploration Stage Company)

Notes to Unaudited Condensed Consolidated Interim Financial Statements

For the nine month period ended March 31, 2014

(Expressed in US Dollars)

Basic and diluted loss per share is computed using the weighted average number of common stock outstanding. Diluted loss per share and the weighted average number of shares of common stock exclude all potentially dilutive shares since their effect is anti-dilutive. As at March 31, 2014, there were a total of 72,375,729 (March 31, 2013: 69,853,294) potentially dilutive stock options and common share purchase warrants outstanding.

The Company raised CAD$4,761,990 during 2013 on a Canadian flow-through basis. The Company is required to spend and renounce this amount on Canadian Exploration Expenditures before December 31, 2014. As of the date of these financial statements, the Company expects to meet this commitment.

14.	Subsequent Events

Property Acquisition

On April 16, 2014 the Company finalized the property acquisition transaction with Malagasy Minerals Inc. and now holds a 100% interest to industrial mineral rights in the Molo Graphite Project. Further information on this transactions is disclosed within Note 7 - Mineral Properties.

As used in this quarterly report, “we”, “us”, “our”, “Energizer Resources”, “Energizer”, “Company” or “our company” refers to Energizer Resources Inc. and all of its subsidiaries. The term NSR stands for Net Smelter Royalty.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Included in this report are "forward-looking" statements, within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA") as well as historical information. Certain statements included in this Form 10-Q, including, without limitation, statements related to anticipated cash flow sources and uses, and words including but not limited to “anticipates”, “believes”, “plans”, “expects”, “future” and similar statements or expressions, identify forward looking statements. Examples of forward-looking statements include, but are not limited to: (a) projections of our revenues, capital expenditures, growth, prospects, dividends, capital structure and other financial matters; (b) statements of our plans and objectives; (c) statements of our future economic performance; (d) statements of assumptions underlying other statements and statements about us and our business relating to the future; and (e) any statements using the words "believes," "budget," "target," "goal," "anticipate," "expect," "plan," "outlook," "objective," "may," "project," "intend," "estimate," or similar expressions. Any forward-looking statements herein are subject to certain risks and uncertainties in the business of Energizer Resources Inc. including but not limited to, planned capital expenditures, potential increases in prospective production costs, future cash flows and borrowings, pursuit of potential acquisition opportunities, the possibility that the industry may be subject to future regulatory or legislative actions (including additional taxes, changes in environmental regulation, changes in Madagascar French civil law and traditional Malagasy law, and disclosure requirements under the Dodd-Frank Wall Street Reform, Consumer Protection Act and the Jumpstart our Business Startups Act of 2012 ), our financial position, business strategy and other plans, objectives for future operations , difficulties of hiring or retaining key personnel and any changes in current accounting rules, all of which may be beyond the control of our Company. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth therein. We claim the protection afforded by the safe harbor for forward-looking statements provided by the PSLRA.

Management’s Discussion and Analysis of Results of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with our financial statements included herein. Further, this quarterly report on Form 10-Q should be read in conjunction with our Financial Statements and Notes to Financial Statements included in our fiscal 2013 Annual Report on Form 10-K for the year ended June 30, 2013, filed with the Securities and Exchange Commission on September 26, 2013. Our actual results could differ materially from those anticipated by the forward-looking statements due to important factors and risks including, but not limited to, those set forth under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K.

In addition, the foregoing factors may affect generally our business, results of operations and financial position. Forward-looking statements speak only as of the date the statement was made. We do not undertake and specifically decline any obligation to update any forward-looking statements.

Our financial statements have been prepared in accordance with United States generally accepted accounting principles. We urge you to read this report in conjunction with the risk factors described herein.

ITEM 1. DESCRIPTION OF BUSINESS

BACKGROUND – COMPANY OVERVIEW

During fiscal 2008, we incorporated Energizer Resources (Mauritius) Ltd., a Mauritius subsidiary and Energizer Resources Madagascar Sarl, a Madagascar subsidiary. During fiscal 2009, we incorporated THB Venture Ltd., a Mauritius subsidiary to hold the interest in Energizer Resources Minerals Sarl, a Madagascar subsidiary, which holds the Green Giant Property in Madagascar. During fiscal 2012, we incorporated Madagascar-ERG Joint Venture (Mauritius) Ltd., a Mauritius subsidiary and ERG (Madagascar) Sarl, a Madagascar subsidiary. ERG (Madagascar) Sarl is 100% owned by Madagascar-ERG Joint Venture (Mauritius) Ltd., which is owned 75% by Energizer Resources (Mauritius) Ltd. ERG (Madagascar) Sarl holds the Malagasy Joint Venture Ground. During fiscal 2014,we incorporated 2391938 Ontario Inc., an Ontario, Canada subsidiary.

We have not had any bankruptcy, receivership or similar proceeding since incorporation. Except as described below, there have been no material reclassifications, mergers, consolidations or purchases or sales of any significant amount of assets not in the ordinary course of business since the date of incorporation.

Summary of Our Business

We are an exploration stage company engaged in the search for graphite, vanadium, gold, uranium and other minerals. We have an interest in properties located in the African country of Madagascar and Canada in the Province of Québec. None of the properties in which we hold an interest have known mineral reserves of any kind at this time. As such, the work programs planned by us are exploratory in nature.

Our executive offices are currently located at 520–141 Adelaide Street West, Toronto, Ontario, Canada M5H 3L5. Our telephone number is (416) 364-4911. We maintain a website at www.energizerresources.com (which website is expressly not incorporated by reference into this filing). These offices are leased on a month-to-month basis, and our monthly rental payments are currently CAD$10,000 per month.

UNTIL WE CAN VALIDATE OTHERWISE, THE PROPERTIES OUTLINED BELOW HAVE NO KNOWN MINERAL RESERVES OF ANY KIND AND WE ARE PLANNING PROGRAMS THAT ARE EXPLORATORY IN NATURE.

Further details regarding our properties, although not incorporated by reference, including the comprehensive geological report prepared in compliance with Canada’s National Instrument 43-101 on our Green Giant Property (formerly the “Three Horses Property” in Madagascar) and our Sagar property in Northern Quebec can be found on our Company’s website: www.energizerresources.com (which website is expressly not incorporated by reference into this filing) or in our Company’s Canadian regulatory filings on www.sedar.com (which website and content is expressly not incorporated by reference into this filing).

Cautionary Note

Due to the nature of our business, we anticipate incurring operating losses for the foreseeable future. We base this expectation, in part, on the fact that very few mineral properties in the exploration stage ultimately develop into producing profitable mines. Our future financial results are also uncertain due to a number of factors, some of which are outside our control. These factors include, but are not limited to:

·	our ability to raise additional capital as required;

·	the market price for graphite, vanadium, gold, uranium and for any other minerals which we may find;

·	ongoing joint ventures;

·	the results of our proposed exploration programs on our mineral properties;

·	environmental regulations that may adversely impact cost and operations; and

·	our ability to find joint venture partners, as needed, for the development of our property interests.

If we are successful in completing an equity financing, as necessary, existing shareholders will experience dilution of their interest in our company. In the event we are not successful in raising additional financing, we anticipate that we will not be able to proceed with our business plan. In such a case, we may decide to discontinue our current business plan and seek other business opportunities in the resource sector. During this period, should it ever arise, we will need to maintain our periodic filings with the appropriate regulatory authorities and, as such, will incur legal and accounting costs. In the event no other such opportunities are available and we cannot raise additional capital to sustain operations, we may be forced to discontinue our business altogether. We do not have any specific alternative business opportunities in mind and have not planned for any such contingency.

Due to our lack of operating history and present inability to generate revenues, our auditors have stated their opinion that there currently exists doubt as to our ability to continue as a going concern.

Properties

Madagascar Properties

Molo Graphite Project, Southern Madagascar, Africa

On December 14, 2011, the Company entered into a Definitive Joint Venture Agreement ("JVA") with Malagasy Minerals Limited ("Malagasy"), a public company on the Australian Stock Exchange, to acquire a 75% interest to explore and develop a group of industrial minerals (including graphite, vanadium and approximately 25 other minerals). Malagasy retains a 25% interest. The land position covers 2,119 permits and 827.7 square kilometres and is mostly adjacent to the south and east of the Company's 100% owned Green Giant Property. The Company paid $2,261,690 and issued 7,500,000 common shares valued at $1,350,000. Malagasy has a carried interest until the Company delivers a Bankable Feasibility Study ("BFS"). Upon the delivery of a BFS, Malagasy is required to contribute its 25% interest in the development and mining operations. Should either party's interest fall below 10%, through not contributing their portion of costs post-BFS, their position will be diluted to a 2% Net Smelter Return ("NSR"). As it has not yet determined whether the property has probable or proven reserves, the Company recognized an impairment loss during fiscal 2012 totaling $3,770,129. This amount represents the cash paid, the value of common shares issued, and legal and other professional fees paid relating to the properties acquisition.

Further to the Memorandum of Understanding signed on October 24, 2013, subsequent to the quarter ended March 31, 2014, April 16, 2014, we signed a Sale and Purchase Agreement and a Mineral Rights Agreement with Malagasy to acquire the remaining 25% interest in the Molo Graphite Project. We agreed to make the following payments to Malagasy when certain conditions are met including within 5 business days of TSX approval: cash payment of CAD$400,000; issue 2,500,000 common shares which will be subject to a 12 month voluntary vesting period; and issue of 3,500,000 common share purchase warrants with an expiration date of five years from the signing date of the agreement at a price to be determined by taking the volume weighted average closing price of our common shares during the five days immediately preceding execution of the Agreement. In addition, we will make a cash payment of CAD$700,000 and issue of 1,000,000 of our common shares within five days of completion of a Bankable Feasibility Study (“BFS”) for the Molo Graphite Project or the formal announcement of a decision to mine; and a cash payment of CAD$1,000,000 within five days of the commencement of Molo mine commercial production. Malagasy will retain a 1.5% Net Smelter Return Royalty on all industrial minerals produced from the property. We also acquired a 100% interest in and to the industrial mineral rights on about 1-1/2 additional claim blocks comprising 10,811 hectares immediately to the east and adjoining the Molo Graphite Deposit claim blocks.

Green Giant Property, Southern Madagascar, Africa

During 2007, we paid $765,000, issued 2,500,0000 common shares and 1,000,000 now expired common share purchase warrants to enter into a joint venture agreement for the Green Giant Property with Madagascar Minerals and Resources Sarl ("MMR"). We owned a 75% interest and MMR owned a 25% interest.

On July 9, 2009, we acquired the remaining 25% interest for $100,000 and terminated the joint venture. MMR retains a 2% NSR. The NSR can be purchased, at the Company's option, for $500,000 in cash or common shares for the first 1% and at a price of $1,000,000 in cash or common shares for the second 1%.

On April 16, 2014, subsequent to the quarter ended March 31, 2014, we signed a Joint Venture Agreement with Malagasy, whereby Malagasy acquires a 75% interest for non-industrial minerals on the Company's 100% owned Green Giant Property in Madagascar. We will own the remaining 25% and have a free carried interest through to the BFS stage. No specific consideration was received for this transaction as it was part of the Sale and Purchase Agreement and Mineral Rights Agreement as noted under the Molo Graphite Project of this note.

Canadian Properties

Sagar Property – Romanet Horst, Labrador Trough, Québec, Canada

During 2006, we purchased from Virginia Mines Inc. ("Virginia") a 100% interest in 377 claims located in northern Quebec, Canada. Virginia retains a 2% NSR on certain claims within this property with other unrelated vendors holding a 1% NSR on certain claims, and a 0.5% NSR on other claims. For the other vendor's NSR, we have the right to buy back half of the 1% NSR for $200,000 and half of the 0.5% NSR for $100,000.

On February 28, 2014, we optioned a 75% interest to Honey Badger Exploration Inc. ("TUF"), a public company related by common management. In order to complete the transaction, TUF agrees to the following:

·	$1,500,000 within 15 days upon the earlier of the completion of a financing or nine months following the agreement's closing date and up to 9.5% of TUF’s issued and outstanding common shares ("I&O Shares") at the time of issuance to a maximum of 15,000,000 common shares.

$1,500,000, subject to receiving shareholder approval but within eighteen months from the agreement's closing date, and up to 15% of TUF’s I&O Shares at the time of issuance to a maximum of 35,000,000 common shares (the maximum includes all common shares previously issued). If shareholder approval is not obtained, we will receive $750,000 and additional common shares that equal up to 9.5% of TUF’s I&O Shares at the time of issuance to a maximum of 20,000,000 common shares (the maximum includes all common shares previously issued).

Subject to meeting certain conditions, TUF is granted a three-year option (“Option”), commencing no earlier than June 1, 2015, to purchase the our remaining 25% interest. If exercised, we will receive $1,000,000 and common shares up to 19.5% of TUF’s I&O Shares at the time of issuance to an aggregate maximum of 60,000,000 common shares (the maximum includes all common shares previously issued) within 15 days of any requisite shareholder and regulatory approval. If shareholder approval is not obtained for the Option, TUF can elect to pay $1,875,000 in lieu of shares. If the Option is not exercised, TUF and ourselves will enter into a joint venture agreement consistent with industry norms for such arrangements including a standard dilution clause.

Subject to certain conditions, we have been provided with a first right of refusal for a period of 5 years to maintain its equity position by participating in any future private placements. We will retain a 2% net smelter royalty (“NSR”) on the property, of which, 1% could be purchased by TUF for $1,000,000.

Further details on exploration programs carried out on all our company’s properties can be found below.

Competitive Conditions in our Industry

The mineral exploration and mining industry is competitive in all phases of exploration, development and production. We compete with a number of other entities and individuals in the search for, and acquisition of, attractive mineral properties. As a result of this competition, the majority of which is with companies with greater financial resources than us, we may not in the future be able to acquire attractive properties on terms our management considers acceptable. Furthermore, we compete with other resource companies, many of whom have greater financial resources and/or more advanced properties that are better able to attract equity investments and other capital. Factors beyond our control may affect the marketability of minerals mined or discovered by us.

Employees

As of May 12, 2014, we had 9 total employees, 7 full-time and 2 part-time employees. In addition to our full time employees, we engage consultants to serve several important managerial and non-managerial functions for us including serving as officers and to performing professional, geological and administrative functions.

MADAGASCAR PROPERTIES

Green Giant Property Description and Location

The Green Giant Property is comprised of 6 mineral permits. The properties are located in the District of Toliara and are referenced as TN 12,306,P(R); TN 12,814, P(R); TN 12,887 P(R); TN 12,888 P(R); TN 13,020 P(R); TN 13,021 P(R) as issued by the Bureau de Cadastre Minier de Madagascar (“BCMM”) pursuant to the Mining Code 1999 (as amended) and its implementing decrees. The total land position is 225 sq. kilometres. This property can be accessed by both air and road.

Joint Venture Property Description and Location

The “Joint Venture Property” is comprised of a portion of or all of 40 mineral permits. The properties are located in the District of Toliara and are referenced as TN 3,432,P(R); TN 5,394, P(R); TN 13,064 P(R); TN 13,811 P(R); TN 14,618, TN 14,619 P(R); TN 14,620 P(R); TN 14,622 P(R); TN 14,623 P(R); TN 16,747 P(R); TN 16,753 P(R); TN 19,003 P(R); TN 19,851 P(R); TN 19,932 P(R); TN 19,934 P(R); TN 19,935 P(R); TN 21,059 P(R); TN 21,060 P(R); TN 21,061 P(R); TN 21,062 P(R); TN 21,063 P(R); TN 21,064 P(R); TN 24,864 P(R); TN 25,605 P(R); TN 25,606 P(R); TN 28,340 P(R); TN 28,346 P(R); TN 28,347 P(R); TN 28,348 P(R); TN 28,349 P(R); TN 28,352 P(R); TN 28,353 P(R); TN 29,020 P(R); TN 31,734 P(R); TN 31,735 P(R); TN 38,323 P(R); TN 38,324 P(R); TN 38,325 P(R); TN 38,392 P(R); and TN 38,469 P(R) as issued by the Bureau de Cadastre Minier de Madagascar (“BCMM”) pursuant to the Mining Code 1999 (as amended) and its implementing decrees. The total land position is 827.7 sq. kilometres. This property can be accessed by both air and road.

Agreements

Molo Graphite Project, Southern Madagascar, Africa

On December 14, 2011, we entered into a Definitive Joint Venture Agreement (“JVA”) with Malagasy to acquire a 75% interest to explore and develop a defined group of industrial minerals (as noted below). Malagasy retains a 25% interest in the exploration and development of the define group of industrial minerals. The new land position covers an area totalling 2,119 research permits and 827.7 square kilometres. This land portfolio is mainly adjacent to the south and east of our Green Giant Property. Under the terms of the JVA, we paid Malagasy $2,261,690 and issued 7,500,000 of our common shares. Malagasy has a free carried interest until we deliver a Bankable Feasibility Study (“BFS”). Upon the delivery of a BFS, Malagasy will be required to contribute its 25% interest in the development and mining operations. Should either party’s interest subsequently fall below a 10% interest, their position will be diluted to a 2% NSR.

The industrial minerals within the agreements are as follows: Vanadium, Lithium, Aggregates, Alunite, Barite, Bentonite, Vermiculite, Carbonatites, Corundum, Dimensional stone (excluding labradorite), Feldspar (excluding labradorite), Fluorspar, Granite, Graphite, Gypsum, Kaolin, Kyanite, Limestone/Dolomite, Marble, Mica, Olivine, Perlite, Phosphate, Potash –Potassium minerals, Pumice Quartz, Staurolite, Zeolites.

Green Giant Property

On July 9, 2009, we acquired the remaining 25% interest for $100,000 and terminated the joint venture. MMR retains a 2% NSR. The NSR can be purchased, at our option, for $500,000 in cash or common shares for the first 1% and at a price of $1,000,000 in cash or common shares for the second 1%.

DRA Agreement Signed for Ability to Develop and Build Mine

During January 2012, we signed a formal agreement with South Africa's DRA Mineral Projects (“DRA”), a world-leading process engineering and mining project development management firm, for the development of our projects in Madagascar. Specific focus will be on the development of vanadium and graphite minerals. This partnership provides us with the ability to both build and manage a mining operation. It also provides DRA the option to purchase up to 5% of our company through private placement at current market conditions.

Madagascar Historical Exploration Programs

The Green Giant Property displays extensive gossans outcroppings at surface. An examination of part of this property revealed several large areas covered with gossanous boulders, which are believed to overlie massive sulphide mineralization. Phases of the exploration projects were managed by our company’s President and COO, Craig Scherba, P. Geol., who at the time was one of our outside consultant geologists. We conducted a first phase of exploration from September to November 2007 that included the following activities:

●	Stream Sediment sampling of all stream on the property area
●	Detailed Geological mapping over selected startigraphic horizons
●	Reconnaissance geological mapping over the entire property
●	Soil sampling over selected target areas and prospecting over selected target areas
●	Limited trenching over selected targets
●	Construction of a cinder block base camp
●	Construction of a one kilometre long surfaced airstrip
●	Repair and surfacing of the access road from base camp to the airstrip
●	Airborne geophysical surveying

During March 2008-June 2008, a full field exploration program following up on the airborne geophysical survey and results of the 2007 exploration program was implemented. This exploration consisted of the following:

●	Infill stream sediment sampling
●	Detailed Geological mapping over selected stratigraphic horizons
●	Prospecting over selected target areas
●	Grid emplacement over selected target areas
●	Ground-based magnetometer and frequency domain EM surveys
●	Soil sampling over selected target areas

After reviewing the analytical data from the March 2008- June 2008 program, additional exploration was conducted from July 2008 to September 2008 to prepare for a drill program. This exploration consisted of the following:

●	Infill stream sediment sampling
●	Detailed geological mapping over selected stratigraphic horizons
●	Prospecting over selected target areas with the aid of a mobile XRF analyzer

Based on compiled analytical results obtained from the various exploration programs, a drill program was initiated on the property from September 2008-November 2008. This exploration program consisted of the following:

●	Prospecting over selected target areas with the aid of a mobile XRF analyzer
●	Ground-based scintillometer surveying over selected target areas
●	Diamond drilling of 31 holes over 4,073 metres

Based on early indications for vanadium on the property, another exploration program was initiated on the Green Giant Property during the spring of 2009. The program (completed between April 2009-July 2009) consisted of an extensive X-Ray Fluorescence analysis (XRF) soil sampling program coupled with mechanical trenching and scintillometer surveys over possible areas of vanadium enrichment and new areas, defined by the soil XRF survey.

We initiated a vanadium drill program during September 2009-December 2009 consisting of the following:

●	XRF soil sample analyses (8,490 samples) on lines 200 metres apart covering 18 kilometre strike length
●	Scintillometer surveying (112 line kilometres) on lines 200 metres apart over an 18 kilometre strike length
●	Trenching (140 trenches for 17,105 metres)
●	Diamond drilling of 54 diamond drill holes over 8,931 metres

The exploration programs to date resulted in the delineation of two vanadium pentoxide (V 2 O 5 ) deposits (named the Jaky and Manga), characterized by two separate categories: oxide and primary.

Based on the results of the September 2009-December 2009 program, we conducted an additional exploration program on the property from April 2010-July 2010. This program consisted of the following activities:

●	Diamond drilling of 46 diamond drill holes over 8,952 metres
●	Prospecting over selected target areas with the aid of a mobile XRF analyzer (20 grab samples)
●	Geologic mapping over the Manga and Mainty deposits at 1:5000 scale
●	ERT ground geophysical survey (5.64 km)
●	MAG ground geophysical survey (169.53 km)
●	Gradient Array EM ground geophysical survey (128.82 km)

In 2011, the identification of graphite in the Manga, Jaky and Mainty zones led our geologists to conduct a reconnaissance exploration program (Phase I program) on the properties in September, 2011. The goal of this exploration program was to delineate new graphitic trends, and compare them to those associated with vanadium mineralization. This program consisted of the following activities:

●	Diamond drilling of 10 holes over 1,157.5 metres
●	Trenching (16 trenches for 1,912 metres)
●	Prospecting over selected target areas

An additional reconnaissance exploration program was conducted from November 2011-December, 2011 (Phase II program). The purpose of this program was to ascertain the industrial mineral potential on the Joint Venture Ground, and further drill testing of graphitic trends on the Green Giant Property. This program consisted of the following:

●	Diamond drilling of 20 holes over 2,842 metres
●	Prospecting over selected target areas
●	EM31 ground geophysical survey over selected target areas (160.5 km)

The discovery of graphite mineralization from the 2011 exploration programs resulted in the initiation of a resource delineation drill program from May 2012-August 2012. This program consisted of the following:

●	Trenching (18 trenches for 2,100 metres)
●	Diamond drilling of 41 diamond drill holes over 8,459 metres

The resource delineation drill program identified that graphite mineralization could be divided into a high grade zone (6 to 10% carbon) that produces small to large graphite flakes, and a low grade zone (4 to 6% carbon) that produces large to jumbo graphite flakes. A bulk sampling program was undertaken in May 2013 with the purpose of collecting two separate samples, in order to test the nature of the low-grade and high-grade deposits to see if they have different requirements. The two bulk samples were submitted for metallurgical test work, which is deemed to be representative of the future plant feed, and hence could be used for a Bankable Feasibility Study going forward. In order to be representative, an external geological consultant determined a sample size of 100 tonnes each (low grade and high grade) was deemed sufficient.

SGS Canada Inc. of Lakefield, Ontario, Canada (“SGS”) conducted metallurgical test work on bench-scale samples obtained from 200 tonnes of sample material collected at the Molo Graphite deposit . SGS determined that the optimum flake size recovery, purity and distribution was achieved when blending the low and high grade sample material at a ratio of 50:50. Based on this analysis, SGS constructed a pilot plant to: 1) confirm the robustness of the proposed metallurgical flow-sheet developed on a laboratory scale under continuous pilot scale conditions, 2) develop process design criteria for the ongoing Molo Full Feasibility Study, and 3) generate large samples of concentrate for evaluation by potential offtake partners.

The average head grade of the bulk sample was 7.98% C(t) based on the mass balances of twelve circuit surveys. The pilot plant was operated targeting a concentrate grade of greater than 95% C(t) in the size fractions greater than 200 mesh, while minimizing flake degradation. The concentrate grades of the coarse flakes were consistently 95% C(t) or higher, while the mass recovery into the large flake (+80 mesh) concentrates varied between 27.9% and 52.6%

The pilot plant was operated under a host of different conditions ranging from 90.8% C(t) concentrate grade at 94.3% recovery to 97.5% C(t) concentrate grade at 87.1% recovery for the twelve surveys at which the circuit was deemed stable. This operating strategy was employed to determine the impact of altering process variables on key metallurgical performance indicators such as concentrate grade, flake size distribution, and carbon recovery.

The following results were obtained from the pilot plant, which confirm the robustness of the proposed flow sheet and also confirm that the graphite flakes from the Molo deposit can be upgraded to high-grade graphite concentrate by means of simple flotation.

·	The average mass recovery into the large and extra-large flake category (greater than +80 mesh) was 43.5% based on the results of fifteen size fraction analyses of the combined concentrate;

·	The average grade of the extra-large flake (greater than +48 mesh) was 97.7% Ct;

·	The average grade of the large flake (greater than +80 mesh) was 97.4% Ct;

·	The average grade of the medium flake (greater than +200 mesh) was 96.7% Ct;

·	The majority of the impurities reported to the small flake size fractions (-400 mesh)

·	The average total carbon content of twelve pilot plant surveys was 93.7% Ct at an average carbon recovery of 90.3%.

The average composition of the combined concentrate of fifteen size fraction analyses is shown in the following table.

Size	Mass as Percentage of Total	Grade
mesh	Concentrate Mass in %	% C(t)
48	15.7	97.7

65	17.6	97.4

80	10.2	96.7

100	9.7	96.4

150	15	96.1

200	10.1	95.2

-200	21.6	88.2

Madagascar Infrastructure

· Road Access

Access to the Company’s Molo Graphite Deposit from Toliara, starts with a 70 km paved road to the village of Andranovory. From Andranovory, secondary all-season roads continue to Betioky, a distance of 93 km. From Betioky, the Molo Graphite Deposit can be reached from Ambatry to Fotadrevo, a distance of 105 km, for an overall total of 268 km, or from Betioky to Ejeda then onwards to Fotadrevo, a distance of 161 km, for an overall total of 324 km. The second route from Ejeda to Fotadrevo is used by heavy transport trucks and by all vehicles during portions of the rainy season, as the other route can become impassable. At the height of the rainy season, both routes to Fotadrevo may become impassable. From Fotadrevo, the Molo Graphite Deposit may be reached by a fairly well maintained dirt track. The map below shows the road access to the Molo Graphite Deposit from the town of Toliara.

Map of Road Structure from Toliara to Fotadrevo

Air Access

With the upgrading of an existing airstrip at Fotadrevo to an all-weather airstrip during the 2008 exploration program, our Madagascar properties are accessible year-round by private aircraft out of Antananarivo, except under special circumstance caused by continuous or multiple days of heavy rain. Flying times to Fotadrevo are approximately 2.5 hours from Antananarivo and 45 minutes from Toliara.

Photo of the Landing Strip at Fotadrevo

Antananarivo is currently serviced by Air France (Paris), South African Airways (Johannesburg), and Air Mauritius (Mauritius). Air Madagascar also provides service to Paris, Johannesburg, Mauritius, Nairobi, and Réunion Island. Domestically, Air Madagascar has regularly scheduled jet and propjet flights throughout the country, including daily flights between Antananarivo and Toliara.

The village of Fotadrevo, where our Company has its base camp, is located to the west of the Molo Graphite Deposit. The village has been a labour source during our company’s exploration programs, and will likely provide a portion of the workforce during future exploration and development. A few basic goods are commercially available in the village, however, the main centre for support of exploration and development are the cities of Toliara and Antananarivo. Two 40 kVA diesel-powered generators provide power to the camp facility.

A cellular telephone tower is located in Fotadrevo, which provides phone and internet coverage. No potable water is currently available within the project area. A well 123 millimetre in diameter has been drilled to a depth of 42 metres within the camp compound, which provides non-potable water for the camp.

Graphite Market and Pricing

Market Overview

According to Industrial Minerals magazine, the natural graphite market is 1,015,100 tonnes of which roughly 55% is flake and 45% is low grade amorphous (or 582,800 flake, 428,300 amorphous, 4,000 vein). Graphite is produced globally, however China currently accounts for most of the graphite production with a market share of 77%. Two tables listing the current major production countries of flake and amorphous graphite are below ( Source: Natural Graphite Report 2012, Industrial Minerals, www.indmin.com ) :

Country	Flake output
China	380,000
Brazil	96,000
India	35,000
North Korea	30,000
Canada	21,000
Norway	8,000
Zimbabwe	5,000
Madagascar	4,000
Russia	2,000
Ukraine	1,500
Germany	300
Total	428,300

Country	Amorphous output
China	400,000
Austria	16,000
Mexico	12,000
Turkey	300
Total	428,300

China produces 77% of the world’s graphite, however over half of its production is low grade amorphous. The graphite industry in China is undergoing fundamental reforms. China is protecting its domestic supply and has imposed a combined 37% export duty and value added tax. Furthermore, China is consolidating and closing a large number of mines, between 180-200, to preserve graphite resources and address environmental concerns.

Current Demand

Graphite has many wide-ranging uses from refractories to anodes in batteries ( Source: Natural Graphite Report 2012, Industrial Minerals, www.indmin.com )

Refractories, foundry and crucibles	39%
Metallurgy	28%
Parts and components	10%
Batteries	9%
Lubricants	9%
Other	5%

Future Demand

Batteries alone is the fastest growing market for graphite with growth between 15-25% a year ( Source: Industrial Minerals, 2012 ) and future demand for graphite is expected through the uptake of lithium-ion batteries (Li-ion). There is 11 times more graphite in a Li-ion battery than there is lithium and demand for graphite in Li-ion batteries, specifically from the growth of the electric vehicle market, is expected to be significant. Other future demand drivers include pebble bed nuclear reactors, fuel cells, large-scale energy storage and graphene.

Graphite Pricing

Graphite pricing is a function of flake size and purity where larger flake and higher purity command premium pricing in the market. The three major categories for flake graphite are large, medium, and small (amorphous).

Graphite is not freely traded on an open market. This means determining its price is somewhat of an opaque market as prices are determined through contracts between buyers and sellers. Nevertheless, Industrial Minerals performs regular customer surveys tracking pricing trends and, from their analysis, overall graphite prices have substantially increased since 2007 due to increased demand and constrained supply. Recently however, graphite prices have decreased from their peak due to the slowdown in the global economy particularly in Europe and Asia. Despite this recent decline, future prices are predicted to remain strong as can be outlined in the graph below:

Source: Natural Graphite Report 2012, Industrial Minerals, www.indmin.com

Vanadium Market and Pricing

Source of this entire section: United States Geological Survey . Data in metric tons of vanadium content unless otherwise noted

Domestic Production and Use

Seven U.S. firms comprise most of the domestic vanadium industry produced ferrovanadium, vanadium pentoxide, vanadium metal and vanadium-bearing chemicals or specialty alloys by processing materials such as petroleum residues, spent catalysts, utility ash and vanadium-bearing pig iron slag. Metallurgical use, primarily as an alloying agent for iron and steel, accounted for about 93% of the U.S. vanadium consumption in 2011. Of the other uses for vanadium, the major non-metallurgical use was in catalysts for the production of maleic anhydride and sulfuric acid.

Salient Statistics—United States	2008			2009			2010			2011			2012est
Production, mine, mill		520			230			1,060			590			270
Imports for consumption:
Ferrovanadium		2,800			353			1,340			2,220			3,400
Vanadium pentoxide, anhydride		3,700			1,120			4,000			2,810			1,570
Oxides and hydroxides, other		144			25			167			886			1,210
Aluminum-vanadium master alloys (gross weight)		618			282			951			278			180
Ash and residues		1,040			791			521			1,420			1,500
Sulfates		2			16			48			42			40
Vanadates		187			214			158			303			320
Vanadium metal, including waste and scrap		5			22			10			44			110
Exports:
Ferrovanadium		452			672			611			314			530
Vanadium pentoxide, anhydride		249			401			140			89			40
Oxides and hydroxides, other		1,040			506			1,100			254			190
Aluminum-vanadium master alloys (gross weight) 1,390		447			1,190			920			1,400
Vanadium metal, including waste and scrap		57			23			21			102			10
Consumption:
Apparent		5,820			1,040			5,190			6,963			6,400
Reported		5,170			4,690			5,030			5,120			5,200
Stocks, consumer, yearend		335			295			248			2185			2220
* Price, average, dollars per pound V2O5	$	12.92		$	5.43		$	6.46		$	6.76		$	6.52
Imports + exports + adjustments for government
and industry stock changes as a percentage of
apparent consumption		91	%		78	%		81	%		92	%		96	%

* Vanadium is not freely traded on an open market. This means determining prices for vanadium is somewhat of an opaque market as prices are determined through contracts between buyers and sellers.

Events, Trends, and Issues

U.S. apparent consumption of vanadium in 2012 decreased by 9% from its 2011 level; however, it was still almost six times higher than its level in 2009. Apparent consumption of vanadium declined dramatically in 2009 from that of 2008 owing to the global economic recession in 2009. Among the major uses for vanadium, production of carbon, full-alloy, and high-strength low-alloy steels accounted for 16%, 45%, and 33% of domestic consumption, respectively. U.S. imports for consumption of vanadium in 2012 increased 4% from those of the previous year. U.S. exports increased 29% from those of the previous year.

In the fourth quarter of 2011, vanadium pentoxide (V2O5) prices continued to decrease to a year-to-date low of $6.22 per pound of V2O5 in December 2011. In January 2012, prices continued to decrease to a year-to-date low of $5.83 per pound of V2O5 until February when prices began to slowly increase again. In August 2012, V2O5 prices averaged $6.60 per pound of V2O5, slightly more than average V2O5 prices in August 2011. In the fourth quarter of 2011, U.S. ferrovanadium (FeV) prices continued to slowly decrease to a year-to-date low of $13.19 per pound FeV (contained vanadium) in December 2011. In January 2012, prices continued to decrease until February 2012 when prices began to slowly increase. In August 2012, FeV prices averaged $15.60 per pound of FeV.

World Mine Production and Reserves

Production data for the United States were revised based on new company information.

	Mine production				Reserves (thousand
	2011		2012est		metric tons)
China		23,000		23,000		5,100
South Africa		22,000		22,000		3,500
Russia		15,200		16,000		5,000
United States		1,590		1,270		45
Other countries		1,600		1,600	not applicable
World total (approximate)		63,390		63,870		14,000

World Resources the Substitutes

World resources of vanadium exceed 63 million tons. Vanadium occurs in deposits of phosphate rock, titaniferous magnetite, and uraniferous sandstone and siltstone, in which it constitutes less than 2% of the host rock. Significant amounts are also present in bauxite and carboniferous materials, such as coal, crude oil, oil shale, and tar sands. Because vanadium is usually recovered as a byproduct or co-product, demonstrated world resources of the element are not fully indicative of available supplies. While domestic resources and secondary recovery are adequate to supply a large portion of domestic needs, a substantial part of U.S. demand is currently met by foreign material.

Steels containing various combinations of other alloying elements can be substituted for steels containing vanadium. Certain metals, such as manganese, molybdenum, niobium (columbium), titanium, and tungsten, are to some degree interchangeable with vanadium as alloying elements in steel. Platinum and nickel can replace vanadium compounds as catalysts in some chemical processes. There is currently no acceptable substitute for vanadium in aerospace titanium alloys.

Permitting in Madagascar

Companies in Madagascar first apply for an exploration mining permit with the Bureau de Cadastre Minier de Madagascar (“BCMM”), a government agency falling under the authority of the Minister of Mines. Permits are granted under usual circumstances are generally issued within a month. The 2013 fees per square within a mining permit range from 89,800 Ariary to 359,000 Ariary (between $39 and $160 using a current exchange rate of 2,300 Madagascar Ariary = $1 USD). The number of squares varies widely by claim number. For the 2013 year, the Company paid approximately $350,000 to the BCMM to renew all of its claims in Madagascar. 2014 bills will be billed during May 2014. This fee covered both the 100% owned Green Giant Property (6 claims) and the 75% owned Joint Venture Property (39 claims). Each year we are required to pay a similar amount in order to maintain the claims in good standing.

The next step in the permitting process, which our company has initiated, is to apply for an exploitation permit. Our company has engaged a third party environmental study company in Madagascar to assist us with this process. In order to get an exploitation permit, an investment plan, exploitation work plan budget and specific ground mapping is submitted to the BCMM. This step is completed in conjunction with a submission of an environmental impact study for the BCMM. This environmental impact study includes, among other things, completion of a water study and a social impact study.

QA/QC Protocols

At all times during sample collection, storage, and shipment to the laboratory facility, the samples are in the control of our company or parties that we have contracted to act as our agents.

When sufficient sample material (grab, trench or core) has been collected, the samples are flown or sent by truck to our storage location in Antananarivo, Madagascar. At all times samples are accompanied by an employee, consultant or agent of our Company. From there, samples are shipped to labs either in South Africa or Canada for ICP-MS analysis.

All analytical results are e-mailed directly by the lab to our project manager on site in Madagascar and to our geological and executive staff. Results are also posted on a secure website and downloaded by our personnel using a secure username and password. All of the labs that carried out the sampling and analytical work are independent of our company.

In order to carry out QA/QC protocols on the assays, blanks, standards and duplicates were inserted into the sample streams. This was done once in every 30 samples, representing an insertion rate of 3.33% of the total.

Since the 2009 Madagascar drill program, our company has rigorously implemented a blank protocol. For the Molo Graphite Deposit a fine-grained quartz sand sourced from a hardware store in Antananarivo was used as the blank material for the sampling campaign. A total of 208 blank samples were used in this program. A detection limit of 0.05% Carbon was used for the purpose of this exercise. To verify the reliability of the blank samples, the detection limit and the blank + 2, and 3 times the detection limit were plotted against the date. The plot shows that there are a lot of blank samples that have concentrations that exceed the blank + 3 times detection limit threshold. This, coupled with the large spread of data points, would lead to the assumption that samples may have been contaminated during their preparation for analysis.

Blanks plot – Log %C versus the date of the analysis.

Since certified reference materials (“CRMs”) are essentially non-existent for graphite, our Company commissioned a third party lab in Canada to create a CRM from the remaining Molo Graphite Deposit drill core pulps from the 2011 program. As certified the third party lab standard (STD 1 C) a recommended value of 9.11 % Carbon.

To check the reliability of the standard, a plot of the recommended CRM value versus date was created. The upper and lower limits of one, two and three times the standard deviations of the recommended value are also included in the plot. All the results except for two fall within the acceptable limit of two times the standard deviation. It is however worth noting that there seems to be a negative bias towards lower concentrations in the first batch of samples that were submitted. As the campaign progressed the bias leant towards the positive side. This issue appears to have been sorted out towards the latter parts of the campaign as the data becomes less spread, and is closer to the recommended value.

Graph showing carbon concentration as analyzed in STD 1C.

For the Molo Graphite Deposit, 205 field duplicates were prepared. To check how close these were to the original samples, a plot of the original samples with a zero, five, and ten per cent difference of the original samples was created. The majority of the samples were within the 10% difference limit. The plot also shows a good correlation between the original value and the duplicate, as is evident from the regression line with an R 2 value of 0.96.

Original (“Orig”) versus Duplicate (“Dupe”) plots.

Next Steps

Energizer is currently shipping graphite concentrate generated from its Pilot Plant metallurgical testwork out to prospective offtake partners all over the world. Additionally, we are conducting an infill drill program on our Molo deposit as required by our Full Feasibility Study and in order to meet banking requirements for an anticipated mine financing. This data will be integrated into a Full Feasibility Study scheduled for completion in the last quarter of calendar year 2014.

Future Programs

The economic potential of the property rests upon the ability to extract graphite and/or vanadium using reasonable, potentially economic parameters. Metallurgical results indicate that an economic processing method is available to extract graphite. This will be determined within a Full Feasibility Study, anticipated for release in the last quarter of calendar year 2014. The results of this study will dictate how management proceeds with project development.

SAGAR PROPERTY

Property Description and Location

The Sagar Property comprises 361 blocks of claims in the Province of Québec, Canada. The approximate centre of exploration activity is circa 56°22’ N latitude and circa 68° 00’ W longitude. Details on the individual claims are available on-line at the Government of Québec’s Ministère des Resources Naturelles et de la Faune GESTIM website at https://gestim.mines.gouv.qc.ca. This property can be accessed by air.

These claims comprise approximately 6,580 hectares. In this region of the Province of Québec, “map staking” predetermines claim outlines. This can be done via a claim staking system with the Ministère des Ressources Naturelles (“MNRF”). Previously, the map-staking grid, producing some of the small parcels, superimposes upon staked claims. There are no carried environmental liabilities on the property. Each claim costs CAD $112 and is active for a one year period. Each following year our company is required to spend a certain dollar amount to keep the claim in good standing or pay CAD $112 per annum in lieu of performing any work. All surface work requires provincial government permits, including camp construction permits. Our company is current with these permits.

To be able to conduct an exploration project, our company needs to obtain permits pertaining to water, forest management and waste disposal for any camp location set-up. These permits are obtained from various Quebec government ministries. This entire process takes approximately than one month to complete. With obtaining the required permits our company is required to pay approximately CAD $200 per claim per annum.

When our company is exploring, our power comes from a generator. Management currently believes that water is ample as the property has a lake and several streams. There are no bonding requirements relating to permits issued out of Quebec at the exploration stage.

Sagar Property Agreement

On May 2, 2006, we signed a letter of intent with Virginia Mines Inc. ("Virginia") for an option to acquire a 75% interest in 200 claims located in northern Québec, Canada. Virginia had the right and option to sell the remaining 25% interest in the property. This agreement was subject to a 2% NSR. Virginia had previously acquired a 100% interest in the property, subject to a 1% NSR on certain claims, and a 0.5% NSR on other claims. Virginia has the right to buy back half of the 1% NSR for $200,000 and half of the 0.5% NSR for $100,000. In order to exercise its option, we issued Virginia 2,000,000 of our common shares, 2,000,000 now expired common share purchase warrants and incurred exploration expenditures greater than $2,000,000 on the property before September 1, 2008. Further, on February 28, 2007, Virginia exercised its option to sell its remaining 25% interest on the property to us for 1,000,000 common shares valued at $1,219,000 and 1,000,000 now expired common share purchase warrants. As a result of these agreements, we now own a 100% interest in this property, subject to the noted NSR’s. We are currently up to date with all obligations required to maintain the property in good standing.

Ferderber Property Agreement

We acquired a 100% undivided right, title and interest in and to 19 mining claims (0036315, 0036316, 0036317, 0036318, 0036319, 0036320, 0036321, 0036322, 0036323, 0036324, 0036325, 0036326, 0036327, 0030649, 0030650, 0030640, 0030638, 0030612, 0030613) held by Peter Ferderber, covering an area of approximately 64 hectares located in the Central Labrador Trough Region of Québec, 13 of which are contiguous to our Sagar Property. This property can be accessed by air. In consideration of our receiving a 100% interest in these claims, subject to any NSR royalties, we paid Mr. Ferderber CAD$6,000, and issued 150,000 of our common shares and 75,000 now expired common share purchase warrants. Mr. Ferderber retained a 1% NSR on this property and agreed that we shall have a first right of refusal to purchase the 1% NSR should Mr. Ferderber elect to sell the royalty. We are currently up to date with all obligations required to maintain the property in good standing.

Sagar and Ferderber Property Optioned

·	$1,500,000 within 15 days upon the earlier of the completion of a financing or nine months following the agreement's closing date and up to 9.5% of TUF’s issued and outstanding common shares ("I&O Shares") at the time of issuance to a maximum of 15,000,000 common shares.

$1,500,000, subject to receiving shareholder approval but within eighteen months from the agreement's closing date, and up to 15% of TUF’s I&O Shares at the time of issuance to a maximum of 35,000,000 common shares (the maximum includes all common shares previously issued). If shareholder approval is not obtained, we will receive $750,000 and additional common shares that equal up to 9.5% of TUF’s I&O Shares at the time of issuance to a maximum of 20,000,000 common shares (the maximum includes all common shares previously issued).

Sagar and Ferderber Property Geological Highlights

The geological setting of the property is the northwest trending Romanet Horst within the Labrador Trough. The significant mineral potential of this geological setting is well demonstrated, we believe, by the abundance and diversity of uranium-gold showings, which range from veins to breccia’s to shear zones. There is also locally significant sedimentary-hosted copper mineralization. Our management contends that the most significant mineralization found to date is the 500 x 200 metre Mistamisk boulder field which contains 150 boulders that range up to 640 g/t gold and 4.11% uranium, with 70 tested boulders averaging 64.9g/t gold and 1.3% uranium. The boulders discovered within the Mistamisk boulder field range in length from 0.30 to 2.0 metres. Previous work has not determined the bedrock source of this boulder field. Copper mineralization has been defined in several spots, the most significant being the Dehli-Pacific showing, which has reported 4.2% copper over 7.6 metres within a drill hole that intersected a shear zone along a sediment-gabbro contact.

Other Expenses

Management anticipates spending approximately $350,000 - $450,000 in ongoing general office and administration expenses and professional fees per quarter for the next twelve months. Expenses will vary in direct proportion with the level of activity relating to future acquisitions and exploration programs.

RESULTS OF OPERATIONS

We have had no operating revenues from inception on March 1, 2004 through to the quarter ended March 31, 2014. Our activities have been financed from the proceeds of securities subscriptions. From inception, on March 1, 2004, to March 31, 2014, we raised total net proceeds of $51,907,720 from private offerings of our securities and $1,075,500 through the exercise of common share purchase warrants and stock options. For the nine month period ending March 31, 2014, $9,732,482 (March 31, 2013: $4,023,113) and $Nil (March 31, 2013: $Nil) was raised through private placements and the exercise of stock options, respectively.

For the period from March 1, 2004 to March 31, 2014, we incurred losses before income taxes of $82,343,185. Expenses included $42,577,972 in mineral property and exploration costs and impairment losses on mineral properties. These costs include acquisition costs relating to the Madagascar properties, the Sagar properties in Quebec and other abandoned properties. We have also incurred $8,731,206 in professional fees since inception; general and administrative expenses of $8,786,367; stock based compensation valued at $24,856,963 using the Black-Scholes pricing model; net foreign exchange translation gains totaling $1,237,551, donated services and expenses of $18,750, and total net other income (including interest and less an other than temporary loss on marketable securities) of $1,237,551.

The following are explanations for the fluctuations during the nine month period ended March 31, 2014:

Following our accounting policies of expensing acquisition costs and exploration expenses on mineral properties as incurred, this amounts increased the net loss for each period. For the nine months ended March 31, 2014, we spent $4,290,899 (March 31, 2013: $3,194,788) on our mineral properties. This represents an increase of $1,096,111. In the prior year, we completed a drill program on our Molo ground as part of work required to complete our National Instrument 43-101 report (which was subsequently filed during the second quarter of fiscal 2013). During the nine months ended March 31, 2014, we have progressed on our Bankable Feasibility Study which to date includes, among other things, drilling and related costs as well as spent funds on our Madagascar pilot plant through SGS in Lakefield, Canada. We have also spent funds on the Sagar property which we recently divested 75% of our 100% interest.

Professional fees totalled $1,567,387 for the period ended March 31, 2014, down $4,160 from the March 31, 2013’s total of $1,571,547. General and administration totalled $911,273 for the period ended March 31, 2014, up $79,305 from the March 31, 2013’s total of $831,968. General and administration are costs associated with running the Toronto and Madagascar offices. Investor relations expenses, including the use of third parties at conferences and lunches who are assisting in spreading knowledge about our company to retail investors, institutional investors and potential off-take parties plus the cost of travel are the primary reasons for the increase in general and administration expenses. Trips have included numerous visits to Asia, Europe, and Africa to update existing investors and potential off-take partners, trips to California for investor presentations and trips to New York City and surrounding area for both investors, conferences and discussions with potential off-take partners. In addition, trips have also been made to our property in Madagascar to work on our company’s bankable feasibility study with the assistance with DRA. With regards to professional fees, legal fees where higher during the current period when compared to the prior period. In addition, the Company recorded a charge of $325,867 due to its former Chief Executive Officer. This was offset by lower professional fee charges to employees and other consultants of the company.

Stock-based compensation decreased by $789,259 from $1,470,678 for the nine month period ended March 31, 2013 to $681,419 for the nine month period ended March 31, 2014. A total of 7,130,000 stock options were issued at exercise prices between $0.11 and $0.18 during the nine months ended March 31, 2014 while 7,595,000 stock options were issued at exercise prices between $0.21 and $0.29 during the nine months ended March 31, 2013. The value noted within the statement of operations is the theoretical Black-Scholes calculated value of the stock options, based on subjective factors including volatility, risk-free interest rate, dividend yield and expected life.

Net investment income totalled $27,260 for the nine month period ended March 31, 2014 and $305,938 during the nine month period ended for March 31, 2013. During 2012, our cash balance was higher allowing us to make greater returns. More significantly, during 2012, due to the rise in the value of low-risk bond funds, we were able to capitalize by investing our net excess cash and yielding a significant return.

· ●	During the nine months ended March 31, 2014, $63,849 (March 31, 2013: $Nil) was written off as a result of other than a temporary decline in market value of various investments held during the life of our company.

Liquidity, Capital Resources and Foreign Currencies

As at March 31, 2014, we had cash on hand of $5,299,715. Our working capital was $3,521,320.

We hold a significant portion of cash reserves in Canadian dollars. Due to foreign exchange rate fluctuations, the value of these Canadian dollar reserves can result in translation gains or losses in US dollar terms. If there was to be a significant decline in the Canadian dollar against the US dollar, the US dollar value of that Canadian dollar cash position presented on our balance sheet would significantly decline. Recently, the Canadian dollar has declined to near the 90 cent mark relative to the US dollar. There is no certainty as to whether the value of the Canadian dollar will rise or continue to fall to lower levels. If the US dollar significantly declines relative to the Canadian dollar, our quoted Canadian dollar position would increase however US dollar cash position would significantly decline. Such foreign exchange declines could cause us to experience losses that will be recorded on our income statement.

In addition to paying certain expenses in Canadian dollars, we are required, from time to time, to pay expenses in South African Rand, Australian Dollars, Great British Pounds and Madagascar Ariary, and possibly other currencies. Therefore, we are subject to risks relating to movements in those currencies.

There are no assurances that we will be able to achieve further sales of common shares or any other form of additional financing. If we are unable to achieve the financing necessary to continue the plan of operations, then we will not be able to continue our exploration and our venture will fail.

Capital Financing

·	From inception to June 30, 2004, we raised $59,750 through the issuance of 9,585,000 common shares.

·	For the year ended June 30, 2005, we did not raise any capital from new financings.

·	For the year ended June 30, 2006, we raised $795,250 through the issuance of 2,750,000 common shares and 2,265,000 common share purchase warrants.

●	For the year ended June 30, 2007, we raised $17,300,000 through the issuance of 34,600,000 common shares and 29,000,250 common share purchase warrants .

·	For the year ended June 30, 2008, we did not raise any capital from new financings.

·	For the year ended June 30, 2009, we raised $680,000 through the issuance of 6,800,000 common shares and 3,400,000 common share purchase warrants.

·	For the year ended June 30, 2010, we raised $6,500,000 through the issuance of 21,666,667 common shares and 21,666,667 common share purchase warrants.

·	For the year ended June 30, 2011, we raised net proceeds of $13,178,708 through the issuance of 30,936,654 common shares and 15,468,328 common share purchase warrants and $886,501 (by issuing 4,549,500 common shares) through the exercise of common share purchase warrants.

·	For the year ended June 30, 2012, we raised net proceeds of $635,000 (by issuing 2,540,000 common shares) through the issuance of common shares and $84,000 (by issuing 510,000 common shares) through the exercise of common stock purchase options.

·	For the year ended June 30, 2013, we raised net proceeds of $4,076,113 through the issuance of 18,157,142 common shares and 3,513,599 common share purchase warrants and $105,000 by issuing 700,000 common shares through the exercise of common stock purchase options.

·	For the nine month period ended March 31, 2014, we raised net proceeds of $9,732,482 through the issuance of 90,523,283 common shares and 35,812,130 common share purchase warrants.

We will likely continue to require additional funding during fiscal 2014 and fiscal 2015. However, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of common shares for additional phases of exploration. Our management will continue to attempt to secure additional financing through both the public and private market sectors to meet our continuing commitments of capital expenditures. No assurance can be given that we will be able to obtain additional financing or that we will be able to obtain additional financing on terms that are favorable to us. If we are successful in completing additional financing in the form of an equity financing or securities convertible into equity, as necessary, existing shareholders will experience dilution of their interest in our company (see “Cautionary Note” above)

Issuances of Securities

We have funded our business to date from sales of our securities. During the period ended March 31, 2014, and since July 1, 2012, we issued the following unregistered securities:

·	During July 2012, $105,000 was raised through the exercise of 700,000 stock options at $0.15.

·	On July 13, 2012, we issued 1,695,000 stock options to directors, officers and consultants of our company at an exercise price of $0.29 and an expiry date of July 13, 2016.

During November 2012, we closed a brokered and non-brokered private placement raising a total of $2,032,500. We issued 5,807,142 common stock at $0.35 per share and 2,903,571 common share purchase warrants at an exercise price of $0.50, expiring 24 months from the date of issue. We paid fees of $119,010 and issued 340,028 compensation common share purchase warrants. Each compensation common share purchase warrant entitles the holder to purchase one common share at $0.35 and one half of one common share purchase warrant at an exercise price of $0.50.

·	On February 27 2013, we issued 5,900,000 stock options to directors, officers and consultants of our company at an exercise price of $0.21 and an expiry date of February 27, 2018.

During March 2013, we closed a private placement raising $2,307,035. We issued 12,350,000 common stock at prices between CAD$0.18 and CAD$0.20 per share. We paid a fee of $84,176 and issued 270,000 compensation warrants. Each compensation warrant entitles the holder to purchase one common share at CAD$0.20.

During July and August 2013, we closed a private placement raising $2,043,452 through the issuance of 16,950,001 common shares. We paid a fee of $114,087 and issued 402,000 compensation warrants at an exercise price of CAD$0.125 and 150,000 compensation warrants at an exercise price of $0.12. Each compensation warrant expires one year from the date of issue.

On December 18, 2013, we closed a private placement raising a total of $1,479,023. We issued 11,189,215 common shares at a price of CAD$0.14. We paid fees of $112,067 and issued 671,353 compensation warrants at an exercise price of CAD$0.14. Each compensation warrant expires eighteen months from the date of issue.

·	On January 10, 2014, we issued 4,625,000 stock options to directors and officers of the Company at an exercise of $0.18 and an expiry date of January 10, 2019.

On January 15, 2014 and January 31, 2014, we closed a private placement raising a total of $6,910,503. We issued 62,384,067 common shares at a price of CAD$0.12 and 31,192,033 common share purchase warrants with an exercise price of CAD0.18. Of the 31,192,033 common share purchase warrants, 29,152,033 expire on January 14, 2017, 1,450,000 expire on June 14, 2015 and 590,000 expire on January 31, 2017. We paid fees of $488,234 and issued 3,396,744 compensation warrants at an exercise price of CAD$0.14. Each compensation warrant expires eighteen months from the date of issue.

·	On February 6, 2014, we issued 250,000 stock options to a consultant of the Company at an exercise of $0.18 and an expiry date of February 6, 2019.

The offer and sale of all shares of our common shares and warrants listed above were affected in reliance on the exemptions for sales of securities not involving a public offering, as set forth in Regulation S promulgated under the Securities Act. The Investor acknowledged the following: Subscriber is not a United States Person, nor is the Subscriber acquiring the shares of our common stock and warrants directly or indirectly for the account or benefit of a United States Person. None of the funds used by the Subscriber to purchase the shares of our common stock and warrants have been obtained from United States Persons. For purposes of this Agreement, “United States Person” within the meaning of U.S. tax laws, means a citizen or resident of the United States, any former U.S. citizen subject to Section 877 of the Internal Revenue Code, any corporation, or partnership organized or existing under the laws of the United States of America or any state, jurisdiction, territory or possession thereof and any estate or trust the income of which is subject to U.S. federal income tax irrespective of its source, and within the meaning of U.S. securities laws, as defined in Rule 902(o) of Regulation S, means: (i) any natural person resident in the United States; (ii) any partnership or corporation organized or incorporated under the laws of the United States; (iii) any estate of which any executor or administrator is a U.S. person; (iv) any trust of which any trustee is a U.S. person; (v) any agency or branch of a foreign entity located in the United States; (vi) any non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. person; (vii) any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual) resident in the United States; and (viii) any partnership or corporation if organized under the laws of any foreign jurisdiction, and formed by a U.S. person principally for the purpose of investing in securities not registered under the Securities Act, unless it is organized or incorporated, and owned, by accredited investors (as defined in Rule 501(a)) who are not natural persons, estates or trusts. Further, we anticipate that additional funding will be in the form of equity financing from the sale of our common stock. However, we cannot provide investors with any assurance that we will be able to raise sufficient funding for additional phases of exploration. We currently believe that debt financing will not be an alternative for funding additional phases of exploration. We do not have any arrangements in place for any future equity financing.

There are no assurances that we will be able to achieve further sales of our common stock or any other form of additional financing. If we are unable to achieve the financing necessary to continue our plan of operations, then we will not be able to continue our exploration and our venture will fail.

Off-balance sheet arrangements

We have no off-balance sheet arrangements including arrangements that would affect the liquidity, capital resources, market risk support and credit risk support or other benefits.

ITEM 3. - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Other than warrants and broker warrants, noted with the financial statements above denominated in Canadian dollars, we do not hold any derivative instruments and do not engage in any hedging activities. Most of our activity is the development and mining of our mining claim.

ITEM 4. - CONTROLS AND PROCEDURES

Our management team, under the supervision and with the participation of our principal executive officer and our principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), as of the last day of the fiscal period covered by this report, March 31, 2014. The term disclosure controls and procedures means our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based on this evaluation and the deficiencies noted in our management’s report on internal controls and procedures over financial reporting, our principal executive officer and our principal financial officer concluded that, given the size of our Company and its finance department, that our disclosure controls and procedures were not effective as of March 31, 2014.

Changes in Internal Control over Financial Reporting

During the fiscal quarter ended March 31, 2014, no changes were made to our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. - LEGAL PROCEEDINGS

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our Company or any of our subsidiaries, threatened against or affecting our Company, our common stock, any of our subsidiaries or of our companies or our subsidiaries' officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

ITEM 1A. - RISK FACTORS

Our business is subject to a variety of risks and uncertainties, including, but not limited to, the risks and uncertainties described below. If any of the risks described below, or elsewhere in this report on Form 10-Q, or our Company’s other filings with the Securities and Exchange Commission (the "SEC"), were to occur, our financial condition and results of operations could suffer and the trading price of our common stock could decline. Additionally, if other risks not presently known to us, or that we do not currently believe to be significant, occur or become significant, our financial condition and results of operations could suffer and the trading price of our common stock could decline.

You should carefully consider the following risk factors together with the other information contained in this Quarterly Report on Form 10-Q, and in prior reports pursuant to the Securities Exchange Act of 1934, as amended and the Securities Act of 1933, as amended. Our risk factors, including but not limited to the risk factors listed below, are as follows:

SHOULD ONE OR MORE OF THE FOREGOING RISKS OR UNCERTAINTIES MATERIALIZE, OR SHOULD THE UNDERLYING ASSUMPTIONS OF OUR BUSINESS PROVE INCORRECT, ACTUAL RESULTS MAY DIFFER SIGNIFICANTLY FROM THOSE ANTICIPATED, BELIEVED, ESTIMATED, EXPECTED, INTENDED OR PLANNED.

The report of our independent registered public accounting firm contains explanatory language that substantial doubt exists about our ability to continue as a going concern.

The independent auditor’s report on our financial statements contains explanatory language that substantial doubt exists about our ability to continue as a going concern. Due to our lack of operating history and present inability to generate revenues, we have sustained operating losses since our inception. Since our inception, up to March 31, 2014, we had accumulated net losses of $82,343,185. If we are unable to obtain sufficient financing in the near term as required or achieve profitability, then we would, in all likelihood, experience severe liquidity problems and may have to curtail our operations. If we curtail our operations, we may be placed into bankruptcy or undergo liquidation, the result of which will adversely affect the value of our common shares.

We may not have access to sufficient capital to pursue our business and therefore would be unable to achieve our planned future growth.

We intend to pursue a strategy that includes development of our Company’s business plan. Currently we have limited capital, which is insufficient to pursue our plans for development and growth. Our ability to implement our Company’s plans will depend primarily on our ability to obtain additional private or public equity or debt financing. Such financing may not be available, or we may be unable to locate and secure additional capital on terms and conditions that are acceptable to us. Financing exploration plans through equity financing will have a dilutive effect on our common shares. Our failure to obtain additional capital will have a material adverse effect on our business.

Our primary exploration efforts are in the African country of Madagascar, where democratic elections took place in 2013.

Any adverse developments to the political situation in Madagascar could have a material effect on our Company’s business, results of operations and financial condition. Democratic elections in Madagascar occurred in 2013, under the UN and EU supervision. To date, our Company has not experienced and disruptions or been placed under any constraints in our exploration efforts due to the political situation in Madagascar. Depending on future actions taken by the elected transitional government, or any future government, our Company’s business operations could be impacted.

Results of the presidential election were issued on January 17, 2014, with Mr. Hery Rajaonarimampianina winning the presidency. He was inaugurated as President of the Republic on January 25, 2014. Legislatives results were proclaimed on February 6, 2014. Of 151 seats in the National Assembly, 4 districts will have to organize new elections. The African Union lifted its sanctions against Madagascar and the new President of the Republic attended the AU summit in Addis Ababa on January 30-31, 2014. The President named a prime minister on April 11, 2014 and a new government was installed on April 18, 2014. The new National Assembly convened on February 18, 2014 and has now elected its Bureau and installed its commissions.

We are actively monitoring the political climate in Madagascar and continue to hold meetings with representatives of the government and the new Ministry of Strategic Resources, which now has jurisdiction over both mining and petroleum. The transformation or amendment of exploration and research mining permits within the country continues to be suspended. Our Company has continued to pay taxes and administrative fees in Madagascar with respect to all the mining permits we hold. These payments have been acknowledged and accepted by the Madagascar government.

Our common shares have been subject to penny stock regulation in the United States of America.

Our common shares have been subject to the provisions of Section 15(g) and Rule 15g-9 of the (US) Securities Exchange Act of 1934, as amended (the “Exchange Act”), commonly referred to as the “penny stock” rule. Section 15(g) sets forth certain requirements for transactions in penny stocks and Rule 15g-9(d)(1) incorporates the definition of penny stock as that used in Rule 3a51-1 of the Exchange Act. The Commission generally defines penny stock to be any equity security that has a market price less than US$5.00 per share, subject to certain exceptions. Rule 3a51-1 provides that any equity security is considered to be penny stock unless that security is: registered and traded on a national securities exchange meeting specified criteria set by the Commission; issued by a registered investment company; excluded from the definition on the basis of price (at least US$5.00 per share) or the registrant’s net tangible assets; or exempted from the definition by the Commission. If our common shares are deemed to be “penny stock”, trading in common shares will be subject to additional sales practice requirements on broker/dealers who sell penny stock to persons other than established customers and accredited investors.

Financial Industry Regulatory Authority, Inc. (“FINRA”) sales practice requirements may limit a shareholder’s ability to buy and sell our common shares.

In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a client, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that client. Prior to recommending speculative low priced securities to their non-institutional clients, broker-dealers must make reasonable efforts to obtain information about the client’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some clients. FINRA requirements make it more difficult for broker-dealers to recommend that their clients buy our common shares, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

As a public company we are subject to complex legal and accounting requirements that will require us to incur significant expenses and will expose us to risk of non-compliance.

As a public company, we are subject to numerous legal and accounting requirements in both Canada and the United States of America that do not apply to private companies. The cost of compliance with many of these requirements is material, not only in absolute terms but, more importantly, in relation to the overall scope of the operations of a small company. Our relative inexperience with these requirements may increase the cost of compliance and may also increase the risk that we will fail to comply. Failure to comply with these requirements can have numerous adverse consequences including, but not limited to, our inability to file required periodic reports on a timely basis, loss of market confidence, delisting of our securities and/or governmental or private actions against us. We cannot assure you that we will be able to comply with all of these requirements or that the cost of such compliance will not prove to be a substantial competitive disadvantage vis-à-vis privately held and larger public competitors.

Compliance with changing regulation of corporate governance and public disclosure will result in additional expenses and pose challenges for our management .

Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations promulgated thereunder, the Sarbanes-Oxley Act and SEC regulations, have created uncertainty for public companies and significantly increased the costs and risks associated with accessing the U.S. public markets. Our management team needs to devote significant time and financial resources to comply with both existing and evolving standards for public companies, which will lead to increased general and administrative expenses and a diversion of management time and attention from revenue generating activities to compliance activities.

Because we are quoted on the OTCQX instead of a national securities exchange in the United States, our U.S. investors may have more difficulty selling their stock or experience negative volatility on the market price of our stock in the United States.

In the United States, our common shares are quoted on the OTCQX. The OTCQX is marketed as an electronic exchange for high growth and early stage U.S. companies and a prospective “ final step toward a NASDAQ or NYSE listing” (although no assurances can be provided that such change of market shall occur). Trades are settled and cleared in the U.S. similar to any NASDAQ or NYSE stock and trade reports are disseminated through Yahoo, Bloomberg, Reuters, and most other financial data providers. The OTCQX can be significantly illiquid, in part because it does not have a national quotation system by which potential investors can follow the market price of shares except through information received and generated by a limited number of broker-dealers that make markets in particular stocks. There is a greater chance of volatility for securities that trade on the OTCQX as compared to a national securities exchange in the United States, such as the New York Stock Exchange, the NASDAQ Stock Market or the NYSE Amex. This volatility may be caused by a variety of factors, including the lack of readily available price quotations, the absence of consistent administrative supervision of bid and ask quotations, lower trading volume, and market conditions. U.S. investors in our common shares may experience high fluctuations in the market price and volume of the trading market for our securities. These fluctuations, when they occur, have a negative effect on the market price for our common shares. Accordingly, our U.S. shareholders may not be able to realize a fair price from their shares when they determine to sell them or may have to hold them for a substantial period of time until the market for our common shares improves.

In addition to being quoted on the OTCQX, our common shares trade on the Toronto Stock Exchange (“TSX”), Canada’s national stock exchange, under the symbol EGZ and on the Frankfurt Exchange under the symbol YE5.

The price at which you purchase our common shares may not be indicative of the price that will prevail in the trading market. You may be unable to sell your common shares at or above your purchase price, which may result in substantial losses to you. The market price for our common shares is particularly volatile given our status as a relatively unknown company with a small and thinly traded public float, limited operating history and lack of profits which could lead to wide fluctuations in our share price.

The market for our common shares is characterized by significant price volatility when compared to seasoned issuers, and we expect that our share price will continue to be more volatile than a seasoned issuer. The volatility in our share price is attributable to a number of factors. First our common shares, at times, are thinly traded. As a consequence of this lack of liquidity, the trading of relatively small quantities of shares by our shareholders may disproportionately influence the price of those shares in either direction. The price for our shares could, for example, decline precipitously in the event that a large number of our common shares are sold on the market without commensurate demand, as compared to a seasoned issuer which could better absorb those sales without adverse impact on its share price. Second, we are a speculative or “risky” investment due to our limited operating history, lack of profits to date and uncertainty of future market acceptance for our potential products. As a consequence, more risk-adverse investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares on the market more quickly and at greater discounts than would be the case with the stock of a seasoned issuer. Many of these factors are beyond our control and may decrease the market price of our common shares, regardless of our performance. We cannot make any predictions as to what the prevailing market price for our common shares will be at any time or as to what effect that the sale of shares or the availability of common shares for sale at any time will have on the prevailing market price.

Shareholders should be aware that, according to SEC Release No. 34-29093, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; boiler room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; excessive and undisclosed bid-ask differential and markups by selling broker-dealers; and the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequent investor losses. Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities. The occurrence of these patterns or practices could increase the volatility of our share price.

Volatility in our common share price may subject us to securities litigation, thereby diverting our resources that may have a material effect on our profitability and results of operations.

The market for our common shares is characterized by significant price volatility when compared to seasoned issuers, and we expect that our share price will continue to be more volatile than a seasoned issuer for the indefinite future. In the past, plaintiffs have often initiated securities class action litigation against a company following periods of volatility in the market price of its securities. We may in the future be the target of similar litigation. This type of litigation could result in substantial costs and could divert management’s attention and resources.

Failure to achieve and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) could have a material adverse effect on our business and our operating results.

If we fail to comply with the requirements of Section 404 of the Sarbanes-Oxley Act regarding internal control over financial reporting or to remedy any material weaknesses in our internal controls that we may identify, such failure could result in material misstatements in our financial statements, cause investors to lose confidence in our reported financial information and have a negative effect on the trading price of our common shares.

Pursuant to Section 404 of the Sarbanes-Oxley Act and current SEC regulations, we are required to prepare assessments regarding internal controls over financial reporting. In connection with our on-going assessment of the effectiveness of our internal control over financial reporting, we may discover “material weaknesses” in our internal controls as defined in standards established by the Public Company Accounting Oversight Board, or the PCAOB. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. The PCAOB defines “significant deficiency” as a deficiency that results in more than a remote likelihood that a misstatement of the financial statements that is more than inconsequential will not be prevented or detected.

In the event that a material weakness is identified, as it has been for this report, subject to expansion of the size of our Company and our finance department, we will employ qualified personnel and adopt and implement policies and procedures to address any material weaknesses that we identify. However, the process of designing and implementing effective internal controls is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company. We cannot assure you that the measures we will take will remediate any material weaknesses that we may identify or that we will implement and maintain adequate controls over our financial process and reporting in the future.

Any failure to complete our assessment of our internal control over financial reporting, to remediate any material weaknesses that we may identify or to implement new controls, or difficulties encountered in their implementation, could harm our operating results, cause us to fail to meet our reporting obligations or result in material misstatements in our financial statements. Any such failure could adversely affect the results of the management evaluations of our internal controls. Inadequate internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our common shares.

Should we lose the services of our key executives, our financial condition and proposed expansion may be negatively impacted.

We depend on the continued contributions of our executive officers to work effectively as a team, to execute our business strategy and to manage our business. The loss of key personnel, or their failure to work effectively, could have a material adverse effect on our business, financial condition, and results of operations. Specifically, we rely on Richard Schler, our Chief Executive Officer, Craig Scherba, our President and Chief Operating Officer and Peter Liabotis, our Chief Financial Officer. We do not maintain key man life insurance. Should we lose any or all of their services and we are unable to replace their services with equally competent and experienced personnel, our operational goals and strategies may be adversely affected, which will negatively affect our potential revenues.

Minnesota law and our articles of incorporation protect our directors from certain types of lawsuits, which could make it difficult for us to recover damages from them in the event of a lawsuit.

Minnesota law provides that our directors will not be liable to our Company or to our stockholders for monetary damages for all but certain types of conduct as directors. Our articles of incorporation require us to indemnify our directors and officers against all damages incurred in connection with our business to the fullest extent provided or allowed by law. The exculpation provisions may have the effect of preventing stockholders from recovering damages against our directors caused by their negligence, poor judgment or other circumstances. The indemnification provisions may require our Company to use its assets to defend our directors and officers against claims, including claims arising out of their negligence, poor judgment, or other circumstances.

We have not identified any mineral reserves or resources and due to the speculative nature of mineral property exploration, there is substantial risk that no commercially exploitable minerals will be found and our business will fail.

Exploration for minerals is a speculative venture involving substantial risk. We cannot provide investors with any assurance that our claims and properties contain commercially exploitable reserves. The exploration work that we intend to conduct on our claims or properties may not result in the discovery of commercial quantities of graphite, vanadium, gold, uranium, or other minerals. Problems such as unusual and unexpected rock formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts. In such a case, we would be unable to complete our business plan.

We are a mineral exploration company with a limited operating history and expect to incur operating losses for the foreseeable future.

We are a mineral exploration company. We have not earned any revenues and we have not been profitable. Prior to completing exploration on our claims, we may incur increased operating expenses without realizing any revenues. There are numerous difficulties normally encountered by mineral exploration companies, and these companies experience a high rate of failure. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the mineral properties that we plan to undertake. These potential problems include, but are not limited to, unanticipated problems relating to exploration and additional costs and expenses that may exceed current estimates. We have no history upon which to base any assumption as to the likelihood that our business will prove successful, and we can provide no assurance to investors that we will generate any operating revenues or ever achieve profitable operations.

Because of the speculative nature of mineral property exploration, there is substantial risk that no commercially exploitable minerals will be found and our business will fail.

Exploration for minerals is a speculative venture involving substantial risk. We cannot provide investors with any assurance that our claims and properties contain commercially exploitable reserves. The exploration work that we intend to conduct on our claims or properties may not result in the discovery of commercial quantities of graphite, vanadium, gold, uranium or other minerals. Uncertainties and unexpected occurrences are virtually given in mineral exploration and often result in unsuccessful exploration efforts. In such a case, we would be unable to complete our business plan.

Because of the inherent dangers involved in mineral exploration, there is a risk that we may incur liability or damages as we conduct our business.

The search for valuable minerals involves numerous hazards. As a result, we may become subject to liability for such hazards, including pollution, cave-ins and other hazards against which we cannot, or may elect not, to insure against. We currently have no such insurance, but our management intends to periodically review the availability of commercially reasonable insurance coverage. If a hazard were to occur, the costs of rectifying the hazard may exceed our asset value and cause us to liquidate all our assets.

If we confirm commercial concentrations of graphite, vanadium, gold, uranium or other minerals on our claims and interests, we can provide no assurance that we will be able to successfully bring those claims or interests into commercial production.

If our exploration programs are successful in confirming deposits of commercial tonnage and grade, we will require significant additional funds in order to place the claims and interests into commercial production. This may occur for a number of reasons, including because of regulatory or permitting difficulties, because we are unable to obtain any adequate funds or because we cannot obtain such funds on terms that we consider economically feasible.

Because access to our properties may be restricted by inclement weather or proper infrastructure, our exploration programs are likely to experience delays.

Access to most of the properties underlying our claims and interests is restricted due to their remote locations and because of weather conditions. Some of our properties are only accessible by air. As a result, any attempts to visit, test, or explore the property are generally limited to those periods when weather permits such activities. These limitations can result in significant delays in exploration efforts, as well as mining and production efforts in the event that commercial amounts of minerals are found. This could cause our business to fail.

As we undertake exploration of our claims and interests, we will be subject to the compliance of government regulation that may increase the anticipated time and cost of our exploration program.

There are several governmental regulations that materially restrict the exploration of minerals. We will be subject to the mining laws and regulations in force in the jurisdictions where our claims are located, and these laws and regulations may change over time. In order to comply with these regulations, we may be required to obtain work permits, post bonds, complete environmental assessments and perform remediation work for any physical disturbance to land. While our planned budget for exploration programs includes a contingency for regulatory compliance, there is a risk that new regulations could increase our costs of doing business and prevent us from carrying out our exploration program, or that our budgeted amounts are inadequate.

Our operations are subject to strict environmental regulations, which result in added costs of operations and operational delays.

Our operations are subject to environmental regulations, which could result in additional costs and operational delays. All phases of our operations are subject to environmental regulation. Environmental legislation is evolving in some countries and jurisdictions in a manner that may require stricter standards, and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects, and a heightened degree of responsibility for companies and their officers, directors, and employees. There is no assurance that any future changes in environmental regulation will not negatively affect our projects.

We have no insurance for environmental problems.

Insurance against environmental risks, including potential liability for pollution or other hazards as a result of the disposal of waste products occurring from exploration and production, has not been available generally in the mining industry. We have no insurance coverage for most environmental risks. In the event of a problem, the payment of environmental liabilities and costs would reduce the funds available to us for future operations. If we are unable to full pay for the cost of remedying an environmental problem, we might be required to enter into an interim compliance measure pending completion of the required remedy.

We do not intend to pay dividends.

We do not anticipate paying cash dividends on our common shares in the foreseeable future. We may not have sufficient funds to legally pay dividends. Even if funds are legally available to pay dividends, we may nevertheless decide, in our sole discretion, not to pay dividends. The declaration, payment and amount of any future dividends will be made at the discretion of our board of directors, and will depend upon, among other things, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors our board of directors may consider relevant. There is no assurance that we will pay any dividends in the future, and, if dividends are paid, there is no assurance with respect to the amount of any such dividend.

Due to external market factors in the mining business, we may not be able to market any minerals that may be found.

The mining industry, in general, is intensely competitive. Even if commercial quantities of minerals are discovered, we can provide no assurance to investors that a ready market will exist for the sale of these minerals. Numerous factors beyond our control may affect the marketability of any substances discovered. These factors include market fluctuations, the sale price of the minerals, the proximity and capacity of markets and processing equipment, and government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, mineral importing and exporting and environmental protection. The effect of these factors cannot be accurately predicted, but any combination of these factors may result in our not receiving an adequate return on invested capital.

Our performance may be subject to fluctuations in market prices of any minerals that we find.

The profitability of a mineral exploration project could be significantly affected by changes in the market price of the relevant minerals. Market prices of graphite have increased over the past several months due to possible new applications. The price of vanadium has increased due to the markets in China as well as the expanded uses including large-scale power storage application. The price of gold has fallen slightly after recently reaching record highs. Demand for gold can also be influenced by economic conditions, attractiveness as an investment vehicle and the relative strength of the U.S. dollar and local investment currencies. The market price of uranium has increased due in large measure to projections as to the number of new nuclear energy plants that will be constructed in China, the United States and other jurisdictions. A number of other factors affect the market prices for other minerals. The aggregate effect of the factors affecting the prices of various minerals is impossible to predict with accuracy. Fluctuations in mineral prices may adversely affect the value of any mineral discoveries made on the properties with which we are involved, which may in turn affect the market price and liquidity of our common shares and our ability to pursue and implement our business plan. In addition, the price of both graphite and vanadium can fluctuate significantly on a month-to-month and year-to-year basis.

Because from time to time we hold a significant portion of our cash reserves in Canadian dollars, we may experience losses due to foreign exchange translations.

From time to time we hold a significant portion of our cash reserves in Canadian dollars. Due to foreign exchange rate fluctuations, the value of these Canadian dollar reserves can result in translation gains or losses in U.S. dollar terms. If there was a significant decline in the Canadian dollar against the U.S. dollar, our converted Canadian dollar cash balances presented in U.S. dollars on our balance sheet would significantly decline. Recently, the Canadian dollar has declined to near the 90 cent mark relative to US dollars. There is no certainty as to whether the value of the Canadian dollar will rise or continue to fall. If the US dollar significantly declines relative to the Canadian dollar our quoted US dollar cash position would significantly decline as it would be more expensive in US dollar terms to pay Canadian dollar expenses. We have not entered into derivative instruments to offset the impact of foreign exchange fluctuations.

We are exposed to general economic conditions, which could have a material adverse impact on our business, operating results and financial condition.

Recently there have been adverse conditions and uncertainty in the global economy as the result of unstable global financial and credit markets, inflation, and recession. These unfavourable economic conditions and the weakness of the credit market may continue to have an impact on our Company’s business and our Company’s financial condition . The current global macroeconomic environment may affect our Company’s ability to access the capital markets may be severely restricted at a time when our Company wishes or needs to access such markets, which could have a materially adverse impact on our Company’s flexibility to react to changing economic and business conditions or carry on our operations.

Until we can full validate, the properties described herein have no known mineral reserves of any kind.

Further details regarding our Company’s properties, although not incorporated by reference, including the comprehensive geological report prepared in compliance with Canada’s National Instrument 43-101 on the Sagar Property in Northern Québec, on the Green Giant Property in Madagascar and on the Joint Venture Ground (Molo Graphite Deposit) in Madagascar, have been filed within our Company’s filings on Sedar at http://www.sedar.com (which website is expressly not incorporated by reference into this filing).

Climate change and related regulatory responses may impact our business.

Climate change as a result of emissions of greenhouse gases is a current topic of discussion and may generate government regulatory responses in the near future. It is impracticable to predict with any certainty the impact of climate change on our business or the regulatory responses to it, although we recognize that they could be significant. However, it is too soon for us to predict with any certainty the ultimate impact, either directionally or quantitatively, of climate change and related regulatory responses.

To the extent that climate change increases the risk of natural disasters or other disruptive events in the areas in which we operate, we could be harmed. While we maintain rudimentary business recovery plans that are intended to allow us to recover from natural disasters or other events that can be disruptive to our business, our plans may not fully protect us from all such disasters or events.

The current financial environment may impact our business and financial condition that we cannot predict.

The continued instability in the global financial system and related limitation on availability of credit may continue to have an impact on our business and our financial condition, and we may continue to face challenges if conditions in the financial markets do not improve. Our ability to access the capital markets has been restricted as a result of the economic downturn and related financial market conditions and may be restricted in the future when we would like, or need, to raise capital. The difficult financial environment may also limit the number of prospects for potential joint venture, asset monetization or other capital raising transactions that we may pursue in the future or reduce the values we are able to realize in those transactions, making these transactions uneconomic or difficult to consummate.

SHOULD ONE OR MORE OF THE FOREGOING RISKS OR UNCERTAINTIES MATERIALIZE, OR SHOULD THE UNDERLYING ASSUMPTIONS PROVE INCORRECT, ACTUAL RESULTS MAY DIFFER SIGNIFICANTLY FROM THOSE ANTICIPATED, BELIEVED, ESTIMATED, EXPECTED, INTENDED OR PLANNED

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

For the period from July 1, 2012 through March 31, 2014, our Company issued the following unregistered securities:

·	During July 2012, $105,000 was raised through the exercise of 700,000 stock options at $0.15 per share.

·	On July 13, 2012, we issued 1,695,000 stock options to directors, officers and consultants of the Company.

·	On February 27, 2013, we issued 5,900,000 stock options to directors, officers and consultants of the Company.

During March 2013, we closed a private placement raising CAD$2,358,000 (USD$2,307,035). We issued 12,350,000 common stock at prices between $0.18 and $0.20 per share. We paid a fee of $86,000 (USD$84,176) and issued 270,000 compensation warrants. Each compensation warrant entitles the holder to purchase one common share at CAD$0.20.

During July and August 2013, we closed a private placement raising $2,043,452 through the issuance of 16,950,001 common shares. We issued 402,000 compensation warrants at an exercise price of CAD$0.125 and 150,000 compensation warrants at an exercise price of $0.12. Each compensation warrant expires one year from the date of issue.

On January 15, 2014 and January 31, 2014, we closed a private placement raising a total of $6,910,503. We issued 62,384,067 common shares at a price of CAD$0.12 and 31,192,033 common share purchase warrants with an exercise price of CAD$0.18. Of the 31,192,033 common share purchase warrants, 29,152,033 expire on January 14, 2017, 1,450,000 expire on June 14, 2015 and 590,000 expire on January 31, 2017. We paid fees of $488,234 and issued 3,396,744 compensation warrants at an exercise price of CAD$0.14. Each compensation warrant expires eighteen months from the date of issue.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

There were no defaults upon senior securities during the period ended March 31, 2014.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

There is no information with respect to which information is not otherwise called for by this form.

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and current reports, proxy statements and other information with the Commission. Our Commission filings are available to the public over the Internet at the Commission’s website at http://www.sec.gov . The public may also read and copy any document we file with the Commission at its Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549, on official business days during the hours of 10:00 am to 3:00 pm. The public may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. We maintain a website at http://www.energizerresources.com , (which website is expressly not incorporated by reference into this filing). Information contained on our website is not part of this report on Form 10-Q.

ITEM 6. – EXHIBITS

Exhibit Number		Description
3.1		Articles of Incorporation of Uranium Star Corp. (now known as Energizer Resources Inc.) (Incorporated by reference to Exhibit 3.1 to the registrant’s current report on Form 8-K as filed with the SEC on May 20, 2008)
3.2		Articles of Amendment to Articles of Incorporation of Uranium Star Corp. changing its name to Energizer Resources Inc. (Incorporated by reference to Exhibit 3.1 to the registrant’s current report on Form 8-K filed with the SEC on July 16, 2010)
3.3		Amended and Restated By-Laws of Energizer Resources Inc. (Incorporated by reference to Exhibit 3.2 to the registrant’s current report on Form 8-K as filed with the SEC on July 16, 2010)
3.4		Amendment to the By-Laws of Energizer Resources Inc. (Incorporated by reference to the registrant’s current report on Form 8-K as filed with the SEC on October 16, 2013)
4.1		Amended and Restated 2006 Stock Option Plan of Energizer Resources, Inc. (as of February 2009) (Incorporated by reference to Exhibit 4.1 to the registrant's Form S-8 registration statement as filed with the SEC on February 19, 2010)
4.2		Form of broker Subscription Agreement for Units (Canadian and Offshore Subscribers) (Incorporated by reference to Exhibit 4.1 to the registrant’s current report on Form 8-K as filed with the SEC on March 19, 2010)
4.3		Form of standard Subscription Agreement for Units (Canadian and Offshore Subscribers) (Incorporated by reference to Exhibit 4.2 to the registrant’s current report on Form 8-K as filed with the SEC on March 19, 2010)
4.4		Form of Warrant to Purchase common shares (Incorporated by reference to Exhibit 4.3 to the registrant’s current report on Form 8-K as filed with the SEC on March 19, 2010)
4.5		Form of Class A broker warrant to Purchase common shares (Incorporated by reference to Exhibit 4.4 to the registrant’s current report on Form 8-K as filed with the SEC on March 19, 2010)
4.6		Form of Class B broker warrant to Purchase common shares (Incorporated by reference to Exhibit 4.5 to the registrant’s current report on Form 8-K as filed with the SEC on March 19, 2010)
4.7		Agency Agreement, dated March 15, 2010, between Energizer Resources, Clarus Securities Inc. and Byron Securities Limited (Incorporated by reference to Exhibit 4.6 to the registrant’s current report on Form 8-K filed with the SEC on March 19, 2010)
4.8		Form of Warrant relating to private placement completed during November 2012.
4.9		Agency Agreement relating to private placement completed during November 2012.
4.10		Amended and Restated Stock Option Plan of Energizer Resources, Inc. (Incorporated by reference to the registrant’s current report on Form 8-K as filed with the SEC on October 16, 2013)
10.1		Property Agreement effective May 14, 2004 between Thornton J. Donaldson and Thornton J. Donaldson, Trustee for Yukon Resources Corp. (Incorporated by reference to Exhibit 10.1 to the registrant's Form SB-2 registration statement as filed with the SEC on September 14, 2004)
10.2		Letter of Intent dated March 10, 2006 with Apofas Ltd. (Incorporated by reference to Exhibit 99.1 to the registrant's current report on Form 8-K as filed with the SEC on March 13, 2006)
10.3		Letter agreement effective May 12, 2006 between Yukon Resources Corp. and Virginia Mines Inc. (Incorporated by reference to Exhibit 99.1 to the registrant's current report on Form 8-K filed as with the SEC on May 9, 2006)
10.4		Joint Venture Agreement dated August 22, 2007 between Uranium Star Corp. & Madagascar Minerals and Resources Sarl (Incorporated by reference to Exhibit 10.1 to the registrant's Form 8-K as filed with SEC on September 11, 2007)

10.5		Share Purchase Agreement between Madagascar Minerals and Resources Sarl and THB Venture Limited (a subsidiary of Energizer Resources Inc.) dated July 9, 2009 (Incorporated by reference to Exhibit 10.5 to the registrant’s Form 10K/A as filed on April 8, 2013)
10.6		Joint Venture Agreement between Malagasy Minerals Limited and Energizer Resources Inc. dated December 14, 2011 (Incorporated by reference to Exhibit 10.6 to the registrant’s Form 10K/A as filed on April 8, 2013).
10.7		Agreement to Purchase Interest In Claims between Honey Badger Exploration Inc. and Energizer Resources Inc. dated February 28, 2014.(Incorporated by reference to Exhibit 10.7 to the registrant’s Form 10Q as filed on May 14, 2014).
10.8		Sale and Purchase Agreement between Malagasy Minerals Limited and Energizer Resources Inc. dated April 16, 2014 (Incorporated by reference to Exhibit 10.8 to the registrant’s Form 10Q as filed on May 14, 2014).
10.9		ERG Project Minerals Rights Agreement between Malagasy Minerals Limited and Energizer Resources Inc. dated April 16, 2014 (Incorporated by reference to Exhibit 10.9 to the registrant’s Form 10Q as filed on May 14, 2014).
10.10		Green Giant Project Joint Venture Agreement between Malagasy Minerals Limited and Energizer Resources Inc. dated April 16, 2014 (Incorporated by reference to Exhibit 10.9 to the registrant’s Form 10Q as filed on May 14, 2014).
21		Subsidiaries of the Registrant (Incorporated by reference to Exhibit 21.1 to the registrant’s annual report on Form 10-K filed with the SEC on September 21, 2009)
31.1		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act. (filed herein)
31.2		Certification of Principal Financial & Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act. (filed herein)
32.1		Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act. (filed herein)
32.2		Certification of Chief Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley Act. (filed herein)
99.1		Canadian National Instrument 43-101 Technical Report Update for Green Giant Property, Fotadrevo, Province of Toliara, Madagascar (Incorporated by reference to Exhibit 99.1 to the registrant's report on Form 8-K filed with SEC on July 9, 2010)

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ENERGIZER RESOURCES INC.

Dated: May 13, 2014	By:	/s/ Richard Schler
		Name: Richard Schler
		Title: Chief Executive Officer and Director

Dated: May 13, 2014
	By:	/s/ Peter D. Liabotis
		Name: Peter D. Liabotis
		Title: Chief Financial Officer (Principal Accounting Officer)

AGREEMENT TO PURCHASE INTEREST IN CLAIMS

THIS AGREEMENT effective as of the 28th day of February, 2014 (the “ Effective Date ”).

BETWEEN :

ENERGIZER RESOURCES INC. , a corporation existing under the laws of the State of Minnesota and having a place of business at 141 Adelaide Street West, Suite 520, Toronto, Ontario, M5H 3L5

(hereinafter referred to as the “ Vendor ”)

AND :

HONEY BADGER EXPLORATION INC. , a corporation existing under the laws of Ontario and having a place of business at 141 Adelaide Street West, Suite 520, Toronto, Ontario, M5H 3L5

(hereinafter referred to as the “ Purchaser ”)

WHEREAS the Vendor is the beneficial and duly registered owner of 377 mining claims located in the Province of Québec, Canada, known as the Sagar Property, as more particularly described in Schedule “A” attached hereto to form part hereof (the “ Claims ”);

WHEREAS Virginia Mines Inc. (the “ Virginia ”) currently holds a 1.5% net smelter return royalty (the “ Virginia Royalty ”) affecting certain of the Claims, as more particularly described in Schedule “B” attached hereto, the whole pursuant to the terms and conditions of that certain letter of intent entered into between the Vendor and Virginia as of April 27, 2006 (the “ Virginia Agreement ”) pursuant to which the Vendor acquired its interest in the Claims that are subject to the Virginia Royalty;

WHEREAS pursuant to the Virginia Agreement, should the Vendor discover a potentially exploitable Gold Deposit (as defined in the Virginia Agreement) with an indicated resource outlined (defined according to NI 43-101 – Standards of Disclosure for Mineral Projects ) of no less than 500,000 ounces of contained gold equivalent (for all precious metals), Virginia shall have, within 90 days of notice of the Vendor of the discovery of such Gold Deposit, a one-time right (the “ Back-In Right ”) to re-acquire a 51% interest in the Claims that are subject to the Virginia Royalty, by issuing a cash payment or common shares of Virginia equivalent to that amount equal to two and a half times the Current Expenditures (as defined in the Virginia Agreement) incurred by the Vendor on the discovery prior to Virginia’s election;

WHEREAS pursuant to the Virginia Agreement, Virginia has a right of first refusal on any sale, assignment or transfer of the Vendor’s interests in the Claims (the “ Right of First Refusal ”);

WHEREAS Pierre Poisson (50%) and Joanne Jones (50%) currently hold a 1% net smelter return royalty (the “ First Royalty ”) affecting certain of the Claims, as more particularly described in Schedule “C” attached hereto to form part hereof, of which 0.5% may be re-purchased by the Vendor for $200,000, the whole pursuant to the terms and conditions of that certain option agreement entered into among Virginia, Pierre Poisson and Joanne Jones as of May 27, 1992 (the “ Poisson Agreement ”) pursuant to which Virginia acquired its interest in the Claims acquired pursuant to the Poisson Agreement;

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WHEREAS Pierre Poisson (50%) and Joanne Jones (50%) currently hold a 0.5% net smelter return royalty (the “ Second Royalty ”) affecting certain of the Claims, as more particularly described in Schedule “D” attached hereto to form part hereof, of which 0.25% may be repurchased by the Vendor for $100,000, the whole pursuant to the terms and conditions of that certain amendment agreement entered into amongst Virginia, Pierre Poisson and Joanne Jones as of November 3, 1992 (the “ Amending Agreement ”);

WHEREAS the Purchaser has agreed to purchase a 75% undivided interest in all of the rights, title and interests of the Vendor in and to the Claims and the Vendor has agreed to sell a 75% undivided interest in all of its rights, title and interests in and to such Claims to the Purchaser, subject to the terms and conditions set forth in this agreement (the “ Transaction ”); and

WHEREAS Virginia has waived its Right of First Refusal pursuant to the Virginia Agreement in connection with the Transaction provided that the Purchaser and the Vendor complete the Transaction within one year from the date hereof; should the Transaction not close within one year from the date hereof, Virginia shall have a fresh and new Right of First refusal in respect thereof, pursuant to the Virginia Agreement.

NOW, THEREFORE, THIS AGREEMENT WITNESSETH that, in consideration of the premises and the mutual covenants and agreements expressed herein, the Vendor and the Purchaser (hereinafter collectively referred to as the “ Parties ” and, individually, a “ Party ”) hereby agree as follows:

1.	Reciprocal Representations and Warranties

1.1	Each Party hereby represents and warrants to each of the other Parties that, as of the date hereof:

(a)

it is a body corporate duly incorporated or continued, as the case maybe, and in good standing under the laws of its jurisdiction of incorporation or continuation, as the case may be, is qualified to do business and is in good standing in those jurisdictions where necessary in order to carry out its purposes;

(b)

all corporate and other actions required to authorize it to enter into and perform this agreement, the Transaction and all other transactions contemplated by this agreement have been properly taken, with the exception of the regulatory approvals and filings which are a condition of Closing (as defined in Section 7 hereof) (the “ Regulatory Approvals ”);

(c)	it has all requisite corporate power to own, lease and operate its assets and to carry on its business as now conducted;

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(d)	it has the capacity to enter into this agreement, the Transaction, all other transactions contemplated by this agreement and all other documents contemplated herein;

(e)

subject to the Regulatory Approvals, it will not breach any other agreement or arrangement to which it is a party or be in violation of any law to which it is subject, by entering into or performing this agreement, the Transaction, all other transactions contemplated by this agreement and all other documents contemplated herein;

(f)	this agreement has been duly executed and delivered by it and is valid and binding upon it in accordance with its terms; and

(g)	except as otherwise set forth herein, no consent from a lender or any third party is necessary to authorize it to execute this agreement, to complete the Transaction and all other transactions contemplated by this agreement, and to execute and deliver all related documents.

2.	Representations and Warranties of the Vendor

2.1	The Vendor hereby represents and warrants to the Purchaser that, as of the date hereof:

(a)

it is the beneficial and registered owner of a 100% interest in the Claims, free and clear of all defects, liens, adverse claims, demands, charges, restrictions, encumbrances, royalties and liabilities of any nature and quality whatsoever, existing or threatened, except for the First Royalty, the Second Royalty, the Virginia Royalty, the Back-In-Right and the Right of First Refusal (hereinafter collectively, the “ Liens ”), and the Purchaser shall acquire good, legal and marketable title to the Claims and beneficial ownership thereof; and

(b)	it is not aware of any material facts or circumstances which have not been disclosed in this agreement and which should be disclosed in order to prevent the representations and warranties in this agreement from being materially misleading.

2.2	With respect to the Claims, the Vendor hereby represents and warrants to the Purchaser that, as of the date hereof:

(a)	Subject to the Liens, it is the exclusive and absolute owner of all mining and proprietary rights attaching to the Claims and proper evidence of such ownership has been duly filed, registered or recorded wherever necessary to perfect and preserve the Vendor's rights, title and interest thereto;

(b)	all mining and proprietary rights have been properly staked or otherwise properly constituted, as applicable, and are valid, in good standing and free and clear of all liens, except for the Liens and public utilities,;

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(c)	it does not owe any amount in connection with the First Royalty, the Second Royalty and the Virginia Royalty as of the Effective Date;

(d)	it has delivered to the Purchaser all relevant information concerning title to each Claim;

(e)

to the best of the Vendor's knowledge and belief, all activities and operations on any of the Claims, prior to the date hereof, have been performed in a manner consistent with the laws and regulations in effect at the relevant time and all filings required in order to maintain the mining rights in good standing have been properly and timely recorded or filed with the appropriate government agencies;

(f)

there is no judgment, decree, injunction, ruling or order of any court, governmental department, commission, agency, instrumentality or arbitrator and no claim, suit, action, litigation, arbitration or governmental proceeding in progress, pending or threatened against or relating to, or affecting any of the Claims which could prevent the Vendor from entering into this agreement and performing its obligations hereunder and from completing the Transaction;

(g)	to the best of the Vendor's knowledge and belief, each Claim is free and clear of any hazardous or toxic material, pollution, or other adverse environmental conditions which may give rise to any environmental liability;

(h)	it has full authority to grant, sell, assign, and transfer to the Purchaser, as applicable, the mining and proprietary rights attaching to each Claim and its rights and obligations under each of the First Royalty, the Second Royalty and the Virginia Royalty, as contemplated herein; and

(i)

it is not in default or violation of any agreement, lease, license, permit, certificate, instrument, regulation, statute or decree applicable to it, which default or violation could adversely affect its ownership of any of the Claims, its right to conduct mineral exploration thereon or its performance or operations in respect thereof.

2.3

The Vendor represents and warrants to the Purchaser that each of the representations and warranties set forth in any provision of this Section 2 is true, correct and complete as at the date of this agreement and shall be true and accurate as of the Closing Date (as described in Section 7 hereof) as if given as of such date.

2.4	The Vendor recognizes that the accuracy and completeness of each representation and warranty set forth in any provision of this Section 2 is a condition upon which the Purchaser is relying and without which the Purchaser would not have agreed to complete the Transaction.

2.5	No investigation or inquiry made by or on behalf of the Purchaser shall have the effect of waiving or diminishing any of the representations and warranties set forth in any provision of this Section 2 .

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3.	Representations and Warranties of the Purchaser

3.1

The Purchaser hereby represents and warrants to the Vendor that, as of the date hereof, it is not aware of any material facts or circumstances which have not been disclosed in this agreement and which should be disclosed in order to prevent its representations and warranties in this agreement from being materially misleading.

3.2

This Agreement has been duly authorized by the board of directors of the Purchaser and no other corporate proceedings on the part of the Purchaser are necessary to authorize this Agreement, any related agreements to which the Purchaser is a party or the transactions contemplated hereby and thereby. This Agreement and all related agreements to which the Purchaser is a party have been duly executed and delivered by the Purchaser and constitute legal, valid and binding obligations of the Purchaser, enforceable against the Purchaser by the Vendor in accordance with their terms, except as enforcement may be limited by bankruptcy, insolvency and other laws affecting the rights of creditors generally and except that equitable remedies may be granted only in the discretion of a court of competent jurisdiction.

3.3

The execution and delivery by the Purchaser of this Agreement and all related documents to which the Purchaser is a party, the performance by the Purchaser of its obligations hereunder and thereunder and the completion of the transactions herein and therein provided for will not result in the violation of, or constitute a default under or cause the acceleration of any obligation of the Purchaser under:

(a)	any agreement to which the Purchaser is a party or by which it is bound;

(b)	any provision of the constating documents or by-laws or resolutions of the board of directors (or any committee thereof) or shareholders of the Purchaser (and no conflict with the same will be caused thereby);

(c)	any judgment, decree, order or award of any agency or arbitrator; or

(d)	any applicable laws of Canada, Ontario or any jurisdictions where the Purchaser is qualified or required to be qualified to do business or where it carries on business.

3.4	There is no requirement for the Purchaser to make any filing with, give any notice to or obtain any Permit of, any agency as a condition to the lawful consummation of the transactions contemplated by this Agreement

3.5

(a)	Upon issuance, the Initial Vendor Shares and the Additional Vendor Shares (collectively, the “Shares”) will be duly authorized and validly issued as fully paid and non-assessable shares in the capital of the Purchaser.

(b)

No prospectus is required nor are any other documents required to be filed, proceedings taken or approvals, permits, consents or authorizations obtained under the Ontario Securities Act and the rules and regulations thereunder (" Ontario Securities Laws ") to permit the Vendor to trade the Shares in the Province of Ontario, either through registrants or dealers registered under Ontario Securities Laws who comply with such laws or in circumstances in which there is an exemption from the registration requirements under Ontario Securities Laws, provided that:

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(i)	at the time of such trade, the Purchaser is and has been a "reporting issuer" (as defined under Ontario Securities Laws) in the Province of Ontario for the four months immediately preceding the trade;

(ii)	at the time of such trade, at least four months have elapsed from the Closing Date;

(iii)

a certificate representing the Shares has been issued that carries a legend in the form prescribed by National Instrument 45-102 – Resale of Securities (" NI 45-102 ");

(iv)	the trade is not a "control distribution" (as such term is defined in NI 45-102) and the seller is not a "promoter" within the meaning of Ontario Securities Laws;

(v)	no unusual effort is made to prepare the market or to create a demand for the Shares;

(vi)	no extraordinary commission or consideration is paid to a person or company in respect of the trade; and

(vii)

if the selling security holder is an insider or officer of the Purchaser, the selling security holder has no reasonable grounds to believe that the Purchaser is in default of "securities legislation" (as such term is defined in National Instrument 14-101).

(c)	The Purchaser is, and has been for a period of four months, a "reporting issuer" (as defined under Ontario Securities Laws) in the Province of Ontario.

3.6

In the past twelve month period, the Purchaser has made all securities filings that it was required to file under any applicable securities laws on a timely basis (the " Securities Filings "). As of their respective dates, each of the Securities Filings complied with all requirements of the applicable securities laws, and none of the Securities Filings contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Purchaser included in the Securities Filings: (i) comply with applicable accounting requirements and with the published rules and regulations of applicable securities laws with respect thereto; (ii) have been prepared in accordance with IFRS or Canadian GAAP, as applicable, during the period involved (except as may be indicated in the notes thereto or, in the case of unaudited financial statements, as permitted by applicable securities laws); and (iii) fairly present (subject, in the case of any unaudited statements, to recurring audit adjustments normal in nature and amount) the consolidated financial position of the Purchaser at the date thereof and the consolidated results of its operations and cash flows or changes in financial position for the periods then ended.

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4.	Consideration

In order to complete the Transaction and as consideration for the purchase and sale of the 75% undivided interest in the Claims, the Purchaser agrees to the following:

4.1	Cash Payments

(a)

pay to the Vendor, by certified cheque, wire transfer or other form of payment acceptable to the Purchaser, the sum of $1,500,000 in cash (the “ Initial Cash Payment ”) within 15 days upon the earlier of (i) the completion of a financing, in accordance with Section 10.6 hereof, or (ii) nine months following the Effective Date; and

(b)	pay to the Vendor, by cheque, wire transfer or other form of payment acceptable to the Purchaser, an additional sum of $1,500,000 in cash (the “ Additional Cash Payment ”) within 18 months of the Effective Date (the “ Second Cash Payment ”).

4.2	Issuance of Shares

(a)

issue and deliver to the Vendor within 15 days after the Initial Cash Payment, an amount of fully paid and non-assessable common shares of the Purchaser (the “ Initial Vendor Shares ”), which represents 9.5% of the Purchaser’s total number of issued and outstanding common shares at the time of issuance, to a maximum of 15,000,000 common shares;

(b)

issue and deliver to the Vendor fully paid and non-assessable common shares of the Purchaser (the “ Additional Vendor Shares ”), within 15 days after the later of (i) receipt of the approval of the shareholders of the Purchaser and (ii) the Second Cash Payment an amount of common shares that in aggregate (Initial Vendor Shares plus Additional Vendor Shares) does not represent a number of common shares greater than 15% (the “ Vendor’s Equity Position ”) of the Purchaser’s issued and outstanding common shares at the time of issuance, to an aggregate maximum of 35,000,000 common shares, which is inclusive of the Initial Vendor Shares.

For clarity, the maximum Additional Vendor Share issuance would be the lesser of 20,000,000 common shares or a number of shares that when added to the Initial Vendor Shares previously issued to the Vendor represents an aggregate number of shares equal to 15% of the Purchaser’s issued and outstanding shares at the time of issuance;

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(c)

if regulatory or shareholder approval for the issuance of the Additional Vendor Shares has not been received and therefore, the Additional Vendor Shares cannot be issued to the Vendor pursuant to the terms of this agreement, the Purchaser shall pay to the Vendor an additional sum of $750,000 in lieu of the Additional Vendor Shares to acquire the initial 75% interest in the Claims and will submit a request to the TSX Venture Exchange («TSXV») to issue an amount of shares that when added to the Initial Vendor Shares previously issued to the Vendor does not represent an aggregate number of common shares greater than 9.5% of the Purchaser’s issued and outstanding common shares at the time of issuance, to a maximum of 20,000,000 common shares ; and

(d)

the Initial Vendor Shares and the Additional Vendor Shares to be issued pursuant to Section 4.2 hereof shall be issued under a private placement exemption and subject to a four-month restricted period stipulated in a legend and any other restrictions under applicable securities laws or TSXV rules, before becoming freely tradable, the issuance of which shall be subject to prior acceptance for listing by the TSXV.

5.	Right of First Refusal

The Purchaser hereby acknowledges and agrees that Virginia has waived its Right of First Refusal pursuant to the Virginia Agreement in connection with the Transaction provided that the Purchaser and the Vendor complete the Transaction within one year from the date hereof; should the Transaction not close within one year from the date hereof, Virginia shall have a fresh and new Right of First refusal in respect thereof, pursuant to the Virginia Agreement.

6.	Assignment of the Virginia Agreement, Poisson Agreement and Amending Agreement

6.1

The Purchaser acknowledges and agrees that the Claims are subject to the Virginia Agreement, the Poisson Agreement and the Amending Agreement (collectively, the “ Assigned Contracts ”) and effective as of Closing, the Vendor hereby assigns and transfers unto the Purchaser a 75% undivided interest in all of its rights, interests, duties and obligations under each of the Assigned Contracts, and the Purchaser hereby accepts the assignment and transfer of the Assigned Contracts effective as of Closing and covenants and agrees that, from and after the Closing Date, the Purchaser will observe, perform and fulfil each and every covenant, provision, obligation, term and condition of, or applicable to the Vendor under the Assigned Contracts as if it was an original party thereto, and following such assignment and transfer, the Vendor shall be relieved of liability thereunder.

6.2	The Purchaser agrees to execute such further and other agreements, including with the parties to the Assigned Contracts, to evidence that the Purchaser has agreed to assume the obligations of the Vendor under the Assigned Contracts.

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7.	Closing Date

Closing of the Transaction (the “ Closing ”), being the completion of the acquisition by the Purchaser of the Claims, shall take place on or prior to November 30 , 2014 or such other date as may be agreed upon between the Vendor and the Purchaser (the “ Closing Date ”).

Covenants

8.1	Covenants of the Purchaser:

(a)

With respect to the issuance, sale and delivery of the Shares to the Vendor hereunder, the Purchaser covenants to use all reasonable commercial efforts to obtain all necessary approvals from the TSXV and comply with all necessary requirements of any applicable securities laws; and upon the issuance o f the Shares to the Vendor, the Purchaser will have received all necessary approvals from the TSXV, and complied with all necessary requirements of any applicable securities laws, with respect to the issuance, sale and delivery of the Shares to the Vendor hereunder;

(b)	The Purchaser shall present a resolution to its shareholders at its next annual meeting of shareholders scheduled for June 2014, to authorize and approve the aggregate issuance of up to 19.5% of the issued and outstanding capital of the Purchaser to the Vendor as required pursuant to this agreement

(c)

the Purchaser shall use its best efforts to maintain its status as a "reporting issuer" under Canadian securities laws for a period of two (2) years following the Closing, and shall use its best efforts to maintain its listing of its common shares on the TSXV for a period of two (2) years following Closing.

9.	Conditions of Closing

The Transaction shall be subject to the following conditions, which may be waived by the Purchaser or the Vendor, where applicable, in whole or in part:

9.1

Due Diligence. Forthwith upon execution of this agreement, the Vendor shall arrange to provide the Purchaser and its authorized representatives and agents, free access, during reasonable business hours, to such information and records, which the Purchaser may reasonably request in order to obtain the information necessary to evaluate the Claims and to prepare the documentation necessary to obtain the Regulatory Approvals. The Vendor agrees to use reasonable commercial efforts to cause the officers, senior employees and other personnel and consultants of the Vendor to meet and collaborate with the Purchaser and its representatives in this regard. The Transaction is conditional upon the Purchaser being satisfied, in its sole and absolute discretion, with the results of such due diligence review.

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9.2

Approvals. Before the Closing Date, all regulatory approvals, authorizations and other consents with respect to the Closing which may be required by law, together with all such permits, licenses and other authorizations as may be reasonably required in order to close the Transaction shall have been obtained, including, without limiting the generality of the foregoing, approval from the Toronto Stock Exchange for the Vendor and from TSXV for the Purchaser, failing which this agreement shall terminate and the parties shall have no further obligations thereunder, with the exception of those contained in Sections 15 and 16 6 hereof.

9.3

Consents. Prior to the Closing Date, the Vendor shall have obtained all consents, permits and approvals from parties to any contracts or other agreements that may be required in connection with the Transaction, without limiting the generality of the foregoing, the consent of Virginia as contemplated in Section 5 hereof.

9.4	Transfer of Documents. On the Closing Date, all necessary transfer forms, agreements, instruments, conveyances, assignments, releases and other document required or useful in the opinion of the Purchaser' legal advisors to properly convey the Claims to the Purchaser shall have been executed.

10.	Delivery of Documents

The transactions contemplated herein and the purchase of the Claims by the Purchaser hereunder shall be conditional upon the delivery of the following documents at or before the Closing Date:

10.1

Following the performance by the Purchaser of its obligations pursuant to Section 4 hereof, the Vendor shall execute, acknowledge and deliver to the Purchaser a Transfer of Mining Rights prepared by the Purchaser and satisfactory to the Vendor in proper form for registration in the Public Register of Real and Immovable Mining Rights maintained at the ministère des Ressources naturelles (Québec) in favour of the Purchaser pursuant to which the Vendor transfers to the Purchaser a 75% undivided interest in all of its right, title and interest in the Claims, with registration fees in connection with this transfer to be paid by the Purchaser.

10.2

The Purchaser shall deliver or cause to be delivered to the Vendor an assignment, assumption and release agreement among the Vendor, the Purchaser, Pierre Poisson and Joanne Jones pursuant to which (i) the Vendor assigns to the Purchaser a 75% undivided interest in all its rights, interests, duties and obligations under each of the Poisson Agreement and the Amending Agreement in connection with each of the First Royalty and the Second Royalty; and (ii) the Purchaser agrees to observe and be bound by all of the provisions each of the Poisson Agreement and the Amending Agreement with respect to the rights, interests and obligations assigned to or assumed by the Purchaser in the place and stead of the Vendor in connection with the First Royalty and the Second Royalty.

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10.3

The Purchaser shall deliver or cause to be delivered to the Vendor an assignment, assumption and release agreement among the Vendor, the Purchaser and Virginia pursuant to which (i) the Vendor assigns to the Purchaser a 75% undivided interest in all its rights, interests, duties and obligations under the Virginia Agreement including in connection with the Virginia Royalty and the Back-In-Right; and (ii) the Purchaser agrees to observe and be bound by all of the provisions of the Virginia Agreement with respect to the rights, interests and obligations assigned to or assumed by the Purchaser in the place and stead of the Vendor.

10.4

The Parties shall have received evidence that all requisite approvals, consents and acceptances of the appropriate regulatory authorities and the Toronto Stock Exchange and the TSXV required to be made or obtained by either one of the Parties in order to complete the Closing have been made or obtained on terms satisfactory to each of the Parties, acting reasonably.

10.5	The Purchaser shall deliver or cause to be delivered to the Vendor evidence satisfactory to the Vendor that the shareholders of the Purchaser have approved the Transaction, if such approval is required by the TSXV, corporate laws or by securities regulations.

10.6

The Purchaser shall have raised capital through the completion of placement of its securities for gross proceeds of a minimum of $3,000,000 on such terms and conditions as may be determined by the Parties (the “ Financing ”), it being understood that the Purchaser shall use reasonable commercial efforts to complete the Financing.

10.7	The Purchaser shall deliver or cause to be delivered to the Vendor by cheque, wire transfer or other form of payment acceptable to the Vendor, the Initial Cash Payment pursuant to Section 4.1(a) hereof.

10.8	The Purchaser shall deliver or cause to be delivered to the Vendor a common share certificate representing the Initial Vendor Shares pursuant to Section 4.2(a) hereof.

11.	Post-Closing

The Transaction shall also be subject to the following post-Closing conditions and documents, which may be waived by the Purchaser or the Vendor, where applicable, in whole or in part:

11.1	The Purchaser shall deliver or cause to be delivered to the Vendor by cheque, wire transfer or other form of payment acceptable to the Vendor, the Additional Cash Payment pursuant to Section 4.1(b) hereof.

11.2

The Purchaser shall deliver or cause to be delivered to the Vendor a common share certificate representing the Additional Vendor Shares pursuant to Section 4.2(b) hereof or, in lieu of the Additional Vendor Shares, the $750,000 cash payment pursuant to Section 4.2(c) hereof, by cheque, wire transfer or other form of payment acceptable to the Vendor.

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12.

Default

If the Purchaser does not issue the shares or make the payments required in accordance with Section 4 hereof, then the Vendor may provide written notice to the Purchaser of its failure. If the Purchaser does not make the outstanding payment or issue that number of outstanding common shares of the Purchaser in accordance with Section 4 hereof within 90 days of such notice, then its rights and obligations under this agreement shall automatically terminate and be of no further force and effect and the Purchaser shall transfer back to the Vendor its undivided interest in the Claims, and the Purchaser shall bear all fees, costs and other expenses that may be incurred in connection therewith.

13.

Option

13.1

If and when the Purchaser has made all the Cash Payments and the Issuance of all Shares (or cash in lieu thereof, as permitted or required herein) in accordance with Section 4 hereof, the Vendor will grant to the Purchaser a three (3) year term option to purchase the remaining 25% interest in the Claims (the “Option”), for the period beginning on the date that is the later of (i) June 1, 2015 and (ii) the Vendor satisfying all of the purchase conditions as described herein. The Option will automatically terminate on a date that is three (3) years from the later of (i) or (ii) above. In order to exercise the Option, the Purchaser shall:

(a)

pay to the Vendor an additional sum of $1,000,000; assuming the applicable shareholder approval has been received, issue an additional amount of the Purchaser’s common shares (the “ Option Shares ”) that in aggregate (Initial Vendor Shares plus Additional Vendor Shares plus Option Shares), does not represent a number of common shares greater than 19.5% of the Purchaser’s issued and outstanding common shares at the time of issuance of the Option Shares, to an aggregate maximum of 60,000,000 common shares. For clarity, the maximum Option Shares issued would be the lesser of 25,000,000 common shares or a number of shares that when added to all the previous share issuances to the Vendor as outlined above represents an aggregate number of shares equal to 19.5% of the Purchaser’s issued and outstanding shares at the time of issuance;

(b)

or, in the event that shareholder approval is required for the issuance of the Option Shares and the Purchaser has not received such shareholder approval, the Purchaser shall pay an additional sum of $1,875,000 in lieu of the Option Shares in order to acquire the remaining 25% interest in the Claims;

(c)

grant the Vendor a pre-emptive right to participate in any further equity financing of the Purchaser in order to allow the Vendor to maintain the Vendor’s equity position in the Purchaser’s share capital (the “ Pre-Emptive Right ”) at the time of the contemplated equity financing. The Pre-Emptive Right shall be exercisable by the Vendor at any time until 5:00 p.m. (Eastern Standard Time) on the date that is five business days following written notice by the Purchaser to the Vendor that it is proceeding with a proposed financing. The Pre-Emptive Right to be granted to the Vendor upon exercise of the Option shall automatically terminate on the earliest to occur of the following; (i) should the Vendor’s equity position in the Purchaser’s share capital at any time be less than 5% of the Purchaser’s issued and outstanding common shares; (ii) should the Vendor decline to participate in two consecutive equity financings of the Purchaser; or (iii) 5 years from the date of this agreement.

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13.2	At any time from the date of this agreement, the Vendor or its successor will not increase, directly or indirectly, its aggregate ownership interest of the Purchaser to more than 19.5% of all issued and outstanding common shares of the Purchaser, without the prior written approval of the Purchaser.

13.3

Notwithstanding the exercise of the Option by the Purchaser, the Vendor shall retain a 2% net smelter returns royalty (“ NSR ”) in the form attached hereto as Schedule “E” in respect of the Claims, of which 1% may be repurchased by the Purchaser, at any time and from time to time, in consideration for payment of $1,000,000 in cash or immediately available funds.

13.4

If the Option is not exercised by the Purchaser within the timing outlined in 13.1, then the Parties agree to enter into a joint venture agreement consistent with industry norms for such agreements including a standard dilution clause for non-participation. The Vendor would then be entitled to a free carried interest on its 25% participating interest until the delivery by the Purchaser of a bankable feasibility study or equivalent on the Claims.

14.	Conduct of Business

Up to the Closing Date, there shall have been no material adverse changes on the Claims, nor shall there be any change in the operations of the Vendor which would materially adversely affect the Claims and on or before the Closing Date, each of the conditions and undertakings contained in this agreement, shall have been entirely respected.

15.

Expenses

Each Party shall bear all fees, costs and other expenses that may be incurred in connection with (i) the preparation, negotiation, execution and delivery of this agreement and any other agreements or documents required to consummate the Transaction and (ii) the preparation, completion, delivery or execution of all documents and regulatory filings related thereto.

16.	Confidentiality

All information, records and documents obtained by the Purchaser and its authorized representatives and agents in connection with the Transaction and relating to this agreement shall be deemed to be of a confidential nature and shall be treated as such by the Purchaser until the Closing Date or for a period of one year after the date hereof in the event there is no Closing. The Purchaser hereby undertakes to keep confidential such documents, information and records, both during negotiations and thereafter, until the Closing Date, except for such documents, records or information which were already in the public domain or which are subsequently obtained by third parties through no fault or without the intervention (directly or indirectly) of the Purchaser.

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17.	Exclusivity

The Vendor agrees that it will not offer to, or solicit offers from, or enter into any negotiations with, any third party for the sale of the Claims, or any part thereof until the expiration of the date provided for the Closing Date as set forth above.

18.	Indemnification

18.1	Indemnification by the Vendor

The Vendor shall indemnify and save harmless the Purchaser, its directors, officers, shareholders, affiliates, employees and agents (the " Purchaser Indemnified Parties ") from and against any and all claims, demands, proceedings, losses, damages, obligations, liabilities, deficiencies, fines, costs and expenses (including all legal and other professional fees and disbursements, interest, penalties and amounts paid in settlement) (collectively, " Losses ") suffered or incurred by the Purchaser Indemnified Parties as a result of or arising directly or indirectly out of or in connection with:

(a)	any breach by the Vendor of or any inaccuracy of any representation or warranty of the Vendor contained in this Agreement or in any agreement, certificate or other document executed and delivered by the Vendor; or

(b)	any breach or non-performance by the Vendor of any covenant to be performed by it which is contained in this Agreement or in any agreement, certificate or other document executed and delivered by the Vendor.

18.2	Indemnification by the Purchaser

The Purchaser shall indemnify and save harmless the Vendor, its directors, officers, shareholders, affiliates, employees and agents (the " Vendor Indemnified Parties ") from and against any and all Losses suffered or incurred by the Vendor Indemnified Parties as a result of or arising directly or indirectly out of or in connection with:

(a)	any breach by the Purchaser of or any inaccuracy of any representation or warranty contained in this Agreement or in any agreement, certificate or other document executed and delivered by the Purchaser; or

(b)	any breach or non-performance by the Purchaser of any covenant to be performed by it which is contained in this Agreement or in any agreement, certificate or other document executed and delivered by the Purchaser (including the Assigned Contracts).

18.3

The Vendor’s and the Purchaser's indemnification obligations under this agreement shall be limited to an amount equal to the dollar value, from time to time, of the consideration received pursuant to this agreement. Notwithstanding the foregoing, there will be no limit on a party’s liability for indemnification hereunder to the extent the claim arises from fraud.

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19.	General Provisions

19.1

Assignment. This agreement shall enure to the benefit of and be binding upon the respective successors and permitted assigns of the Parties. Neither Party shall assign its rights or delegate its obligations hereunder voluntarily or by operation of law, without the prior written consent of the other Party.

19.2

Waiver of Rights. The failure of a Party to insist on the strict performance of any provision of this agreement or to exercise any right, power or remedy upon a breach hereof shall not constitute a waiver of any provision of this agreement or limit the Party's right thereafter to enforce any provision or exercise any right.

19.3	Amendments. No modification or amendment to this agreement shall be valid unless made in writing and duly executed by the Parties.

19.4	Entire Agreement. This agreement, contains the entire understanding of the Parties and cancels and replaces all prior understandings between the Parties relating to the subject matter hereof, and all prior agreements.

19.5

Arbitration. Any dispute or conflict between the parties concerning this Agreement which cannot be settled by them shall be submitted firstly to a mutually agreeable mediator who will have no authority to bind the parties and, in the event that mediation efforts are unsuccessful, to a single arbitrator pursuant to the provisions of the Arbitration Act (Ontario), or, if the parties cannot agree upon a single arbitrator, to three arbitrators, one appointed by the Vendor, one appointed by the Purchaser and a third appointed by the arbitrators appointed by the Vendor and the Purchaser. The arbitrator or arbitrators, as the case may be, may order any party to produce documents prior to the arbitration or to submit a witness to discovery. Arbitration proceedings shall take place in Toronto, Ontario at such place as the arbitrator or arbitrators shall determine.

19.6

Severability. If any term, part or provision of this agreement is declared unenforceable, illegal, or in conflict with any laws to which this agreement is subject, such term, part or provision shall be considered severed from this agreement, the remaining portions thereof shall not be affected and this agreement shall be construed and enforced as if it did not contain that term, part or provision.

19.7	Time. Time is of the essence of this agreement and all related documents.

19.8	Further Assurances. Each of the Parties hereby undertakes to refrain from performing any act or entering into any transaction or negotiation which would interfere or be inconsistent with the terms of this agreement and the due completion of the Transaction.

19.9	Currency. All monetary amounts expressed in dollars in this agreement shall be determined and payable in Canadian currency, unless otherwise expressly provided.

19.10

Public Announcements . A Party desiring to make a disclosure, statement or press release concerning this agreement shall first consult with the other Party prior to making such disclosure, statement or press release, and the Parties shall use all reasonable efforts, acting expediently and in good faith, to agree upon a text for such statement or press release which is satisfactory to the Parties.

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19.11

Notice. Any notice or other required communications hereunder shall be given in writing and delivered by hand, registered air mail, telefax, or by overnight courier. Any such notice shall be given to each of the Parties at their following addresses:

TO THE VENDOR :

ENERGIZER RESOURCES INC.

141 Adelaide Street West

Suite 520

Toronto, Ontario M5H 3L5

Attention: Richard E. Schler

TO THE PURCHASER:

HONEY BADGER EXPLORATION INC.

141 Adelaide Street West

Suite 520

Toronto, Ontario M5H 3L5

Attention: Peter Liabotis

or to any other addresses that any Party may at any time designate by written notice to the other Party.

All notices shall be effective and shall be deemed delivered (i) if by hand, or by overnight courier, on the date of delivery if delivered during normal business hours, and, if not delivered during normal business hours, on the next business day following delivery, (ii) if by electronic communication, on the next business day following receipt of the electronic communication, and (iii) if by mail, on the next business day after actual receipt.

19.12

Counterparts. This agreement may be executed in any number of counterparts, and it shall not be necessary that the signatures of all Parties be contained on any counterpart. Each counterpart shall be deemed an original, but all counterparts together shall constitute one and the same instrument.

19.13

Independent Legal Advice. The Parties expressly declare that they have been given sufficient time to seek such independent legal or other advice as they deem appropriate with respect to this matter and the terms of this agreement and the Parties voluntarily accept the said terms.

19.14

Governing Law. This agreement is made under and shall be governed by and construed in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein.

[SIGNATU RE PAGE FOLLOWS]

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IN WITNESS WHEREOF , the Parties have duly executed this agreement as of the date first above written.

ENERGIZER RESOURCES INC.		HONEY BADGER EXPLOR ATION INC.


By:	“Peter Harder”	By:	“J.P. Desrochers”
Name:	Peter Harder	Name:	J.P. Desrochers
Title:	Chairman of the Board	Title:	Director

By:	“Richard Schler”	By:	“Peter Liabotis”
Name:	Richard Schler	Name:	Peter Liabotis
Title:	Chief Executive Officer	Title:	Chief Financial Officer

[Signature Page – Agreement to Purchase Claims]

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SCHEDULE “A”

Descripti o n of the Sagar Property

CDC 36315	CDC 1043890	CDC 1043925	CDC 1043960	CDC 1044170	CDC 1132961
CDC 36316	CDC 1043891	CDC 1043926	CDC 1043961	CDC 1103333	CDC 1132962
CDC 36317	CDC 1043892	CDC 1043927	CDC 1043962	CDC 1103334	CDC 1132963
CDC 36318	CDC 1043893	CDC 1043928	CDC 1043963	CDC 1103335	CDC 1132964
CDC 36319	CDC 1043894	CDC 1043929	CDC 1043964	CDC 1103336	CDC 1132965
CDC 36320	CDC 1043895	CDC 1043930	CDC 1043965	CDC 1103337	CDC 1132966
CDC 36321	CDC 1043896	CDC 1043931	CDC 1043966	CDC 1103338	CDC 1132967
CDC 36322	CDC 1043897	CDC 1043932	CDC 1043967	CDC 1103339	CDC 1132968
CDC 36323	CDC 1043898	CDC 1043933	CDC 1043968	CDC 1132934	CDC 1132969
CDC 36324	CDC 1043899	CDC 1043934	CDC 1043969	CDC 1132935	CDC 1132970
CDC 36325	CDC 1043900	CDC 1043935	CDC 1043970	CDC 1132936	CDC 1132971
CDC 36326	CDC 1043901	CDC 1043936	CDC 1043971	CDC 1132937	CDC 1132972
CDC 36327	CDC 1043902	CDC 1043937	CDC 1043972	CDC 1132938	CDC 1132973
CDC 1043868	CDC 1043903	CDC 1043938	CDC 1043973	CDC 1132939	CDC 1132974
CDC 1043869	CDC 1043904	CDC 1043939	CDC 1043974	CDC 1132940	CDC 1132975
CDC 1043870	CDC 1043905	CDC 1043940	CDC 1043975	CDC 1132941	CDC 1132976
CDC 1043871	CDC 1043906	CDC 1043941	CDC 1043976	CDC 1132942	CDC 1132977
CDC 1043872	CDC 1043907	CDC 1043942	CDC 1043977	CDC 1132943	CDC 1132978
CDC 1043873	CDC 1043908	CDC 1043943	CDC 1043978	CDC 1132944	CDC 1132979
CDC 1043874	CDC 1043909	CDC 1043944	CDC 1043979	CDC 1132945	CDC 1132980
CDC 1043875	CDC 1043910	CDC 1043945	CDC 1043980	CDC 1132946	CDC 2097640
CDC 1043876	CDC 1043911	CDC 1043946	CDC 1043981	CDC 1132947	CDC 2097641
CDC 1043877	CDC 1043912	CDC 1043947	CDC 1043982	CDC 1132948	CDC 2097642
CDC 1043878	CDC 1043913	CDC 1043948	CDC 1043983	CDC 1132949	CDC 2097643
CDC 1043879	CDC 1043914	CDC 1043949	CDC 1043984	CDC 1132950	CDC 2097644
CDC 1043880	CDC 1043915	CDC 1043950	CDC 1043985	CDC 1132951	CDC 2097645
CDC 1043881	CDC 1043916	CDC 1043951	CDC 1043986	CDC 1132952	CDC 2097646
CDC 1043882	CDC 1043917	CDC 1043952	CDC 1043987	CDC 1132953	CDC 2097647
CDC 1043883	CDC 1043918	CDC 1043953	CDC 1043988	CDC 1132954	CDC 2097648
CDC 1043884	CDC 1043919	CDC 1043954	CDC 1043989	CDC 1132955	CDC 2097649
CDC 1043885	CDC 1043920	CDC 1043955	CDC 1043990	CDC 1132956	CDC 2097650
CDC 1043886	CDC 1043921	CDC 1043956	CDC 1043991	CDC 1132957	CDC 2097651
CDC 1043887	CDC 1043922	CDC 1043957	CDC 1043992	CDC 1132958	CDC 2097652
CDC 1043888	CDC 1043923	CDC 1043958	CDC 1043993	CDC 1132959	CDC 2120537
CDC 1043889	CDC 1043924	CDC 1043959	CDC 1043994	CDC 1132960	CDC 2120538

- 18 -

CDC 2120539	CDC 2377789	CDC 2384943	CDC 2384982	CDC 2388395
CDC 2120540	CDC 2377790	CDC 2384944	CDC 2384983	CDC 2388396
CDC 2120541	CDC 2377791	CDC 2384945	CDC 2384984	CDC 2388397
CDC 2120542	CDC 2377792	CDC 2384946	CDC 2384985	CDC 2388398
CDC 2120543	CDC 2377793	CDC 2384947	CDC 2384986	CDC 2388399
CDC 2120544	CDC 2377794	CDC 2384948	CDC 2384987	CDC 2389191
CDC 2120545	CDC 2377795	CDC 2384949	CDC 2384988	CDC 2389192
CDC 2120546	CDC 2377796	CDC 2384950	CDC 2384989	CDC 2389193
CDC 2120547	CDC 2377797	CDC 2384951	CDC 2384990	CDC 2389194
CDC 2120548	CDC 2377798	CDC 2384952	CDC 2384991	CDC 2389195
CDC 2120549	CDC 2377799	CDC 2384953	CDC 2384992	CDC 2389196
CDC 2120550	CDC 2377800	CDC 2384954	CDC 2384993
CDC 2120551	CDC 2377801	CDC 2384955	CDC 2385416
CDC 2120552	CDC 2377802	CDC 2384956	CDC 2385417
CDC 2120553	CDC 2377803	CDC 2384957	CDC 2385418
CDC 2120554	CDC 2377804	CDC 2384958	CDC 2385419
CDC 2120555	CDC 2377805	CDC 2384959	CDC 2385420
CDC 2120556	CDC 2377806	CDC 2384960	CDC 2385421
CDC 2120557	CDC 2377807	CDC 2384961	CDC 2385422
CDC 2120558	CDC 2377808	CDC 2384962	CDC 2385423
CDC 2120559	CDC 2377809	CDC 2384963	CDC 2385424
CDC 2120560	CDC 2377810	CDC 2384964	CDC 2385425
CDC 2120561	CDC 2377811	CDC 2384965	CDC 2385426
CDC 2120562	CDC 2377812	CDC 2384966	CDC 2386856
CDC 2120563	CDC 2377813	CDC 2384967	CDC 2386857
CDC 2120564	CDC 2377814	CDC 2384968	CDC 2386858
CDC 2120565	CDC 2377815	CDC 2384969	CDC 2386859
CDC 2120566	CDC 2377816	CDC 2384970	CDC 2386860
CDC 2120567	CDC 2384932	CDC 2384971	CDC 2386861
CDC 2120568	CDC 2384933	CDC 2384972	CDC 2388385
CDC 2120569	CDC 2384934	CDC 2384973	CDC 2388386
CDC 2120571	CDC 2384935	CDC 2384974	CDC 2388387
CDC 2120572	CDC 2384936	CDC 2384975	CDC 2388388
CDC 2120573	CDC 2384937	CDC 2384976	CDC 2388389
CDC 2120574	CDC 2384938	CDC 2384977	CDC 2388390
CDC 2120575	CDC 2384939	CDC 2384978	CDC 2388391
CDC 2120576	CDC 2384940	CDC 2384979	CDC 2388392
CDC 2120577	CDC 2384941	CDC 2384980	CDC 2388393
CDC 2377788	CDC 2384942	CDC 2384981	CDC 2388394

- 19 -

SCHEDULE “B”

Description of the Claims that are subject to the Virginia Royalty

CDC 1043868	CDC 1043903	CDC 1043938	CDC 1043973	CDC 1132939	CDC 1132974
CDC 1043869	CDC 1043904	CDC 1043939	CDC 1043974	CDC 1132940	CDC 1132975
CDC 1043870	CDC 1043905	CDC 1043940	CDC 1043975	CDC 1132941	CDC 1132976
CDC 1043871	CDC 1043906	CDC 1043941	CDC 1043976	CDC 1132942	CDC 1132977
CDC 1043872	CDC 1043907	CDC 1043942	CDC 1043977	CDC 1132943	CDC 1132978
CDC 1043873	CDC 1043908	CDC 1043943	CDC 1043978	CDC 1132944	CDC 1132979
CDC 1043874	CDC 1043909	CDC 1043944	CDC 1043979	CDC 1132945	CDC 1132980
CDC 1043875	CDC 1043910	CDC 1043945	CDC 1043980	CDC 1132946
CDC 1043876	CDC 1043911	CDC 1043946	CDC 1043981	CDC 1132947
CDC 1043877	CDC 1043912	CDC 1043947	CDC 1043982	CDC 1132948
CDC 1043878	CDC 1043913	CDC 1043948	CDC 1043983	CDC 1132949
CDC 1043879	CDC 1043914	CDC 1043949	CDC 1043984	CDC 1132950
CDC 1043880	CDC 1043915	CDC 1043950	CDC 1043985	CDC 1132951
CDC 1043881	CDC 1043916	CDC 1043951	CDC 1043986	CDC 1132952
CDC 1043882	CDC 1043917	CDC 1043952	CDC 1043987	CDC 1132953
CDC 1043883	CDC 1043918	CDC 1043953	CDC 1043988	CDC 1132954
CDC 1043884	CDC 1043919	CDC 1043954	CDC 1043989	CDC 1132955
CDC 1043885	CDC 1043920	CDC 1043955	CDC 1043990	CDC 1132956
CDC 1043886	CDC 1043921	CDC 1043956	CDC 1043991	CDC 1132957
CDC 1043887	CDC 1043922	CDC 1043957	CDC 1043992	CDC 1132958
CDC 1043888	CDC 1043923	CDC 1043958	CDC 1043993	CDC 1132959
CDC 1043889	CDC 1043924	CDC 1043959	CDC 1043994	CDC 1132960
CDC 1043890	CDC 1043925	CDC 1043960	CDC 1044170	CDC 1132961
CDC 1043891	CDC 1043926	CDC 1043961	CDC 1103333	CDC 1132962
CDC 1043892	CDC 1043927	CDC 1043962	CDC 1103334	CDC 1132963
CDC 1043893	CDC 1043928	CDC 1043963	CDC 1103335	CDC 1132964
CDC 1043894	CDC 1043929	CDC 1043964	CDC 1103336	CDC 1132965
CDC 1043895	CDC 1043930	CDC 1043965	CDC 1103337	CDC 1132966
CDC 1043896	CDC 1043931	CDC 1043966	CDC 1103338	CDC 1132967
CDC 1043897	CDC 1043932	CDC 1043967	CDC 1103339	CDC 1132968
CDC 1043898	CDC 1043933	CDC 1043968	CDC 1132934	CDC 1132969
CDC 1043899	CDC 1043934	CDC 1043969	CDC 1132935	CDC 1132970
CDC 1043900	CDC 1043935	CDC 1043970	CDC 1132936	CDC 1132971
CDC 1043901	CDC 1043936	CDC 1043971	CDC 1132937	CDC 1132972
CDC 1043902	CDC 1043937	CDC 1043972	CDC 1132938	CDC 1132973

- 20 -

SCHEDULE “C”

Description of the Claims that are subject to the First Royalty

CDC 1043868	CDC 1043903	CDC 1043938	CDC 1043973	CDC 1132946
CDC 1043869	CDC 1043904	CDC 1043939	CDC 1043974	CDC 1132947
CDC 1043870	CDC 1043905	CDC 1043940	CDC 1043975	CDC 1132948
CDC 1043871	CDC 1043906	CDC 1043941	CDC 1043976	CDC 1132949
CDC 1043872	CDC 1043907	CDC 1043942	CDC 1043977	CDC 1132950
CDC 1043873	CDC 1043908	CDC 1043943	CDC 1043978	CDC 1132951
CDC 1043874	CDC 1043909	CDC 1043944	CDC 1043979	CDC 1132952
CDC 1043875	CDC 1043910	CDC 1043945	CDC 1043980	CDC 1132953
CDC 1043876	CDC 1043911	CDC 1043946	CDC 1043981	CDC 1132954
CDC 1043877	CDC 1043912	CDC 1043947	CDC 1043982	CDC 1132955
CDC 1043878	CDC 1043913	CDC 1043948	CDC 1043983	CDC 1132956
CDC 1043879	CDC 1043914	CDC 1043949	CDC 1043984	CDC 1132957
CDC 1043880	CDC 1043915	CDC 1043950	CDC 1043985	CDC 1132958
CDC 1043881	CDC 1043916	CDC 1043951	CDC 1043986	CDC 1132959
CDC 1043882	CDC 1043917	CDC 1043952	CDC 1043987	CDC 1132960
CDC 1043883	CDC 1043918	CDC 1043953	CDC 1043988	CDC 1132961
CDC 1043884	CDC 1043919	CDC 1043954	CDC 1043989	CDC 1132962
CDC 1043885	CDC 1043920	CDC 1043955	CDC 1043990	CDC 1132963
CDC 1043886	CDC 1043921	CDC 1043956	CDC 1043991	CDC 1132964
CDC 1043887	CDC 1043922	CDC 1043957	CDC 1043992	CDC 1132965
CDC 1043888	CDC 1043923	CDC 1043958	CDC 1043993	CDC 1132966
CDC 1043889	CDC 1043924	CDC 1043959	CDC 1043994	CDC 1132967
CDC 1043890	CDC 1043925	CDC 1043960	CDC 1044170	CDC 1132968
CDC 1043891	CDC 1043926	CDC 1043961	CDC 1132934	CDC 1132969
CDC 1043892	CDC 1043927	CDC 1043962	CDC 1132935	CDC 1132970
CDC 1043893	CDC 1043928	CDC 1043963	CDC 1132936	CDC 1132971
CDC 1043894	CDC 1043929	CDC 1043964	CDC 1132937	CDC 1132972
CDC 1043895	CDC 1043930	CDC 1043965	CDC 1132938	CDC 1132973
CDC 1043896	CDC 1043931	CDC 1043966	CDC 1132939	CDC 1132974
CDC 1043897	CDC 1043932	CDC 1043967	CDC 1132940	CDC 1132975
CDC 1043898	CDC 1043933	CDC 1043968	CDC 1132941	CDC 1132976
CDC 1043899	CDC 1043934	CDC 1043969	CDC 1132942	CDC 1132977
CDC 1043900	CDC 1043935	CDC 1043970	CDC 1132943	CDC 1132978
CDC 1043901	CDC 1043936	CDC 1043971	CDC 1132944	CDC 1132979
CDC 1043902	CDC 1043937	CDC 1043972	CDC 1132945	CDC 1132980

- 21 -

SCHEDULE “D”

Description of the Claims that are subject to the Second Royalty

CDC 1103333

CDC 1103334

CDC 1103335

- 22 -

SCHEDULE “E”

Net Smelter Returns Royalty

Net Smelter Return Royalty (“NSRR”) shall mean any and all amounts received by the Purchaser from a third party, from time to time, for the product extracted from ore mined from the Claims, deducting therefrom:

If the product is treated by an arm’s length party at a smelter, refinery or mint, all expenses relating thereto, including all costs and charges for the treatment, tolling, smelting, refining or minting of such product and all costs associated therewith such as transporting, insuring, handling, weighing, sampling, assaying and marketing, as well as all penalties, representation charges, referee’s fees and expenses, import taxes and export taxes, that is to say the net amount received by the Purchaser from the smelter, refinery or mint, as the case may be, less all costs associated therewith or;

If the product is treated at a smelter, refinery or mint owned, operated or controlled by the Purchaser or an affiliate of it, all costs, charges and expenses relating thereto or associated therewith, excluding any capital costs incurred in the mining and milling of the product by including the expenses in (a) above, such charges by similar smelters, refineries or mints as the case may be, in arm’s length transactions for the treatment of like quantities and quality of product.

Any dispute or difference between the parties with respect to the determination of Net Smelter Returns shall, if objections made by the Vendor with the timeframe stipulated herein be submitted to arbitration in accordance with the Arbitration Act of the Province of Ontario.

The Net Smelter Return Royalty shall not be calculated or payable until the first anniversary of the commencement of commercial production. The Net Smelter Return Royalty shall become payable on all production subsequent to that date. Calculations shall be made at the end of each subsequent calendar quarter in which ores or concentrates from the Claims are sold or otherwise deemed disposed of and payment to the Vendor shall be made within 30 days after the end of each quarter.

The Net Smelter Return Royalty holders, on the 30-day prior notice to the Purchaser may effect that the payment of their proportionate share of the Net Smelter Return Royalty shall be satisfied by the delivery In Kind to or to the order of the Vendor of their said proportionate share of the metals and/or minerals received by the Net Smelter Return Royalty holders of the smelting, refining and other treatment of the ore extracted from the Claims. At the time of such delivery, the Purchaser shall have deducted their said proportionate share of all charges and costs noted in this paragraph which are deducted in the course of calculating the Net Smelter Return Royalty herein.

- 23 -

EXHIBIT 10.8

Sale & Purchase Agreement

Energizer Resources Inc.

Purchaser

and

Malagasy Minerals Limited

Vendor

and

Madagascar-ERG Joint Venture (Mauritius) Ltd

Company

Jackson McDonald

140 St Georges Terrace

Perth WA 6000

+61 8 9426 6611

+61 8 9481 8649

www.jacmac.com.au

Contact:

Reference:

Will Moncrieff

7141864

		Sale & Purchase Agreement

Table of contents

1.	Definitions and interpretation		2
	1.1	Definitions	2
	1.2	Interpretation	8
2.	Sale and purchase		9
	2.1	Agreement to sell and purchase	9
	2.2	Consideration	9
	2.3	Payment of Purchase Price	9
	2.4	Escrow	10
3.	Conditions to Completion		10
	3.1	Conditions precedent	10
	3.2	Best endeavours	10
	3.3	Waiver of Conditions precedent	10
	3.4	Non-satisfaction of Conditions	11
4.	Completion		11
	4.1	Time and place of Completion	11
	4.2	Obligations of Vendor at Completion	11
	4.3	Meeting of directors of the Company	12
	4.4	Obligations of Purchaser at Completion	12
	4.5	Completion simultaneous	12
	4.6	Title, property and risk	13
	4.7	Termination of the Joint Venture Agreement and release	13
5.	Pre-Completion conduct		13
	5.1	Conduct pending Completion	13
	5.2	Vendor’s assistance prior to Completion	14
6.	Period after Completion		14
	6.1	Mineral Rights Agreement	14
	6.2	Production Payments	14
	6.3	Escrow	15
	6.4	Royalty	15
7.	Representations and warranties		15
	7.1	Representations and warranties by Purchaser	15
	7.2	Representations and warranties by the Vendor	16
	7.3	Disclaimer of liability by the Vendor	17

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		Sale & Purchase Agreement

8.	Termination		18
	8.1	Termination	18
	8.2	Consequences of Termination before Completion	18
9.	Confidentiality and public announcements		18
	9.1	Confidentiality	18
	9.2	Conditions	20
	9.3	Notice to other Parties	21
	9.4	Indemnities	21
	9.5	Survival of confidentiality obligations	21
	9.6	Use of Mining Information in respect to Other Mineral Rights	21
	9.7	Notices	21
10.	Miscellaneous		23
	10.1	Governing law	23
	10.2	Amendments	23
	10.3	Primacy of this Agreement	23
	10.4	Waiver	23
	10.5	Consents	23
	10.6	Counterparts	23
	10.7	No representation or reliance	23
	10.8	Expenses	24
	10.9	Entire agreement	24
	10.10	Indemnities	24
	10.11	Severance and enforceability	24
	10.12	No merger	25
	10.13	Power of attorney	25
	10.14	Taxes	25
Schedule 1 – Industrial Minerals			26
Schedule 2 – Net Smelter Return Royalty			27
Annexure A – Mineral Rights Agreement			33

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		Sale & Purchase Agreement

Sale & Purchase Agreement

Date

2014

Parties

Energizer Resources Inc. Purchaser	141 Adelaide Street, West Suite 520, Toronto, Ontario, Canada

Malagasy Minerals Limited ACN 121 700 105 Vendor	15, Lovegrove Close, Mount Claremont Western Australia

Madagascar-ERG Joint Venture (Mauritius) Ltd Company Number: 106367 Company	6 th Floor, Newton Tower, Sir William Newton Street, Port Louis, Republic of Mauritius

Rec itals

A.	Pursuant to a Joint Venture Agreement dated 15 December 2011:

(i)	the Purchaser acquired a 75% interest in the JV Industrial Mineral Rights; and

(ii)	the Company was established as the joint venture company for the Joint Venture and the holder of the JV Industrial Mineral Rights and the Purchaser and the Vendor own three shares and one share respectively in the Company.

B.	By the Memorandum of Understanding, the Vendor has agreed, inter alia, to sell to the Purchaser and the Purchaser has agreed to buy from the Vendor

(i)	the Vendor Share in the Company; and

(ii)	the Additional Industrial Mineral Rights.

C.	The MGY Subsidiaries, which are subsidiaries of the Vendor, are the sole registered and beneficial holders of the Additional Exploration Permits.

D.	The Vendor has agreed, inter alia, to procure the MGY Subsidiariesto transfer the Additional Industrial Mineral Rights to the Company in the manner set out in the Mineral Rights Agreement.

E.	The Parties have agreed to formalise the sale and purchase proposed in the Memorandum of Understanding on the terms and conditions contained in this Agreement, together with the Mineral Rights Agreement and the Green Giant JVA.

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		Sale & Purchase Agreement

Agreement

1.	Definitions and interpretation

1.1	Definitions

In this Agreement, unless the context requires otherwise, the following expressions will have the following meanings:

Additional Exploration Permits has the meaning given to that term in the Mineral Rights Agreement.

Additional Exploitation Permits has the meaning given to that term in the Mineral Rights Agreement.

Additional Industrial Mineral Rights has the meaning given to that term in the Mineral Rights Agreement.

Additional Permit Holders has the meaning given to that term in the Mineral Rights Agreement.

Additional Permits has the meaning given to that term in the Mineral Rights Agreement.

Agreement means this Sale and Purchase Agreement, including any Schedules or annexures, as amended from time to time.

ASX means the ASX Limited (ACN 008 624 691) trading as the Australian Securities Exchange.

Authority means any government department, local government council, government or statutory authority or any other party under a Law or the listing rules of a securities exchange or stock exchange, which has a right to impose a requirement or whose consent is required with respect to any matter or thing arising under, or affected by, this Agreement.

Business Day means a day other than a Saturday or Sunday on or public holiday in Ontario, Canada or Perth, Western Australia.

Cash Consideration means C$400,000.

Claim means in relation to a Party, any demand, claim, action or proceeding made or brought by or against the Party, howsoever arising and whether present, unascertained, immediate, future or contingent.

Completion means completion of the sale and purchase of the Vendor Share and the Additional Industrial Mineral Rights under this Agreement.

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		Sale & Purchase Agreement

Completion Date means:

(a)	the date that is the fourteen (14) days afterthe satisfaction or waiver of the Conditions; or

(b)	any other date which is agreed in writing by the Parties.

Conditions means the conditions specified clause 3.1 and Condition means any one of them.

Conditions Satisfaction Date means dates for satisfaction of the Conditions, as specified in clause 3.4.

Confidential Information means all information, documents, maps, reports, records, studies, forms, specifications, processes, statements, formulae, trade secrets, drawings and other data (and copies and extracts made of or from any such data) in written or electronic form and whether reduced to writing or not, and at any time in the possession or under the control of or readily accessible to any Party, including the Mining Information, concerning:

(a)	the existence or contents of this Agreement;

(b)	Joint Venture Property;

(c)	the operations and transactions of a Party;

(d)	the organisation, finance, customers, markets, suppliers, intellectual property and know-how of a Party or a Related Body Corporate of a Party; and

(e)	any other information obtained in performance of this Agreement,

that is not in the public domain (except by failure of a Party to perform and observe its covenants and obligations under this Agreement) and that has been obtained by a Party during the negotiations preceding the making of this Agreement or the Memorandum of Understanding by or through or by being a Party to this Agreement or the Memorandum of Understanding.

Development Area has the meaning given to it in the Mineral Rights Agreement.

Dispose means in relation to a person and any property, means to sell, transfer, assign, surrender, create an Encumbrance over, declare oneself a trustee of or part with the benefit or otherwise dispose of that property (or any interest in it or any party of it) whether done before, on or after the person obtains any interest in the property, including without limitation in relation to a share, to enter into a transaction in relation to the share (or any interest in the share) which results in a person other than the registered holder of the share:

(a)	acquiring or having an equitable or beneficial interest in the share, including, without limitation, an equitable interest arising under a declaration of trust, an agreement for sale and purchase or an option agreement or an agreement creating a charge or other Encumbrance over the share; or

(b)	acquiring or having any right to receive (directly or indirectly) any dividends or other distribution or proceeds of disposal payable in respect of the share or any right to receive an amount calculated by reference to any of them; or

(c)	acquiring or having any rights of pre-emption, first refusal or other direct or indirect control over the disposal of the share; or

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		Sale & Purchase Agreement

(d)	acquiring or having any rights of (direct or indirect) control over the exercise of any voting rights or rights to appoint Directors attaching to the share; or

(e)

otherwise acquiring or having equitable rights against the registered holder of the share (or against a person who directly or indirectly controls the affairs of the registered holder of the shares) which have the effect of placing the other person in substantially the same position as if the person had acquired a legal or equitable interest in the share itself,

but excludes:

(f)	a transaction expressly permitted by this Agreement; or

(g)	a transaction conditional on each Party consenting to it.

Encumbrances means any mortgage, bill of sale, lien, charge, pledge, writ, warrant, production royalty, caveat (and all claims stated in the caveat), assignment by way of security, security interest, title retention, preferential right or trust arrangement, Claim, covenant, profit a pendre, easement, or any other security arrangement or other right or interest of any third party and includes any other arrangement having the same effect.

Energex means Energex SARL, a company incorporated under the laws of Madagascar and a wholly owned subsidiary of the Vendor

Environmental Law means any law concerning environmental matters which regulates or affects the Additional Exploration Permits, and includes, but is not limited to, laws concerning land use, development, pollution, waste disposal, toxic and hazardous substances, conservation of natural or cultural resources and resource allocation including any law relating to exploration for or development of any natural resource

Environmental Liabilities means any obligation, expense, penalty or fine under Environmental Law, including rehabilitation and rectification work of whatsoever nature or kind.

ERG Project Permits has the meaning given to that term in the Mineral Rights Agreement.

ERG Project Area has the meaning given to that term in the Mineral Rights Agreement.

Good Standing means in relation to anAdditional Exploration Permit, that:

(a)	such permit is and remains in full force and effect;and

(b)	such permit:

(i)	is and remains not liable to cancellation, forfeiture or non-renewal; or

(ii)	is liable to cancellation, forfeiture or non-renewal where such liabilityis:

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		Sale & Purchase Agreement

(A)	not a result of the default of the holder of the permit or its subsidiaries;

(B)	solely a result of a compulsory surrender under the Mining Code; or

(C)	solely a result of a Political Event.

Governmental Agency means any government or any governmental, semi-governmental, administrative, fiscal or judicial body, responsible minister, department, office, commission, delegate, authority, instrumentality, tribunal, board, agency, entity or organ of government, whether federal, state, territorial or local, statutory or otherwise, in respect of a sovereign state and includes any of them purporting to exercise any jurisdiction or power outside that sovereign state.

Green Giant JVA means a document entitled “Green Giant Project Joint Venture Agreement” between Energizer and Malagasy, to be entered into on terms acceptable to each of the Parties.

Industrial Minerals means the minerals listed in Schedule 1of this Agreement.

Insolvency Event means any one or more of the following:

(a)	a Party being or stating that it is unable to pay its debts when they fall due;

(b)	any valid attempt to enforce any Encumbrance over a Party’s assets;

(c)	an administrator being appointed or any step taken to appoint an administrator in respect of a Party;

(d)	a receiver, receiver and manager, official manager, trustee administrator, liquidator or other controller or similar officer being appointed over the assets of a Party; or

(e)	an event having a substantially similar effect to clauses (a) to (d) occurring in connection with a Party under the law of any jurisdiction.

Joint Venture means the joint venture formed between Energizer and Malagasy pursuant to the Joint Venture Agreement.

Joint Venture Agreement means the document entitled “Joint Venture Agreement” and dated 15 December 2011 between the Vendor, the Purchaser and the Company.

Joint Venture Property means all assets of the Company, including (without limitation) the following:

(a)	the JV Industrial Mineral Rights;

(b)	MadagascarCo’srights under any JV Sublease;

(c)	any JV Permits held by the Company or MadagascarCo;

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		Sale & Purchase Agreement

(d)	all plant and equipment held by the Company, MadagascarCo, Malagasy or Energizer on behalf of the Joint Venture;

(e)	all debts owed to the Company;

(f)	any unearned income of the Company;

(g)	the Mining Information; and

(h)	all rights and benefits of the Company under all agreements, leases, contracts and arrangements to which the Company is a party in whole or in part, as at Completion.

JV Industrial Mineral Rights has the meaning given to that term in the Mineral Rights Agreement.

JV Permits has the meaning given to that term in the Mineral Rights Agreement.

JV Sublease has the meaning given to that term in the Mineral Rights Agreement.

Law means any statute, ordinance, code, regulation, law, by-law, local law, plan, planning scheme, local structure plan, official directive, order, instrument, undertaking, judicial, administrative or regulatory decree, judgement, ruling or order.

Loss means any loss, damage, liability, expense or cost but does not include Consequential Loss.

Madagascar Co has the meaning given to that term in the Mineral Rights Agreement.

Material Adverse Effect means an unfavourable or adverse event, occurrence or circumstance, or the result thereof, that causes the actual value of the ERG Project Permits orERG Project Area to be materially impaired or devalued but does not include anything that occurs as a result of a Political Event.

Mazoto means Mazoto Minerals SARL, a company incorporated under the laws of Madagascar and a wholly owned subsidiary of the Vendor.

MDA means Mada-Aust SARL, a company incorporated under the laws of Madagascar and a wholly owned subsidiary of the Vendor .

Memorandum of Understanding has the meaning given to that term in the Mineral Rights Agreement.

MGY Subsidiaries has the meaning given to that term in the Mineral Rights Agreement.

Mineral Rights Agreement means the document entitled “ERG Project Mineral Rights Agreement” in the form set out in Annexure A, to be entered into on or about the date of this Agreement.

Mining Code has the meaning given to that term in the Mineral Rights Agreement.

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		Sale & Purchase Agreement

Mining Information means all technical information including (without limitation) geological, geochemical and geophysical reports, surveys, mosaics, aerial photographs, samples, drill cores, drill logs, drill pulp, assay results, maps and plans relating to the Industrial Minerals in the ERG Project Area, whether in physical, written or electronic form.

Party means a party to this Agreement and Parties means the parties to this Agreement.

Political Event means any act, event or cause which is beyond the reasonable control of the Party concerned (other than lack of or inability to use funds) resulting from the action or inaction of any Governmental Agency including expropriation, restraint, prohibition, intervention, requisition, requirement, direction or embargo by legislation, regulation or other legally enforceable order.

Production Payments are the payments described in clause 6.2.

Purchase Price means:

(a)	the Cash Consideration;

(b)	the Share Consideration;

(c)	the right to the Production Payments; and

(d)	grant of the Royalty.

Related Bodies Corporate means in relation to a Party, a corporation that is:

(a)	a holding company of the Party;

(b)	a subsidiary of the Party; or

(c)	a subsidiary of a holding company of the Party.

Related Entity has the same meaning that it has in the Corporations Act.

Restriction Agreement means an agreement in a form acceptable to the Purchaser and the Vendor (acting reasonably) or in such form as is required by the relevant Authorities, whereby the Vendor agrees that the Share Consideration will be restricted from trading in accordance with the requirements of clause 2.4 or 6.3 (as applicable).

Royalty has the meaning in clause 6.4.

Share means a fully paid common share in the Company.

Share Consideration means:

(a)	2,500,000 ordinary shares in the Purchaser; and

(b)

3,500,000 warrants to subscribe for ordinary shares in the Purchaser, exercisable at a price equal to the volume weighted average price of the Purchaser’s ordinary shares traded on TSX during the five (5) days prior to the date of this Agreement and expiring on the date five (5) years from the date of this Agreement.

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		Sale & Purchase Agreement

TSX means the Toronto Stock Exchange.

Vendor Share means the Share held by the Vendor, being the only share held by the Vendor in the Company.

1.2	Interpretation

(a)	headings are for convenience; and

unless the context indicates otherwise:

(b)	an obligation or a liability assumed by, or a right conferred on, 2 or more persons binds or benefits them jointly and severally;

(c)	a word or phrase in the singular number includes the plural, a word or phrase in the plural number includes the singular, and a word indicating a gender includes every other gender;

(d)	if a word or phrase is given a defined meaning, any other part of speech or grammatical form of that word or phrase has a corresponding meaning;

(e)	a reference to:

(i)	a party, clause, schedule, exhibit, attachment or annexure is a reference to a party, clause, schedule, exhibit, attachment or annexure to or of this Agreement;

(ii)	a party includes that party’s executors, administrators, successors , permitted assigns, including persons taking by way of novation and, in the case of a trustee, includes a substituted or an additional trustee;

(iii)

an agreement includes any undertaking, deed, agreement and legally enforceable arrangement whether in writing or not, and is to that agreement as varied, novated, ratified or replaced from time to time;

(iv)	a document includes an agreement in writing and any deed, certificate, notice, instrument or document of any kind;

(v)	a document in writing includes a document recorded by any electronic, magnetic, photographic or other medium by which information may be stored or reproduced;

(vi)	a document (including this Agreement) includes a reference to all schedules, exhibits, attachments and annexures to it, and is to that document as varied, novated, ratified or replaced from time to time;

(vii)

legislation or to a provision of legislation includes any consolidation, amendment, re-enactment, substitute or replacement of or for it, and refers also to any regulation or statutory instrument issued or delegated legislation made under it;

(viii)

a person includes an individual, the estate of an individual, a corporation, an authority, an unincorporated body, an association or joint venture (whether incorporated or unincorporated), a partnership and a trust;

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(ix)	a right includes a power, remedy, authority, discretion or benefit;

(x)	conduct includes an omission, statement or undertaking, whether in writing or not;

(xi)	an agreement, representation or warranty in favour of two or more persons is for the benefit of them jointly and severally; and

(xii)

an agreement, representation or warranty on the part of two or more persons binds them jointly and severally;

(f)	the word “ includes ” in any form is not a word of limitation;

(g)	the words “ for example ” or “ such as ” when introducing an example do not limit the meaning of the words to which the example relates to that example or to examples of a similar kind;

(h)	a reference to a day is to a period of time commencing at midnight and ending 24 hours later;

(i)	if a period of time dates from a given day or the day of an act or event, it is to be calculated exclusive of that day; and

(j)	a reference to “ C$ ”, “ $ ” or “ dollar ” is to Canadian currency except where otherwise expressly indicated.

2.	Sale and purchase

2.1	Agreement to sell and purchase

Subject to the satisfaction or waiver of the Conditions, the Vendor agrees to sell and the Purchaser agrees to purchase the Vendor Share. for the Purchase Price free from Encumbrances or other adverse interests on the terms and conditions set out in this Agreement.

2.2	Consideration

The consideration payable by the Purchaser to the Vendor for the purchase of the Vendor Share and the Additional Industrial Mineral Rights is the Purchase Price.

2.3	Payment of Purchase Price

(a)	The Cash Consideration is to be paid by the Purchaser to the Vendor on Completion.

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(b)	The Share Consideration is to be issued by the Purchaser to the Vendor on Completion.

(c)	The right to the Production Payments and the grant of the Royalty are described in clauses 6.2 and 6.4 respectively.

2.4

Escrow

The Vendor acknowledges and agrees that the issue of the Share Consideration will be subject to:

(a)	any escrow or resale restrictions or both imposed by any relevant Authority; and

(b)	a voluntary escrow period of 12 months, which period shall run concurrently with any hold periods imposed by a relevant Authority.

3.	Conditions to Completion

3.1	Conditions precedent

Completion of the sale and purchase of the Vendor Share under this Agreement is subject to and conditional upon the satisfaction of the following conditions precedent (each a “Condition”):

(a)	the Parties having obtained all shareholder and regulatory approvals necessary to achieve Completion under this Agreement including:

(i)	TSX approvals;

(ii)	ASX approvals; and

(iii)

all necessary approvals under the relevant laws of Ontario, Canada, the United States of America and Australia,

(b)	the Purchaser, Vendor and Company executing the Mineral Rights Agreement:

(c)	the Purchaser and Vendor executing the Green Giant JVA.

3.2	Best endeavours

Each of the Parties must use its best endeavours to procure satisfaction of the Conditions as soon as practicable following the date of this Agreement and, in any event, not later than the Conditions Satisfaction Date.

3.3	Waiver of Conditions precedent

The Conditions in clause 3.1are included for the benefit of both Parties and may only be waived by mutual agreement of the Parties.

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3.4	Non-satisfaction of Conditions

In the event that the Conditions in clause 3.1 are not satisfied or waived within 60 days following the date of this Agreement or such later date as the Parties may agree in writing ( Conditions Satisfaction Date ), then either Party may terminate this Agreement by giving written notice to the other Party to that effect.

4.	Completion

4.1	Time and place of Completion

Completion is to occur on the Completion Date at a time and place agreed by the Parties.

4.2	Obligations of Vendor at Completion

At Completion, the Vendor must

(a)	deliver to the Purchaser the following documents:

(i)	( share certificates ) the share certificate(s) in respect of the Vendor Share;

(ii)	( Restriction Agreement ) a Restriction Agreement duly executed by the Vendor;

(iii)

( sharetransfer instruments ) instruments of transfer for the Vendor Share naming the Purchaser as the transferee, duly executed by the Vendor and in registrable form;

(iv)	( company documents ) all copies in the Vendor’s possession of cheque books, financial and accounting records, agreements, and all other records, papers, books and documents of the Company;

(v)	( permits and licenses ) all originals and copies in the Vendor’s possession of current permits, licences, leases, subleases and other documents issued to the Company under any legislation or ordinance relating to the ERG Project Area;

(vi)	( Mining Information ) copies of all Mining Information in the Vendor’s possession; and

(vii)

( other documents ) any other document which the Purchaser reasonably requires to obtain good title to the Vendor Shareand to enable the Purchaser to cause the registration of the Vendor Share in the name of the Purchaser.

(b)	( execution of agreements ) if not already done, execute the:

(i)	the Mineral Rights Agreement; and

(ii)	the Green Giant JVA.

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4.3	Meeting of directors of the Company

The Vendor and the Company must take all steps necessary to ensure thata duly convened meeting of the directors of the Company is held at Completion ( Meeting ) and resolutions are passed at that Meeting to effect the approval of:

(a)	the registration of the transfer of the Vendor Share;

(b)	the issue of a new share certificate for the Vendor Share in the name of the Purchaser; and

(c)	the cancellation of the existing share certificate(s) in the name of the Vendor for the Vendor Share.

4.4	Obligations of Purchaser at Completion

At Completion the Purchaser must:

(a)	( Cash Consideration ) pay the Cash Consideration to the Vendor;

(b)	( Share Consideration ) issue the Share Consideration to the Vendor free from any Encumbrances or other third party rights and enter the Vendor on the Purchaser’s share register as the holder of the Share Consideration;

(c)	( Purchaser’s shares ) do all things necessary and within its power to ensure that ordinary shares in the Purchaser issued pursuant to the Share Consideration are admitted to quotation on the TSX or other equivalent stock exchange and, subject to the clause 2.4, are freely tradeable;

(d)	( holding statements ) deliver or cause to be delivered to the Vendor:

(i)	certificates or holding statements in respect of the Share Consideration (delivery to occur as soon as possible following Completion); and

(ii)	any other document which the Vendor requires to obtain or evidence good title to the Share Consideration,

(e)	( execution of agreements ) if not already done, execute the Green Giant JVA and the Mineral Rights Agreement; and

(f)	( other acts ) do and execute all other acts and documents which this Agreement requires the Purchaser to do or execute at Completion.

4.5	Completion simultaneous

The actions to take place at Completion as contemplated by clauses 4.2, 4.3 and 4.4 are interdependent and must take place, as nearly as possible, simultaneously.If one action does not take place, then without prejudice to any rights available to any Party as a consequence:

(a)	there is no obligation on any Party to undertake or perform any of the other actions;

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(b)	to the extent that such actions have already been undertaken, the Parties must do everything reasonably required to reverse those actions; and

(c)	each Party must return to the other all documents delivered to it under this clause 4, and must each repay to the other all payments received by it under this clause 4, without prejudice to any other rights any Party may have in respect of that failure.

4.6	Title, property and risk

(a)	The title to, property in and risk of the Vendor Share and the Additional Industrial Mineral Rights:

(i)	until Completion, remains solely with the Vendor; and

(ii)	passes to the Purchaser on and from Completion.

(b)	The title to, property in and risk of the Additional Industrial Mineral Rights shall pass to the Purchaser in accordance with the terms of the Mineral Rights Agreement.

4.7	Termination of the Joint Venture Agreement and release

Upon Completion:

(a)	the Joint Venture Agreement will immediately terminate in accordance with clause 28.1(b) of the Joint Venture Agreement; and

(b)	subject to the terms of this Agreement, each Party acknowledges and agrees that:

(i)	it shall have no rights whatsoever against the other Parties for any payment or Claim arising under or in connection with the Joint Venture Agreement; and

(ii)

it unconditionally releases and forever discharges each of the other Parties from any Claims they may now have or but for this Agreement at any time in the future may have had directly or indirectly against the other Parties arising under or in connection with the Joint Venture Agreement whether such Claims are known, unknown or incapable of being known at the time of execution of this Agreement.

5.	Pre-Completion conduct

5.1	Conduct pending Completion

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From the date of this Agreement until Completion or the termination of this Agreement, whichever occurs first, the Vendor:

(a)	( disposal of Shares ) must not, without the prior written consent of the Purchaser, Dispose or agree to Dispose of the Vendor Share;

(b)	( disposal of Additional Permits ) must procure that the MGY Subsidiaries do not, without the prior written consent of the Purchaser, Dispose or agree to Dispose of the Additional Permits;

(c)	( no Encumbrances ) must not create any Encumbrance or any adverse claim or interest concerning:

(i)	the Joint Venture Property;

(ii)	the Vendor Share;

(iii)

the Additional Industrial Mineral Rights; or

(iv)	the Company,

in favour of any third party in any capacity whatsoever; and

(d)

( Good Standing ) must ensure that the Additional Permit Holders make all payments necessary to maintain the Additional Exploration Permits in Good Standing and pay any and all rates, rents and taxes until Completion, including making applications and doing all things necessary as may be required by relevant Laws.

5.2	Vendor’s assistance prior to Completion

Until the earlier of Completion or the termination of this Agreement, the Vendor must supply to the Purchaser, and any person who has the Purchaser’s written authority, any information or document in its possession or control reasonably requested concerning the Additional Industrial Mineral Rights.

6.	Period after Completion

6.1	Mineral Rights Agreement

On and from Completion, the terms set out in the Mineral Rights Agreement will apply to the conduct ofall exploration and mining activities conducted by the Parties within the ERG Project Area.

6.2	Production Payments

(a)	Upon the Purchaser completing a bankable feasibility study in respect of the exploitation of Industrial Minerals within the ERG Project Area andmaking a public announcement on the TSX regarding the results of that study, the Purchaser must:

(i)	within 30 days of the date of the announcement pay to the Vendor the amount of C$700,000 in cash; and

(ii)

subject to receiving relevant TSX approvals and other necessary approvals (which the Purchaser agrees to seek within 5 Business Days of the date of the announcement) and immediately upon receiving such approvals, issue to the Vendor 1,000,000 ordinary sharesof the Purchaser at a price equal to the volume weighted average price of the Purchaser’s ordinary shares traded on TSX during the five (5) days immediately prior the date of issue.

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(b)	On the commencement of commercial production of Industrial Minerals from the ERG Project Area, the Purchaser must, within 30 days, pay to the Vendor the amount of C$1,000,000 in cash.

6.3

Escrow

(a)	The Vendor acknowledges and agrees that the issue of the Purchaser’s common shares pursuant to clause 6.2(a)(ii) will be subject to:

(i)	any escrow or resale restrictions or both imposed by any relevant Authority; and

(ii)	a voluntary escrow period of 12 months, which period shall run concurrently with any hold periods imposed by relevant Authorities.

(b)	The issue of the Purchaser’s common shares shall be subject to the Vendor delivering to the Purchaser a Restriction Agreement, duly executed by the Vendor.

6.4

Royalty

On and from the commencement of commercial production of Industrial Minerals from the ERG Project Area, the Purchaser must pay to the Vendor a royalty of an amount equal to one and a half percent (1.5%) of net smelter returns of all Industrial Minerals produced from the ERG Project Area calculated in accordance with Schedule 2 ( Royalty ).

7	Representations and warranties

7.1	Representations and warranties by Purchaser

The Purchaser represents and warrants to the Vendor as at both the date of this Agreement and at Completion that:

(a)	it is validly incorporated and subsisting under the laws of Minnesota, USA;

(b)	the execution and delivery of this Agreement has been duly and validly authorised by all necessary corporate action;

(c)	it has corporate power and lawful authority to execute and deliver this Agreement and to observe and perform or cause to be observed and performed all of its obligations in and under this Agreement;

(d)	there is no litigation or proceeding of any nature concerning the Purchaser, pending or threatened against them or a Related Body Corporate which may prevent or impair the Purchaser’s ability to enter into or perform its obligations in and under this Agreement;

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(e)

this Agreement does not conflict with or constitute or result in a material breach of or default under any agreement, deed, writ, order, injunction, judgment, law, rule or regulation to which it is a party or is subject or by which it is bound in a manner which may materially and adversely affect the rights and interests of a Party under this Agreement; and

(f)	it has not suffered an Insolvency Event.

7.2	Representations and warranties bythe Vendor

The Vendor represents and warrants to the Purchaser as at both the date of this Agreement and at Completion that:

(a)	it is the registered legal and beneficial owner of the Vendor Share;

(b)	it is validly incorporated and subsisting under the laws of Australia;

(c)	the execution and delivery of this Agreement has been duly and validly authorised by all necessary corporate action;

(d)	it has corporate power and lawful authority to execute and deliver this Agreement and to observe and perform or cause to be observed and performed all of its obligations in and under this Agreement;

(e)	there is no litigation or proceeding of any nature concerning the Vendor, pending or threatened against the Vendor or a Related Body Corporate which may prevent or impair the Vendor’s ability to enter into or perform its obligations in and under this Agreement;

(f)

(g)	it has not suffered an Insolvency Event;

(h)

subject to the Bureau du Cadastre Minier de Madagascar approving the Vendor’s application to include Industrial Mineral Rights under the Additional Permits, it has the full right, power and authority to sell the Additional Industrial Mineral Rights and to procure the MGY Subsidiaries to transfer the legal and beneficial interest to the Additional Industrial Mineral Rights to the Purchaser in accordance with the Mineral Rights Agreement;

(i)	one or more of the MGY Subsidiaries arethe registered and beneficial holders of the Additional Exploration Permits;

(j)

no person other than the Purchaser, the Vendor and their Related Bodies Corporate has any proprietary rights of any nature in respect of the Additional Exploration Permits and they have not granted to any person any rights to own or possess any interest or any rights to explore or prospect for minerals or to mine the same in any part of the land comprising the Additional Exploration Permits;

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(k)	the Additional Exploration Permits are free of any Encumbrances except to the extent of any conditions imposed under the Mining Code;

(l)

there is no litigation or proceeding of any nature concerning the Additional Exploration Permits, pending or threatened againstor any other person which may defeat, impair, detrimentally affect or reduce the right, title and interest of the Company or the Additional Permit Holders in theAdditional Exploration Permits or the interest therein, including any plaint seeking forfeiture of the Additional Exploration Permits;

(m)	to the best of its knowledge, the Additional Exploration Permits have been duly marked off, granted and applied for in accordance with the Mining Code;

(n)

the Additional Exploration Permits are in Good Standing under the Mining Code and they are not in breach or contravention of any of the terms and conditions upon which the Additional Exploration Permits were granted or of any other rule, regulation or provision of the Mining Code or any other statute concerning, affecting or relating to the Additional Exploration Permits;

(o)

to the best of the Vendor’s knowledge, information and belief, there are no facts or circumstances that could, under the currently applicable laws of Madagascar, give rise to the cancellation, forfeiture or suspension or grant of the Additional Exploration Permits when renewed, that could have a Material Adverse Effect;

(p)	except as disclosed to thePurchaser before the date of this Agreement, there are no agreements or dealings in respect of the Additional Exploration Permits;

(q)	there is not in existence any current compensation agreement with the owner or occupier of any land which is subject to the Additional Exploration Permits;

(r)

there are no Environmental Liabilities relating to or affecting the Additional Exploration Permits, nor are there any circumstances relating to the Exploration Permits which may reasonably be expected to give rise to future Environmental Liabilities, except to the extent of any report, study or assessment required to be lodged pursuant to the Mining Code or other regulation in relation to the Additional Exploration Permits;

(s)	the Mining Information is complete and accurate in all material respects as it relates to the Additional Exploration Permits; and

(t)	the Additional Exploration Permits have been granted in respect of all of the ground described in the Additional Exploration Permits other than as a result of a compulsory surrender required under the Mining Code or other law affecting the Additional Exploration Permits.

7.3	Disclaimer of liability by the Vendor

The Vendor is not liable for any loss arising from a breach of the warranties and representations in clause 7.2 to the extent such loss is:

(a)	incurred as a result of a Political Event;

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(b)	disclosed by the Vendor to the Purchaser or is known by the Purchaser at or prior to Completion;

(c)	in excess of the total amount of the Purchase Price; or

(d)	caused or contributed to by a breach by the Purchaser or the Company ortheir respective obligations under this Agreement.

8.	Termination

8.1	Termination

Either Party may terminate this Agreement at any time prior to Completion,by giving notice to the other Parties to that effect if, the Party:

(a)	commits any serious breach or non-observance of any of the provisions of this Agreement that is not capable of being remedied;

(b)	fails to remedy a breach of this Agreement that is capable of being remedied within fourteen (14) days of being requested (in writing) by the non-defaulting Party to remedy that breach; or

(c)	suffers an Insolvency Event.

8.2	Consequences of Termination before Completion

If this Agreement is terminated in accordance with clause 8.1 or otherwise:

(a)	no Party has any liability to the other Parties except for antecedent breaches of this Agreement; and

(b)	clause 9 will continue to operate to the extent applicable.

9.	Confidentiality and public announcements

9.1	Confidentiality

Subject to this clause 9, each Party (for this clause Recipient ) who is in possession or control of or has access to Confidential Information of another Party or a Related Body Corporate of another Party ( Owner ) must use that Confidential Information only for the purposes of acts contemplated by this Agreement, and keep that Confidential Information confidential and not disclose it or allow it to be disclosed to any third party except:

(a)	if the information is at the time generally and publicly available other than as a result of breach of confidence by the Recipient;

(b)	if the information is at the time lawfully in the possession of the proposed recipient of the information through sources other than the Recipient;

(c)	by the Recipient to legal and other professional advisers and other consultants and officers and employees of:

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(i)	the Recipient; or

(ii)	the Recipient's Related Bodies Corporate,

in any case requiring the information for the purposes of this Agreement or any transaction contemplated by it, or for the purpose of advising that Party in relation thereto;

(d)	with the prior writtenconsent of the Owner;

(e)	to the extent required by law or by a lawful requirement of any Governmental Agency having jurisdiction over the Recipient or any of its Related Bodies Corporate;

(f)	if required in connection with legal proceedings or arbitration relating to this Agreement or for the purpose of advising the Recipient in relation thereto;

(g)	if and to the extent that it may be necessary or desirable to disclose to any Governmental Agency in connection with applications for consents, approvals, authorities or licenses in relation to this Agreement;

(h)	to the extent required by a lawful requirement of any stock exchange having jurisdiction over the Recipient or any of its Related Bodies Corporate;

(i)	if necessary to be disclosed in any prospectus or information memorandum to investors or proposed or prospective investors:

(i)	for an issue or disposal of any shares or options in the Recipient or any of its Related Bodies Corporate;

(ii)	for an issue of debt instruments of the Recipient or any of its Related Bodies Corporate; or

(iii)

for the purposes of the Recipient obtaining a listing on any stock exchange of any shares, options or debt instruments;

(j)	if necessary to be disclosed to a professional investor or investment adviser for the purposes of enabling an assessment to be made about the merits or otherwise of an investment in the Recipient or any of its Related Bodies Corporate;

(k)	if necessary to be disclosed to an existing or bona fide proposed or prospective:

(i)	financier of the Recipient or of any of its Related Bodies Corporate; or

(ii)	rating agency in respect of the Recipient or of any of its Related Bodies Corporate;

(l)	if necessary to be disclosed to any bona fide proposed or prospective:

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(i)	transferee of any property to which the information relates or of any shares in the Recipient or any Related Body Corporate of the Recipient;

(ii)	financier of such transferee providing or proposing or considering whether to provide financial accommodation; or

(iii)

assignee of rights under the Recipient's financing documents; or

(m)	if necessary to be disclosed to legal and other professional advisers and other consultants and officers or employees of any of the persons referred to in clause 9.1(j), 9.1(k), or 9.1(l).

9.2	Conditions

(a)

In the case of a disclosure under clause 9.1(c) or 9.1(d) and, where appropriate, under clause 9.1(e) or 9.1(f), the Party wishing to make the disclosure must inform the proposed recipient of the confidentiality of the information and the Party must take such precautions as are reasonable in the circumstances to ensure that the proposed recipient keeps the information confidential.

(b)	In the case of a disclosure under clause 9.1(g) 9.1(h) or 9.1(i), the Party wishing to make the disclosure may only do so:

(i)	with the written consent of both Parties, which must not be unreasonably withheld or delayed; or

(ii)

to the extent required by law, the official rules of any the relevant stock exchange or any Governmental Agency, but if any Party is required to make any such announcement, it must promptly notify the other Party, where reasonably practicable and lawful to do so, before the announcement is made and must confer with the other Party and consider any comments of the other Partyregarding the timing and content of such announcement or any action which the other Party may reasonably elect to take to challenge the validity of such requirementsubject at all times to the disclosing Party’s obligations under law, the official rules of the relevant stock exchange or any Governmental Agency.

(c)	In the case of a disclosure under clause 9.1(j), 9.1(k) or 9.1(l) or (in the case of legal and other professional advisers and other consultants only) 9.1(m) the Party wishing to make the disclosure must not make any disclosure unless:

(i)	in the case of a disclosure under clause 9.1(j), 9.1(k) or 9.1(l) the proposed recipient has first entered into and delivered to the Recipient a confidentiality undertaking in a form acceptable to the other Party; or

(ii)

in the case of a disclosure under clause 9.1(m) the principal or employer of the proposed recipient has first entered into and delivered to the Recipient a confidentiality undertaking in a form acceptable to the other Party which will incorporate a warranty by the principal or employer of the proposed recipient that the proposed recipient is under an obligation of confidentiality to the principal or employer and that the principal or employer will enforce that obligation to the fullest extent that the law or equity allows upon being called upon to do so by any of the Parties .

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9.3	Notice to other Parties

Each Party must:

(a)

promptly inform each other Party of any request received by that Party from any person described in clause 9.1(e) to disclose information under that clause;

(b)

inform all other Parties as soon as reasonably practicable after information is disclosed by the Party under clause 9.1(e); and

(c)

not disclose any information under clause 9.1 unless all other Parties have been informed of the proposed disclosure.

9.4	Indemnities

Each Party indemnifies each other Party against any costs, losses, damages and liabilities suffered or incurred by that other Party arising out of or in connection with any disclosure by the first-mentioned Party of information in contravention of this clause 9.

9.5	Survival of confidentiality obligations

The obligations of confidentiality imposed by this clause 9 survive the termination of this Agreement and any person who ceases to be a Party continues to be bound by those obligations.

9.6	Use of Mining Information in respect to Other Mineral Rights

Nothing in this clause 9 prevents the Vendor from using the Mining Information in relation to the exploration and development of the Other Minerals.

9.7

Notices

Each communication (including each notice, consent, approval, request and demand) under or in connection with this Agreement:

(a)	must be in writing;

(b)	must be addressed as follows (or otherwise notified by that Party to the other Party from time to time):

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To Energizer	Energizer Resources Inc

	Attention:	Chief Executive Officer

	Address:	Energizer Resources Inc. 141 Adelaide Street West Suite 520 Toronto, Ontario CANADA
	Facsimile:	+1 416.364.2753

To Malagasy	Malagasy Minerals Limited

	Attention:	Company Secretary

	Address:	Malagasy Minerals Limited 15 Lovegrove Close Mount Claremont Western Australia 6010 AUSTRALIA
	Facsimile:	+61 8 9284 3801

(c)	must be signed by the Party making it or (on that party’s behalf) by the solicitor for or any attorney, director, secretary or authorised agent of that Party;

(d)	must be delivered by hand or posted by prepaid post to the address, or sent by fax to the number, of the addressee; and

(e)	is taken to be received by the addressee:

(i)	(in the case of prepaid post sent to an address in the same country) on the third day after the date of posting;

(ii)	(in the case of prepaid post sent to an address in another country) on the fifth day after the date of posting;

(iii)

(in the case of fax) at the time in the place to which it is sent equivalent to the time shown on the transmission confirmation report produced by the fax machine from which it was sent; and

(iv)	(in the case of delivery by hand) on delivery,

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but if the communication is taken to be received on a day that is not a working day or after 5.00 pm, it is taken to be received at 9.00 am on the next working day (“working day” meaning a day that is not a Saturday, Sunday or public holiday, and is a day on which banks are open for business generally, in the place to which the communication is posted, sent or delivered).

10.	Miscellaneous

10.1	Governing law

This Agreement is governed by and must be construed according to the law applying in Ontario, Canada.

10.2	Amendments

This Agreement may only be varied by a document signed by or on behalf of each of the Parties.

10.3	Primacy of this Agreement

The Parties agree that this Agreement has primacy over any ancillary agreement contemplated by this Agreement and, in the case of inconsistency, the terms and conditions of this Agreement will prevail. Each Party agrees that it will procure that any subsidiary of it will comply with the terms of this Agreement notwithstanding any inconsistency between this Agreement any ancillary agreement contemplated by this Agreement which a subsidiary of a Party is a party to.

10.4

Waiver

(a)

Failure to exercise or enforce, or a delay in exercising or enforcing, or the partial exercise or enforcement, of a right provided by law or under this Agreement by a Party does not preclude, or operate as a waiver of, the exercise or enforcement, or further exercise or enforcement, of that or any other right provided by law or under this Agreement.

(b)	A waiver or consent given by a Party under this Agreement is only effective and binding on that Party if it is given or confirmed in writing by that Party.

(c)	No waiver of a breach of a term of this Agreement operates as a waiver of another breach of that term or of a breach of any other term of this Agreement.

10.5

Consents

A consent required under this Agreement from a Party may be given or withheld, or may be given subject to any conditions, as that Party in its absolute discretion thinks fit, unless this Agreement expressly provides otherwise.

10.6	Counterparts

This Agreement may be executed in any number of counterparts and by the Parties on separate counterparts. Each counterpart constitutes an original of this Agreement and all together constitute one agreement.

10.7	No representation or reliance

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(a)	Each Party acknowledges that neither Party (nor any person acting on a Party’s behalf) has made any representation or other inducement to it to enter into this Agreement except for representations or inducements expressly set out in this Agreement.

(b)	Each Party acknowledges and confirms that it does not enter into this Agreement in reliance on any representation or other inducement by or on behalf of the other Party, except for representations or inducements expressly set out in this Agreement.

10.8

Expenses

Except as otherwise provided in this Agreement, each Party must pay its own costs and expenses in connection with negotiating, preparing, executing and performing this Agreement.

10.9	Entire agreement

To the extent permitted by law, in relation to its subject matter this Agreement:

(a)	embodies the entire understanding of the Parties, and constitutes the entire terms agreed by the Parties; and

(b)	supersedes any prior written or other agreement of the Parties.

10.10

Indemnities

(a)	Each indemnity in this Agreement is a continuing obligation, separate and independent from the other obligations of the Parties, and survives termination, completion or expiration of this Agreement.

(b)	It is not necessary for a Party to incur expense or to make any payment before enforcing a right of indemnity conferred by this Agreement.

(c)	A Party must pay on demand any amount it must pay under an indemnity in this Agreement.

10.11

Severance and enforceability

Any provision, or the application of any provision, of this Agreement that is void, illegal or unenforceable in any jurisdiction does not affect the validity, legality or enforceability of that provision in any other jurisdiction or of the remaining provisions of this Agreement in that or any other jurisdiction.

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10.12

No merger

The rights and obligations of the Parties under this Agreement do not merge on completion of any transaction under this Agreement, and survive the execution and delivery of any assignment or other document entered into for the purpose of implementing any transaction under this Agreement.

10.13

Power of attorney

(a)	Each attorney who signs this Agreement on behalf of a Party declares that the attorney has no notice from the Party who appointed him that the power of attorney granted to him, under which the attorney signs this Agreement, has been revoked or suspended in any way.

(b)	Each Party represents and warrants to each other that its respective attorney or authorised officer who signs this Agreement on behalf of that Party has been duly authorised by that Party to sign this Agreement on its behalf and that authorisation has not been revoked.

10.14

Taxes

(a)	For the purpose of this clause 10.14, Tax means a tax including any value added or goods and services taxes (including TVA), rate, levy, duty (other than a tax on the net overall income of a Party) and any interest penalty fine or expense relating to any of them.

(b)	Subject to clause 10.14(c), any Taxes that may be imposed by any authorities in connection with this Agreement and any Taxes, fees or costs in relation to the registration of this Agreementwill be paid by the Purchaser.

(c)	Any Taxes which may be imposed by any authorities in connection with the transfer of the Vendor Share under this Agreement, will be apportioned equally between the Purchaser and the Vendor.

(d)

The Purchaser will indemnify and hold the Vendor harmless against any liability for the Purchaser’s obligations set out in clauses10.14(b) and 10.14(c) above, provided that under no circumstances will the Purchaser be liable or accountable for any capital gains tax or income tax liability of the Vendor.

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Schedule 1– Industrial Minerals

Vanadium

Lithium

Aggregates

Alunite

Barite

Bentonite

Vermiculite

Carbonatites

Corundum

Dimension stone, other than labradorite

Feldspar, other than labradorite

Fluorspar

Granite

Graphite

Gypsum

Kaolin

Kyanite

Limestone / Dolomite

Marble

Mica

Olivine

Perlite

Phosphate

Potash –Potassium minerals

Pumice

Quartz

Staurolite

Zeolites

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Schedule 2 – Net Smelter Return Royalty

The royalty referred to in clause 6.4 of the Agreement is to be calculated and paid by the Payer to a Payee in accordance with this Schedule 2 .

S2.1	Definitions

In this Schedule, unless otherwise defined below or the context requires otherwise, expressions defined in the Agreement of which this Schedule forms part have the same meaning as in the Agreement and the following expressions will have the following meanings:

Adjustment means any adjustment that may bemade by the Payer to the Royalty Records:

(a)	which arise from a subsequent adjustment to the amount paid to a Payer based on the actual Products recovered after refining;

(b)	tocorrect any accounting or recording errors from previous Quarters;

(c)	which are otherwise made in accordance with this Agreement; or

(d)	which are agreed by the Parties.

Carried Forward Deduction means the amount of Deductions that exceeds the Gross Revenue in a Quarter, which may then be carried forward and deducted from Gross Revenue in subsequent Quarters.

Deductions means all costs paid or incurred by the Payer, in US dollars or in US Dollar Equivalent, in relation to the sale of Product extracted and recovered from the Development Area after mining and milling or other initial processing within or adjacent to the Development Area, and include:

(a)	all costs of smelting and refining and retorting the ore and minerals extracted from the Development Area, including Penalties for impurities and all umpire charges and other processor deductions;

(b)

all road, sea and rail freight, transportation, security and incidental costs and expenses, including forwarding, shipping, demurrage, delay and insurance costs, incurred between the outer boundary of, or adjacent to, the Development Area and the point of delivery of the Products into a Refinery, including the cost of transport to and between any Refinery or other places of treatment;

(c)	handling and incidental costs and expenses including agency, banking, assaying, sampling, weighing, loading, unloading, stockpiling and storage;

(d)	actual sales costs, and reasonable marketing, representation, agency and brokerage costs in respect of the Product subject to the Royalty;

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(e)	administrative and other general overhead costs that are directly attributable and reasonably allocable to the costs set out in paragraphs (a) to (d) above, as agreed with the Payee;

(f)	Carried Forward Deductions;

(g)	shipping agency fees;

(h)	bank charges on sales receipts and payments;

(i)	government charges on banking transactions;

(j)

all taxes (excluding taxes based on income of the Payer), royalties, duties, levies and charges lawfully imposed by an Authority, including carbon emission licence fees, charges, fuel excise (net of any fuel tax credits) and carbon trading taxes in any way connected with the transportation or sale of the Product from the Mining Area, including any value added or goods and services taxes (but not if subject to an input tax credit, which is actually claimed and received);

(k)	any other incidental charge or expense incurred between the outer boundary of, or adjacent to, the Development Area up to the point of delivery of the Products into a Refinery, including on-site transport and storage,

but does not include:

(l)	any exploration, development, construction, mining, crushing, treatment or concentrating costs incurred by the Payer within or adjacent to the Development Area; or

(m)

where Products are loaded, treated, milled, processed, transported or unloaded outside the ERG Project Area in a Refinery wholly or partially owned by the Payer or a shareholder, Related Body Corporate or Related Entity of the Payer, any costs and expenses that are in excess of those which would be paid or incurred by the Payer on arm’s length terms, or which would not be Deductions if those Products were processed by a third party.

Development Area means the area within the ERG Project Area existing at the date of this Agreement where mining activities are conducted from time to time during the term of this Agreement.

Exchange Rate means the average of the spot rate of exchange during the relevant period for the purchase of one currency against another currency as set by the usual bank for the Payer or another recognised and reputable banking institution chosen by the Payer, acting reasonably.

Gross Revenue in respect of an expired Quarter means the aggregate of:

(a)

the total amounts actually received by the Payer from the sale of Product to the owner or operator of a Refinery, in US dollars, or in US Dollar Equivalent, ( Sales ) including the proceeds received from an insurer in the case of loss of, or damage to, the Products (net of any excess paid in respect of that loss),during the expired Quarter, less any refunds, claims or discount, where Sales are effected on an arms-length basis on normal commercial terms; and

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(b)

if Sales are effected on any other basis than on an arms-length basis on normal commercial terms, or if Product is disposed of otherwise than by sale (whether immediate or for future delivery) during the expired Quarter, the fair market value of the Product so sold or otherwise disposed of during the expired Quarter in US dollars, or in US Dollar Equivalent,as determined in accordance with paragraph S2.8.

Month means calendar month.

Net Smelter Return means Gross Revenue and Adjustments (whether plus or minus) for the relevant Quarter minus Deductions for that Quarter.

Payee means the Vendor, or any subsequent party entitled in accordance with this Agreement to receive payment of the Royalty.

Payer means the Purchaser, or any subsequent mining development company established by the Purchaser and ERG for the exploitation of Industrial Minerals within the Development Area.

Penalty means a charge made by a Refinery, in addition to normal refining costs, for removing from the Product minerals or other substances where the cost of the removal exceeds the value of those minerals or other substances.

Refinery means a smelter, refinery or other processing facility.

Product means any Industrial Minerals, or any product derived from the processing of Industrial Minerals extracted and recovered from the ERG Project Area which is capable of being sold or otherwise disposed of, including those described in Schedule 1.

Quarter means the period of three consecutive Months commencing 1 January, 1 April, 1 July or 1 October in any year, other than the first Quarter which commences on the date the Payee become entitled to the Royalty under clause 6.4 of the Agreement and expires on the date immediately preceding the next to occur of 1 January, 1 April, 1 July or 1 October, and Quarterly has the corresponding meaning.

Royalty means 1.5% of the Net Smelter Return.

US Dollar Equivalent means, where sum to which this Agreement relates is not stated in US dollars, the amount determined by converting the amount in foreign currency into US dollars at the Exchange Rate existing when the relevant revenue was earned or receivable, or the relevant expenditure was incurred, by the Payer.

S2.2	Calculation of Net Smelter Return

The Payer will calculate the Net Smelter Return Quarterly from the date on which Product is first produced from the Development Area.

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S2.3

Reporting

Within 30 days of the end of each Quarter, the Payer will provide the Payee with a statement setting out in reasonable detail the calculation of the Royalty due to the Payee from the Payer for the previous Quarter and any adjustments occasioned by errors in any previous accounting.

S2.4	Time for payment of Royalty

Within 30 days of the end of each Quarter, the Payer must pay to the Payee the Royalty plus or minus any adjustments in accordance with paragraph S2.3.

S2.5	Audits and adjustments

(a)

The Payer’s records that relate to the calculation of the Net Smelter Return and the Royalty for a Quarter ( Royalty Records ) shall be open to inspection and review by the Payee’s external auditors for a period of 12 Months after the end of such Quarter, at the Payee’s cost. If not reviewed in that 12 Month period the Royalty payment for that Quarter will be taken to be in full and final satisfaction of the Payer’s obligations in respect of that payment.

(b)	If an audit carried out pursuant to paragraph S2.5(a) (Audit) discloses that the Payer has made an overpayment of the Royalty or has made an underpayment of the Royalty of 5% or less, then the Payee will be responsible for payment of the costs of the Audit and the Payer will (as the case may be):

(i)	deduct the amount of any such overpayment from its next Royalty payment to the Payee; or

(ii)	add the amount of any such underpayment to the next Royalty payment it makes to the Payee.

(c)	If an Audit discloses an underpayment by the Payer of more than 5%, then the costs of the Audit shall be borne by the Payer and the amount of the underpayment will be paid by the Payer to the Payee within 14 days after delivery of the Audit report to the Payer.

S2.6	Assignment

(a)

The Payer must not sell, assign or otherwise dispose of or encumber the whole or part of its interest in the Development Area without first requiring the assignee or other such party to enter into a covenant with the Payee on terms to the satisfaction of the Payee (acting reasonably) binding it to observe and perform all the terms and conditions of these procedures as from the effective date of assignment or encumbrance.

(b)

The Payee may only assign, sell or otherwise dispose of the whole (but not a part) of its rights and interest in or under the Royalty ( Relevant Interest ), other than to a Related Body Corporate of the Payee to which this paragraph (b) does not apply, if it first offers to the Payer the opportunity to acquire the Relevant Interest for consideration equal to that offered by the proposed assignee. If the Payer does not accept the offer within 30 days,the Payee may proceed with the assignment, sale or disposal to the proposed assignee within 90 days and on terms no more favourable to the proposed assignee than those offered to the Payer. If the Payer accepts the offer then settlement of the assignment of the Relevant Interest to the Payer shall occur within 60 days thereafter.

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S2.7	Hedging and Disposal of Intermediate Product

(a)	All profits and losses resulting from the Payer engaging in any commodity futures trading, option trading, metals trading, gold loans or any combination thereof, or other hedging or price protection arrangements or mechanisms are excluded from calculations of the Net Smelter Return.

(b)	The Payer must not dispose of, or allow for commingling of, any ore from the Development Area or any intermediate product unless it has ensured that it has access to all information necessary in order to calculate the Royalty.

S2.8	Reference to expert

(a)	If any dispute or difference arises between the Parties in connection with, the calculation of the Net Smelter Return or the Royalty, the Parties undertake with each other to use all reasonable endeavours, in good faith, to settle the dispute or difference by negotiation.

(b)	If any dispute referred to in paragraph S2.8(a) has not been resolved within a reasonable time of not less than 21 days, either Party may refer the matter in issue to an independent expert for determination.

(c)	Prior to resolution of the dispute, the Parties must continue to perform their respective obligations under this Agreement including all pre-existing obligations the subject of the dispute, except only:

(i)	an obligation to make a payment to the other Party, where that payment is a subject of the dispute; or

(ii)	to the extent that lack of resolution of the dispute prevents such performance.

(d)	Nothing in this clause prevents a Party from commencing proceedings in any court where proceedings are required to obtain urgent interlocutory relief.

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Executed as an agreement

Signed as an agreement by Energizer Resources Inc.	) ) )

/s/ Peter Liabotis		/s/ Richard Schler
Signature		Signature

Peter Liabotis		Richard Schler
Print name		Print name

CFO		CEO

Signed as an agreement by Malagasy Minerals Limited (ACN 121 700 105)	) ) )

/s/ Graeme Raymond Boden		/s/ Natasha Lee Forde
Signature		Signature

Graeme Raymond Boden		Natasha Lee Forde
Print name		Print name

Director		Company Secretary

Signed as an agreement by Madagascar - ERG Joint Venture (Mauritius) Ltd	) ) )

/s/ Peter Liabotis		/s/ Richard Schler
Signature		Signature

Peter Liabotis		Richard Schler
Print name		Print name

Director		Company Secretary / Director

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Annexure A – Mineral Rights Agreement

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EXHIBIT 10.9

ERG Project Mineral Rights Agreement

Energizer Resources Inc.

Energizer

and

Malagasy Minerals Limited

Malagasy

and

Madagascar-ERG Joint Venture (Mauritius) Limited

ERG

Jackson McDonald

140 St Georges Terrace

Perth WA 6000

+61 8 9426 6611

+61 8 9481 8649

www.jacmac.com.au

Contact:

Reference:

Will Moncrieff

7141864

Table of contents

1	Definitions and interpretation		2
	1.1	Definitions	2
	1.2	Interpretation	10
2	Conditions		11
	2.1	Conditions precedent	11
	2.2	Waiver of Conditions precedent	12
	2.3	Non-satisfaction of Conditions	12
3	Term		12
4	Rights to explore and sublease		12
	4.1	Grant of Additional Industrial Mineral Rights	12
	4.2	Minerals Rights interests at Completion	13
	4.3	Grant of Additional Permits Area Subleases	13
	4.4	Continuation of JV Subleases and JV Industrial Mineral Rights	14
	4.5	Transfer of ERG Project Permits	14
	4.6	Termination of Industrial Minerals Subleases	15
	4.7	Grant of Other Minerals Subleases	16
	4.8	Covenants of Permit Holders in respect of the ERG Project Exploration Permits	16
	4.9	Covenants in respect of the ERG Project Exploration Permits	17
	4.10	Remedies of Sublessee	18
	4.11	Exercise of mineral rights	18
	4.12	Notice of activities	19
	4.13	Mutual indemnities	20
5	Transfer of Permits		20
6	Mining Operations		20
	6.1	Decision to Mine	20
	6.2	Transfer of Mining Area	21
	6.3	Conversion to Exploitation Permits	21
	6.4	Transfer of Exploitation Permits	21
	6.5	Holding of Exploitation Permits	22
	6.6	Approval of Mining Department	22
	6.7	Option of Permit Holders to transfer Exploration Permits prior to conversion	22
	6.8	Avoidance of forfeiture of Tenements	22
7	Environment and Mining Operations		23

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8	Other Mineral Rights		23
	8.1	Holder of Other Mineral Rights	23
	8.2	Priority of exercise of ERG Project Industrial Mineral Rights	24
	8.3	Suspension of Other Mineral Rights for duration of Mining Operations	24
	8.4	Transfer of Other Mineral Rights	24
	8.5	Transfer of ERG Project Industrial Mineral Rights	24
	8.6	Co-mingling	25
9	Representations and warranties		26
	9.1	Representations and warranties by Energizer	26
	9.2	Representations and warranties by Malagasy	26
	9.3	Limitation of warranties and disclaimer of liability by Malagasy	28
10	Guarantees		29
	10.1	Guarantee by Malagasy	29
	10.2	Guarantee by Energizer	29
11	Assignment		29
12	Termination		30
	12.1	Event of Default	30
	12.2	Effect of termination	30
	12.3	Continuing remedies	31
13	Force Majeure		31
	13.1	Force Majeure	31
	13.2	Relief	31
	13.3	Labour disputes	32
	13.4	Resumption	32
14	Dispute resolution		32
	14.1	Application	32
	14.2	Dispute negotiation	32
	14.3	Arbitration	33
	14.4	Urgent relief	33
	14.5	Continued performance	33
15	Disputes as to Technical or Financial Matters		33
	15.1	Definitions	33
	15.2	Application	34
	15.3	Dispute negotiation	34
	15.4	Independent Expert	34

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16	Expert Determination		34
	16.1	Referral to Independent Expert	34
	16.2	Appointment of Independent Expert	34
	16.3	Requirements of Independent Expert	35
	16.4	Rights of the Parties	35
	16.5	Confidentiality	35
	16.6	Determination	36
	16.7	Costs of Independent Expert	36
17	Status of Agreement and further acts		36
18	Relationship between Parties		36
19	Confidentiality and public announcements		37
	19.1	Confidentiality	37
	19.2	Conditions	38
	19.3	Notice to other Parties	39
	19.4	Indemnities	39
	19.5	Survival of confidentiality obligations	40
	19.6	Use of Mining Information in respect to Other Mineral Rights	40
20	Notices		40
21	Miscellaneous		41
	21.1	Governing law	41
	21.2	Amendments	41
	21.3	Primacy of this Agreement	41
	21.4	Language	41
	21.5	Waiver	41
	21.6	Consents	42
	21.7	Counterparts	42
	21.8	No representation or reliance	42
	21.9	Expenses	42
	21.1	Entire agreement	42
	21.11	Indemnities	43
	21.12	Severance and enforceability	43
	21.13	No merger	43
	21.14	Power of attorney	43
	21.15	Taxes	43
Annexure A – Additional Permits Area			1
Annexure B – JV Area			2
Annexure C – Additional Permits Area Sublease Agreements			3
Annexure D – JV Sublease Agreements			4

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ERG Project Mineral Rights Agreement

Date

2014

Parties

Energizer Resources Inc. Energizer	141 Adelaide Street, West Suite 520, Toronto, Ontario, Canada

Malagasy Minerals Limited ACN 121 700 105 Malagasy	15 Lovegrove Close, Mount Clarement, Western Australia

Madagascar-ERG Joint Venture (Mauritius) Ltd Company Number: 106367 ERG	6 th Floor, Newton Tower, Sir William Newton Street, Port Louis, Republic of Mauritius

Rec itals

A.	As at the date of this Agreement, the MGY Subsidiaries are the sole registered holders of the JV Exploration Permits and the Additional Exploration Permits and there are presently no JV Exploitation Permits, Additional Exploitation Permits or ERG Project Exploitation Permits.

B.	Pursuant to a Joint Venture Agreement dated 15 December 2011 between Malagasy, Energizer and ERG:

(i)	Energizer acquired a 75% interest in the JV Industrial Mineral Rights;

(ii)	ERG was established as the joint venture company for the Joint Venture and Energizer and Malagasy owned three (3) shares and one (1) share respectively in ERG;

(iii)

Malagasy, through its subsidiaries, the MGY Subsidiaries, maintains a 100% interest in the Other Mineral Rights; and

(iv)	ERG, through its 100% subsidiary, MadagascarCo, held the JV Industrial Mineral Rights for the JV Permits by way of the JV Subleases.

C.	Pursuant to the Sale and Purchase Agreement Energizer has agreed to acquire Malagasy’s share in ERG.

The Parties agree and acknowledge that at the date of this Agreement, the Mining Department (the BCMM) is not accepting and/or processing applications for transfer, registration, amendment or renewal of mining permits or interests in Madagascar and it is not presently possible to obtain formal recognition of the renewal, partition, transfer, registration or amendment of the JV Exploration Permits or the Additional Exploration Permits.

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Pursuant to the Memorandum of Understanding, Malagasy has also agreed, to effect, through the MGY Subsidiaries, a sublease of the Additional Industrial Minerals Rights to MadagascarCo and, when possible, a transfer of the ERG Project Exploration Permits (to the extent they fall within the ERG Project Area) on the terms of this Agreement.

F.	Pursuant to the Memorandum of Understanding, Malagasy, through its subsidiaries, the MGY Subsidiaries, has agreed to sell to ERG and ERG has agreed to acquire the Additional Industrial Mineral Rights on the terms of this Agreement and the Sale & Purchase Agreement.

G.	The Parties have agreed to enter into this Agreement to record the basis on which:

(i)	ERG will obtain the Additional Industrial Mineral Rights and hold the ERG Project Industrial Mineral Rights;

(ii)	Malagasy will hold the Other Mineral Rights;

(iii)

the Parties will co-ordinate their respective Exploration and Mining activities within the ERG Project Area;

(iv)	the Parties will apply for and obtain the various approvals and authorisations required to conduct their respective exploration and mining operations on the ERG Project Area; and

(v)	the Parties will maintain the ERG Project Permits and, when possible, the MGY Subsidiaries will transfer to ERG’s nominee the ERG Project Exploration Permits (to the extent they fall within the ERG Project Area).

Agreement

1.	Definitions and interpretation

1.1	Definitions

In this Agreement, unless the context requires otherwise, the following expressions will have the following meanings:

Accession Deed means a deed between the Parties to this Agreement and a third party pursuant to which the third party assumes the obligations of the assigning Party to the extent of the interest being assigned to the third party as if the third party was an original party to this Agreement and is otherwise in a form satisfactory to the non-assigning Party, acting reasonably.

Additional Exploitation Permits means a permit granted under the Mining Code within the Additional Permits Area which gives the holder an exclusive right to exploit authorised minerals, continue exploration and research of such minerals and to build any permanent or temporary structures.

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Additional Exploration Permits means:

(a)	subject to paragraph (b), the exploration permits granted under the Mining Code listed in Schedule 2; and

(b)	in the event of the grant of a new permit over all or part of any of an Additional Permit in accordance with clause 4.5(d):

(i)	includes any licence, concession, permit or tenement granted within the ERG Project Area in relation to the same ground as the relevant Additional Exploration Permit; and

(ii)	excludes any licence, concession, permit or tenement outside of the ERG Project Area.

Additional Industrial Minerals Rights means the right to explore for and mine Industrial Minerals within the Additional Permits Area.

Additional Permits means:

(a)	the Additional Exploration Permits;

(b)	the Additional Exploitation Permits;

(c)	any licence, concession, permit or tenement which may hereafter be in force or issued in lieu of or in relation to the same ground as the permits referred to in paragraphs (a) or (b) of this definition;

(d)	any permit, concession, licence or tenement that is a successor, renewal, modification, extension or substitute for the permits referred to in paragraphs (a), (b) or (c) of this definition; and

(e)

all rights to mine and other privileges appurtenant to the mining tenements and all ore and mineral-bearing material, sand, slimes, tailings and residues of whatsoever nature located on and under the land the subject of a licence, concession, permit or tenement referred to in paragraphs (a), (b), (c) or (d) of this definition,

and includes such extensions, renewals, conversions, substitutions, modifications, amalgamations, subdivisions and variations whether surrendered or replaced for the Additional Permits.

Additional Permits Area means the areas of the Additional Exploration Permits described in Annexure A and identified by the area highlighted in green in the map at Schedule 3.

Additional Permits Area Subleases has the meaning given to that term in clause 4.3(a).

Additional Permits Area Sublease Agreements means the sublease agreements to be entered into by the Additional Permit Holders and MadagascarCo pursuant to clause 4.3(c) in relation to the relevant area / squares of each Additional Permit held by the Additional Permit Holders within the Additional Permits Area, in the form set out at Annexure C, subject to any reasonable amendments required as a result of review by the Parties’ Madagascan advisors.

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Additional Permit Holders means the holders, at any given time, of the Additional Permits.

Agreement means this agreement, including any amendments made in accordance with clause 21.2.

ASX means the ASX Limited (ACN 008 624 691) trading as the Australian Securities Exchange.

Authority means any government department, local government council, government or statutory authority or any other party under a Law which has a right to impose a requirement or whose consent is required with respect to any matter or thing arising under, or affected by, this Agreement.

Business Day means a day other than a Saturday or Sunday on or public holiday in Ontario, Canada or Perth, Western Australia.

Commencement Date means the date on which all of the conditions in clause 2.1 are satisfied or waived.

Completion has the meaning given to it in the Sale and Purchase Agreement.

(a)	the existence or contents of this Agreement;

(b)	ERG Project Industrial Mineral Rights;

(c)	the Other Mineral Rights;

(d)	the ERG Project Permits;

(e)	the operations and transactions of a Party; and

(f)	any other information obtained during the Term of this Agreement,

that is not in the public domain (except by failure of a Party to perform and observe its covenants and obligations under this Agreement) and that has been obtained by a Party during the negotiations preceding the making of this Agreement or the Heads of Agreement by or through or by being a Party to this Agreement or the Heads of Agreement .

Decision to Mine has the meaning given in clause 6.1 .

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Encumbrance means any mortgage, bill of sale, lien, charge, pledge, writ, warrant, production royalty, caveat (and all claims stated in the caveat), assignment by way of security, security interest, title retention, preferential right or trust arrangement, Claim, covenant, profit a pendre, easement, or any other security arrangement or other right or interest of any third party and includes any other arrangement having the same effect.

Energex means Energex SARL, a company incorporated under the laws of Madagascar and a wholly owned subsidiary of Malagasy.

Environmental Law means any law concerning environmental matters which regulates or affects the ERG Project Permits, and includes, but is not limited to, laws concerning land use, development, pollution, waste disposal, toxic and hazardous substances, conservation of natural or cultural resources and resource allocation including any law relating to exploration for or development of any natural resource.

Environmental Liability means any obligation, expense, penalty or fine under Environmental Law, including rehabilitation and rectification work of whatsoever nature or kind.

ERG Project Exploitation Permit means a permit granted under the Mining Code in relation to the ERG Project Area which gives the holder an exclusive right to exploit authorised minerals, continue exploration and research of such minerals and to build any permanent or temporary structures.

ERG Project Exploration Permits means all of the Additional Exploration Permits and the JV Exploration Permits and ERG Project Exploration Permit means any one of those.

ERG Project Industrial Mineral Rights means all Mineral Rights with respect to Industrial Minerals, including the JV Industrial Mineral Rights and the Additional Industrial Mineral Rights.

ERG Project Permit Holders means the Additional Permit Holders and the JV Permit Holders.

ERG Project Permits means all of the Additional Permits and the JV Permits and ERG Project Permit means one of those.

ERG Project Area means the combined areas of the Additional Permits Area and the JV Area and identified by the area outlined in red on the map at Schedule 3.

Expert means an expert appointed in accordance with clause 16.

Exploration all activities and operations that have as their purpose the discovery, location, delineation and further investigation of any minerals, mineral deposits and ore, including drilling and trenching, the testing or proving of those bodies, the conducting of pre-feasibility, viability and amenability studies and the establishment and the administration of field offices for the performance of any of these functions.

Force Majeure has the meaning given in clause 13.

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Good Mining Practices means, in relation to mining, those practices, methods and acts engaged in or approved by a firm or body corporate which, in the conduct of its undertaking, exercises that degree of safe and efficient practice, diligence, prudence, and foresight reasonably and ordinarily exercised by skilled and experienced operators engaged in the mining industry in Ontario, Canada.

Good Standing means in relation to an ERG Project Permit, that:

(a)	such permit is and remains in full force and effect; and

(b)	such permit:

(i)	is and remains not liable to cancellation, forfeiture or non-renewal; or

(i)	is liable to cancellation, forfeiture or non-renewal where such liability is:

(A)	not a result of the default of the holder of the permit or its subsidiaries;

(B)	solely a result of a compulsory surrender under the Mining Code; or

(C)	solely a result of a Political Event.

Green Giant JVA means the document entitled “Green Giant Project Joint Venture Agreement” between Energizer, ERG and Malagasy dated on or about the date of this Agreement.

IMR Transferee has the meaning given in clause 8.5(a).

Industrial Minerals means the minerals listed in Schedule 1.

Industrial Minerals Subleases means the Additional Permits Area Subleases and the JV Subleases and an Industrial Minerals Sublease means any one of them.

Industrial Minerals Sublease Agreements means the Additional Permits Area Sublease Agreements or a JV Sublease Agreements and Industrial Minerals Sublease Agreement means one such agreement.

Joint Venture Agreement means the joint venture agreement dated 15 December 2011 between Malagasy, Energizer and ERG.

JV Area means the areas of the JV Exploration Permits described in Annexure B and identified by the area highlighted in yellow in the map at Schedule 3.

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JV Industrial Mineral Rights means the right to explore for and mine Industrial Minerals within the JV Area in accordance with the JV Permits.

JV Exploitation Permits means a permit granted under the Mining Code in relation to the JV Area which gives the holder an exclusive right to exploit authorised minerals, continue exploration and research of such minerals and to build any permanent or temporary structures.

JV Exploration Permits means

(a)	subject to paragraph (b), the exploration permits granted under the Mining Code listed in Schedule 4; and

(b)	in the event of the grant of a new permit over all or part of any of a JV Permits in accordance with clause 4.5(d):

(i)	includes any licence, concession, permit or tenement granted within the ERG Project Area in relation to the same ground as the relevant JV Permit; and

(ii)	excludes any licence, concession, permit or tenement outside of the ERG Project Area.

JV Permit Holders means the holders of the JV Permits at any given point in time.

JV Permits means

(a)	the JV Exploration Permits;

(b)	the JV Exploitation Permits;

(c)	any licence, concession, permit or tenement which may hereafter be in force or issued in lieu of or in relation to the same ground as the permits referred to in paragraphs (a) or (b) of this definition;

(d)	any permit, concession, licence or tenement that is a successor, renewal, modification, extension or substitute for the permits referred to in paragraphs (a), (b) or (c) of this definition; and

JV Subleases means subleases granted by the JV Permit Holders to MadagascarCo pursuant to clause 10.1 of the Joint Venture Agreement.

JV Sublease Agreements means sublease agreements entered into pursuant to the Joint Venture Agreement between MadagascarCo and one or more of the JV Permit Holders in relation to the area / squares of each JV Exploration Permit held by the relevant JV Permit Holder(s) within the JV Area.

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MadagascarCo means the company incorporated under the laws of Madagascar known as ERG (Madagascar) Ltd.

Material Adverse Effect means an unfavourable or adverse event, occurrence or circumstance, or the result thereof, that causes the actual value of ERG Project Area or the ERG Project Industrial Mineral Rights to be materially impaired or devalued but does not include anything that occurs as a result of a Political Event.

Mazoto means Mazoto Minerals SARL, a company incorporated under the laws of Madagascar and a wholly owned subsidiary of Malagasy.

MDA means Mada - Aust SARL, a company incorporated under the laws of Madagascar and a wholly owned subsidiary of Malagasy .

Memorandum of Understanding means the letter of understanding from Energizer to Mr Peter Langworthy, Non-Executive Director of Malagasy dated 22 October 2013 and signed by Energizer on 24 October 2013 and by Malagasy on 22 October 2013.

MGY Subsidiaries means MDA, Mazoto and Energex.

Mineral Rights means the right to explore for and mine minerals within the ERG Project Area in accordance with the ERG Project Permits .

Minimum Expenditure Obligations means the minimum expenditure which the holder of an ERG Project Permit is required under the Mining Code to incur in respect oof the ERG Project Permit in a given year.

Mining means all work of or associated with extraction of mineral deposits by way of commercial exploitation, including all preparatory development and incidental work (other than Exploration) and to the extent agreed between the Parties may include extraction, beneficiation, transportation, refining, processing and marketing of minerals, including ore concentrates, matte and metals produced.

Mining Area the area of the ERG Project Area reasonably required to conduct Mining Operations and identified in accordance with clause 6.1(b)(i), including reasonable sufficient areas for all mining, mining waste dumps, areas required for treatment facilities, leach pads, tailings dams and/or other associated infrastructure and may consist of one or more separate parcels of land .

Mining Code means the body of legal provisions in force in Madagascar contained in the Law n o 99-022 of 19/08/1999 containing the Mining Code as amended by Law n o 2005-021 of 17/10/2005 as well as Decree n o 2006-910 of 19/12/2006 setting out the conditions of application of the Law n o 99-022 of 19/08/1999 as amended by Law n o 2005-021 of 17/10/2005, as amended from time to time .

Mining Department means the Bureau du Cadastre Minier de Madagascar (the Madagascar Mining Registry Office), also known as the BCMM.

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Mining Operations means commercial mining operations and all activities necessary, expedient, conducive or incidental to the commercial mining operations including without limitation:

(a)	mine development; and

(b)	as applicable:

(i)	in the case of Malagasy, the weighing, sampling, assaying, mining, extraction, crushing, refining, treatment, transportation, handling, storage, loading and delivery of Other Minerals; and

(ii)	in the case of ERG, the weighing, sampling, assaying, mining, extraction, crushing, refining, treatment, transportation, handling, storage, loading and delivery of Industrial Minerals.

Other Minerals means all minerals other than Industrial Minerals.

Other Mineral Rights means all Mineral Rights other than the ERG Project Industrial Mineral Rights.

Other Minerals Sublease has the meaning given in clause 4.7(a).

Other Minerals Sublease Agreements means sublease agreements entered into pursuant to clause 4.7 between Malagasy and MadagascarCo in relation to the area / squares of each of the ERG Project Permits held by MadagascarCo within the ERG Project Area, in the form set out in Annexure D, subject to any reasonable amendments required as a result of review by the Parties’ Madagascan advisors.

Outgoings means all rents, rates, survey fees and other fees and charges under the applicable legislation or otherwise in connection with an ERG Project Permit.

Party means a party to this Agreement and Parties means the parties to this Agreement.

Permit Holders means at any given point in time, the persons who are the registered owners of the ERG Project Permits as registered with the Mining Department.

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Related Body Corporate in relation to a Party, a corporation that is:

(a)	a holding company of the Party;

(b)	a subsidiary of the Party; or

(c)	a subsidiary of a holding company of the Party.

Sale and Purchase Agreement means document entitled “Sale and Purchase Agreement” between ERG, Energizer and Malagasy executed on about the date of this Agreement.

SIAC means the Singapore International Arbitration Centre.

Sublease means an Industrial Minerals Sublease or a Other Minerals Sublease.

Sublease Agreements means an Industrial Minerals Sublease Agreement or an Other Minerals Sublease Agreement.

Sublessee means the party which has been granted the relevant Sublease.

Term has the meaning set out in clause 2.

TSX means the Toronto Stock Exchange.

1.2	Interpretation

(a)	headings are for convenience; and

unless the context indicates otherwise:

(b)	an obligation or a liability assumed by, or a right conferred on, 2 or more persons binds or benefits them jointly and severally;

(c)	a word or phrase in the singular number includes the plural, a word or phrase in the plural number includes the singular, and a word indicating a gender includes every other gender;

(d)	if a word or phrase is given a defined meaning, any other part of speech or grammatical form of that word or phrase has a corresponding meaning;

(e)	a reference to:

(i)	a party, clause, schedule, exhibit, attachment or annexure is a reference to a party, clause, schedule, exhibit, attachment or annexure to or of this Agreement;

(ii)	a party includes that party’s executors, administrators, successors , permitted assigns, including persons taking by way of novation and, in the case of a trustee, includes a substituted or an additional trustee;

(iii)

(iv)	a document includes an agreement in writing and any deed, certificate, notice, instrument or document of any kind;

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(v)	a document in writing includes a document recorded by any electronic, magnetic, photographic or other medium by which information may be stored or reproduced;

(vi)	a document (including this Agreement) includes a reference to all schedules, exhibits, attachments and annexures to it, and is to that document as varied, novated, ratified or replaced from time to time;

(vii)

(viii)

(ix)	a right includes a power, remedy, authority, discretion or benefit;

(x)	conduct includes an omission, statement or undertaking, whether in writing or not;

(xi)	an agreement, representation or warranty in favour of two or more persons is for the benefit of them jointly and severally; and

(xii)

an agreement, representation or warranty on the part of two or more persons binds them jointly and severally;

(f)	the word “ includes ” in any form is not a word of limitation;

(g)	the words “ for example ” or “ such as ” when introducing an example do not limit the meaning of the words to which the example relates to that example or to examples of a similar kind;

(h)	a reference to a day is to a period of time commencing at midnight and ending 24 hours later;

(i)	if a period of time dates from a given day or the day of an act or event, it is to be calculated exclusive of that day; and

(j)	a reference to “ C$ ”, “ $ ” or “ dollar ” is to US currency.

2.	Conditions

2.1	Conditions precedent

This Agreement is subject to and conditional upon:

(a)	the execution of the Sale and Purchase Agreement;

(b)	the execution of the Green Giant JVA;

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(c)	Completion pursuant to the Sale and Purchase Agreement; and

(d)	the Parties having obtained all shareholder and regulatory approvals necessary to achieve Completion and give effect to this Agreement including:

(i)	TSX approvals;

(ii)	ASX approvals; and

(iii)

all necessary approvals under the relevant laws of Ontario, Canada, the United States of America and Australia.

2.2	Waiver of Conditions precedent

The conditions in clause 2.1 are included for the benefit of both Parties and may only be waived by mutual agreement of the Parties.

2.3	Non-satisfaction of Conditions

In the event that the condition in clause 2.1 is not satisfied within 60 days following the date of this Agreement or such later date as the Parties may agree in writing, then either Party may terminate this Agreement by giving written notice to the other Party to that effect.

Term

This Agreement commences on the Commencement Date and terminates on the earlier of:

(a)	a single Party becoming the holder of all of the Mineral Rights, namely all of the ERG Project Industrial Mineral Rights and all of the Other Mineral Rights; and

(b)	the expiry or other termination of the last of the ERG Project Permits,

( Term ).

4.	Rights to explore and sublease

4.1	Grant of Additional Industrial Mineral Rights

Upon Completion:

(a)	the Additional Permit Holders will be deemed to have granted the Additional Industrial Mineral Rights to ERG for consideration which includes the benefit of Exploration activities undertaken at the cost of ERG and MadagascarCo; and

(b)	Malagasy must procure that the Additional Permit Holders do all things required pursuant to this Agreement or otherwise necessary to effect the grant of the Additional Industrial Mineral Rights to ERG.

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4.2	Minerals Rights interests at Completion

On and from Completion, the respective Mineral Rights interests of the Parties within the ERG Project Area will be:

Party	ERG Project Industrial Mineral Rights	Other Mineral Rights
ERG (to be a wholly owned subsidiary of Energizer	100%	0%
MGY Subsidiaries	0%	100%

4.3	Grant of Additional Permits Area Subleases

(a)

Upon Completion, Malagasy will procure that the Additional Permit Holders promptly grant to MadagascarCo, or its Related Bodies Corporate, subleases in respect of the Additional Industrial Mineral Rights over the Additional Permits Area on terms whereby, for consideration which includes the benefit of Exploration activities undertaken at the cost of ERG and MadagascarCo:

(i)	MadagascarCo will, in accordance with the Mining Code, be the sole holder of the Industrial Mineral Rights and have the exclusive right to conduct Exploration and Mining for Industrial Minerals within the Additional Permits Area; and

(ii)	the Additional Permits Holders will, in accordance with and as permitted under the Mining Code, retain the exclusive right to Other Mineral Rights,

(each an Additional Permits Area Sublease ).

(b)	Subject to the Mining Code, the Additional Permits Area Subleases will be for the term of the Additional Permits, including for the term of any renewal of the Additional Permits.

(c)

Subject to clause 4.3(d), the Additional Permit Holders must enter into the Additional Permits Area Sublease Agreements and any other agreement(s) required by the Mining Code with MadagascarCo to give effect to the right to carry out Exploration and Mining as described in clause 4.3(a) and the Additional Permits Area Subleases.

(d)	The Parties must use all reasonable endeavours to ensure the Additional Permits Area Sublease Agreements and any other agreement contemplated by clause 4.3 are entered into by the Additional Permit Holder and MadagascarCo on, or as soon as possible after, the Completion.

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4.4	Continuation of JV Subleases and JV Industrial Mineral Rights

The Parties acknowledge and agree that, subject to clause 4.6, the JV Industrial Mineral Rights, the JV Subleases and the JV Subleases Agreements continue after the termination of the Joint Venture Agreement at Completion on the terms of this Agreement and the JV Sublease Agreements.

4.5	Transfer of ERG Project Permits

The Parties agree and acknowledge that upon either Party being notified by the Mining Department or otherwise becoming aware that that the Mining Department will from that time permit formal transfer and registration of interests in, transfers of and dealings in the ERG Project Permits, that Party must notify the other Party and following such notification:

(a)

subject to clause 4.5(e), Malagasy must promptly deliver, or must cause the ERG Project Permit Holders to promptly deliver, to ERG signed instruments of transfer in registrable form for the ERG Project Permits (or part thereof in accordance with clause 4.5(d) below) naming MadagascarCo or such other entity as nominated by ERG, as the transferee;

(b)

ERG must promptly lodge, or must cause MadagascarCo to promptly lodge executed transfers in registrable form for the ERG Project Permits (or part thereof in accordance with clause 4.5(d) below) with the Mining Department or any Authority which has the right to approve or register exploration and mining permits in Madagascar in accordance with the laws of Madagascar;

(c)

in the event that Mining Department accepts the registration of the transfers, Malagasy will retain the Other Mineral Rights and the exclusive right to carry out Exploration and Mining for Other Minerals within the ERG Project Area, in accordance with the laws of Madagascar, for the purposes of identifying and exploiting any Other Minerals within that area;

(d)	subject to clause 4.5(e), to the extent that one or more squares (carres) of an ERG Project Permit fall outside of the ERG Project Area, in lieu of transfer of the whole ERG Project Permit to MadagascarCo in accordance with clause 4.5(a):

(i)	Malagasy must use its best endeavours to promptly:

(A)	deliver to ERG, or must cause the ERG Project Permit Holders to promptly deliver, signed instruments of transfer in registrable form for the transfer of a permit, covering only the squares (carres) of the ERG Project Permit which fall within the ERG Project Area, to MadagascarCo; or

(B)

apply for, and obtain from, the Mining Department the grant of a new permit covering only the squares (carres) of the ERG Project Permit which fall within the ERG Project Area and upon the grant of such new permit promptly deliver to ERG, or must cause the holders of the new permit to promptly deliver, signed instruments of transfer in registrable form for the transfer of the new permit to MadagascarCo; and

(ii)	until such a replacement permit is transferred to MadagascarCo, the Additional Permits Area Sublease or JV Sublease (as applicable) which applies to that area shall remain in force, unless otherwise agreed in writing by the Parties;

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(e)	irrespective of the obligations described in this clause 4.5, if a Party is required to do anything in relation to this clause 4.5 which could foreseeably result in any cancellation, forfeiture or suspension of the whole or any part of an ERG Project Permit, then:

(i)	the Parties must consult with one another and in good faith agree to either:

(A)	proceed with the action; or

(B)	refrain from that action and undertake such alternative actions as agreed by the Parties in order to transfer the relevant rights and interests in the ERG Project Area to ERG; and

(ii)	a Party must not proceed with any action that is wholly within its control and could foreseeably result in any cancellation, forfeiture or suspension of the whole or any part of an ERG Project Permit without the other Parties’ consent ; and

(f)	if segregation under clause 4.5(d) is temporarily unable to occur due to matters outside of the control of the Permit Holders and the Parties, or the Parties agree not proceed with any transfer or segregation under clause 4.5(e), then the Parties and the Permit Holders agree;

(i)	that the Sublease Agreements in respect of the relevant ERG Project Permit shall remain in place to ensure that ERG has its full interest and benefit in the ERG Project Area;

(ii)	to implement all reasonable arrangements (whether set out in paragraph (d) or otherwise) to achieve a transfer or grant of the relevant legal interest in the ERG Project Area to ERG as soon as reasonably possible; and

(iii)

until a transfer is effected in accordance with paragraph (ii), Malagays’s obligations under this Agreement as ERG Project Permit Holder shall continue in respect of the relevant ERG Project Permits.

4.6	Termination of Industrial Minerals Subleases

Upon the successful transfer and registration of each of the ERG Project Exploration Permits to MadagascarCo pursuant to clause 4.5:

(a)	the parties will do all things necessary to promptly terminate the Industrial Minerals Subleases to which the transferred ERG Project Permit (or part thereof) relates including the termination of the Industrial Minerals Sublease Agreements; and

(b)	each Party acknowledges and agrees that:

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(i)	it shall have no rights whatsoever against the other Parties for any payment or Claim arising under or in connection with an Industrial Minerals Sublease which is terminated in accordance with clause 4.6(a) above; and

(ii)

it unconditionally releases and forever discharges each of the other Parties from any Claims they may now have or but for this Agreement at any time in the future may have had directly or indirectly against the other Parties arising under or in connection with an Industrial Minerals Subleases which is terminated in accordance with clause 4.6(a) above, whether such Claims are known, unknown or incapable of being known at the time of execution of this Agreement.

4.7	Grant of Other Minerals Subleases

(a)

Upon the successful transfer and registration of an ERG Project Permit to MadagascarCo, ERG will procure that MadagascarCo grants to Malagasy, or its Related Bodies Corporate, a sublease in respect of Other Mineral Rights within the area of the relevant ERG Project Permit other than the ERG Project Industrial Mineral Rights, on terms whereby, for consideration which includes the benefit of Exploration activities undertaken at the cost of Malagasy:

(i)

Malagasy will, in accordance with the Mining Code, be the sole holder of all Other Mineral Rights within the area of the relevant ERG Project Permit other than the ERG Project Industrial Mineral Rights, and will have the exclusive right to conduct Exploration and Mining for all minerals within the area of the relevant ERG Project Permit, other than Industrial Minerals within the ERG Project Area; and

(ii)	ERG will, in accordance with and as permitted under the Mining Code, retain the exclusive right to ERG Project Industrial Mineral Rights,

(each an Other Minerals Sublease ).

(b)	Subject to the Mining Code, the Other Minerals Subleases will be for the term of the ERG Project Permits, including for the term of any renewal of the ERG Project Permits.

(c)

Subject to clause 4.7(d), MadagascarCo must enter into the Other Minerals Sublease Agreements and any other agreement(s) required by the Mining Code with Malagasy or its Related Body Corporate to give effect to the right to carry out Exploration and Mining as described in clause 4.7(a) and the Other Minerals Subleases.

(d)	The Parties must use all reasonable endeavours to ensure the Other Minerals Sublease Agreements and any other agreement contemplated by clause 4.7 are entered into by Malagasy and MadagascarCo on, or as soon as possible after, Completion.

4.8	Covenants of Permit Holders in respect of the ERG Project Exploration Permits

The Permit Holders must at all times during the Term:

(a)	use all reasonable endeavours permitted under the laws of Madagascar to ensure the ERG Project Permits are renewed in the usual course for such periods as permitted by the Mining Code, as requested by the Sublessee;

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(b)

do all such acts as are reasonably necessary to keep the ERG Project Permits in Good Standing under the Mining Code which can only be done or performed by the registered holder of the ERG Project Permits, provided that the Permit Holder must give the Sublessee adequate prior notice of all such acts;

(c)

use all reasonable endeavours to have the Sublease Agreements registered with the Mining Department as soon as possible (provided in this case, the costs associated with registration of the Sublease Agreements with the Mining Department will be met 50% by the Permit Holders and 50% by the Sublessee); and

(d)	apply to the Mining Department to add such minerals to the ERG Project Permits as may be requested by Malagasy or ERG from time to time to the extent those minerals are not already noted on the ERG Project Permits.

4.9	Covenants in respect of the ERG Project Exploration Permits

(a)	Subject to clauses 4.8 and 4.11, during the Term, ERG and MadagascarCo must

(i)	do all such acts and make all such payments as are reasonably necessary to keep the ERG Project Permits in Good Standing under the Mining Code;

(ii)	comply with all Minimum Expenditure Obligations in respect of the ERG Project Permits (if any),

provided that, for the period that Malagasy or the MGY Subsidiaries are the Permit Holder, they shall:

(iii)

execute such documents and give to ERG or MadagascarCo such assistance as they may reasonably require to maintain the ERG Project Permits and to keep the ERG Project Permits in Good Standing under the Mining Code; and

(iv)	where reasonably required by ERG and MadagascarCo, make application for and use their best endeavours to obtain renewals of the ERG Project Permits or conversion of the ERG Project Permits into new mining titles under the Mining Code, as required by ERG and MadagascarCo.

(b)	During the Term, ERG and Malagasy must contribute as equal contributors to all Outgoings.

(c)	During the Term, the Permit Holders must supply to the Sublessee, and any person who has the Sublessee’s written authority, any information or document in its possession or control reasonably requested concerning the ERG Project Exploration Permits.

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4.10	Remedies of Sublessee

(a)	If any Permit Holder does, permits or suffers to be done anything, or omits to do anything required under the Mining Code or other laws of Madagascar, which constitutes a breach of any of its covenants under this Agreement and which may, in the Sublessee’s reasonable opinion, result in:

(i)	the termination or non-renewal of an ERG Project Permit;

(ii)	a revocation of any permit, authority or approval necessary to maintain the Good Standing of an ERG Project Permit under the Mining Code; or

(iii)

loss of access to any part of the ERG Project Area ,

the Sublessee has the right, on each occurrence, to be appointed the Permit Holder’s attorney for the purpose of taking whatever remedial steps it considers necessary to remedy the breach.

(b)	Any costs incurred by the Sublessee in exercising its rights pursuant to clause 4.10(a) will be a debt due from the Permit Holders to the Sublessee payable upon demand.

(c)	The right created by clause 4.10(a) are the sole remedy in respect of a breach to which clause 4.10(a) applies.

(d)

The Sublessee will not be liable to the Permit Holders for any loss or damage suffered by the Permit Holders as a result of actions taken or omissions made by Sublessee in the course of exercising or purporting to exercise its rights under clause 4.10(a) so long as the Sublessee has acted in good faith.

4.11	Exercise of mineral rights

ERG must, and must procure that MadagascarCo will, in the exercise of the ERG Project Industrial Mineral Rights, and Malagasy and its Related Bodies Corporate must, in the exercise of the Other Mineral Rights:

(a)	comply with the conditions of the ERG Project Permits (to the extent that those conditions relate to the ERG Project Area) as if that party were the permit holder;

(b)	comply with the requirements of the Mining Department, the Mining Code, Environmental Laws and any other laws dealing with miners and the exploration for and mining of minerals;

(c)	be solely responsible for any Environmental Liability arising from the exercise of the ERG Project Industrial Mineral Rights in the case of ERG and MadagascarCo, and the exercise of the Other Mineral Rights in the case of Malagasy;

(d)	be responsible for approvals required for activities on the ERG Project Area, provided that the Permit Holder shall give such assistance as is reasonably necessary to apply for such approvals;

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(e)	be responsible for the preparation and lodgement of any reporting obligations on any work done on, and money expended in connection with the ERG Project Area, provided that the Permit Holder shall give such assistance as is reasonably necessary to prepare such reports;

(f)	comply with, adopt and exercise Good Mining Practices including rehabilitating any ground disturbance;

(g)	without prejudice to clause 8, use its reasonable endeavours to minimise interference with the other Parties’ activities in planning, programming and executing any exploration activity on the ERG Project Exploration Permits;

(h)	keep all drill holes, costeans, trenches, excavations, shafts and other workings secure and safe and properly maintained and, where necessary, fenced; and

(i)	not do or suffer to be done anything which will or may place in jeopardy the ERG Project Permits or render any of them liable to forfeiture.

4.12	Notice of activities

(a)	Each Party must, at least 20 Business Days prior to commencing any program of activity on the ERG Project Area ( Proposed Activity ), give a notice to the other ( Notice of Proposed Activity ) containing particulars of:

(i)	the general nature of the Proposed Activity; and

(ii)	the areas of the ERG Project Area which the Party proposes to enter upon to conduct the Proposed Activity and or to construct, operate and maintain infrastructure in relation to the Proposed Activity.

(b)

The Sublessee will, at the cost of the Permit Holders or a Related Body Corporate of the Permit Holders, assay any exploration results for any minerals within the ERG Project Area requested by the Permit Holders provided that such request is received within 20 Business Days after receipt of a Notice of Proposed Activity.

(c)

The Permit Holders or a Related Body Corporate of the Permit Holders will, at the cost of the Sublessee, assay any exploration results for any minerals within the ERG Project Area requested by the Sublessee provided that such request is received within 20-Business Days after receipt of a Notice of Proposed Activity.

(d)	Each Party must provide to the other Party the results of the Party’s activities on the ERG Project Area by way of:

(i)	quarterly reports; and

(ii)	reports at such other times as is required by the Permit Holders or a Related Body Corporate of the Permit Holders to enable the Permit Holders to comply with statutory and Mining Departmental reporting obligations as the holders of the ERG Project Exploration Permits.

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4.13	Mutual indemnities

(a)

Energizer and ERG each jointly and severally agree to indemnify, and keep indemnified, and hold harmless Malagasy and its Related Bodies Corporate, directors, employees and consultants from and against all Claims that may be made, brought against, suffered, sustained or incurred by Malagasy, the MGY Subsidiaries or any of their Related Bodies Corporate, arising out of any act or omission (including any negligent act or omission) of Energizer or ERG and in the course of the exercise of activities undertaken by Energizer or ERG on the ERG Project Area.

(b)

Malagasy agrees to indemnify, and keep indemnified, and hold harmless Energizer and ERG and each of their Related Bodies Corporate, directors, employees and consultants from and against all Claims that may be made, brought against, suffered, sustained or incurred by ERG and MadagascarCo or any of their Related Bodies Corporate, arising out of any act or omission (including any negligent act or omission) of Malagasy or the MGY Subsidiaries and in the course of the exercise of activities undertaken by Malagasy or the MGY Subsidiaries on the ERG Project Area or in relation to the ERG Project Permits.

5.	Transfer of Permits

(a)	Subject to clause 5(b), should the Permit Holders decide to Dispose of their interest in any of the ERG Project Permits, they may only sell, transfer or otherwise dispose of that interest to any person ( Permit Transferee ):

(i)	provided the Sublessee is given the opportunity to match any bona fide third party offer as a right of first refusal for a period of 30 days from the time of notice of the offer from the Permit Holders; and

(ii)	the Permit Transferee enters into an Accession Deed.

(b)	The Permit Holders may transfer the ERG Project Permits to each other or a Related Body Corporate of the Permit Holders provided that the transferee first enters into an Accession Deed.

6.	Mining Operations

6.1	Decision to Mine

(a)	Either Party may at any time and at its sole discretion decide to commence Mining Operations in respect of Industrial Minerals or Other Minerals (as applicable) within all or part of the ERG Project Area ( Decision to Mine ).

(b)	Upon making a Decision to Mine in accordance with clause 6.1(a), the party who made the Decision to Mine ( Mining Party ) must promptly:

(i)

give notice to the other Party ( Non-Mining Party ) and the Permit Holders of the Decision to Mine including identifying the boundaries of the Mining Area which is appropriate to encompass all deposits of Industrial Minerals or Other Minerals (as applicable) which are to be included in the Mining Operations, together with any milling or concentrating plant and other appropriate infrastructure and facilities necessary for the efficient conduct of the Mining Operations; and

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(ii)

instruct the Permit Holders to apply for, as the case may be, any authorisation or permission required under the Mining Code or other laws of Madagascar, including the conversion of Exploration Permits into Exploitation Permits and relevant environmental authorisations, the granting of which by the Mining Department or other Governmental Agency of Madagascar is a condition to the implementation of the Decision to Mine.

6.2	Transfer of Mining Area

As soon as practicable after determination of the Decision to Mine:

(a)	the Permit Holders and the Mining Party must co-operate to prepare, execute and procure registration of such conditional surrenders, applications, transfers, new sub-leases and other documents as may be necessary to segregate the Mining Area and to vest such area in the Mining Party; but

(b)

if the Mining Party decides to delay segregation, or segregation cannot immediately occur due to matters outside of the control of the Permit Holders or the Mining Party, then the Parties and the Permit Holders will implement all such reasonable alternative arrangements in order for the Mining Party to have the sole benefit and control of the Mining Area.

6.3	Conversion to Exploitation Permits

The Parties acknowledge and agree that:

(a)	in order to commence Mining Operations in respect of all or a part of the ERG Project Area, the ERG Project Exploration Permits, to the extent they cover the Mining Area ( Current Permits ) will be converted into ERG Project Exploitation Permits; and

(b)	upon either Party making a Decision to Mine, the Parties must do all things necessary to, as promptly as possible, have the Current Permits converted into ERG Project Exploitation Permits and to apply for all relevant environmental authorisations.

6.4	Transfer of Exploitation Permits

(a)

Any ERG Project Exploitation Permit issued by the Mining Department to the Permit Holders, except where the Mining Party or its Related Body Corporate is the sole Permit Holder, must be immediately transferred or, if for whatever reason the ERG Project Exploitation Permit cannot immediately be transferred, sub-leased (as applicable) by the Permit Holders to the Mining Party as soon as possible after the grant of the ERG Project Exploitation Permit.

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(b)

The Parties acknowledge and agree that, in relation to this clause 6, it is the preference of the Parties to have any ERG Project Exploitation Permit issued by the Mining Department to a Permit Holder other than the Mining Party or its Related Body Corporate, immediately transferred to the Mining Party. However if such a transfer is not possible for whatever reason, then the Parties will implement such alternative arrangements in order for the Mining Party to have the sole benefit and control of the ERG Project Exploitation Permit including entering into new sub-leases in respect of the ERG Project Exploitation Permits on terms and conditions which are consistent with this Agreement.

(c)

The Parties acknowledge and agree that on transfer of the ERG Project Exploitation Permits to the Mining Party, the Mining Party will grant a sub-lease to the Non-Mining Party or its nominee in respect to the Industrial Mineral Rights or Other Mineral Rights (as applicable) within the ERG Project Exploitation Permit on terms and conditions which are consistent with this Agreement, including clause 4.

6.5	Holding of Exploitation Permits

During the time between the granting of an ERG Project Exploitation Permit and the formal transfer or sub-lease of the ERG Project Exploitation Permit to the Mining Party, the Permit Holders shall hold the ERG Project Exploitation Permits for the Mining Party’s sole benefit and agree:

(a)	not to act in any manner or do anything which is detrimental to the Mining Party or the ERG Project Exploitation Permits; and

(b)	to act in accordance with the Mining Party’s reasonable instructions in relation to the ERG Project Exploitation Permits provided these instructions are not contrary to or in breach of the laws of Madagascar.

6.6	Approval of Mining Department

The Permit Holders must promptly apply for the approval of the Mining Department or other relevant body for the transfer or sub-lease (as applicable) of any ERG Project Exploitation Permit issued to the Permit Holders in accordance with clause 6.4 and to do all other things reasonably necessary to effect the transfer or sub-lease of the granted ERG Project Exploitation Permits to the Mining Party as soon as possible after the grant of the ERG Project Exploitation Permit.

6.7	Option of Permit Holders to transfer Exploration Permits prior to conversion

The Permit Holders may fulfil their obligations under this clause 6 by transferring the Current Permits or the ERG Project Exploration Permits of which the Current Permits form part, to the Mining Party before any ERG Project Exploitation Permit is issued, subject to compliance with all applicable laws and conditions of grant of the relevant ERG Project Permits.

6.8	Avoidance of forfeiture of Tenements

(a)	If a Party is required to do anything in relation to this clause 6 which could foreseeably result in any cancellation, forfeiture or suspension of the whole or any part of an ERG Project Permit, then:

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(i)	the Parties must consult with one another and in good faith agree to either:

(A)	proceed with the action; or

(B)	refrain from that action and undertake such alternative actions as agreed by the Parties in order to transfer the relevant rights and interests in the ERG Project Area to ERG; and

(ii)	a Party must not proceed with any action that is wholly within its control and could foreseeably result in any cancellation, forfeiture or suspension of the whole or any part of an ERG Project Permit without the other Parties’ consent ; and

(b)	if segregation or transfer under this clause 6 is temporarily unable to occur due to matters outside of the control of the Permit Holders and the Parties, or the Parties agree not proceed with any transfer or segregation under clause 6.8(a), then the Parties and the Permit Holders agree;

(i)	that the Sublease Agreements in respect of the relevant ERG Project Permit shall remain in place to ensure that ERG has its full interest and benefit in the ERG Project Area;

(ii)	to implement all reasonable arrangements (whether set out in this clause 6 or otherwise) to achieve a transfer or grant of the relevant legal interest in the ERG Project Area to ERG as soon as reasonably possible; and

(iii)

until a transfer is effected in accordance with paragraph 4.5(f)(ii), Malagasy’s obligations under this Agreement as ERG Project Permit Holder shall continue in respect of the relevant ERG Project Permits.

7.	Environment and Mining Operations

Prior to undertaking any Mining Operations within the ERG Project Area, the Parties must use all reasonable endeavours to ensure the Mining Party obtains all relevant environmental approvals necessary under Madagascan law, including the approval of the environmental commitment plan (plan d’engagement environnemental) and of the environmental impact study (Etude d’impact environmental) and the issuance of an environmental authorisation related to the proposed Mining Operations.

8.	Other Mineral Rights

8.1	Holder of Other Mineral Rights

The Parties agree and acknowledge that the MGY Subsidiaries are:

(a)	the sole holders of the Other Mineral Rights; and

(b)	no other party has any rights in the ERG Project Permits other than as contemplated by this Agreement.

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8.2	Priority of exercise of ERG Project Industrial Mineral Rights

Subject to clause 8.3, Malagasy and ERG must consult, co-operate and otherwise use all reasonable endeavours not to interfere with:

(a)	the exercise of the ERG Project Industrial Mineral Rights by ERG; and

(b)	the exercise of the Other Mineral Rights by the Malagasy,

but to the extent such interference cannot reasonably be avoided, the exercise of the ERG Project Industrial Mineral Rights by ERG will have priority. Without limiting the foregoing, Malagasy, as the holder of the Other Mineral Rights, and ERG must, prior to the commencement of their respective seasonal exploration programmes on the ERG Project Area, consult with each other as to the contents of those programs and use reasonable endeavours to ensure those programs are not incompatible.

8.3	Suspension of Other Mineral Rights for duration of Mining Operations

Subject to clause 8.6, upon ERG making a Decision to Mine, the Other Mineral Rights of Malagasy will be suspended over the Mining Area from the commencement and for the duration of the Mining Operations the subject of that Decision to Mine.

8.4	Transfer of Other Mineral Rights

Malagasy may transfer, assign or otherwise dispose of the whole or any part of the Other Mineral Rights to any person ( OMR Transferee ) subject to:

(a)	Malagasy giving ERG the opportunity to match any bona fide third party offer for the Other Mineral Rights as a right of first refusal for a period of 30 days from the time of notice of the offer from Malagasy;

(b)	the OMR Transferee being technically and financially able to perform the obligations of Malagasy as the holder of the Other Mineral Rights under this Agreement to the extent of the interest disposed of; and

(c)	the OMR Transferee entering into a deed with ERG whereby the OMR Transferee agrees to be bound by, and assumes the obligations of Malagasy as the holder of the Other Mineral Rights under this Agreement (including the obligations under this clause) to the extent of the interest to be disposed of.

If the OMR Transferee is a person that has technical and financial abilities (insofar as such abilities are relevant to the performance of the obligations of the holder of the Other Mineral Rights under this Agreement) that are equivalent or greater to those of Malagasy as at the Commencement Date, then the requirements of clause 8.4(b) shall be deemed to be satisfied.

8.5	Transfer of ERG Project Industrial Mineral Rights

(a)	ERG may transfer, assign or otherwise dispose of the whole or any part of the ERG Project Industrial Mineral Rights to any person ( IMR Transferee ) subject to:

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(i)	ERG giving Malagasy the opportunity to match any bona fide third party offer for the ERG Project Industrial Mineral Rights as a right of first refusal for a period of 30 days from the time of notice of the offer from ERG;

(ii)	the IMR Transferee being technically and financially able to perform the obligations of ERG and MadagascarCo under this Agreement to the extent of the interest disposed of; and

(iii)

the IMR Transferee entering into a deed with Malagasy whereby the IMR Transferee agrees to be bound by, and assumes the obligations of ERG and MadagascarCo under this Agreement (including the obligations under this clause) to the extent of the interest to be disposed of.

(b)

If the IMR Transferee is a person that has technical and financial abilities (insofar as such abilities are relevant to the performance of the obligations of the holder of the ERG Project Industrial Mineral Rights under this Agreement) that are equivalent or greater to those of Energizer and ERG as at the Commencement Date , then the requirements of clause 8.5 (a)(ii) shall be deemed to be satisfied.

8.6	Co-mingling

(a)

If a deposit of Industrial Minerals is co-mingled with or co-incident to a deposit of Other Minerals then ERG and Malagasy will negotiate in good faith the terms on which they will jointly develop the Industrial Minerals and Other Minerals, provided that, subject to clause 8.6(b), in no circumstances will the exploration or development of a deposit of Other Minerals impede the exploration or development of a deposit of Industrial Minerals.

(b)	The development of a deposit of Other Minerals that is co-mingled or co-incident to a deposit of Industrial Minerals will prevail over the exploration or development of the deposit of Industrial Minerals only in following circumstances:

(i)	the deposit of Other Minerals has been determined by a competent person to be an orebody comprising Measured Resource or Ore Reserve with a greater net present value than the deposit of Industrial Minerals; and

(ii)

Malagasy can demonstrate to the satisfaction of ERG, acting reasonably, that the deposit of Other Minerals can and will be developed and mined within the same timeframe as ERG proposes to develop and mine the deposit of Industrial Minerals. For the purpose clause 8.6(b)(ii), Malagasy must produce for ERG’s consideration a Bankable Feasibility Study or equivalent study.

In this clause 8.6(b), “Ore Reserve”, “Measured Resource” and “competent person” have the meanings ascribed to those terms in the 2012 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia and known as the 2012 JORC Code.

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(c)

Subject to clause 8.6(d), if ERG and Malagasy are unable to negotiate the joint development of the Industrial Minerals and Other Minerals, then as part of the development of the Industrial Minerals, ERG will, on receiving a written notification from Malagasy, stockpile the Other Minerals so that Malagasy may have the benefit of the development of the Other Minerals once ERG has ceased Mining.

(d)

Any stockpiling costs associated with the development of Industrial Minerals (including overburden and waste) will be at the expense of ERG. Any costs associated with the stockpiling of Other Minerals undertaken at the request of Malagasy which are not activities which would have been incurred by ERG in the course of Mining Operations in any event, including (but not limited to) any ongoing environmental compliance costs, will be funded 100% by Malagasy.

9.	Representations and warranties

9.1	Representations and warranties by Energizer

Energizer represents and warrants to Malagasy as at the Execution Date that:

(a)	it is validly incorporated and subsisting under the laws of Minnesota, USA;

(b)	the execution and delivery of this Agreement has been duly and validly authorised by all necessary corporate action;

(c)	it has corporate power and lawful authority to execute and deliver this Agreement and to observe and perform or cause to be observed and performed all of its obligations in and under this Agreement;

(d)

(e)	it is solvent and is capable of performing its obligations under this Agreement.

9.2	Representations and warranties by Malagasy

(a)	Malagasy represents and warrants to Energizer and ERG as at the Execution Date that:

(i)	it is validly incorporated and subsisting under the laws of Australia;

(ii)	the execution and delivery of this Agreement has been duly and validly authorised by all necessary corporate action;

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(iii)

it has corporate power and lawful authority to execute and deliver this Agreement and to observe and perform or cause to be observed and performed all of its obligations in and under this Agreement;

(iv)

subject to clause 9.3, this Agreement does not conflict with or constitute or result in a material breach of or default under any agreement, deed, writ, order, injunction, judgment, law, rule or regulation to which it is a party or is subject or by which it is bound in a manner which may materially and adversely affect the rights and interests of a Party under this Agreement; and

(v)	it is solvent and is capable of performing its obligations under this Agreement.

(b)	Subject to clause 9.3, Malagasy represents and warrants to Energizer, ERG and MadagascarCo as at the Execution Date, and as at the date of execution of the Additional Permits Area Subleases that:

(i)	it has full right, power and authority to procure the MGY Subsidiaries to grant the Additional Permits Area Subleases to MadagascarCo in accordance with this Agreement;

(ii)	one or more of the MGY Subsidiaries are the registered and beneficial holders of the Additional Exploration Permits as identified in this Agreement.

(iii)

no person other than Malagasy, Energizer and/or their Related Bodies Corporate has any proprietary rights of any nature in respect of the Additional Exploration Permits and they have not granted to any person any rights to own or possess any interest or any rights to explore or prospect for minerals or to mine the same in any part of the land comprising the Additional Exploration Permits;

(iv)	the Additional Exploration Permits are free of any Encumbrances except to the extent of any conditions imposed under the Mining Code on the Additional Exploration Permits;

(v)

there is no litigation or proceeding of any nature concerning the Additional Exploration Permits, pending or threatened against them or any other person which may defeat, impair, detrimentally affect or reduce the right, title and interest of the Additional Permit Holders, Malagasy or their Related Bodies Corporate in the Additional Exploration Permits or the interest therein, including any plaint seeking forfeiture of the Additional Exploration Permits;

(vi)	to the best of its knowledge, the Additional Exploration Permits have been duly marked off, granted and applied for in accordance with the Mining Code;

(vii)

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(viii)

to the best of Malagasy’s knowledge, information and belief, there are no facts or circumstances that could, under the currently applicable laws of Madagascar, give rise to the cancellation, forfeiture or suspension or grant of the Additional Exploration Permits when renewed, that could have a Material Adverse Effect;

(ix)	except as disclosed to Energizer before the date of this Agreement, there are no agreements or dealings in respect of the Additional Exploration Permits;

(x)	there is not in existence any current compensation agreement with the owner or occupier of any land which is subject to the Additional Exploration Permits;

(xi)	there are no Environmental Liabilities relating to or affecting the Additional Exploration Permits, except to the extent of any report, study or assessment required to be lodged pursuant to the Mining Code or other regulation in relation to the Additional Exploration Permits;

(xii)

the Additional Exploration Permits have been granted in respect of all of the ground described in the Additional Exploration Permits, other than as a result of a compulsory surrender required under the Mining Code or other law effecting the Additional Exploration Permits; and

(xiii)

to the best of its knowledge, Malagasy and the MGY Subsidiaries have done everything that can be done to keep the JV Exploration Permits and the Additional Exploration Permits in Good Standing. For the purpose of this warranty, the Parties agree and acknowledge that due to the matters described in Recital D, neither Malagasy nor the MGY Subsidiaries can obtain formal recognition from the Mining Department or other relevant authority that the JV Exploration Permits or the Additional Exploration Permits are legally valid or effective with regard to the ERG Project Industrial Mineral Rights or Other Mineral Rights.

9.3	Limitation of warranties and disclaimer of liability by Malagasy

Malagasy is not liable for any loss arising from a breach of the warranties and representations in clause 9.2(b) to the extent such loss is:

(a)	incurred as a result of a Political Event;

(b)	disclosed by Malagasy to Energizer and ERG or is known by Energizer and ERG prior to Completion; or

(c)	caused or contributed to by a breach by Energizer, ERG or MadagascarCo or their respective obligations under this Agreement.

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10.	Guarantees

10.1	Guarantee by Malagasy

(a)	Malagasy agrees to guarantee to Energizer, ERG and MadagascarCo the due performance and observance by each of MDA, Mazoto and Energex of each and every obligation of MDA, Mazoto and Energex under:

(i)	this Agreement;

(ii)	the JV Sublease Agreements; and

(iii)

Additional Permits Area Sublease Agreements.

(b)	Malagasy agrees to indemnify Energizer, ERG and MadagascarCo in relation to any loss suffered as a result of MDA, Mazoto or Energex failing to perform or observe any of their obligations under:

(i)	this Agreement;

(ii)	the JV Sublease Agreements; and

(iii)

Additional Permits Area Sublease Agreements.

10.2	Guarantee by Energizer

(a)	By executing this Agreement, Energizer guarantees to Malagasy the due performance and observance by ERG and MadagascarCo of each and every obligation of ERG and MadagascarCo under:

(i)	this Agreement; and

(ii)	any Other Minerals Sublease Agreement entered into by the Parties in accordance with this Agreement.

(b)	Energizer agrees to indemnify Malagasy in relation to any loss suffered as a result of ERG or MadagascarCo failing to perform or observe any of their obligations under:

(i)	this Agreement; and

(ii)	any Other Minerals Sublease Agreement entered into by the Parties in accordance with this Agreement,

other than those obligations of ERG under this Agreement that relate to a Mining Area.

11.	Assignment

(a)	No Party may assign, sublet, licence or otherwise transfer or part with, mortgage, encumber or in any way deal with its interest under this Agreement otherwise than in accordance with the provisions of this Agreement.

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(b)	At any time during the Term, Energizer or ERG may assign all or any of its rights or obligations under this Agreement as a matter of right to any Related Body Corporate of Energizer without Malagasy’s consent, provided that the assignee enters into an Accession Deed.

(c)

At any time during the Term, Malagasy may assign all or any of its rights or obligations under this Agreement as a matter of right to any Related Body Corporate of Malagasy without Energizer’s consent, provided that the assignee enters into an Accession Deed and is capable of performing the obligations so assigned.

12.	Termination

12.1	Event of Default

(a)

Should a Party fail to do, execute or perform any material act or thing which such Party is obliged to do, execute or perform pursuant to this Agreement ( Event of Default ), the aggrieved Party may give the defaulting Party a notice requiring the defaulting Party to remedy such Event of Default within a period of 30 days following service of the notice or if such default is not capable of being remedied within such period of 30 days then within such further period as the aggrieved Party or Parties shall deem reasonable.

(b)

If a Party serves a notice of default under clause 12.1(a) and such default remains un-remedied upon expiry of the period specified in such notice for rectification, the aggrieved Party may terminate this Agreement forthwith upon the service of a further notice in writing to that effect and upon the service of such further notice this Agreement shall terminate forthwith without prejudice to the rights and remedies of the aggrieved Party at law or otherwise howsoever arising.

(c)	Clause 12.1(a) does not apply to any Event of Default for which another remedy is provided in this Agreement.

12.2	Effect of termination

(a)	Termination of this Agreement releases each Party from any further performance of any liability under this Agreement but does not:

(i)	affect any provision of this Agreement expressed to operate or have effect after termination; or

(ii)	have any prejudicial effect on any accrued right of any Party in relation to any breach or default under this Agreement by any other Party occurring before termination.

(b)	If this Agreement is terminated in accordance with clause 12.1, the aggrieved Party has an option to acquire the defaulting Party’s rights and interests under this Agreement at:

(i)	a value determined by the Parties negotiating in good faith; or

(ii)	in the absence of agreement under clause 12.2(b)(i) above, a discount of 10% to market value as determined by an independent expert appointed in accordance with clause 16.2.

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12.3	Continuing remedies

Each Party, following termination of this Agreement under this clause 12, retains any right against any other Party under this Agreement in relation to any breach or default by that other Party that accrued before termination, in addition to any other right provided by law, except to the extent that the liability of that other Party is excluded or limited under any provision of this Agreement.

13.	Force Majeure

13.1	Force Majeure

In this clause 13, Force Majeure means any act, event or cause which is beyond the reasonable control of the Party concerned (other than lack of or inability to use funds), including:

(a)

act of God, accident of navigation, war (whether declared or not), sabotage, insurrection, civil commotion, national emergency (whether in fact or law), martial law, fire, lightning, flood, earthquake, landslide, storm or other severe adverse weather conditions, explosion, power shortage, strike or other labour difficulty (whether or not involving employees of a Party concerned), epidemic, quarantine, radiation or radioactive contamination;

(b)	action or inaction of any government or governmental or other competent Governmental Agency (including any court) including expropriation, restraint, prohibition, intervention, requisition, requirement, direction or embargo by legislation, regulation or other legally enforceable order;

(c)	delay in the grant of access to an ERG Project Permit;

(d)	inability to secure, on commercially acceptable terms, rights of access to a Permit from the owners, occupiers, lessees, custodians, trustees, native title claimants or holders of any land to which the ERG Project Permit relates;

(e)	breakdown of plant, machinery or equipment or shortages of labour, transportation, fuel, power, plant, machinery, equipment or material; and

(f)	any other cause which by the exercise of foresight or due diligence, a Party is unable to prevent or overcome.

13.2

Relief

If, as a direct result of Force Majeure, a Party becomes unable, wholly or in part, to perform any of its obligations or to exercise a right under this Agreement:

(a)	that Party is to give the other Party prompt notice of the Force Majeure with reasonably full particulars and, insofar as known to it, the probable extent to which it will be unable to perform, or be delayed in performing its obligation or exercising its right;

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(b)	that obligation, other than an obligation to pay money, is suspended and the time for performing that obligation or for exercising that right is extended but only so far as and for so long as it is affected by the Force Majeure; and

(c)	the affected Party is to use all possible diligence to overcome or remove the Force Majeure as quickly as possible.

13.3	Labour disputes

Clause 13.2(c) does not require the affected Party to:

(a)	settle any strike or other labour dispute on terms contrary to its wishes; or

(b)	contest the validity or enforceability of any law, regulation or legally enforceable order by way of legal proceedings.

13.4	Resumption

The obligation of the affected Party to perform its obligations, resumes as soon as it is no longer affected by the Force Majeure.

14.	Dispute resolution

14.1	Application

This clause 14 applies to any dispute or difference ( dispute ) (other than a dispute to which clause 15 applies) arising between the Parties in relation to:

(a)	this Agreement or its interpretation;

(b)	any right or liability of any Party under this Agreement; or

(c)	the performance of any action by any Party under or arising out of this Agreement, whether before or after its termination.

14.2	Dispute negotiation

(a)	A Party must not commence legal proceedings in relation to a dispute or refer a dispute to arbitration under this Agreement, unless that Party has complied with this clause 14.

(b)	A Party claiming that a dispute has arisen must notify the other Party specifying details of the dispute.

(c)	Each Party must refer a dispute to an authorised officer of that Party for consideration and use its best efforts to resolve the dispute through negotiation within seven (7) Business Days following the dispute notification or longer period agreed between the Parties.

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(d)	Each Party must refer the dispute to its chief executive officer, in the event that the authorised officers of the Parties fail to resolve the dispute within the specified period.

(e)	Each Party must following reference to its chief executive officer use its best efforts to resolve the dispute by agreement or through an agreed mediation procedure.

(f)	A Party in compliance with this clause 14.2 may terminate the dispute resolution process by notice to the other Party at any time after seven (7) Business Days following reference of the dispute to its chief executive officer.

(g)	A Party is not required to comply with this clause 14.2 in relation to any dispute where the other Party is in breach of or default under this clause 14.2 in relation to that dispute.

14.3	Arbitration

Each Party must submit any dispute which remains unresolved following the negotiation process specified in clause 14.2 to arbitration under the Arbitration Rules of SIAC in accordance with the following procedures:

(a)	the arbitration will be conducted by three arbitrators, who will be appointed as agreed by the Parties or, failing such agreement, by the Deputy President of SIAC or his or her nominee;

(b)	the arbitration will be conducted in English;

(c)	each Party is entitled to legal representation at any arbitration; and

(d)	any arbitration will be conducted in Singapore, or at such other place as the Parties may agree.

14.4	Urgent relief

A Party may at any time apply to a court of competent jurisdiction for any equitable or other remedy for reasons of urgency, despite anything contained in this clause 14.

14.5	Continued performance

A Party must continue to perform any obligation or liability of that Party in compliance with this Agreement relating to any issue in dispute, despite and during any dispute negotiation or arbitration being conducted under this clause 14.

15.	Disputes as to Technical or Financial Matters

15.1	Definitions

In this clause 15:

(a)	Technical Matter means a matter which is capable of determination by reference to Mining knowledge or practice; and

(b)	Financial Matter means a matter which is capable of determination by audit or reference to financial or accounting records, knowledge or practice.

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15.2	Application

(a)	This clause 15 applies to any dispute arising between the Parties in relation to a Financial Matter or a Technical Matter.

(b)	This clause 15 does not prevent any Party from seeking urgent interlocutory or declaratory relief from a court of competent jurisdiction where, in that Party's reasonable opinion, that action is necessary to protect that Party's rights.

15.3	Dispute negotiation

A Party claiming that a dispute in relation to Financial Matters or Technical Matters has arisen must notify the other Party specifying details of the dispute and convene a meeting of the senior management of the Parties within 10 Business Days of the notice of dispute to discuss the dispute with the aim of resolving it.

15.4	Independent Expert

If the dispute is not resolved by negotiations between the senior management of the Parties within 20 Business Days of the first meeting between senior management under clause 15.3 and the Dispute relates to a Financial Matter or a Technical Matter, either Party may submit the dispute to an Independent Expert for determination in accordance with clause 16.

16.	Expert Determination

16.1	Referral to Independent Expert

Wherever under this Agreement:

(a)	a Party submits a dispute in accordance with clause 15; or

(b)	the Parties agree that a dispute between them will be resolved by an Independent Expert; or

(c)	a dispute is required by this Agreement to be determined by an Independent Expert,

then the dispute may be referred by either Party to an Independent Expert under this clause 16.

16.2	Appointment of Independent Expert

The procedure for the appointment of an Independent Expert will be as follows:

(a)	the Parties must, within 5 Business Days of a Party submitting a Dispute to an Independent Expert in accordance with clause 15.4, endeavour to agree upon the identity of a single Independent Expert to whom the dispute will be referred for determination as soon as is reasonably practicable;

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(b)	if the Parties are unable to agree upon the identity of a single Independent Expert within 20 Business Days of first meeting between senior management under clause 16.2(a), the Parties will, as soon as practicable thereafter:

(i)	in the case of a Financial Matter, request the President of the Institute of Chartered Accountants in Australia to appoint the Independent Expert; and

(ii)	in the case of a Technical Matter, request the President of the Australasian Institute of Mining and Metallurgy to appoint the Independent Expert; and

(c)	within 10 Business Days of appointment, the Independent Expert must set a time and place for receiving the Parties’ submissions.

16.3	Requirements of Independent Expert

(a)	The Independent Expert will be required to have appropriate commercial and practical experience and expertise in the area of the dispute.

(b)

Any person nominated to act as an Independent Expert will be required to fully disclose any interest or duty prior to that person’s appointment. If that person has or may have any interest or duty which conflicts with their appointment as Independent Expert, then that person may not be appointed except with the agreement of all parties to the dispute.

(c)	Any person nominated to act as an Independent Expert must, before they are appointed, confirm in writing that they are able to resolve the dispute within a reasonable time.

(d)	The Independent Expert appointed under clause 16.2 will act as an expert and not as an arbitrator.

16.4	Rights of the Parties

Each Party:

(a)	may be legally represented at any hearing before the Independent Expert;

(b)	is entitled to produce to the Independent Expert any materials or evidence which that Party believes is relevant to the dispute; and

(c)	must make available to the Independent Expert all materials requested by the Independent Expert and all other materials which are relevant to the Independent Expert’s determination.

16.5	Confidentiality

Unless otherwise agreed by the Parties involved in the determination by the Independent Expert, all material and evidence made available for the purposes of the determination must be kept private and confidential.

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16.6	Determination

(a)	The Independent Expert must make a determination on the dispute within 70 Business Days of appointment and must determine what, if any, adjustments may be necessary between the Parties. The determination of the Independent Expert:

(i)	must be in the form of a written report;

(ii)	will be final and binding upon the Parties except in the case of bias, fraud, manifest mistake or error; and

(iii)

will be kept private and confidential unless otherwise agreed to by all Parties involved in the determination.

(b)	If the Independent Expert does not determine the dispute within 70 Business Days of appointment, the Parties may terminate the appointment by written agreement and a new Independent Expert will be appointed within 10 Business Days in accordance with the procedure set out in clause 16.2.

16.7	Costs of Independent Expert

The costs in relation to a determination by the Independent Expert will be dealt with as follows:

(a)	the costs of the Independent Expert will be apportioned between the Parties in such proportions as the Independent Expert thinks fit, otherwise the Parties will each bear their own costs; and

(b)	the Parties will each bear their own costs incurred in the preparation and presentation of any submissions or evidence to the Independent Expert.

17.	Status of Agreement and further acts

(a)	The Parties agree that this Agreement is binding upon them and intend that this Agreement is legally enforceable in accordance with its terms.

(b)	Each Party must promptly do all further acts and execute and deliver all further documents (in form and content reasonably satisfactory to that Party) required by law or reasonably requested by any other party to give effect to this Agreement and the transactions contemplated by this Agreement.

18.	Relationship between Parties

(a)

Nothing in this Agreement is to be construed so to constitute a Party a partner, agent or representative of any other Party or to create any partnerships or trust for any purpose howsoever except to the extent to which the operator is the agent of the Parties. No Party will be under any fiduciary or other duty to the other which will prevent it from engaging in or enjoying the benefits of any competing endeavours subject to the express provisions of this Agreement.

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(b)	No Party will have any authority to act on behalf of any other Party, except as expressly provided in this Agreement. Where a Party acts on behalf of another without authority, such Party must indemnify the other from any losses, claims, damages and liabilities arising out of any such act.

(c)	Each Party has the unrestricted right to engage in and receive the full benefit of any competing activities outside of the ERG Project Area.

19.	Confidentiality and public announcements

19.1	Confidentiality

Subject to clause 19.6, each Party (for this clause Recipient ) who is in possession or control of or has access to Confidential Information of another Party or a Related Body Corporate of another Party ( Owner ) must use that Confidential Information only for the purposes of acts contemplated by this Agreement, and keep that Confidential Information confidential and not disclose it or allow it to be disclosed to any third party except:

(a)	if the information is at the time generally and publicly available other than as a result of breach of confidence by the Recipient;

(b)	if the information is at the time lawfully in the possession of the proposed recipient of the information through sources other than the Recipient;

(c)	by the Recipient to legal and other professional advisers and other consultants and officers and employees of:

(i)	the Recipient; or

(ii)	the Recipient's Related Bodies Corporate,

in any case requiring the information for the purposes of this Agreement or any transaction contemplated by it, or for the purpose of advising that Party in relation thereto;

(d)	with the prior written consent of the Owner;

(e)	to the extent required by law or by a lawful requirement of any Governmental Agency having jurisdiction over the Recipient or any of its Related Bodies Corporate;

(f)	if required in connection with legal proceedings or arbitration relating to this Agreement or for the purpose of advising the Recipient in relation thereto;

(g)	if and to the extent that it may be necessary or desirable to disclose to any Governmental Agency in connection with applications for consents, approvals, authorities or licenses in relation to this Agreement;

(h)	to the extent required by a lawful requirement of any stock exchange having jurisdiction over the Recipient or any of its Related Bodies Corporate;

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(i)	if necessary to be disclosed in any prospectus or information memorandum to investors or proposed or prospective investors:

(i)	for an issue or disposal of any shares or options in the Recipient or any of its Related Bodies Corporate;

(ii)	for an issue of debt instruments of the Recipient or any of its Related Bodies Corporate; or

(iii)

for the purposes of the Recipient obtaining a listing on any stock exchange of any shares, options or debt instruments;

(j)	if necessary to be disclosed to a professional investor or investment adviser for the purposes of enabling an assessment to be made about the merits or otherwise of an investment in the Recipient or any of its Related Bodies Corporate;

(k)	if necessary to be disclosed to an existing or bona fide proposed or prospective:

(i)	financier of the Recipient or of any of its Related Bodies Corporate; or

(ii)	rating agency in respect of the Recipient or of any of its Related Bodies Corporate;

(l)	if necessary to be disclosed to any bona fide proposed or prospective:

(i)	transferee of any property to which the information relates or of any shares in the Recipient or any Related Body Corporate of the Recipient;

(ii)	financier of such transferee providing or proposing or considering whether to provide financial accommodation; or

(iii)

assignee of rights under the Recipient's financing documents; or

(m)	if necessary to be disclosed to legal and other professional advisers and other consultants and officers or employees of any of the persons referred to in clause 19.1(j), 19.1(k), or 19.1(l).

19.2	Conditions

(a)

In the case of a disclosure under clause 19.1(c) or 19.1(d) and, where appropriate, under clause 19.1(e) and 19.1(f), the Party wishing to make the disclosure must inform the proposed recipient of the confidentiality of the information and the Party must take such precautions as are reasonable in the circumstances to ensure that the proposed recipient keeps the information confidential.

(b)	In the case of a disclosure under clause 19.1(g), 19.1(h) and 19.1(i), the Party wishing to make the disclosure may only do so:

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(i)	with the written consent of both Parties, which must not be unreasonably withheld or delayed; or

(ii)

to the extent required by law, the official rules of the relevant stock exchange or any Governmental Agency, but if any Party is required to make any such announcement, it must promptly notify the other Party, where reasonably practicable and lawful to do so, before the announcement is made and must confer with the other Party and consider any comments of the other Party regarding the timing and content of such announcement or any action which the other Party may reasonably elect to take to challenge the validity of such requirement, subject at all times to the disclosing Party’s obligations under law, the official rules of the relevant stock exchange or any Governmental Agency.

(c)	In the case of a disclosure under clause 19.1(j), 19.1(k) or 19.1(l) or (in the case of legal and other professional advisers and other consultants only) 19.1(m) the Party wishing to make the disclosure must not make any disclosure unless:

(i)	in the case of a disclosure under clause 19.1(j), 19.1(k) or 19.1(l) the proposed recipient has first entered into and delivered to the Recipient a confidentiality undertaking in a form acceptable to the other Parties; or

(ii)

in the case of a disclosure under clause 19.1(m) the principal or employer of the proposed recipient has first entered into and delivered to the Recipient a confidentiality undertaking in a form acceptable to the other Parties which will incorporate a warranty by the principal or employer of the proposed recipient that the proposed recipient is under an obligation of confidentiality to the principal or employer and that the principal or employer will enforce that obligation to the fullest extent that the law or equity allows upon being called upon to do so by any of the Parties.

19.3	Notice to other Parties

Each Party must:

(a)	promptly inform each other Party of any request received by that Party from any person described in clause 19.1(e) to disclose information under that clause;

(b)	inform all other Parties as soon as reasonably practicable after information is disclosed by the Party under clause 19.1(e); and

(c)	not disclose any information under clause 19.1 unless all other Parties have been informed of the proposed disclosure.

19.4	Indemnities

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19.5	Survival of confidentiality obligations

The obligations of confidentiality imposed by this clause 19 survive the termination of this Agreement and any person who ceases to be a Party continues to be bound by those obligations.

19.6	Use of Mining Information in respect to Other Mineral Rights

Nothing in this clause 19 prevents Malagasy from using the Mining Information in relation to the exploration and development of the Other Minerals.

20.

Notices

Each communication (including each notice, consent, approval, request and demand) under or in connection with this Agreement:

(a)	must be in writing;

(b)	must be addressed as follows (or otherwise notified by that Party to the other Party from time to time):

To Energizer and ERG	Energizer Resources Inc

	Attention:	Chief Executive Officer

	Address:	Energizer Resources Inc. 141 Adelaide Street West Suite 520 Toronto, Ontario CANADA

	Facsimile:	+1 416.364.2753

To Malagasy	Malagasy Minerals Limited

	Attention:	Company Secretary

	Address:	Malagasy Minerals Limited 15 Lovegrove Close Mount Claremont Western Australia 6010 AUSTRALIA

	Facsimile:	+61 8 9284 3801

(c)	must be signed by the Party making it or (on that party’s behalf) by the solicitor for or any attorney, director, secretary or authorised agent of that Party;

(d)	must be delivered by hand or posted by prepaid post to the address, or sent by fax to the number, of the addressee; and

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(e)	is taken to be received by the addressee:

(i)	(in the case of prepaid post sent to an address in the same country) on the third day after the date of posting;

(ii)	(in the case of prepaid post sent to an address in another country) on the fifth day after the date of posting;

(iii)

(in the case of fax) at the time in the place to which it is sent equivalent to the time shown on the transmission confirmation report produced by the fax machine from which it was sent; and

(iv)	(in the case of delivery by hand) on delivery;

21.	Miscellaneous

21.1	Governing law

This Agreement is governed by and must be construed according to the law applying in Ontario, Canada.

21.2	Amendments

This Agreement may only be varied by a document signed by or on behalf of each of the Parties.

21.3	Primacy of this Agreement

21.4

Language

Where this Agreement or any ancillary agreement to this Agreement, including the Sublease Agreements, is written and signed in any other language other than English (including French), both versions are equally valid. However, in the case of inconsistency, the Parties agree that the English version of the relevant agreement shall prevail.

21.5

Waiver

(a)

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(b)	A waiver or consent given by a Party under this Agreement is only effective and binding on that Party if it is given or confirmed in writing by that Party.

(c)	No waiver of a breach of a term of this Agreement operates as a waiver of another breach of that term or of a breach of any other term of this Agreement.

21.6

Consents

21.7	Counterparts

21.8	No representation or reliance

(a)	Each Party acknowledges that neither Party (nor any person acting on a Party’s behalf) has made any representation or other inducement to it to enter into this Agreement except for representations or inducements expressly set out in this Agreement.

(b)	Each Party acknowledges and confirms that it does not enter into this Agreement in reliance on any representation or other inducement by or on behalf of the other Party, except for representations or inducements expressly set out in this Agreement.

21.9

Expenses

Except as otherwise provided in this Agreement, each Party must pay its own costs and expenses in connection with negotiating, preparing, executing and performing this Agreement.

21.10

Entire agreement

To the extent permitted by law, in relation to its subject matter this Agreement:

(a)	embodies the entire understanding of the Parties, and constitutes the entire terms agreed by the Parties; and

(b)	supersedes any prior written or other agreement of the Parties.

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21.11

Indemnities

(a)	Each indemnity in this Agreement is a continuing obligation, separate and independent from the other obligations of the Parties, and survives termination, completion or expiration of this Agreement.

(b)	It is not necessary for a Party to incur expense or to make any payment before enforcing a right of indemnity conferred by this Agreement.

(c)	A Party must pay on demand any amount it must pay under an indemnity in this Agreement.

21.12

Severance and enforceability

21.13

No merger

21.14

Power of attorney

(a)	Each attorney who signs this Agreement on behalf of a Party declares that the attorney has no notice from the Party who appointed him that the power of attorney granted to him, under which the attorney signs this Agreement, has been revoked or suspended in any way.

(b)	Each Party represents and warrants to each other that its respective attorney or authorised officer who signs this Agreement on behalf of that Party has been duly authorised by that Party to sign this Agreement on its behalf and that authorisation has not been revoked.

21.15

Taxes

(a)	For the purpose of this clause 21.15, Tax means a tax including any value added or goods and services taxes (including TVA), rate, levy, duty (other than a tax on the net overall income of a Party) and any interest penalty fine or expense relating to any of them.

(b)	Subject to clause 21.15(c), any Taxes that may be imposed by any authorities in connection with this Agreement and any Taxes, fees or costs in relation to the transfer of the ERG Project Permits under this Agreement and registration of this Agreement will be paid by the Energizer.

(c)	Any Taxes which may be imposed by any authorities in connection with the the grant of the Additional Industrial Mineral Rights under this Agreement will be apportioned equally between the Energizer and Malagasy.

(d)	Energizer will indemnify and hold the Malagasy harmless against any liability for the Purchaser’s obligations set out in clauses 21.15(b) and 21.15(c), provided that under no circumstances will the Energizer be liable or accountable for any capital gains tax or income tax liability of Malagasy.

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Schedule 1 – Industrial Minerals

Vanadium

Lithium

Aggregates

Alunite

Barite

Bentonite

Vermiculite

Carbonatites

Corundum

Dimension stone, other than labradorite

Feldspar, other than labradorite

Fluorspar

Granite

Graphite

Gypsum

Kaolin

Kyanite

Limestone / Dolomite

Marble

Mica

Olivine

Perlite

Phosphate

Potash – Potassium minerals

Pumice

Quartz

Staurolite

Zeolites

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Schedule 2 – Additional Exploration Permits

Item	Exploration Permit
1	3432
2	14618

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Schedule 3 - Map of ERG Project Area, JV Area and Additional Permits Area

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Schedule 4 – JV Exploration Permits

Item	Exploration Permit	Item	Exploration Permit
1	3432	21	21064
2	5394	22	24864
3	13064	23	25605
4	13811	24	25606
5	14619	25	28340
6	14620	26	28346
7	14622	27	28347
8	14623	28	28348
9	16747	29	28349
10	16753	30	28352
11	19003	31	28353
12	19851	32	29020
13	19932	33	31734
14	19934	34	31735
15	19935	35	38323
16	21059	36	38324
17	21060	37	38325
18	21061	38	38392
19	21062	39	38469
20	21063

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Executed as an agreement

Signed as an agreement by Energizer Resources Inc.	) ) )

/s/ Peter Liabotis		/s/ Richard Schler
Signature		Signature

Peter Liabotis		Richard Schler
Print name		Print name

CFO		CEO

Signed as an agreement by Malagasy Minerals Limited (ACN 121 700 105)	) ) )

/s/ Graeme Raymond Boden		/s/ Natasha Lee Forde
Signature		Signature

Graeme Raymond Boden		Natasha Lee Forde
Print name		Print name

Director		Company Secretary

Signed as an agreement by Madagascar- ERG Joint Venture (Mauritius) Ltd	) ) )

/s/ Peter Liabotis		/s/ Richard Schler
Signature		Signature

Peter Liabotis		Richard Schler
Print name		Print name

Director		Company Secretary / Director

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Annexure A – Additional Permits Area

Confidential and Legally Privileged

page 1

Annexure B – JV Area

Confidential and Legally Privileged

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Annexure C – Additional Permits Area Sublease Agreements

Confidential and Legally Privileged

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Annexure D – JV Sublease Agreements

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EXHIBIT 10.10

Green Giant Project

Joint Venture Agreement

Energizer Resources Inc.

Energizer

and

Malagasy Minerals Limited

ACN 121 700 105

Malagasy

Jackson McDonald

Lawyers

140 St Georges Terrace

Perth Western Australia 6000

+61 8 9426 6611

+61 8 9481 8649

www.jacmac.com.au

Contact:

Reference:

Will Moncrieff

7141864

	Joint Venture Agreement

Table of contents

1. Interpretation			2

	1.1	Definitions	2
	1.2	Interpretation	11

2. Commencement			12

3. Conditions precedent			12

	3.1	Conditions	12
	3.2	Best endeavours	13
	3.3	Waiver of conditions	13
	3.4	Non-satisfaction of conditions	13

4. Consideration			13

	4.1	Sale and Purchase Agreement	13

5. Provision of Mining Information			13

6. Acknowledgements by Parties			14

7. Establishment of JV Company and its Board			14

	7.1	Establishment	15
	7.2	Initial Shareholding Interests	15
	7.3	Adoption of constituent document	15
	7.4	Board members	15
	7.5	Appointment and removal of Directors	15
	7.6	Role and powers of the Board	16
	7.7	Meetings of the Board	16
	7.8	Notice of Board meetings	16
	7.9	Quorum	17
	7.10	Decisions of the Boards	17
	7.11	Voting	17
	7.12	Experts and advisers	17
	7.13	Minutes of meetings and records	17

8. Establishment of TenementCo			17

	8.1	Establishment	17
	8.2	Management of TenementCo	18
	8.3	Appointment and removal	18
	8.4	Role of Country Manager	18
	8.5	Adoption of constituent document	18

9. Business of the JV Company and TenementCo			18

10. Co-operation of Shareholders			19

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	Joint Venture Agreement

11. Right to explore and sublease			19

	11.1	Grant of Subleases	19
	11.2	Covenants of Energizer in respect of the Exploration Permits	20
	11.3	Covenants in respect of the Exploration Permits	21
	11.4	Remedies of Malagasy	21
	11.5	Exercise of Other Mineral Rights	22
	11.6	Notice of activities	22
	11.7	Mutual indemnities	23

12. Surrender of Exploration Permits			23

13. Transfer of Permits			24

14. Bankable Feasibility Study, Funding Decision and Decision to Mine			24

	14.1	Bankable Feasibility Study	24
	14.2	Funding Decision	25
	14.3	Obligation to Fund	26
	14.4	Decision to Mine	26
	14.5	Election to participate and formation of mining joint venture	26
	14.6	Establishment of Mining Area	26
	14.7	Holding of Mining Area	27
	14.8	Mining Area ceases to be Joint Venture Property	27
	14.9	Transfer of Mining Area	27
	14.10	Terms of Mining Joint Venture	28
	14.11	Agreement	28

15. Conversion to Exploitation Permits			28

	15.1	Conversion	28
	15.2	Transfer of Exploitation Permits	29
	15.3	Holding of Exploitation Permits	29
	15.4	Approval of Mining Department	29
	15.5	Option Beneficial Holderto transfer Exploration Permits prior to conversion	29
	15.6	Avoidance of forfeiture of Permits	30

16. Environment and Mining Operations			30

17. Industrial Mineral Rights			30

	17.1	Holder of Permits and Industrial Mineral Rights	30
	17.2	Priority of exercise of Industrial Mineral Rights	31
	17.3	Exercise of Industrial Mineral Rights by the Beneficial Holder	31
	17.4	Suspension of Other Mineral Rights for duration of Mining Operations	31
	17.5	Transfer of Industrial Mineral Rights	32
	17.6	Transfer of Other Mineral Rights	32
	17.7	Co-mingling	32

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	Joint Venture Agreement

18. Operator			33

	18.1	First Operator	33
	18.2	Functions of the Operator	33
	18.3	Operator to prepare Programs and Budgets	34
	18.4	Liability of Operator	34
	18.5	Indemnity of Operator	34
	18.6	Preserve Permits	34
	18.7	Reporting	34
	18.8	Change of Operator	34

19. Contributions to Joint Venture Costs			35

20. Right to dilute			35

	20.1	Election not to fund	35
	20.2	Contributions where election not to fund	35
	20.3	Dilution	36

21. Disposal of Shares and pre-emption rights			39

22. Drag along			39

23. Tag along			40

24. Royalties			40

	24.1	Interest below 10%	40
	24.2	Transfer of Royalties	40

25. Representations and warranties			40

	25.1	Representations and warranties by Malagasy	40
	25.2	Representations and warranties by Energizer	41
	25.3	Disclaimer of liability by Energizer	43

26. Guarantee by Energizer			43

27. Guarantee by Malagasy			43

28. Assignment			44

29. Termination			44

	29.1	Termination events	44
	29.2	Event of Default	44
	29.3	Effect of termination	45
	29.4	Continuing remedies	45

30. Force Majeure			45

	30.1	Force Majeure	45
	30.2	Relief	46
	30.3	Labour disputes	46
	30.4	Resumption	46

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	Joint Venture Agreement

31. Dispute resolution			46

	31.1	Application	46
	31.2	Dispute negotiation	47
	31.3	Arbitration	47
	31.4	Urgent relief	47
	31.5	Continued performance	48

32. Disputes as to Technical or Financial Matters			48

	32.1	Definitions	48
	32.2	Application	48
	32.3	Dispute negotiation	48
	32.4	Independent Expert	48

33. Expert determination			48

	33.1	Referral to Independent Expert	49
	33.2	Appointment of Independent Expert	49
	33.3	Requirements of Independent Expert	49
	33.4	Rights of the Parties	50
	33.5	Confidentiality	50
	33.6	Determination	50
	33.7	Costs of Independent Expert	50

34. Status of Agreement and further acts			51

35. Relationship between Parties			51

36. Confidentiality and public announcements			51

	36.1	Confidentiality	51
	36.2	Conditions	53
	36.3	Notice to other Shareholders	53
	36.4	Indemnities	54
	36.5	Survival of confidentiality obligations	54
	36.6	Use of Mining Information in respect to Other Mineral Rights	54

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	Joint Venture Agreement

37. Notices			54

38. Miscellaneous			55

	38.1	Governing law	55
	38.2	Amendments	55
	38.3	Primacy of this Agreement	55
	38.4	Language	55
	38.5	Waiver	56
	38.6	Consents	56
	38.7	Counterparts	56
	38.8	No representation or reliance	56
	38.9	Expenses	56
	38.10	Entire agreement	56
	38.11	Indemnities	57
	38.12	Severance and enforceability	57
	38.13	No merger	57
	38.14	Power of attorney	57
	38.15	Taxes	57

Schedule 1 – Exploration Permits and Area of Interest			58

Schedule 2 – Industrial Minerals			59

Schedule 3 – Map of Area of Interest			60

Schedule 4 – Net Smelter Return Royalty			61

Executed as an agreement			66

Annexure A – Form of Sublease Agreement			67

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	Joint Venture Agreement

Date:

2014

Parties

Energizer Resources Inc. Energizer	141 Adelaide Street, West Suite 520, Toronto, Ontario, Canada

Malagasy Minerals Limited ACN 121 700 105 Malagasy	15 Lovegrove Close, Mount Claremont, Western Australia

Background

A.	Pursuant to the Tenement Acquisition Agreements:

(a)	the Beneficial Holder acquired the Exploration Permits from MMR and is the beneficial holder of the Exploration Permits;

(b)	MMR is obliged to transfer the Exploration Permits to the Beneficial Holder .

In 2008, the Beneficial Holder applied to the Mining Department (the BCMM) for the Exploration Permits to be transferred to the Beneficial Holder and, in 2009, the Beneficial Holder received from the Mining Department Certificates of Registration in its name in relation to each of the Exploration Permits.

From the time of the execution of the Tenement Acquisition Agreements until the date of this Agreement, the Mining Department has not accepted and/or processed applications for transfer, registration or renewal of mining permits or interests in Madagascar and as a result the Beneficial Holder has been unable to obtain delivery of the actual mining permits under Madagascan law for each of the Exploration Permits.

D.	As at the date of this Agreement, MMR is the Registered Holder of the Exploration Permits.

E.	The Parties agree and acknowledge that at the date of this Agreement, the Mining Department (the BCMM) is:

(a)	not accepting and/or processing applications for transfer, registration or renewal of mining permits or interests in Madagascar and it is not presently possible to obtain formal recognition of the renewal, partition, transfer or registration of the Exploration Permits; or

(b)	in the event that the Mining Department has recently recommenced accepting and processing applications for transfer, registration or renewal of mining permits or interests, there has not been sufficient time for the Beneficial Holder to either:

(i)	obtain delivery of the actual mining permits for each of the Exploration Permits; or

(ii)	gain sufficient knowledge of the Mining Department’s recommencement of these activities to be confident that transfers of the Exploration Permits are currently achievable.

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	Joint Venture Agreement

F.	By the Memorandum of Understanding Energizer and Malagasy agreed to participate in a joint venture in respect of the Permits in relation to the Other Mineral Rights subject to the Parties simultaneously entering into the Sale and Purchase Agreement and the Mineral Rights Agreement.

G.	The parties have agreed to establish a joint venture on the terms of this Agreement, which supersedes and replaces the Memorandum of Understanding.

Agreement

1.	Interpretation

1.1	Definitions

In this Agreement, unless the context requires otherwise, the following expressions will have the following meanings:

Accession Deed	a deed between the Parties to this Agreement and a third party pursuant to which the third party assumes the obligations of the assigning Party to the extent of the interest being assigned to the third party as if the third party was an original party to this Agreement and is otherwise in a form satisfactory to the non-assigning Party, acting reasonably.

Agreement	this agreement.

Area of Interest	the areas the subject of the Exploration Permits and identified by the area shaded dark green in the map at Schedule 3.

Bankable Feasibility Study	a detailed report or reports prepared by or on behalf of Malagasy and/or JV Company evaluating the feasibility of placing mineral deposits within the Area of Interest, or any part thereof, into production and operation as a mine, which detailed report or reports must include, without limitation, a reasonable assessment of the mineable mineral reserves and their amenability to metallurgical treatment, a complete description of the work, equipment and supplies required to bring the mineral deposits within the Area of Interest into mineral production and the estimated cost thereof, a description of the mining methods to be employed and a financial appraisal of possible mining operations. Such detailed report or reports must be, in the opinion of the person or firm commissioning such report or reports, or, in the event of a dispute between the Parties, in the opinion of such qualified independent firm of consultants as Malagasy and/or JV Company selects in good faith, in such form and of such substance which is normally accepted by substantial, recognised financial institutions for the purpose of determining whether to lend funds for the development of mineral deposits, and must include and be supported by at least the following:

	(a)	a description of the mining claims within the Area of Interest and that part of the mining claims within the Area of Interest proposed to be the subject of a mine;

	(b)	the estimated recoverable reserves of minerals and the estimated composition and content thereof;

	(c)	the procedure for the development, mining and production of Other Minerals from the mining claims within the Area of Interest;

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	(d)	results of mineral processing tests and ore amenability tests;

	(e)	the nature and extent of the facilities which might be necessary to acquire or construct, which may include ore processing facilities if the nature, volume and location of the ore makes such ore processing facilities necessary and feasible, in which event the study must also include a design for such ore processing facilities;

	(f)	a detailed cost and timing analysis, including a capital cost budget, of the total estimated costs and expenses required to develop a mine on the mining claims within the Area of Interest and to purchase, construct and install all structures, machinery, equipment, and electricity connection or generation equipment required for such mine including an ore processing facility, if so included in accordance with the terms hereof;

	(g)	detailed operating cost estimates, including working capital requirements for the initial three months of operation of the mine or such longer period as may be reasonably justified;

	(h)	all description of necessary environmental impact and mitigation studies and costs, including planned rehabilitation of the mining claims within the Area of Interest with estimated costs thereof;

	(i)	a critical path time schedule for bringing the mining claims within the Area of Interest or any part thereof to commercial production;

	(j)	such other data and information as are reasonably necessary to substantiate the existence of a mineral deposit of sufficient size and grade to justify development of a mine on the mining claims within the Area of Interest, taking into account all relevant business, tax and other economic considerations;

	(k)	disclosure of all price assumptions;

	(l)	a transportation cost analysis;

	(m)	a proposed procedure or method of disposing of tailings as required under the environmental and mining laws of all Governmental Agencies having jurisdiction;

	(n)	a detailed discussion and analysis of governmental requirements with respect to the development of a mine on the mining claims within the Area of Interest including time schedules;

	(o)	details regarding any proposed financing of the project;

	(p)	a discounted cash flow (net of income taxes) and return on investment analysis, including an economic forecast for the life of the proposed mine; and

	(q)	appropriate sensitivity analyses.

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Beneficial Holder	Energizer’s wholly owned subsidiary, Energizer Resources (Minerals) sarl, a company incorporated under the laws of Madagascar, having its registered office at Immeuble Tecno Mobile, Pres Lot 001 A Bis, Andranomena-Antehiroka, Antananarivo 101, Madagascar.

Board	the board of Directors of JV Company or TenementCo (as the context requires).

Business	the business of JV Company and TenementCo as described in clause 9(a) and such other business as the Shareholders may agree.

Business Day	a day which is not a Saturday, a Sunday or a public holiday in Ontario, Canada or Perth, Western Australia.

Claim	in relation to a Party, any demand, claim, action or proceeding made or brought by or against the Party, howsoever arising and whether present, unascertained, immediate, future or contingent.

Commencement Date	the date on which all of the conditions in clause 3.1 are satisfied or waived.

Completion	has the meaning given to it in the Sale and Purchase Agreement.

Confidential Information	all information, documents, maps, reports, records, studies, forms, specifications, processes, statements, formulae, trade secrets, drawings and other data (and copies and extracts made of or from any such data) in written or electronic form and whether reduced to writing or not, and at any time in the possession or under the control of or readily accessible to any Party, including the Mining Information, concerning: (a) the existence or contents of this Agreement; (b) Joint Venture Property; (c) Joint Venture Operations; (d) JV Company; (e) TenementCo; (f) the operations and transactions of a Party; (g) the organisation, finance, customers, markets, suppliers, intellectual property and know-how of a Party or a Related Body Corporate of a Party; and (h) any other information obtained during the Term or in the course of the Joint Venture, that is not in the public domain (except by failure of a Party to perform and observe its covenants and obligations under this Agreement) and that has been obtained by a Party during the negotiations preceding the making of this Agreement or the Memorandum of Understanding by or through or by being a Party to this Agreement or the Memorandum of Understanding.

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Country Manager	has the meaning in clause 8.2.

Decision to Mine	has the meaning given to that term in clause 14.4(a).

Director	a director of JV Company.

Dispose	in relation to a person and any property, means to sell, transfer, assign, surrender, create an Encumbrance over, declare oneself a trustee of or part with the benefit or otherwise dispose of that property (or any interest in it or any party of it) whether done before, on or after the person obtains any interest in the property, including without limitation in relation to a share, to enter into a transaction in relation to the share (or any interest in the share) which results in a person other than the registered holder of the share: (a) acquiring or having an equitable or beneficial interest in the share, including, without limitation, an equitable interest arising under a declaration of trust, an agreement for sale and purchase or an option agreement or an agreement creating a charge or other Encumbrance over the share; or (b) acquiring or having any right to receive (directly or indirectly) any dividends or other distribution or proceeds of disposal payable in respect of the share or any right to receive an amount calculated by reference to any of them; or (c) acquiring or having any rights of pre-emption, first refusal or other direct or indirect control over the disposal of the share; or (d) acquiring or having any rights of (direct or indirect) control over the exercise of any voting rights or rights to appoint Directors attaching to the share; or (e) otherwise acquiring or having equitable rights against the registered holder of the share (or against a person who directly or indirectly controls the affairs of the registered holder of the shares) which have the effect of placing the other person in substantially the same position as if the person had acquired a legal or equitable interest in the share itself, but excludes: (f) a transaction expressly permitted by this Agreement; or (g) a transaction conditional on each Shareholder consenting to it.

Encumbrance	any mortgage, bill of sale, lien, charge, pledge, writ, warrant, production royalty, caveat (and all claims stated in the caveat), assignment by way of security, security interest, title retention, preferential right or trust arrangement, Claim, covenant, profit a pendre, easement, or any other security arrangement or other right or interest of any third party and includes any other arrangement having the same effect.

Energizer	Energizer Resources Inc., a company incorporated under the laws Minnesota, United States of America.

Environmental Law	any law concerning environmental matters which regulates or affects the Permits, and includes, but is not limited to, laws concerning land use, development, pollution, waste disposal, toxic and hazardous substances, conservation of natural or cultural resources and resource allocation including any law relating to exploration for or development of any natural resource.

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Environmental Liability	any obligation, expense, penalty or fine under Environmental Law, including rehabilitation and rectification work of whatsoever nature or kind.

Execution Date	the date of execution of this Agreement by the last of the Parties.

Exploitation Permit	a permit granted under the Mining Code in relation to the Area of Interest which gives the holder an exclusive right to exploit authorised minerals, continue exploration and research of such minerals and to build any permanent or temporary structures.

Exploration	all activities and operations that have as their purpose the discovery, location, delineation and further investigation of any Other Minerals, Other Mineral deposits and ore, including drilling and trenching, the testing or proving of those bodies, the conducting of pre-feasibility, viability and amenability studies and the establishment and the administration of field offices for the performance of any of these functions.

Exploration Area	the area of the Area of Interest that is not a Mining Area.

Exploration Operations	all Exploration activities conducted by JV Company and TenementCo in accordance with this Agreement.

Exploration Permits	the exploration permits granted under the Mining Code listed in Schedule 1.

Funding Decision	a formal decision by JV Company to accept the provision of funding from a third party, whether by way of a loan arrangement, the subscription of equity, the acquisition of Joint Venture Property or a combination thereof, for the purposes of commencement of construction of a mine in respect of a deposit of Other Minerals within the Area of Interest.

Funding Decision Date	the date on which a Funding Decision is deemed to have been made pursuant to clause 14.2(g) .

Good Mining Practices	in relation to Exploration and Mining, those practices, methods and acts engaged in or approved by a firm or body corporate which, in the conduct of its undertaking, exercises that degree of safe and efficient practice, diligence, prudence, and foresight reasonably and ordinarily exercised by skilled and experienced operators engaged in the mining industry in Ontario, Canada.

Good Standing	in relation to a Permit, that: (a) such permit is and remains in full force and effect; and (b) such permit: (i) is and remains not liable to cancellation, forfeiture or non-renewal; or (i) is liable to cancellation, forfeiture or non-renewal where such liability is: A. not a result of the default of the holder of the permit or its subsidiaries; B. solely a result of a compulsory surrender under the Mining Code; or C. solely a result of a Political Event.

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Governmental Agency	any government or any governmental, semi-governmental, administrative, fiscal or judicial body, responsible minister, department, office, commission, delegate, authority, instrumentality, tribunal, board, agency, entity or organ of government, whether federal, state, territorial or local, statutory or otherwise, in respect of a sovereign state and includes any of them purporting to exercise any jurisdiction or power outside that sovereign state.

Independent Expert	an expert independent of the Parties appointed under and for the purposes of clause 33.

Industrial Minerals	the minerals listed in Schedule 2 of this Agreement.

Industrial Mineral Rights	all Mineral Rights with respect to Industrial Minerals.

Joint Venture	the joint venture constituted by this Agreement for the Exploration of, and if warranted, the Mining of the Area of Interest, to be conducted by JV Company and TenementCo pursuant to this Agreement, but does not include the Mining JV.

Joint Venture Costs	all costs, expenses and liabilities incurred in connection with Joint Venture Operations including: (a) all costs of establishing and maintaining JV Company and TenementCo; (b) the costs of conducting Exploration Operations (including any Minimum Expenditure Obligations); (c) the costs of conducting Mining Operations; (d) all rents, fees and taxes applicable to the Permits; (e) all Outgoings in relation to Permits; (f) the cost of all personnel engaged in the conduct of Joint Venture Operations; (g) the cost of all items of plant, equipment, machinery and vehicles used in connection with Joint Venture Operations; (h) a charge (not including any element of profit) for administrative and overhead expenses incurred by the Operator, at a rate not exceeding 10% of items of expense referred to in this definition; (i) any costs of procuring and maintaining any insurance required for the conduct of Joint Venture Operations in accordance with good industry practice; (j) administrative, overhead, office and employment costs and expenses incurred in connection with the conduct of Joint Venture Operations; and (k) domestic and international travel expenses incurred in connection with the conduct of Joint Venture Operations.
Joint Venture Operations	all activities of the Joint Venture under this Agreement including Exploration Operations and if applicable, Mining Operations.

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Joint Venture Property	all property of whatsoever kind held or hereafter acquired or created by or on behalf of JV Company or TenementCo for the purposes of the Joint Venture including (without limitation): (a) the Other Mineral Rights; (b) rights under any Sublease; (c) any Permits held by JV Company or TenementCo; and (d) Mining Information.
JV Company	the company incorporated or to be incorporated under the laws of Mauritius as described in clause 7.

Law	any statute, ordinance, code, regulation, law, by-law, local law, plan, planning scheme, local structure plan, official directive, order, instrument, undertaking, judicial, administrative or regulatory decree, judgement, ruling or order.

Madagascar	the Republic of Madagascar.

Madagascar Development JV Company	has the meaning in clause 14.7(b).

Madagascan Government	the government of Madagascar.
Malagasy	Malagasy Minerals Limited ACN 121 700 105, a company incorporated under the laws of Australia.

Material Adverse Effect	an unfavourable or adverse event, occurrence or circumstance, or the result thereof, that causes the actual value of the Area of Interest or the Other Mineral Rights to be materially impaired or devalued but does not include anything that occurs as a result of a Political Event .

Mauritian Development JV Company	has the meaning in clause 14.7(b).

Mauritius	the Republic of Mauritius.

Memorandum of Understanding	the letter of understanding from Energizer to Mr Peter Langworthy, Non-Executive Director of Malagasy, dated 22 October 2013 and signed by Energizer on 24 October 2013 and by Malagasy on 22 October 2013.

Mineral Rights	the right to explore for and mine minerals within the Area of Interest in accordance with the Permits.

Mineral Rights Agreement	the document entitled “ERG Project Mineral Rights Agreement” between Energizer, Malagasy and Madagascar-ERG Joint Venture (Mauritius) Limited dated on or about the Execution Date.

Minimum Expenditure Obligations	the minimum expenditure which the holder of a Permit is required under the Mining Code to incur in respect of that Permit in any given year.

Mining	all work of or associated with extraction of Other Mineral deposits by way of commercial exploitation, including all preparatory development and incidental work (other than Exploration) and to the extent agreed between the Parties may include extraction, beneficiation, transportation, refining, processing and marketing of minerals, including ore concentrates, matte and metals produced.

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Mining Area	the area of the Area of Interest determined under clause 14.6.

Mining Code	the body of legal provisions in force in Madagascar contained in the Law n o 99-022 of 19/08/1999 containing the Mining Code as amended by Law n o 2005-021 of 17/10/2005 as well as Decree n o 2006-910 of 19/12/2006 setting out the conditions of application of the Law n o 99-022 of 19/08/1999 as amended by Law n o 2005-021 of 17/10/2005, as amended from time to time.

Mining Department	Bureau du Cadastre Minier de Madagascar (the Madagascar Mining Registry Office), also known as the BCMM.

Mining Information	all technical information including (without limitation) geological, geochemical and geophysical reports, surveys, mosaics, aerial photographs, samples, drill cores, drill logs, drill pulp, assay results, maps and plans relating to the Other Minerals in the Area of Interest or to Joint Venture Operations, whether in physical, written or electronic form.

Mining JV	the joint venture to be constituted by this Agreement for Mining within the Mining Area, to be conducted by the Madagascan Development JV Company as holder of Other Mineral Rights within the Mining Area, on the terms specified in clause 14.10 of this Agreement.

Mining Operations	all Mining activities conducted by Mauritian Development JV Company and Madagascar Development JV Company under this Agreement.

MMR	Madagascar Minerals and Resources sarl a company incorporated under the laws of Madagascar, having its registered office at Lot VB81 A Ter, Ambatoroka, Anatananarivo 101, Madagascar.

NewCo Madagascar	has the meaning in clause 14.5(b).

NewCo Mauritius	has the meaning in clause 14.5(b).

Operator	the person appointed as operator in accordance with clause 18 for the purposes of managing, directing and controlling any and all Joint Venture Operations on behalf of and as agent for JV Company, TenementCo and the Shareholders.

Other Mineral Rights	all Mineral Rights other than the Industrial Mineral Rights.

Other Minerals	all other minerals other than the Industrial Minerals.

Outgoings	all rents, rates, survey fees and other fees and charges under the applicable legislation or otherwise in connection with a Permit.

Parties	the parties to this Agreement and Party means any one of them.

Permits	(a) the Exploration Permits; (b) the Exploitation Permits; (c) any licence, concession, permit or tenement which may hereafter be in force or issued in lieu of or in relation to the same ground as the permits referred to in paragraphs (a) or (b) of this definition; (d) any permit, concession, licence or tenement that is a successor, renewal, modification, extension or substitute for the permits referred to in paragraphs (a), (b) or (c) of this definition; and (e) all rights to mine and other privileges appurtenant to the mining tenements and all ore and mineral-bearing material, sand, slimes, tailings and residues of whatsoever nature located on and under the land the subject of a licence, concession, permit or tenement referred to in paragraphs (a), (b), (c) or (d) of this definition.

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Political Event	means any act, event or cause which is beyond the reasonable control of the Party concerned (other than lack of or inability to use funds) resulting from the action or inaction of any Governmental Agency including expropriation, restraint, prohibition, intervention, requisition, requirement, direction or embargo by legislation, regulation or other legally enforceable order.

Programs and Budgets	a program and budget for the conduct of Joint Venture Operations.

Purchase Price	has the meaning given to it in the Sale and Purchase Agreement.

Registered Holder	means the company that is registered with the Mining Department as the holder of the Exploration Permits from time to time.

Related Body Corporate	in relation to a corporation, a corporation that is: (a) a holding company of the first mentioned corporation; (b) a subsidiary of the first mentioned corporation; or (c) a subsidiary of a holding company of the first mentioned corporation.
Respective Proportion	in respect of a Shareholder, a proportion equal to the proportion (by value) of the issued capital of JV Company or NewCo Mauritius (as the context requires) held by that Shareholder from time to time.

Sale and Purchase Agreement	the document entitled “Sale and Purchase Agreement” between Energizer, Malagasy and Madagascar-ERG Joint Venture (Mauritius) Ltd dated on or about the Execution Date.

Share	a share in the capital of JV Company or NewCo Mauritius (as the context requires).

Shareholder	a holder of Shares.

Shareholding Interest	a direct interest in Shares.

SIAC	the Singapore International Arbitration Centre.
Simple Majority	(a) in relation to a resolution of Directors, a resolution that is passed by an affirmative vote of more than 50% of the votes cast by Directors entitled to vote on the resolution; and (b) in relation to a resolution of Shareholders, a resolution that is passed by an affirmative vote of more than 50% of the votes cast by Shareholders entitled to vote on the resolution.

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Sublease	has the meaning given to that term in clause 11.1.

Sublease Agreements	means the sublease agreements to be entered into by the Beneficial Holder and TenementCo in relation to the relevant area / squares of each Exploration Permit held by the Beneficial Holder within the Area of Interest, in the form set out at Annexure A.

Tenement Acquisition Agreements	the agreement between MMR and the Beneficial Holder for the acquisition of the Exploration Permits dated on or about July 9 2009.

TenementCo	the company incorporated or to be incorporated under the laws of Madagascar as described in clause 8.

Term	the period from the Execution Date to the termination of this Agreement in accordance with its provisions.

Trigger Date	The first to occur of the following: (c) the Funding Decision Date; or (d) the date on which a Bankable Feasibility Study is delivered to the Shareholders in accordance with clause 14.1.

1.2	Interpretation

(a)	headings are for convenience; and

unless the context indicates otherwise:

(b)	an obligation or a liability assumed by, or a right conferred on, 2 or more persons binds or benefits them jointly and severally;

(c)	a word or phrase in the singular number includes the plural, a word or phrase in the plural number includes the singular, and a word indicating a gender includes every other gender;

(d)	if a word or phrase is given a defined meaning, any other part of speech or grammatical form of that word or phrase has a corresponding meaning;

(e)	a reference to:

(i)	a party, clause, schedule, exhibit, attachment or annexure is a reference to a party, clause, schedule, exhibit, attachment or annexure to or of this Agreement;

(ii)	a party includes that party’s executors, administrators, successors , permitted assigns, including persons taking by way of novation and, in the case of a trustee, includes a substituted or an additional trustee;

(iii)

(iv)	a document includes an agreement in writing and any deed, certificate, notice, instrument or document of any kind;

(v)	a document in writing includes a document recorded by any electronic, magnetic, photographic or other medium by which information may be stored or reproduced;

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(vi)	a document (including this Agreement) includes a reference to all schedules, exhibits, attachments and annexures to it, and is to that document as varied, novated, ratified or replaced from time to time;

(vii)

(viii)

(ix)	a right includes a power, remedy, authority, discretion or benefit;

(x)	conduct includes an omission, statement or undertaking, whether in writing or not;

(xi)	an agreement, representation or warranty in favour of two or more persons is for the benefit of them jointly and severally; and

(xii)

an agreement, representation or warranty on the part of two or more persons binds them jointly and severally;

(f)	the word “ includes ” in any form is not a word of limitation;

(g)	the words “ for example ” or “ such as ” when introducing an example do not limit the meaning of the words to which the example relates to that example or to examples of a similar kind;

(h)	a reference to a day is to a period of time commencing at midnight and ending 24 hours later;

(i)	if a period of time dates from a given day or the day of an act or event, it is to be calculated exclusive of that day; and

(j)	a reference to “ A$ ”, “ $ ” or “ dollar ” is to Australian currency.

2.	Commencement

(a)	The Parties acknowledge and agree that this Agreement commences with effect on and from the Commencement Date.

(b)	With effect on and from the Commencement Date, this Agreement replaces and supersedes the Memorandum of Understanding, which is of no further force and effect.

3.	Conditions precedent

3.1	Conditions

This Agreement is subject to and conditional upon:

(a)	the execution of the Sale and Purchase Agreement;

(b)	the execution of the Mineral Rights Agreement;

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(c)	Completion pursuant to the Sale and Purchase Agreement; and

(d)	the Parties having obtained all shareholder and regulatory approvals necessary to achieve Completion and give effect to this Agreement including:

(i)	TSX approvals;

(ii)	ASX approvals; and

(iii)

all necessary approvals under the relevant laws of Ontario, Canada, the United States of America and Australia

3.2	Best endeavours

Each of the Parties must use its best endeavours to procure satisfaction of the conditions as soon as practicable following the date of this Agreement, and in any event, not later than the Condition Satisfaction Date.

3.3	Waiver of conditions

The conditions in clause 3.1 are included for the benefit of both Parties and may only be waived by mutual agreement of the Parties.

3.4	Non-satisfaction of conditions

In the event that the conditions in clause 3.1 are not satisfied within 60 days following the date of this Agreement or such later date as the Parties may agree in writing ( Condition Satisfaction Date ), then either Party may terminate this Agreement by giving written notice to the other Party to that effect.

4.	Consideration

4.1	Sale and Purchase Agreement

This Agreement is executed in conjunction with the Sale and Purchase Agreement and the Mineral Rights Agreement and the grant of the Other Mineral Rights to Malagasy under this Agreement is in consideration of:

(a)	Malagasy’s performance of its obligations under the Sale and Purchase Agreement and the Mineral Rights Agreement; and

(b)

Malagasy procuring that, on and from the commencement of commercial production of Other Minerals from the Area of Interest, the JV Company or NewCo Mauritius pay Energizer a royalty of an amount equal to one and a half percent (1.5%) of net smelter returns of all Other Minerals produced from the Area of Interest calculated in accordance with Schedule 4.

5.	Provision of Mining Information

Subject to satisfaction of the conditions in clause 3.1, Energizer must promptly provide to Malagasy copies of all Mining Information held by Energizer and the Beneficial Holder in respect of the Permits.

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6.	Acknowledgements by Parties

(a)	The Parties acknowledge and agree that :

(i)	as at the date of this Agreement, MMR is the Registered Holder and MMR will remain the Registered Holder subject to the terms of this Agreement;

(ii)

upon Energizer receiving notice from the Mining Department that the Mining Department will from that time permit formal transfer and registration of interests in, and transfers of, the Exploration Permits, Energizer must use its reasonable endeavours to procure that MMR and the Beneficial Holder will do all things necessary to transfer the Exploration Permits to the Beneficial Holder; and

(iii)

following a transfer in accordance with clause 6(a)(ii), the Exploration Permits will remain with the Beneficial Holder other than any portion of an Exploration Permit which is converted to an Exploitation Permit which will be dealt with in accordance with clause 15 .

(b)	Energizer must use its reasonable endeavours to procure that the Beneficial Holder and the Registered Holder will:

(i)	perform all obligations expressed by this Agreement to be imposed on those entities by this Agreement; and

(ii)	execute all such documents as are necessary for those entities to be bound by the obligations imposed on them, and to be entitled to exercise the rights contemplated by this Agreement.

(c)	The Shareholders must procure that the JV Company and TenementCo:

(i)	perform all obligations expressed by this Agreement to be imposed on the JV Company and TenementCo; and

(ii)	execute all such documents as are necessary for those entities to be bound by the obligations imposed on them, and to be entitled to exercise the rights contemplated by this Agreement.

(d)	The Parties acknowledge that they will use their respective best endeavours to execute the Sublease Agreements contemporaneously with the signing of this Agreement.

(e)

The Parties acknowledge that Exploration Operations may only be conducted in respect of those Other Minerals noted on the Permits or for which an authorisation of the Mining Department has been received by the Registered Holder acknowledging that those Other Minerals are the subject of the Permits. Energizer will use its reasonable endeavours to procure that the Registered Holder comply with their obligations under clause 11.2(d).

7.	Establishment of JV Company and its Board

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7.1	Establishment

The Parties have established, or will as soon as practicable after the Commencement Date establish a new company as the JV Company, being a company incorporated under the laws of Mauritius.

7.2	Initial Shareholding Interests

(a)	On establishment of JV Company, the initial Shareholders and their Shareholding Interests in JV Company will be as follows:

Shareholder	Number of Shares		% Interest
Malagasy		3		75	%
Energizer (or a Related Body Corporate of Energizer)		1		25	%

(b)	If required, each Shareholder must subscribe for, for nominal consideration, the number of Shares specified in clause 7.2(a) next to its name.

7.3	Adoption of constituent document

JV Company will adopt articles of association as its constituent document in accordance with the laws of Mauritius and in a form that is consistent with the terms of this Agreement.

7.4	Board members

The Board will comprise three (3) representatives of Malagasy.

7.5	Appointment and removal of Directors

(a)	Malagasy shall have the right to appoint further Directors to the Board provided the total number of Directors does not exceed that number permitted under the articles of association of JV Company or by law.

(b)	Following Trigger Date, and provided Energizer remains a Shareholder, Energizer will be entitled to nominate one (1) Director to the Board.

(c)	In circumstances where the office of Chairman of the Board becomes free, a new Chairman shall be nominated by the Shareholder holding the majority of Shares at that time.

(d)	A person will be automatically removed as a Director without the need for any other actions by the Shareholders or the Director if:

(i)	the Shareholder who nominated the person as a Director ceases to be a Shareholder.

(ii)	the Shareholder that nominated the person as a Director gives written notice to JV Company that the person ceases to be a Director; or

(iii)

in such other circumstances as provided for in the articles of association of JV Company.

(e)

If a Shareholder that nominated a person as a Director gives written notice to the other Shareholders that the person has ceased to be a Director pursuant to clause 7.5(d)(ii), the Shareholder may (without the need for any other actions by JV Company or the Directors) appoint another person as a Director to replace the person who has ceased to be a Director.

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7.6	Role and powers of the Board

(a)

The business and affairs of the Joint Venture are to be under the control and direction of the Board. All decisions of the Board must not breach the terms of this Agreement or any Law. Except as otherwise provided in this Agreement, the Board is to decide all matters in relation to the business and affairs of the Joint Venture including:

(i)	adoption of an accounting procedures manual for the Joint Venture and the Operator;

(ii)	appointment of independent auditors (if any);

(iii)

delegation of matters to any sub-committees and the Operator;

(iv)	giving directions to, and setting spending limits and other control mechanisms for any sub-committees and the Operator;

(v)	the surrender of the Joint Venture Property;

(vi)	approval and revision of Programs and Budgets; and

(vii)

other matters to be decided by the Board as specified in this Agreement.

(b)	All decisions of the Board bind the Shareholders unless such decision is in breach of this Agreement or any Law. Each Shareholder agrees to give effect to those decisions provided such decision or the giving effect to such decision does not breach this Agreement or any Law.

7.7	Meetings of the Board

(a)	The Board will meet:

(i)	at least once each calendar year; and

(ii)	at such other times as the Board may decide.

(b)	Meetings of the Board may take place where the Directors are physically present together, by telephone link-up or by audio-visual transmission.

(c)	A Director may at any time, and the company secretary will on the request of a Director, convene a meeting of the Directors.

7.8	Notice of Board meetings

Notice of each meeting of the Board:

(a)	must specify the time and the place of the meeting, but need not state the nature of the business to be transacted;

(b)	must be given to each Director not less than 5 days before the meeting; and

(c)	may be given by telephone, facsimile transmission or electronic mail message,

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but the non-receipt by a Director of any notice of a Board meeting will not affect the validity of the convening of the meeting.

7.9

Quorum

The quorum for a Board meeting is a majority of the Directors entitled to attend and vote at a meeting of Directors. If Energizer has a right to appoint a Director under clause 7.5(b), then a quorum for a Board meeting must include the representative of Energizer, unless Energizer agrees otherwise. If a quorum is not present, then the Board meeting will be adjourned for at least 7 days until such time as a quorum of Directors can be present.

7.10	Decisions of the Boards

All resolutions of the Board may be passed by a Simple Majority vote of the Directors.

7.11

Voting

(a)	Each Director may vote at a meeting of the Board.

(b)

Each Director is entitled to one vote for each Share held by his nominating Shareholder in JV Company, provided that the total number of votes cast by the Directors appointed by his nominating Shareholder who vote on the matter shall not exceed the number of Shares held by the nominating Shareholder in JV Company. For example, if a Shareholder holds 3 Shares, the total number of votes cast by all Directors nominated by that Shareholder shall be 3.

(c)	In the case of equality of votes, the Chairman of the meeting will have a casting vote.

7.12	Experts and advisers

The Board may invite experts and advisers to attend any meeting of the Board.

7.13	Minutes of meetings and records

(a)	Minutes of Board meetings will be kept.

(b)	On request, JV Company will provide copies of the agenda of Board meetings, minutes of Board meetings and Board papers supporting such minutes to the Shareholder who requests such information.

(c)	On reasonable notice, any Shareholder and its advisers shall have access to review and will be provided with copies of such of the records of JV Company and TenementCo as reasonably requested from time to time.

(d)	Energizer and its advisers will, at the cost of Energizer, have the right to conduct an audit review of the records of JV Company and Tenement Co.

8.	Establishment of TenementCo

8.1	Establishment

(a)	The Parties have established, or will as soon as practicable after the Commencement Date establish, a company as TenementCo, being a company incorporated under the laws of Madagascar for the purposes of holding the Subleases.

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(b)	All shares in TenementCo are or will be owned by JV Company.

(c)	TenementCo has or will be incorporated for the time being as a Société á Responsabilité Limitée.

8.2	Management of TenementCo

(a)	Malagasy has, or will as soon as practicable after the Commencement Date, appoint the Gérant résident ( Country Manager ) of TenementCo, who will act in accordance with the instructions provided to him by JV Company.

(b)	Malagasy may after the Commencement Date, appoint additional Gérants of TenementCo.

(c)	Decisions of TenementCo will only be made in accordance with an instruction from JV Company and will require the approval of a majority of managers (Gérants) of TenementCo holding office from time to time.

8.3	Appointment and removal

(a)	Malagasy shall have the ability to appoint additional Country Managers or remove and replace existing Country Managers of TenementCo subject to the total number of Country Managers so appointed not exceeding that number provided for in the constituent document of TenementCo or by law.

(b)

If it hasn’t already done so, following the Trigger Date, Malagasy will consider whether it is appropriate for TenementCo to remain incorporated as a Société á Responsabilité Limitée company or whether it is more appropriate to convert to a Société Anonyme company. If TenementCo is converted to a Société Anonyme company at any time following the Trigger Date, and provided Energizer remains a Shareholder of JV Company, Energizer will be entitled to nominate one (1) director to the Board of TenementCo.

8.4	Role of Country Manager

The role of the Country Manager is to carry out and implement the directions received from JV Company in respect of the Business and to carry out the day to day management of Joint Venture Operations.

8.5	Adoption of constituent document

TenementCo has adopted, or will adopt, “statuts” as its constituent document in accordance with the laws of Madagascar.

9.	Business of the JV Company and TenementCo

(a)	The business of JV Company will be to, through TenementCo:

(i)	conduct Joint Venture Operations;

(ii)	hold and administer the Other Mineral Rights;

(iii)

hold and administer the Sublease Agreements and Subleases;

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(iv)	upon the grant of Exploitation Permits over any part of the Area of Interest in accordance with clause 15.1, hold and administer the Exploitation Permits; and

(v)	conduct any Exploration Operations and or Mining Operations.

(b)

The Shareholders agree and acknowledge that JV Company and/or TenementCo may enter into agreements with third parties with respect to the use, operation or other exploitation of any mining infrastructure which is located within the Area of Interest or any in relation to any other Joint Venture Property, but any agreement of this type must be entered into on arm’s length commercial terms.

10.	Co-operation of Shareholders

Each Shareholder must:

(a)	cooperate to:

(i)	foster the development of the Business; and

(ii)	ensure that JV Company and TenementCo can successfully carry on the Business in accordance with all applicable laws and regulations;

(b)

not use Confidential Information in a way which damages or is reasonably likely to damage JV Company or TenementCo or any Shareholder, which obligation will continue after a Shareholder has ceased being a Shareholder in JV Company and survive termination of this Agreement. Nothing in this clause prevents Energizer from using the Mining Information in relation to the exploration and development of the Industrial Minerals;

(c)	not unreasonably delay an action, approval, direction, determination or decision required of the Shareholder;

(d)	make approvals or decisions that are required of the Shareholder in accordance with the terms and conditions of this Agreement; and

(e)

provide such assistance as required by this Agreement, at the cost of JV Company, as may from time to time reasonably be requested of it by JV Company or TenementCo or which the Shareholders agree would assist in the development of the Business, provided any costs incurred are reasonable out-of-pocket expenses and do not relate to minor ad-hoc assistance which will be provided in good faith.

11.	Right to explore and sublease

11.1	Grant of Subleases

(a)

Energizer will procure that as soon as reasonably practicable during the Term, the Beneficial Holder grants to TenementCo the Other Mineral Rights and the exclusive right to carry out Exploration and Mining within the Area of Interest, in accordance with the laws of Madagascar, for the purposes of identifying and exploiting any Other Minerals within that area.

(b)

Energizer will use its best endeavours to procure that as soon as reasonably practicable during the Term, the Beneficial Holder and the Registered Holder grant to TenementCo subleases over the Area of Interest on terms whereby, for consideration which includes the benefit of Exploration Operations undertaken at the cost of TenementCo:

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(i)	TenementCo will , in accordance with the Mining Code, be the sole holder of the Other Mineral Rights and have the exclusive right to conduct Exploration and Mining within the Area of Interest; and

(ii)	the Beneficial Holder will, in accordance with and as permitted under the Mining Code, retain the exclusive right to Industrial Mineral Rights,

(each a Sublease ).

(c)	Subject to the Mining Code, the Subleases will be for the term of the Permits, including for the term of any renewal of the Permits.

(d)

Subject to clause 11.1(e), Energizer will use its reasonable endeavours to procure that the Beneficial Holder and the Registered Holder must enter into the Sublease Agreements and any other agreement(s) with TenementCo required by the Mining Code to give effect to the exclusive right to carry out Exploration as described in clause 11.1(a) and the Subleases as contemplated under clause 11.1(b).

(e)	The Parties must use all reasonable endeavours to ensure the Sublease Agreements and any other agreement contemplated by clause 11.1(d) are entered into by the Registered Holder, the Beneficial Holder and TenementCo on, or as soon as possible after, the Commencement Date.

11.2	Covenants of Energizer in respect of the Exploration Permits

Energizer must use its reasonable endeavours to procure that the Beneficial Holder and the Registered Holder, at the cost of JV Company, will:

(a)	use all reasonable endeavours permitted under the laws of Madagascar to ensure the Permits are renewed in the usual course for such periods as permitted by the Mining Code, as requested by JV Company;

(b)	do all such acts as are reasonably necessary to keep the Permits in Good Standing which can only be done or performed by the registered holder of the Permits, provided that the Registered Holder must give to JV Company adequate prior notice of all such acts;

(c)

(d)	apply to the Mining Department to add such of the Other Minerals to the Permits as may be requested by JV Company from time to time to the extent those Other Minerals are not already noted on the Permits.

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11.3	Covenants in respect of the Exploration Permits

(a)	Subject to clauses 11.2 and 17.3, during the Term, JV Company and TenementCo must:

(i)	do all such acts and make all such payments as are reasonably necessary to keep the Permits in Good Standing;

(ii)	comply with all Minimum Expenditure Obligations in respect of the Permits (if any); and

(iii)

contribute as sole contributors to all Outgoings.

(b)

For the purposes of ensuring compliance with the obligations under this clause 11.3, Energizer may provide to JV Company or TenementCo (as the case may be) a cash call (together with a copy of the supporting documentation (including any invoice to the extent an invoice exists) to which the cash call relates) for the amount required to be paid by JV Company or TenementCo pursuant to this clause 11.3 no more than 30 days prior to the due date for payment of such amount and JV Company or TenementCo (as the case may be) has the option to satisfy the cash call by:

(i)	paying the amount referred to in the cash call to Energizer within 20 days of receipt of the cash call; or

(ii)

paying the amount referred to in the cash call direct to the third party to which the relevant invoice or other supporting documentation relates on or before the due date for payment noted in the cash call provided that the third party will accept payment direct from JV Company or TenementCo (as the case may be).

11.4	Remedies of Malagasy

(a)	If Energizer fails to procure any acts or omissions of any Beneficial Holder, which constitutes a breach of clause 11.2 under this Agreement and which may, in JV Company’s reasonable opinion, result in:

(i)	the termination or non-renewal of a Permit;

(ii)	a revocation of any permit, authority or approval necessary to maintain the Good Standing of a Permit; or

(iii)

loss of access to any part of the Area of Interest,

JV Company or TenementCo has the right, on each occurrence, to be appointed the Beneficial Holder’s attorney for the purpose of taking whatever remedial steps it considers necessary to remedy the breach.

(b)	Any costs incurred by JV Company or TenementCo in exercising its rights pursuant to clause 11.4(a) will be a debt due from the Beneficial Holder to JV Company payable upon demand.

(c)	The rights created by clause 11.4(a) are the sole remedy in respect to a breach to which clause 11.4(a) applies.

(d)

JV Company and TenementCo will not be liable to the Beneficial Holder for any loss or damage suffered by the Beneficial Holder as a result of actions taken or omissions made by JV Company in the course of exercising or purporting to exercise its rights under clause 11.4(a) so long as JV Company has acted in good faith.

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11.5	Exercise of Other Mineral Rights

JV Company and TenementCo must, in the exercise of the Other Mineral Rights:

(a)	comply with the conditions of the Permits (to the extent that those conditions relate to the Area of Interest) as if TenementCo were the permit holder;

(b)	comply with the requirements of the Mining Department, the Mining Code, Environmental Laws and any other laws dealing with miners and the exploration for and mining of minerals;

(c)	be responsible for approvals required for activities on the Area of Interest;

(d)	be responsible for the preparation and lodgement of any reporting obligations on any work done on, and money expended in connection with the Area of Interest;

(e)	comply with, adopt and exercise Good Mining Practices including rehabilitating any ground disturbance;

(f)	without prejudice to clause 17, use its reasonable endeavours to minimise interference with the Beneficial Holder’s activities in planning, programming and executing any exploration activity on the Exploration Permits;

(g)	keep all drill holes, costeans, trenches, excavations, shafts and other workings secure and safe and properly maintained and, where necessary, fenced; and

(h)	not do or suffer to be done anything which will or may place in jeopardy the Permits or render any of them liable to forfeiture.

11.6	Notice of activities

(a)	TenementCo must, at least 20 Business Days prior to commencing any program of activity on the Area of Interest ( Proposed Activity ), give a notice to Energizer ( Notice of Proposed Activity ) containing particulars of:

(i)	the general nature of the Proposed Activity; and

(ii)	the areas of the Area of Interest which TenementCo proposes to enter upon to conduct the Proposed Activity and or to construct, operate and maintain infrastructure in relation to the Proposed Activity.

(b)	TenementCo will, at the cost of Energizer, assay any exploration results for any Industrial Minerals requested by Energizer provided that such request is received within 20 Business Days after receipt of a Notice of Proposed Activity.

(c)	Energizer will or will procure the Beneficial Holder to, at the cost of Malagasy, assay any exploration results for any Other Minerals within the Area of Interest requested by Malagasy provided that such request is received within 20 Business Days after receipt of a Notice of Proposed Activity.

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(d)	TenementCo must provide to Energizer the results of TenementCo’s activities on the Area of Interest by way of:

(i)	quarterly reports; and

(ii)	reports at such other times as is required by Energizer to enable the Beneficial Holder to comply with statutory and Mining Departmental reporting obligations.

11.7	Mutual indemnities

(a)

JV Company and TenementCo each jointly and severally agree to indemnify, and keep indemnified, and hold harmless Energizer and the Beneficial Holder and their Related Bodies Corporate, directors, employees and consultants from and against all Claims that may be made, brought against, suffered, sustained or incurred by Energizer or the Beneficial Holder, arising out of any act or omission (including any negligent act or omission) of JV Company or TenementCo and in the course of the exercise of activities undertaken by JV Company or TenementCo on the Area of Interest.

(b)

Energizer agrees to indemnify, and keep indemnified, and hold harmless the Shareholders and JV Company and their Related Bodies Corporate, directors, employees and consultants from and against all Claims that may be made, brought against, suffered, sustained or incurred by the Shareholders or JV Company, arising out of any act or omission (including any negligent act or omission) of Energizer or the Beneficial Holder and in the course of the exercise of activities undertaken by them on the Area of Interest.

12.	Surrender of Joint Venture Property

(a)	Subject to clause 12(d), the Board of JV Company may resolve by Simple Majority to surrender any of the Joint Venture Property ( Surrendered Property ).

(b)

If the Board resolves to surrender the whole or any part of, the Joint Venture Property pursuant to any compulsory relinquishment obligations under the Mining Code, then it must consult with the Beneficial Holder and in good faith agree on the areas to be surrendered under the compulsory relinquishment.

(c)	If the Board resolves to surrender the whole or any part of, the Joint Venture Property other than pursuant to any compulsory relinquishment obligations under the Mining Code, the Operator must not give effect to that decision:

(i)

if one of the Shareholders (acting through a Director) voted against that resolution to surrender ( Dissenting Party ), until the Operator has first offered in writing to transfer the relevant Joint Venture Property or part thereof to the Dissenting Party for no consideration other than the cost of transfer and the Dissenting Party has not accepted that offer within 14 days after it is made; and

(ii)

if there is no Dissenting Party or the Dissenting Party does not accept the offer under clause 12(c), until the Operator has first offered in writing to transfer the relevant Joint Venture Property or part thereof to the Beneficial Holder for no consideration other than the cost of transfer and the Beneficial Holder has not accepted that offer within 14 days after it is made.

(d)

If the Dissenting Party or the Beneficial Holder accepts an offer under clause 12(c), the Operator, the Board and the JV Company must promptly do all things reasonable to complete the transfer and give sole benefit and control of the Surrendered Property to the Dissenting Party or the Beneficial Holder as the case may be.

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(e)	Where the Board resolves to surrender any of the Joint Venture Property, it must:

(i)	provide two (2) months written notice of the surrender to each Shareholder, which identifies the specific Joint Venture Property which is to be surrendered; and

(ii)

ensure that, to the extent the surrender of Joint Venture Property applies or relates to a Permit or Permits, that all Outgoings, Minimum Expenditure Obligations (if any) and any payments reasonably necessary to keep the relevant Permit(s) in Good Standing are paid to date and for one (1) year following the date on which notice is given in accordance with clause 12(e)(i) above.

(f)	On and from the transfer or surrender of any Joint Venture Property under this clause 12:

(i)	the Surrendered Property will cease to be Joint Venture Property for any purpose under this Agreement; and

(ii)

except as expressly provided elsewhere in this Agreement, the Shareholders, JV Company and TenementCo will cease to have any rights or liabilities in respect of the Surrendered Property, other than any rights or liabilities which have accrued prior to the date of the resolution to surrender the Surrendered Property.

13.	Transfer of Permits

(a)	Subject to clause 13(b), should the Beneficial Holder decide to Dispose of their interest in any of the Permits, Energizer must procure that the Beneficial Holder may only sell, transfer or otherwise dispose of that interest to any person ( Permit Transferee ):

(i)	provided the JV Company and TenementCo are given the opportunity to match any bona fide third party offer as a right of first refusal for a period of 30 days from the time of notice of the offer from the Beneficial Holder; and

(ii)	the Permit Transferee enters into an Accession Deed .

(b)	The Beneficial Holder may transfer the Permits to another wholly owned subsidiary of Energizer provided that the transferee first enters into an Accession Deed.

14.	Bankable Feasibility Study, Funding Decision and Decision to Mine

14.1	Bankable Feasibility Study

(a)	At any time during the Term, the Board may direct the Operator to carry out a Bankable Feasibility Study in respect of the Area of Interest, the costs of which will form part of the Joint Venture Costs.

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(b)

Throughout the completion of the Bankable Feasibility Study, the Operator will provide the Shareholders with quarterly reports on the progress of the Bankable Feasibility Study and such other information as a Shareholder may reasonably request from time to time in order that such Shareholder can be kept informed of the progress of the Bankable Feasibility Study in order that it will be in a position to arrange finances to make a Decision to Mine in the time period required by clause 14.4(a).

(c)	Upon completion of a Bankable Feasibility Study referred to in clause 14.1(a), the Operator must provide the Shareholders with a copy thereof.

14.2	Funding Decision

(a)	At any time during the Term, the Board may direct the Operator to engage with third parties with a view to securing a Funding Decision in respect of the Area of Interest. The costs of such engagement will form part of the Joint Venture Costs.

(b)

Throughout any engagement with third parties in relation to a possible Funding Decision, the Operator will provide the Shareholders with quarterly reports on the progress of such engagement and such other information as a Shareholder may reasonably request from time to time in order that such Shareholder can be kept informed of the progress of the engagement in order that it will be in a position to arrange finances to make a Decision to Mine in the time period required by clause 14.4(a).

(c)	Upon a Funding Decision having been made, the Operator must give the Shareholders written notice of the same together with such documents and other evidence setting out that decision.

(d)	Within 10 Business Days of service on it of a notice under clause 14.2(c), a Shareholder may dispute that a Funding Decision has been made by giving written notice to the Operator and the other Shareholders.

(e)	If a Shareholder fails to give notices in accordance with clause 14.2(d) within the 10 Business Day period referred to in that clause, the Shareholder will be deemed to have accepted that a Funding Decision has been made.

(f)

If a Shareholder gives notice to the Operator and the other Shareholders in accordance with clause 14.2(d) within the 10 Business Day period referred to in that clause, the dispute as to whether a Funding Decision has been made shall be a dispute to which clause 30 applies and shall not, for the avoidance of doubt, be dispute in relation to a Technical Matter or a Financial Matter as defined in clause 32.1.

(g)	A Funding Decision will be deemed to have been made:

(i)	if no Shareholder gives notices in accordance with clause 14.2(d) within the 10 Business Day period referred to in that clause: on the date immediately following the last day of the 10 Business Day period; or

(ii)	if notices are given in accordance with clause 14.2(d) within the 10 Business Day period referred to in that clause, and if the dispute is resolved with an agreement or determination that a Funding Decision has been made: on the date of such agreement or determination.

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14.3	Obligation to Fund

On and from the Trigger Date, the Shareholders will fund Joint Venture Costs in respect to the Mining Area in their Respective Proportions until such time as external funding (other than that the subject of any Funding Decision) for the development and commencement of Mining Operations has been procured.

14.4	Decision to Mine

(a)

Following the Trigger Date, the Shareholders may, by a Simple Majority, decide to commence Mining Operations in respect of all or part of the Area of Interest the subject of the Bankable Feasibility Study or the Funding Decision (as applicable) ( Decision to Mine ). A Decision to Mine cannot be made earlier than the date which is 90 days after the Trigger Date, unless otherwise agreed in writing by all Shareholders.

(b)	If the Shareholders make a Decision to Mine in accordance with clause 14.4(a), JV Company must:

(i)

use its reasonable endeavours to procure that the Beneficial Holder and the Registered Holder apply for, as the case may be, any authorisation or permission required under the Mining Code or other laws of Madagascar, including the conversion of Exploration Permits into Exploitation Permits and relevant environmental authorisations, the granting of which by the Mining Department or other Governmental Agency of Madagascar is a condition to the implementation of the Decision to Mine; and

(ii)	be responsible for arranging project finance for the development and commencement of the Mining Operations.

14.5	Election to participate and formation of mining joint venture

(a)

A Shareholder which did not vote in favour of the Decision to Mine may elect, within 40 Business Days of the Decision to Mine, not to participate in the Mining Operation the subject of the Decision to Mine. The Shareholders who do not make such an election or who voted in favour of the Decision to Mine are referred to as Mining Parties .

(b)

Upon the expiration of the 40 Business Day election period provided for in clause 14.5(a) ( Mining JV Commencement Date ), the Mining Parties will incorporate a joint venture company under the laws of Mauritius ( NewCo Mauritius ), the shareholders of which will be the Mining Parties, in the same proportion as their respective Shareholding Interest in JV Company bear to each other at the time a Decision to Mine is made, which will in turn will hold 100% of the shares in a newly formed company in Madagascar ( NewCo Madagascar ).

14.6	Establishment of Mining Area

(a)

Within 30 Business Days after the Mining JV Commencement Date, the Parties will meet to establish the boundaries of the Mining Area which is appropriate to encompass all deposits of Other Minerals the subject of the Bankable Feasibility Study or Funding Decision (as applicable), which deposits may be mined as a single mining enterprise, together with any milling or concentrating plant and other appropriate infrastructure and facilities necessary for the efficient conduct of Mining Operations.

(b)

In the event of disagreement, the boundaries established for the Mining Area will be determined in accordance with clause 32 and will be the area reasonably required for the Mining Operations the subject of a Decision to Mine and accords with the Mining Code, Good Mining Practices and the Bankable Feasibility Study (if any).

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14.7	Holding of Mining Area

(a)

Upon the incorporation of NewCo Mauritius and NewCo Madagascar and the establishment of the Mining Area in accordance with clause 14.6, the Mining Parties will consult with each other in good faith and make a determination as to whether the Joint Venture Property within the Mining Area will be transferred into NewCo Madagascar or whether the Joint Venture Property within the Exploration Area ( Exploration Assets ) will be transferred to NewCo Madagascar, leaving the Joint Venture Property within the Mining Area as the sole property of JV Company for the Mining JV.

(b)

After a determination is made under clause 14.7(a), the Mauritian company (being NewCo Mauritius or JV Company) which through its Madagascan subsidiary (being NewCo Madagascar or TenementCo), holds the property of the Mining JV within the Mining Area from time to time will be known as the Mauritian Development JV Company , the purpose of which will be to conduct Mining Operations in respect of the Mining Area. The subsidiary in Madagascar of the Mauritian Development JV Company which holds the property of the Mining JV within the Mining Area will be known as the Madagascar Development JV Company .

(c)	If the Exploration Assets are transferred into NewCo Madagascar then this Agreement will apply in relation to the Exploration Assets as if NewCo Mauritius and NewCo Madagascar were named herein in place of JV Company and TenementCo respectively.

14.8	Mining Area ceases to be Joint Venture Property

(a)	On the Mining JV Commencement Date:

(i)	the Mining Area will be segregated from the Area of Interest;

(ii)

the Joint Venture Property within the Mining Area will cease to be held beneficially by the JV Company or TenementCo (as applicable) as Joint Venture Property and will be held solely by the Madagascar Development JV Company as property of the Mining JV until transferred in accordance with clause 14.9; and

(iii)

if JV Company is the Madagascar Development JV Company, those Shareholders who are not Mining Parties must, at the cost of the Mining Parties, transfer all of their interest in Madagascar Development JV Company to the Mining Parties on a pro rata basis resulting in the Mining Parties holding Mining Venture Interests consistent with clause 14.10(b), for consideration equal to 75% of the market value of that interest as agreed between the Parties or, in the absence of agreement, as determined by an independent expert appointed in accordance with clause 33.2 ,.

(b)	For the avoidance of doubt, a Shareholder who transfers all of their interest in Madagascar Development JV Company under clause 14.8(a)(iii) will not be entitled to receive a royalty under clause 24 in respect of the relevant Mining Area which is transferred to the Mining Parties.

14.9	Transfer of Mining Area

As soon as practicable after determination of the Mining Area:

(a)

the Shareholders and Mining Parties must, and Energizer must use its reasonable endeavours to procure that the Beneficial Holder and the Registered Holder will, co-operate to prepare, execute and procure registration of such conditional surrenders, applications, transfers, new sub-leases and other documents as may be necessary to segregate the Mining Area and to vest the Joint Venture Property within the Mining Area in Madagascar Development JV Company and (if necessary) to vest the Joint Venture Property in the Exploration Area in NewCo Madagascar; but

(b)

if the Mining Parties decide to delay segregation, or segregation cannot immediately occur due to matters outside of the control of the Beneficial Holder, Shareholders or Mining Parties, the Shareholders and Mining Parties will, and Energizer must use its reasonable endeavours to procure that the Beneficial Holder and the Registered Holder will, implement such alternative arrangements in order for Madagascar Development JV Company to have the sole benefit and control of the Joint Venture Property within the Mining Area and for the Shareholders to have the sole benefit and control of the Joint Venture Property within the Exploration Area.

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14.10

Terms of Mining Joint Venture

(a)	Following the determination of the Mining Area and the conversion of the Permits into exploitation permits under clause 15, the Mauritian Development JV Company may proceed to implement Mining Operations within the Mining Area.

(b)	The interest of each Mining Party in the Mauritian Development JV Company will be in proportion to their relative Shareholding Interests in JV Company ( Mining Venture Interest ) at the time a Decision to Mine is made or as they may otherwise agree between themselves.

(c)

If the then Operator is a Mining Party, then the Operator will be the operator of the Mining Operations conducted by the Mauritian Development JV Company through Madagascar Development JV Company ( Mining Operator ). Otherwise, the Mining Parties will elect a Mining Operator by majority vote in proportion to their respective Mining Venture Interests.

(d)	The Mining Parties will contribute to the costs incurred by the Mauritian Development JV Company in proportion to their respective Mining Venture Interests to the extent additional funds are required by Mauritian Development JV Company.

14.11

Agreement

As soon as possible following the Mining JV Commencement Date, the shareholders of the Mauritian Development JV Company (being the Mining Parties) will in good faith enter into negotiations for and execute an appropriate agreement in place of this Agreement in respect of the Mining Area for the Mining JV. The agreement will:

(a)	provide for all matters necessary for the planning, financing, construction, commissioning and conduct of Mining Operations;

(b)	otherwise reflect the terms of this Agreement where relevant; and

(c)

provide for the execution of cross charges which encumber each Mining Party’s Mining Venture Interest, and its interest in any contracts for, and the proceeds of, sale of Other Minerals in favour of each other Mining Party and the Mining Operator as security for its performance of its duties and obligations arising under the agreement.

Until that agreement is executed, this Agreement and, in particular, clause 14.10 will continue to bind the Mining Parties.

15.	Conversion to Exploitation Permits

15.1	Conversion

The Parties acknowledge and agree that:

(a)	in order to commence Mining Operations in respect of all or a part of the Area of Interest, the Exploration Permits, to the extent they cover the Mining Area ( Current Permits ) will be converted into Exploitation Permits; and

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(b)	if the Shareholders make a Decision to Mine, the Parties must do all things necessary to, as promptly as possible, have the Current Permits converted into Exploitation Permits and to apply for all relevant environmental authorisations.

15.2	Transfer of Exploitation Permits

(a)

Energizer must use its reasonable endeavours to procure that any Exploitation Permit issued by the Mining Department to the Beneficial Holder or the Registered Holder is immediately transferred or, if for whatever reason the Exploitation Permit cannot immediately be transferred, sub-leased (as applicable) by the Beneficial Holder and/or the Registered Holder to Madagascar Development JV Company as soon as possible after the grant of the Exploitation Permit.

(b)

The Parties acknowledge and agree that, in relation to this clause 15, it is the preference of the Parties to have any Exploitation Permit issued by the Mining Department to a Beneficial Holder or the Registered Holder immediately transferred to Madagascar Development JV Company. However if such a transfer is not possible for whatever reason, then the Parties will implement such alternative arrangements in order for Madagascar Development JV Company to have the sole benefit and control of the Exploitation Permit including entering into new sub-leases in respect of the Exploitation Permits on terms and conditions which are consistent with this Agreement.

(c)

The Parties acknowledge and agree that on transfer of the Exploitation Permits to Madagascar Development JV Company, Madagascar Development JV Company will grant a sub-lease to Energizer or its nominee in respect to the Industrial Mineral Rights within the Exploitation Permit on terms and conditions which are consistent with this Agreement, including clause 17.

15.3	Holding of Exploitation Permits

During the time between the granting of an Exploitation Permit and the formal transfer or sub-lease of the Exploitation Permit to Madagascar Development JV Company, must use its reasonable endeavours to procure that the Beneficial Holder or Registered Holder to whom the Exploitation Permit was granted shall hold the Exploitation Permit for Madagascar Development JV Company’s sole benefit and agree:

(a)	not to act in any manner which is detrimental to Madagascar Development JV Company or the Exploitation Permit; and

(b)	to act in accordance with Madagascar Development JV Company’s reasonable instructions in relation to the Exploitation Permit provided these instructions are not contrary to or breach of the Laws of Madagascar.

15.4	Approval of Mining Department

Energizer must use its reasonable endeavours to procure that Beneficial Holder and/or the Registered Holder will promptly apply for the approval of the Mining Department or other relevant body for the transfer or sub-lease (as applicable) of any Exploitation Permit issued to the Beneficial Holder or the Registered Party in accordance with clause 15.1 and to do all other things reasonably necessary to effect the transfer or sub-lease of the granted Exploitation Permits to Madagascar Development JV Company as soon as possible after the grant of the Exploitation Permit.

15.5	Beneficial Holder may transfer Exploration Permits prior to conversion

The Beneficial Holder may fulfil its obligations under this clause 15 if the Beneficial Holder and/or the Registered Holder transfer the Current Permits or the Exploration Permits of which the Current Permits form part, to Madagascar Development JV Company before any Exploitation Permit is issued, subject to compliance with all applicable laws and conditions of grant of the relevant Permits.

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15.6	Avoidance of forfeiture of Permits

(a)	If a Party is required to do anything in relation to this clause 15 which could foreseeably result in any cancellation, forfeiture or suspension of the whole or any part of a Permit, then:

(i)	the Parties must consult with one another and in good faith agree to either:

A.	proceed with the action; or

B.	refrain from that action and undertake such alternative actions as agreed by the Parties in order to transfer the relevant rights and interests in the Area of Interest to the Madagascar Development JV Company ; and

(ii)	a Party must not proceed with any action that is wholly within its control and could foreseeably result in any cancellation, forfeiture or suspension of the whole or any part of a Permit without the other Parties’ consent; and

(b)	if segregation or transfer under this clause 15 is temporarily unable to occur due to matters outside of the control of the Permit Holders and the Parties, or the Parties agree not to proceed with any transfer or segregation under clause 15.6(a), then the Parties and the Beneficial Holder agree:

(i)	that the Sublease Agreements in respect of the relevant Exploration Permits shall remain in place to ensure that the JV Company has its full interest and benefit in the Area of Interest;

(ii)	to implement all reasonable arrangements (whether set out in this clause 15 or otherwise) to achieve a transfer or grant of the relevant legal interest in the Area of Interest to the JV Company as soon as reasonably possible; and

(iii)

until a transfer is effected in accordance with clause 15.6(b)(ii), Energizer’s obligations under this Agreement to procure the required actions of the Beneficial Holders and the Registered Holder shall continue in respect of the relevant Permits.

16.	Environment and Mining Operations

Prior to undertaking any Mining Operations within the Area of Interest, the Parties must use all reasonable endeavours to ensure Madagascar Development JV Company obtains all relevant environmental approvals necessary under Madagascan law, including the approval of the environmental commitment plan (plan d’engagement environnemental) and of the environmental impact study (Etude d’impact environmental) and the issuance of an environmental authorisation related to the proposed Mining Operations.

17.	Industrial Mineral Rights

17.1	Holder of Permits and Industrial Mineral Rights

(a)

Upon Energizer receiving notice from the Mining Department that the Mining Department will from that time permit formal transfer and registration of interests in, and transfers of, the Exploration Permits, Energizer must use its reasonable endeavours to procure that the MMR and the Beneficial Holder prepare, execute and register such applications, transfers and other documents as may be necessary to transfer the Permits from MMR to the Beneficial Holder.

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(b)	The Parties agree and acknowledge that :

(i)	subject to clause 15 and clause 17.1(a), MMR is the Registered Holder;

(ii)	subject to clause 15, the Beneficial Holder is the beneficial holder of the Permits;

(iii)

subject clause 15, upon and from a transfer of the Permits in accordance with clause 17.1 the Beneficial Holder will be the Registered Holder; and

(iv)	the Beneficial Holder is the sole beneficial holder of the Industrial Mineral Rights,

and no other party has any rights in the Permits or the Industrial Mineral Rights other than as contemplated by this Agreement.

17.2	Priority of exercise of Industrial Mineral Rights

Subject to clause 17.4, the Beneficial Holder, as the holder of the Industrial Mineral Rights, and the JV Company must consult, co-operate and otherwise use all reasonable endeavours not to interfere with:

(a)	the exercise of the Other Mineral Rights by the JV Company; and

(b)	the exercise of the Industrial Mineral Rights by the Beneficial Holder,

but to the extent such interference cannot reasonably be avoided, the exercise of the Industrial Mineral Rights by the Beneficial Holder will have priority. Without limiting the foregoing, the Beneficial Holder, as the holder of the Industrial Mineral Rights, and JV Company must, prior to the commencement of their respective seasonal exploration programmes on the Area of Interest, consult with each other as to the contents of those programs and use reasonable endeavours to ensure those programs are not incompatible.

17.3	Exercise of Industrial Mineral Rights by the Beneficial Holder

Energizer must use its reasonable endeavours to procure that, in the exercise of the Industrial Mineral Rights, the Beneficial Holder will:

(a)	comply with all applicable laws and conditions of grant of the Permits; and

(b)	not do or suffer to be done anything which will or may render a Permit liable to cancellation or forfeiture.

17.4	Suspension of Industrial Mineral Rights for duration of Mining Operations

Subject to clause 17.7, upon JV Company making a Decision to Mine, the Industrial Mineral Rights of the Beneficial Holder will be suspended over the Mining Area for the duration of the Mining Operations the subject of that Decision to Mine.

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17.5	Transfer of Industrial Mineral Rights

The Beneficial Holder may transfer, assign or otherwise dispose of the whole or any part of the Industrial Mineral Rights to any person ( IMR Transferee ) subject to:

(a)	the Beneficial Holder giving the JV Company the opportunity to match any bona fide third party offer for the Industrial Mineral Rights as a right of first refusal for a period of 30 days from the time of notice of the offer from the Beneficial Holder;

(b)	the IMR Transferee being technically and financially able to perform the obligations of the Beneficial Holder as the holder of the Industrial Mineral Rights under this Agreement to the extent of the interest disposed of; and

(c)

the IMR Transferee entering into a deed with JV Company and Shareholders whereby the IMR Transferee agrees to be bound by, and assumes the obligations of the Beneficial Holder as the holder of the Industrial Mineral Rights under this Agreement (including the obligations under this clause) to the extent of the interest to be disposed of.

17.6	Transfer of Other Mineral Rights

(a)	JV Company or TenementCo may transfer, assign or otherwise dispose of the whole or any part of the Other Mineral Rights to any person ( OMR Transferee ) subject to:

(i)	subject to clause 17.6(b), JV Company giving the relevant Beneficial Holder the opportunity to match any bona fide third party offer for the Other Mineral Rights as a right of first refusal for a period of 30 days from the time of notice of the offer from JV Company;

(ii)	subject to clause 17.6(c), the OMR Transferee being technically and financially able to perform the obligations of JV Company and TenementCo as the holder of the Other Mineral Rights under this Agreement to the extent of the interest disposed of; and

(iii)

the IMR Transferee entering into a deed with the relevant Beneficial Holder whereby the OMR Transferee agrees to be bound by, and assumes the obligations of the Shareholders, JV Company and TenementCo as the holder of the Other Mineral Rights under this Agreement (including the obligations under this clause) to the extent of the interest to be disposed of.

(b)	If the disposal to the OMR Transferee is on arms length commercial terms, clause 17.6(a)(i) shall not apply.

(c)

If the IMR Transferee is a person that has technical and financial abilities (insofar as such abilities are relevant to the performance of the obligations of the holder of the Other Mineral Rights under this Agreement) that are equivalent or greater to those of Malagasy as at the Execution Date, then the requirements of clause 17.6(a)(ii) shall be deemed to be satisfied.

17.7	Co-mingling

(a)

If a deposit of Other Minerals is co-mingled or co-incident to a deposit of Industrial Minerals then the Beneficial Holder and JV Company will negotiate in good faith the terms on which they will jointly develop the Industrial Minerals and Other Minerals, provided that, subject to clause 17.7(b), in no circumstances will the exploration or development of a deposit of Industrial Minerals impede the exploration or development of a deposit of Other Minerals.

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(b)	The development of a deposit of Other Minerals that is co-mingled or co-incident to a deposit of Industrial Minerals will prevail over the exploration or development of the deposit of Industrial Minerals only in following circumstances:

(i)	the deposit of Other Minerals has been determined by a competent person to be an orebody comprising a resource or reserve with a greater net present value than the deposit of Industrial Minerals; and

(ii)	the JV Company can demonstrate to the satisfaction of the Energizer, acting reasonably, that the deposit of Other Minerals can and will be developed and mined within the same timeframe as Energizer proposes to develop and mine the deposit of Industrial Minerals.

In this clause 17.7(b), “reserve”, “resource” and “competent person” have the meanings ascribed to those terms in the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia and known as the JORC Code.

(c)

Subject to clause 17.7(d), if the Beneficial Holder and JV Company are unable to negotiate the joint development of the Industrial Minerals and Other Minerals, then as part of the development of the Other Minerals, JV Company will, on receiving a written notification from Energizer, stockpile the Industrial Minerals so that the Beneficial Holder may have the benefit of the development of the Industrial Minerals once JV Company has ceased Mining.

(d)

Any stockpiling costs associated with the development of Other Minerals (including overburden and waste) will be at the expense of JV Company. Any costs associated with the stockpiling of Industrial Minerals undertaken at the request of Energizer which are not activities which would have been incurred by JV Company in the course of Mining Operations in any event, including (but not limited to) any ongoing environmental compliance costs, will be funded 100% by Energizer.

18.

Operator

18.1	First Operator

Malagasy (or its nominee) will be the initial Operator and remain as Operator until it is removed or resigns in accordance with the terms of this Agreement.

18.2	Functions of the Operator

The Operator will:

(a)

(by itself or through its employees, agents or contractors) manage, direct and control any and all Joint Venture Operations on behalf of and as agent for JV Company, TenementCo and the Parties, subject to the applicable laws of the jurisdictions in which the abovementioned entities are incorporated;

(b)	implement the Programs and Budgets approved by the Board; and

(c)	implement the decisions of the Board and shall make all expenditures necessary to comply with those instructions and directions.

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18.3	Operator to prepare Programs and Budgets

The Operator shall prepare and submit Programs and Budgets for consideration and approval by the Board, which shall be prepared for periods each of 12 months duration commencing on 1 July.

18.4	Liability of Operator

The Operator shall not have any liability to the Shareholders for losses sustained or liabilities incurred if, in the circumstances of the particular case, it has acted or refrained from acting in the course of performing in good faith its obligations under this Agreement and has not been wilfully or grossly negligent.

18.5	Indemnity of Operator

Each Shareholder severally, to the extent of its Shareholding Interest must indemnify and hold harmless the Operator (acting in that capacity), its directors, employees, agents and contractors ( Indemnified Persons ) from and against all damage, loss, expense or liability of any nature suffered or incurred by the Indemnified Persons (including any claims made by third parties) in connection with Joint Venture Operations, including any personal injury, disease, illness or death, or physical loss of or damage to property, of the Indemnified Persons or any third party, except, in respect of an Indemnified Person, where that Indemnified Person has committed fraud or has been wilfully or grossly negligent.

18.6	Preserve Permits

The Operator must use all reasonable endeavours and comply with the directions of JV Company to maintain the Permits in Good Standing, subject to receiving sufficient funds to do so in accordance with the provisions of this Agreement.

18.7

Reporting

The Operator will keep the Parties advised of all Joint Venture Operations and will provide any information required to complete reports required to be submitted by any Party under this Agreement, including under clause 11.6, the Mining Code as well as any information required by the Parties to comply with their respective obligations under the listing rules of any securities exchange.

18.8	Change of Operator

(a)	Malagasy will continue as Operator until:

(i)	it ceases to hold a majority Shareholding Interest in JV Company; or

(ii)	it resigns as Operator by giving 30 days' written notice to the other Shareholders of JV Company of its intention to do so.

(b)	On the resignation or removal of the Operator in accordance with clause 18.8(a), JV Company shall, by way of a Shareholders’ resolution, appoint a new Operator.

(c)	The resolution referred to in clause 18.8(b) above shall be passed by a Simple Majority.

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19.	Contributions to Joint Venture Costs

(a)	Subject to clause 19(b), all Joint Venture Costs will be funded 100% by Malagasy, including JV Company’s and TenementCo’s obligations under clause 11.3.

(b)	Subject to clause 20, on and from the Trigger Date, all Joint Venture Costs in respect to the Mining Area will be funded by the Mining Parties in their Respective Proportions.

(c)

From the time Energizer is required to contribute to the funding under clause 19(b) ( Contribution Date ), Energizer and its representatives will, at Energizer’s expense and on reasonable notice, have the right to access, review and audit the expenditure of Mauritian Development JV Company and Madagascar Development JV Company.

(d)

From the Contribution Date, Mauritian Development JV Company may, from time to time by giving notice simultaneously to all Shareholders in Mauritian Development JV Company, request those Shareholders to fund the Joint Venture Costs in their Respective Proportions ( Contribution Notice ) and subject to clause 20.1, within one month after notice is given, all Shareholders must fund the amount specified in the notice.

(e)	Subject to clause 20.3(c), payment of amounts which a Shareholder is required to fund under this clause 19 and clause 20.2(d) shall be deemed to be the subscription by that Shareholder for additional Shares in Mauritian Development JV Company unless otherwise agreed by the Shareholders.

20.	Right to dilute

20.1	Election not to fund

A Shareholder may, by giving notice to Mauritian Development JV Company within 10 Business Days of receiving notice from Mauritian Development JV Company under clause 19(d), elect not to fund part or all of the amount the subject of that notice. For the avoidance of any doubt, a Shareholder may exercise its rights under this clause in respect of any Contribution Notice and may elect to contribute to future Contribution Notices after it has elected to dilute in respect of a Contribution Notice.

20.2	Contributions where election not to fund

If Mauritian Development JV Company receives notice of an election by a Shareholder under clause 20.1 ( Non-Contributing Shareholder ), then:

(a)	the Non-Contributing Shareholder will not be obliged to contribute the contribution specified in the notice, and:

(b)	Mauritian Development JV Company may give notice to the other Shareholders of the total amount of Joint Venture Costs not funded by Non-Contributing Shareholders ( Shortfall );

(c)

each other Shareholder ( Contributing Shareholder ) may, within 10 Business Days after receiving a notice from Mauritian Development JV Company under clause 20.2(b), give notice to Mauritian Development JV Company that it wishes to fund an additional amount of Joint Venture Costs up to the Shortfall (or, if there is more than one Contributing Shareholder and if the total additional amount that Contributing Shareholders wish to fund is greater than the Shortfall, Mauritian Development JV Company will allocate to each Contributing Shareholder that gives notice the proportion of the Shortfall that the amount of additional Joint Venture Costs that the Contributing Shareholder wishes to fund bears to the total additional Joint Venture Costs that all Contributing Shareholders wish to fund); and

(d)

each Contributing Shareholder must fund the amount of Joint Venture Costs requested from the Contributing Shareholder under clause 20.2(c) and the additional amount of Joint Venture Costs of which it gives notice to Mauritian Development JV Company or which Mauritian Development JV Company allocates to it under clause 20.2(c).

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20.3

Dilution

(a)	The Non-Contributing Shareholder’s percentage ownership of Mauritian Development JV Company will be diluted according to the following formula:

I =

A x 100

where:

I =

the Non-Contributing Shareholder’s reduced percentage shareholding;

A =

the total amount contributed to the funding of Mauritian Development JV Company by the Non-Contributing Shareholder at the date of the calculation plus the deemed contribution of the Non-Contributing Shareholder; and

B =

total amount of all funding of Mauritian Development JV Company at the date of the calculation plus the deemed contributions of all Parties,

and the percentage ownership in Mauritian Development JV Company of the contributing Shareholder will increase by an amount equal to the reduction of the percentage shareholding of the Non-Contributing Shareholder.

(b)	For the purposes of the above calculation, the deemed contribution of the Shareholders will be as follows:

Energizer: one third of the actual funding provided by Malagasy to Mauritian Development JV Company up until Energizer becomes liable to contribute to funding pursuant to clause 19(b).

Malagasy: nil.

By way of examples, if Malagasy has expended $30 million prior to the date on which Energizer becomes liable to contribute to funding pursuant to clause 19 (b) ( Contribution Date ), then :

(a)	As at the Contribution Date:

(i)

the actual total funding contribution of the Shareholders will be:

Energizer:

nil

Malagasy:

$30 million

(ii)

the deemed contribution of the Shareholders will be:

Energizer:

one third of $30 million = $10 million

Malagasy:

nil

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(iii)

Energizer’s percentage ownership of Mauritian Development JV Company will be:

A x 100

10 million x 100

40 million

25%

(iv)

Malagasy’s percentage ownership of Mauritian Development JV Company will be:

A x 100

30 million x 100

40 million

75%

(b)	If there is then a $10 million programme to which each of Energizer and Malagasy contribute i.e. $2.5 million and $7.5 million respectively, then:

(i)

the actual total funding contribution of the Shareholders will be:

Energizer:

$2.5 million

Malagasy:

$37.5 million

(ii)

the deemed contribution of the Shareholders will be:

Energizer:

one third of $30 million = $10 million

Malagasy:

nil

(iii)

Energizer’s percentage ownership of Mauritian Development JV Company will be:

A x 100

12.5 million x 100

50 million

25%

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(iv)

Malagasy’s percentage ownership of Mauritian Development JV Company will be:

A x 100

37.5 million x 100

50 million

75%

(c)	If there is then a $20 million programme to which Energizer elects NOT to contribute but Malagasy does contribute 100% of the $20 million programme cost:

(i)

the actual total funding contribution of the Shareholders will be:

Energizer:

$2.5 million

Malagasy:

$57.5 million

(ii)

the deemed contribution of the Shareholders will be:

Energizer:

one third of $30 million = $10 million

Malagasy:

nil

(iii)

Energizer’s percentage ownership of Mauritian Development JV Company will be:

A x 100

12.5 million x 100

70 million

17.86%

(iv)

Malagasy’s percentage ownership of Mauritian Development JV Company will be:

A x 100

57.5 million x 100

70 million

82.14%

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(c)	A reduction to a Shareholder’s Shareholding Interest shall be effected in such manner as may be agreed between the Shareholders, or failing such agreement within 30 Business Days after the dilution occurs, in the manner determined by the Contributing Shareholders, including by means of:

(i)	a transfer of Shares as between Shareholders;

(ii)	the forfeiture or cancellation of some or all of the Non-Contributing Shareholder’s Shares; or

(iii)

the issue of new Shares to the Contributing Parties.

21.	Disposal of Shares and pre-emption rights

A Shareholder of JV Company or NewCo Mauritius may transfer, assign or otherwise dispose of the whole or any part of their Shares to any person ( Share Transferee ) subject to:

(a)	the transferring Shareholder giving the other non-transferring Shareholder the opportunity to match any bona fide third party offer for the Shares as a right of first refusal for a period of 30 days from the time of notice of the offer from the transferring Shareholder;

(b)

the Share Transferee being technically and financially able to perform the obligations of the transferring Shareholder under this Agreement to the extent of the interest disposed of (for avoidance of doubt if Malagasy is proposing to sell its Shares then the purchaser must have the necessary skills to ensure JV Company or NewCo Mauritius (as applicable) can manage the matters contemplated by this Agreement); and

(c)

the Share Transferee entering into a deed with the non-transferring Shareholder whereby the Transferee agrees to be bound by, and assumes the obligations of the transferring Shareholder under this Agreement (including the obligations under this clause) to the extent of the interest to be disposed of.

22.	Drag along

(a)

Subject to clauses 21 and 22(b), if any third person ( Offeror ) provides to a Shareholder or Shareholders who hold Shares representing not less than 50% of the Shares on issue in the capital of the JV Company or NewCo Mauritius (as applicable) ( Majority Shareholder ) a bona fide arm’s length offer to purchase all of the Shares in JV Company or NewCo Mauritius (as applicable), and each Share of the same class is proposed to be purchased for equal consideration and on the same terms and conditions, then the Majority Shareholder may require each other Shareholder ( Minority Shareholder ) by providing notice in writing to transfer its Shares to the Offeror free from all Encumbrances on those same terms and conditions.

(b)	Clause 22(a) only applies where the Offeror has made a full cash offer to purchase all of the Shares on issue in the capital of the JV Company or NewCo Mauritius (as applicable).

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23.

Tag along

(a)

Subject to clauses 21 and 23(b), if the Majority Shareholder wishes to accept a bona fide arm’s length offer for all of its Shares from an Offeror and does not serve a notice in accordance with clause 22, then the Minority Shareholder may require the Majority Shareholder to cause the Offeror to purchase all of the Shares of the Minority Shareholder at a price per Share and on such other terms and conditions as are no less favourable to those offered to the Majority Shareholder by the Offeror for the Shares of the Majority Shareholder.

(b)	Clause 23(a) only applies where the Offeror has made a full cash offer to purchase all of the Shares on issue in the capital of the JV Company or NewCo Mauritius (as applicable).

24.

Royalties

24.1	Interest below 10%

(a)

If at any time a Shareholder’s Shareholding Interest in JV Company or NewCo Mauritius is reduced to 10% or less, then that Shareholder will be deemed to have assigned and transferred its remaining Shareholding Interest to the other Shareholder in consideration for the other Shareholder procuring that JV Company or NewCo Mauritius pay a royalty of an amount equal to two percent (2%) of net smelter returns of all Other Minerals produced from the Area of Interest calculated in accordance with Schedule 4.

(b)	For the sake of clarity, if the diluting Shareholder is Energizer, the royalty payable in accordance with clause 24.1(a) is in addition to the royalty payable pursuant to clause 4.1(b).

24.2	Transfer of Royalties

In circumstances where a royalty becomes payable in accordance with clause 4.1(b) or clause 24.1(a), the payee of the royalty may transfer, assign or otherwise dispose of its interest in the royalty to any person ( Royalty Transferee ) subject to:

(a)	the payee of the royalty giving the payer of the royalty the opportunity to match any bona fide third party offer for the royalty as a right of first refusal for a period of 30 days from the time of notice of the offer from the payee; and

(b)	the Royalty Transferee entering into a deed with the payer of the royalty whereby the Royalty Transferee agrees to be bound by, and assumes the obligations of the payee under this Agreement (including the obligations under this clause) to the extent of the interest to be disposed of.

25.	Representations and warranties

25.1	Representations and warranties by Malagasy

Malagasy represents and warrants to Energizer as at the Execution Date that:

(a)	it is validly incorporated and subsisting under the laws of Australia;

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(b)	the execution and delivery of this Agreement has been duly and validly authorised by all necessary corporate action;

(c)	it has corporate power and lawful authority to execute and deliver this Agreement and to observe and perform or cause to be observed and performed all of its obligations in and under this Agreement;

(d)	there is no litigation or proceeding of any nature concerning Malagasy, pending or threatened against them or a Related Body Corporate which may prevent or impair Malagasy’s ability to enter into or perform its obligations in and under this Agreement;

(e)

(f)	it is solvent and is capable of performing its obligations under this Agreement.

25.2	Representations and warranties by Energizer

(a)	Energizer represents and warrants to Malagasy as at the Execution Date that:

(i)	it is validly incorporated and subsisting under the laws of Minnesota, USA;

(ii)	the execution and delivery of this Agreement has been duly and validly authorised by all necessary corporate action;

(iii)

it has corporate power and lawful authority to execute and deliver this Agreement and to observe and perform or cause to be observed and performed all of its obligations in and under this Agreement;

(iv)	there is no litigation or proceeding of any nature concerning Energizer, pending or threatened against them or a Related Body Corporate which may prevent or impair Energizer’s ability to enter into or perform its obligations in and under this Agreement;

(v)

(vi)	it is solvent and is capable of performing its obligations under this Agreement.

(b)	Subject to clause 25.3, Energizer represents and warrants to Malagasy as at the Execution Date, and to Malagasy, JV Company and TenementCo as at the date of execution of the Subleases that to the best of its knowledge:

(i)	subject to it being able to procure each of the actions of the Registered Holder contemplated by this Agreement, it has full right, power and authority to grant the Subleases to TenementCo in accordance with this Agreement;

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(ii)	its subsidiaries, the Beneficial Holder, are the beneficial holders of the Exploration Permits .

(iii)

no person other than the Registered Holder, Energizer and/or Energizer’s Related Bodies Corporate has any proprietary rights of any nature in respect of the Exploration Permits and they have not granted to any person any rights to own or possess any interest or any rights to explore or prospect for minerals or to mine the same in any part of the land comprising the Exploration Permits;

(iv)	the Exploration Permits are free of any Encumbrances except to the extent of any conditions imposed under the Mining Code on the Exploration Permits;

(v)

there is no litigation or proceeding of any nature concerning the Exploration Permits, pending or threatened against them or any other person which may defeat, impair, detrimentally affect or reduce the right, title and interest of JV Company or TenementCo in the Exploration Permits or the interest therein, including any plaint seeking forfeiture of the Exploration Permits;

(vi)	to the best of its knowledge, the Exploration Permits have been duly marked off, granted and applied for in accordance with the Mining Code;

(vii)

the Exploration Permits are in full force and effect and in Good Standing and not liable to cancellation or forfeiture for any known reasons and they are not in breach or contravention of any of the terms and conditions upon which the Exploration Permits were granted or of any other rule, regulation or provision of the Mining Code or any other statute concerning, affecting or relating to the Exploration Permits;

(viii)

there are no facts or circumstances that could, under the currently applicable laws of Madagascar, give rise to the cancellation, forfeiture or suspension or grant of the Exploration Permits when renewed, that could have a Material Adverse Effect;

(ix)	except as disclosed to Malagasy before the Execution Date, there are no agreements or dealings in respect of the Exploration Permits;

(x)	there is not in existence any current compensation agreement with the owner or occupier of any land which is subject to the Exploration Permits;

(xi)

there are no Environmental Liabilities relating to or affecting the Exploration Permits, nor are there any circumstances relating to the Exploration Permits which may reasonably be expected to give rise to future Environmental Liabilities, except to the extent of any report, study or assessment required to be lodged pursuant to the Mining Code or other regulation in relation to the Exploration Permits;

(xii)

the Mining Information is complete and accurate in all material respects; and

(xiii)

the Exploration Permits have been granted in respect of all of the ground described in the Exploration Permits .

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25.3	Disclaimer of liability by Energizer

Energizer is not liable for any loss arising from a breach of the warranties and representations in clause 25.2(b) to the extent such loss is:

(a)	caused or contributed to by any failure of Energizer to procure certain acts or omissions of the Registered Holder provided that Energizer used its reasonable endeavours to procure such acts or omissions;

(b)	a result of the Registered Holder withholding information from, or providing misleading information to, Energizer provided that Energizer did not know that information was being withheld or that the information provided was misleading;

(c)	a result of a Political Event;

(d)	disclosed by Energizer to Malagasy or is known by Malagasy at or prior to Completion;

(e)	in excess of the total amount of the Purchase Price; or

(f)	caused or contributed to by a breach by Malagasy or its Related Bodies Corporate or their respective obligations under this Agreement.

26.	Guarantee by Energizer

(a)	Energizer agrees to guarantee to Malagasy the due performance and observance by the Beneficial Holder of each and every obligation of the Beneficial Holder under:

(i)	this Agreement; and

(ii)	any Sublease Agreement entered into by the Parties in accordance with this Agreement.

(b)	Energizer agrees to indemnify Malagasy in relation to any loss suffered as a result of the Beneficial Holder failing to perform or observe any of their obligations under:

(i)	this Agreement; and

(ii)	any Sublease Agreement entered into by the Parties in accordance with this Agreement.

27.	Guarantee by Malagasy

By executing this Agreement, Malagasy guarantees to Energizer and the Beneficial Holder the due performance and observance by each of JV Company and TenementCo of each and every obligation of JV Company and TenementCo under this Agreement other than those obligations of JV Company and TenementCo under this Agreement that relate to a Mining Area.

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28.	Assignment

(a)	No Party may assign, sublet, licence or otherwise transfer or part with, mortgage, encumber or in any way deal with its interest under this Agreement otherwise than in accordance with the provisions of this Agreement.

(b)	At any time during the Term, Malagasy may assign all or any of its rights or obligations under this Agreement as a matter of right to any Related Body Corporate of Malagasy without Energizer’s consent, provided that the assignee enters into an Accession Deed.

29.	Termination

29.1	Termination events

This Agreement terminates immediately upon the occurrence of:

(a)	any unanimous agreement by the Shareholders to that effect;

(b)	in relation to any Party, that Party ceasing to hold any Shares in JV Company; and

(c)	TenementCo ceasing to have any rights to any of the Other Mineral Rights.

29.2	Event of Default

(a)

(b)

If a Party serves a notice of default under clause 29.2(a) and such default remains un-remedied upon expiry of the period specified in such notice for rectification, the aggrieved Party may terminate this Agreement forthwith upon the service of a further notice in writing to that effect and upon the service of such further notice this Agreement shall terminate forthwith without prejudice to the rights and remedies of the aggrieved Party at law or otherwise howsoever arising.

(c)	Clause 29.2(a) does not apply to any Event of Default for which another remedy is provided in this Agreement. By way of example, clause 29.2(a) does not apply to a failure to contribute to a Contribution Notice under clause 19 but instead clause 20 would apply to such failure to contribute.

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29.3	Effect of termination

(a)	Termination of this Agreement releases each Party from any further performance of any liability under this Agreement but does not:

(i)	affect any provision of this Agreement expressed to operate or have effect after termination; or

(ii)	have any prejudicial effect on any accrued right of any Party in relation to any breach or default under this Agreement by any other Party occurring before termination.

(b)	If this Agreement is terminated in accordance with clause 29.2, the aggrieved Party has an option to acquire the defaulting Party’s rights and interests under this Agreement at:

(i)	a value determined by the Parties negotiating in good faith; or

(ii)	in the absence of agreement under clause 29.3(b)(i) above, a discount of 10% to market value as determined by an independent expert appointed in accordance with clause 33.2 .

29.4	Continuing remedies

Each Party, following termination of this Agreement under this clause 29, retains any right against any other Party under this Agreement in relation to any breach or default by that other Party that accrued before termination, in addition to any other right provided by law, except to the extent that the liability of that other Party is excluded or limited under any provision of this Agreement.

30.	Force Majeure

30.1	Force Majeure

In this clause 30 Force Majeure means any act, event or cause which is beyond the reasonable control of the Party concerned (other than lack of or inability to use funds), including:

(a)

(b)	action or inaction of any government or governmental or other competent Governmental Agency (including any court) including expropriation, restraint, prohibition, intervention, requisition, requirement, direction or embargo by legislation, regulation or other legally enforceable order;

(c)	delay in the grant of access to a Permit;

(d)	inability to secure, on commercially acceptable terms, rights of access to a Permit from the owners, occupiers, lessees, custodians, trustees, native title claimants or holders of any land to which the Permit relates;

(e)	breakdown of plant, machinery or equipment or shortages of labour, transportation, fuel, power, plant, machinery, equipment or material; and

(f)	any other cause which by the exercise of foresight or due diligence, a Party is unable to prevent or overcome.

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30.2

Relief

If, as a direct result of Force Majeure, a Party becomes unable, wholly or in part, to perform any of its obligations or to exercise a right under this Agreement:

(a)	that Party is to give the other Party prompt notice of the Force Majeure with reasonably full particulars and, insofar as known to it, the probable extent to which it will be unable to perform, or be delayed in performing its obligation or exercising its right;

(b)	that obligation, other than an obligation to pay money, is suspended and the time for performing that obligation or for exercising that right is extended but only so far as and for so long as it is affected by the Force Majeure; and

(c)	the affected Party is to use all possible diligence to overcome or remove the Force Majeure as quickly as possible.

30.3	Labour disputes

Clause 30.2(c) does not require the affected Party to:

(a)	settle any strike or other labour dispute on terms contrary to its wishes; or

(b)	contest the validity or enforceability of any law, regulation or legally enforceable order by way of legal proceedings.

30.4	Resumption

The obligation of the affected Party to perform its obligations, resumes as soon as it is no longer affected by the Force Majeure.

31.	Dispute resolution

31.1	Application

This clause 31 applies to any dispute or difference ( dispute ) (other than a dispute to which clause 32 applies) arising between the Parties in relation to:

(a)	this Agreement or its interpretation;

(b)	any right or liability of any Party under this Agreement; or

(c)	the performance of any action by any Party under or arising out of this Agreement, whether before or after its termination.

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31.2	Dispute negotiation

(a)	A Party must not commence legal proceedings in relation to a dispute or refer a dispute to arbitration under this Agreement, unless that Party has complied with this clause 31.

(b)	A Party claiming that a dispute has arisen must notify the other Party specifying details of the dispute.

(c)	Each Party must refer a dispute to an authorised officer of that Party for consideration and use its best efforts to resolve the dispute through negotiation within seven (7) Business Days following the dispute notification or longer period agreed between the Parties.

(d)	Each Party must refer the dispute to its chief executive officer, in the event that the authorised officers of the Parties fail to resolve the dispute within the specified period.

(e)	Each Party must following reference to its chief executive officer use its best efforts to resolve the dispute by agreement or through an agreed mediation procedure.

(f)	A Party in compliance with this clause 31.2 may terminate the dispute resolution process by notice to the other Party at any time after seven (7) Business Days following reference of the dispute to its chief executive officer.

(g)	A Party is not required to comply with this clause 31.2 in relation to any dispute where the other Party is in breach of or default under this clause 31.2 in relation to that dispute.

31.3	Arbitration

Each Party must submit any dispute which remains unresolved following the negotiation process specified in clause 31.2 to arbitration under the Arbitration Rules of SIAC in accordance with the following procedures:

(a)	the arbitration will be conducted by three arbitrators, who will be appointed as agreed by the Parties or, failing such agreement, by the Deputy President of SIAC or his or her nominee;

(b)	the arbitration will be conducted in English;

(c)	each Party is entitled to legal representation at any arbitration; and

(d)	any arbitration will be conducted in Singapore, or at such other place as the Parties may agree.

31.4	Urgent relief

A Party may at any time apply to a court of competent jurisdiction for any equitable or other remedy for reasons of urgency, despite anything contained in this clause 31.

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31.5	Continued performance

32.	Disputes as to Technical or Financial Matters

32.1	Definitions

In this clause 32:

(a)	Technical Matter means a matter which is capable of determination by reference to Mining knowledge or practice; and

(b)	Financial Matter means a matter which is capable of determination by audit or reference to financial or accounting records, knowledge or practice.

32.2	Application

(a)	This clause 32 applies to any dispute arising between the Parties in relation to a Financial Matter or a Technical Matter.

(b)	This clause 32 does not prevent any Party from seeking urgent interlocutory or declaratory relief from a court of competent jurisdiction where, in that Party's reasonable opinion, that action is necessary to protect that Party's rights.

32.3	Dispute negotiation

32.4	Independent Expert

If the dispute is not resolved by negotiations between the senior management of the Parties within 20 Business Days of the first meeting between senior management under clause 32.3 and the Dispute relates to a Financial Matter or a Technical Matter, either Party may submit the dispute to an Independent Expert for determination in accordance with clause 33.

33.	Expert determination

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33.1	Referral to Independent Expert

Wherever under this Agreement:

(a)	a Party submits a dispute in accordance with clause 32; or

(b)	the Parties agree that a dispute between them will be resolved by an Independent Expert; or

(c)	a dispute is required by this Agreement to be determined by an Independent Expert,

then the dispute may be referred by either Party to an Independent Expert under this clause 33.

33.2	Appointment of Independent Expert

The procedure for the appointment of an Independent Expert will be as follows:

(a)	the Parties must endeavour to agree upon the identity of a single Independent Expert to whom the dispute will be referred for determination as soon as is reasonably practicable;

(b)	if the Parties are unable to agree upon the identity of a single Independent Expert within 20 Business Days, the Parties will, as soon as practicable thereafter:

(i)	in the case of a Financial Matter, request the President of Chartered Accountants in Australia to appoint the Independent Expert; and

(ii)	in the case of a Technical Matter, request the President of the Australian Institute of Mining and Metallurgy to appoint the Independent Expert; and

(c)	within 10 Business Days of appointment, the Independent Expert must set a time and place for receiving the Parties’ submissions.

33.3	Requirements of Independent Expert

(a)	The Independent Expert will be required to have appropriate commercial and practical experience and expertise in the area of the dispute.

(b)

(c)	Any person nominated to act as an Independent Expert must, before they are appointed, confirm in writing that they are able to resolve the dispute within a reasonable time.

(d)	The Independent Expert appointed under clause 33.2 will act as an expert and not as an arbitrator.

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33.4	Rights of the Parties

Each Party:

(a)	may be legally represented at any hearing before the Independent Expert;

(b)	is entitled to produce to the Independent Expert any materials or evidence which that Party believes is relevant to the dispute; and

(c)	must make available to the Independent Expert all materials requested by the Independent Expert and all other materials which are relevant to the Independent Expert’s determination.

33.5	Confidentiality

33.6	Determination

(a)	The Independent Expert must make a determination on the dispute within 70 Business Days of appointment and must determine what, if any, adjustments may be necessary between the Parties. The determination of the Independent Expert:

(i)	must be in the form of a written report;

(ii)	will be final and binding upon the Parties except in the case of bias, fraud, manifest mistake or error; and

(iii)

will be kept private and confidential unless otherwise agreed to by all Parties involved in the determination.

(b)	If the Independent Expert does not determine the dispute within 70 Business Days of appointment, either Party may terminate the appointment by written notice and a new Independent Expert will be appointed within 10 Business Days in accordance with the procedure set out in clause 33.2.

33.7	Costs of Independent Expert

The costs in relation to a determination by the Independent Expert will be dealt with as follows:

(a)	the costs of the Independent Expert will be apportioned between the Parties in such proportions as the Independent Expert thinks fit, otherwise the Parties will each bear their own costs; and

(b)	the Parties will each bear their own costs incurred in the preparation and presentation of any submissions or evidence to the Independent Expert.

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34.	Status of Agreement and further acts

(a)	The Parties agree that this Agreement is binding upon them and intend that this Agreement is legally enforceable in accordance with its terms.

(b)	Each Party must promptly do all further acts and execute and deliver all further documents (in form and content reasonably satisfactory to that Party) required by law or reasonably requested by any other party to give effect to this Agreement and the transactions contemplated by this Agreement.

35.	Relationship between Parties

(a)

(b)	No Party will have any authority to act on behalf of any other Party, except as expressly provided in this Agreement. Where a Party acts on behalf of another without authority, such Party must indemnify the other from any losses, claims, damages and liabilities arising out of any such act.

(c)	Each Party has the unrestricted right to engage in and receive the full benefit of any competing activities outside the area the subject of the Joint Venture Operations.

(d)

Any agreement which is entered into by JV Company, TenementCo or the Operator on behalf of JV Company or TenementCo in the performance of its functions and obligations under this Agreement with a Shareholder, a Related Body Corporate of a Shareholder or an officer or director of a Shareholder or a Related Body Corporate of the Shareholder must:

(i)

be on terms no less commercially reasonable in the particular circumstances of the agreement than would have been the case had the agreement been entered into on normal arm’s length commercial terms with a third party who is not a Shareholder, a Related Body Corporate of a Shareholder or an officer or director of a Shareholder or a Related Body Corporate of a Shareholder; and

(ii)	be entered into in good faith in the best interests of the Joint Venture.

36.	Confidentiality and public announcements

36.1	Confidentiality

Subject to clause 36.6, each Party (for this clause Recipient ) who is in possession or control of or has access to Confidential Information of another Party or a Related Body Corporate of another Party ( Owner ) must use that Confidential Information only for the purposes of acts contemplated by this Agreement, and keep that Confidential Information confidential and not disclose it or allow it to be disclosed to any third party except:

(a)	if the information is at the time generally and publicly available other than as a result of breach of confidence by the Recipient;

(b)	if the information is at the time lawfully in the possession of the proposed recipient of the information through sources other than the Recipient;

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(c)	by the Recipient to legal and other professional advisers and other consultants and officers and employees of:

(i)	the Recipient; or

(ii)	the Recipient's Related Bodies Corporate,

in any case requiring the information for the purposes of this Agreement or any transaction contemplated by it, or for the purpose of advising that Party in relation thereto;

(d)	with the prior written consent of the Owner;

(e)	to the extent required by law or by a lawful requirement of any Governmental Agency having jurisdiction over the Recipient or any of its Related Bodies Corporate;

(f)	if required in connection with legal proceedings or arbitration relating to this Agreement or for the purpose of advising the Recipient in relation thereto;

(g)	if and to the extent that it may be necessary or desirable to disclose to any Governmental Agency in connection with applications for consents, approvals, authorities or licenses in relation to this Agreement;

(h)	to the extent required by a lawful requirement of any stock exchange having jurisdiction over the Recipient or any of its Related Bodies Corporate;

(i)	if necessary to be disclosed in any prospectus or information memorandum to investors or proposed or prospective investors:

(i)	for an issue or disposal of any shares or options in the Recipient or any of its Related Bodies Corporate;

(ii)	for an issue of debt instruments of the Recipient or any of its Related Bodies Corporate; or

(iii)

for the purposes of the Recipient obtaining a listing on any stock exchange of any shares, options or debt instruments;

(j)	if necessary to be disclosed to a professional investor or investment adviser for the purposes of enabling an assessment to be made about the merits or otherwise of an investment in the Recipient or any of its Related Bodies Corporate;

(k)	if necessary to be disclosed to an existing or bona fide proposed or prospective:

(i)	financier of the Recipient or of any of its Related Bodies Corporate; or

(ii)	rating agency in respect of the Recipient or of any of its Related Bodies Corporate;

(l)	if necessary to be disclosed to any bona fide proposed or prospective:

(i)	transferee of any property to which the information relates or of any shares in the Recipient or any Related Body Corporate of the Recipient;

(ii)	financier of such transferee providing or proposing or considering whether to provide financial accommodation; or

(iii)

assignee of rights under the Recipient's financing documents; or

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(m)	if necessary to be disclosed to legal and other professional advisers and other consultants and officers or employees of any of the persons referred to in clause 36.1(j), 36.1(k), or 36.1(l).

36.2	Conditions

(a)

In the case of a disclosure under clause 36.1(c) or 36.1(d) and, where appropriate, under clause 36.1(e), and 36.1(f), the Party wishing to make the disclosure must inform the proposed recipient of the confidentiality of the information and the Party must take such precautions as are reasonable in the circumstances to ensure that the proposed recipient keeps the information confidential.

(b)	In the case of a disclosure under clause 36.1(g), 36.1(h) and 36.1(i), the Party wishing to make the disclosure may only do so:

(i)	with the written consent of both Parties, which must not be unreasonably withheld or delayed; or

(ii)

(c)	In the case of a disclosure under clause 36.1(j), 36.1(k) or 36.1(l) or (in the case of legal and other professional advisers and other consultants only) 36.1(m) the Party wishing to make the disclosure must not make any disclosure unless:

(i)	in the case of a disclosure under clause 36.1(j), 36.1(k) or 36.1(l) the proposed recipient has first entered into and delivered to the Shareholders a confidentiality undertaking in a form acceptable to the other Shareholders; or

(ii)

in the case of a disclosure under clause 36.1(m) the principal or employer of the proposed recipient has first entered into and delivered to the Shareholders a confidentiality undertaking in a form acceptable to the other Shareholders which will incorporate a warranty by the principal or employer of the proposed recipient that the proposed recipient is under an obligation of confidentiality to the principal or employer and that the principal or employer will enforce that obligation to the fullest extent that the law or equity allows upon being called upon to do so by any of the Shareholders .

36.3	Notice to other Shareholders

Each Party must:

(a)	promptly inform each other Party of any request received by that Party from any person described in clause 36.1(e) to disclose information under that clause;

(b)	inform all other Shareholders as soon as reasonably practicable after information is disclosed by the Party under clause 36.1(e) and

(c)	not disclose any information under clause 36.1 unless all other Shareholders have been informed of the proposed disclosure.

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36.4	Indemnities

36.5	Survival of confidentiality obligations

The obligations of confidentiality imposed by this clause 36 survive the termination of this Agreement and any person who ceases to be a Party continues to be bound by those obligations.

36.6	Use of Mining Information in respect to Other Mineral Rights

Nothing in this clause 36 prevents Energizer from using the Mining Information in relation to the exploration and development of the Industrial Minerals.

37.

Notices

Each communication (including each notice, consent, approval, request and demand) under or in connection with this Agreement:

(a)	must be in writing;

(b)	must be addressed as follows (or otherwise notified by that Party to the other Party from time to time):

To Energizer or the Beneficial Holder	Energizer Resources Inc

	Attention:	Chief Executive Officer

	Address:	Energizer Resources Inc. 141 Adelaide Street West Suite 520 Toronto, Ontario CANADA

	Facsimile:	+1 416.364.2753

To Malagasy	Malagasy Minerals Limited

	Attention:	Company Secretary

	Address:	Malagasy Minerals Limited 15 Lovegrove Close Mount Claremont Western Australia 6010 AUSTRALIA

	Facsimile:	+61 8 9284 3801

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(c)	must be signed by the Party making it or (on that party’s behalf) by the solicitor for or any attorney, director, secretary or authorised agent of that Party;

(d)	must be delivered by hand or posted by prepaid post to the address, or sent by fax to the number, of the addressee; and

(e)	is taken to be received by the addressee:

(i)	(in the case of prepaid post sent to an address in the same country) on the third day after the date of posting;

(ii)	(in the case of prepaid post sent to an address in another country) on the fifth day after the date of posting;

(iii)

(in the case of fax) at the time in the place to which it is sent equivalent to the time shown on the transmission confirmation report produced by the fax machine from which it was sent; and

(iv)	(in the case of delivery by hand) on delivery;

38.	Miscellaneous

38.1	Governing law

This Agreement is governed by and must be construed according to the law applying in Ontario, Canada.

38.2	Amendments

This Agreement may only be varied by a document signed by or on behalf of each of the Parties.

38.3	Primacy of this Agreement

The Parties agree that this Agreement has primacy over any ancillary agreement contemplated by this Agreement, including the Sublease Agreements and, in the case of inconsistency, the terms and conditions of this Agreement will prevail. Each Party agrees that it will procure that any subsidiary of it will comply with the terms of this Agreement notwithstanding any inconsistency between this Agreement any ancillary agreement contemplated by this Agreement which a subsidiary of a Party is a party to.

38.4

Language

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38.5

Waiver

(a)

(b)	A waiver or consent given by a Party under this Agreement is only effective and binding on that Party if it is given or confirmed in writing by that Party.

(c)	No waiver of a breach of a term of this Agreement operates as a waiver of another breach of that term or of a breach of any other term of this Agreement.

38.6

Consents

38.7	Counterparts

38.8	No representation or reliance

(a)	Each Party acknowledges that neither Party (nor any person acting on a Party’s behalf) has made any representation or other inducement to it to enter into this Agreement except for representations or inducements expressly set out in this Agreement.

(b)	Each Party acknowledges and confirms that it does not enter into this Agreement in reliance on any representation or other inducement by or on behalf of the other Party, except for representations or inducements expressly set out in this Agreement.

38.9

Expenses

Except as otherwise provided in this Agreement, each Party must pay its own costs and expenses in connection with negotiating, preparing, executing and performing this Agreement.

38.10

Entire agreement

To the extent permitted by law, in relation to its subject matter this Agreement:

(a)	embodies the entire understanding of the Parties, and constitutes the entire terms agreed by the Parties; and

(b)	supersedes any prior written or other agreement of the Parties.

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38.11

Indemnities

(a)	Each indemnity in this Agreement is a continuing obligation, separate and independent from the other obligations of the Parties, and survives termination, completion or expiration of this Agreement.

(b)	It is not necessary for a Party to incur expense or to make any payment before enforcing a right of indemnity conferred by this Agreement.

(c)	A Party must pay on demand any amount it must pay under an indemnity in this Agreement.

38.12

Severance and enforceability

38.13

No merger

38.14

Power of attorney

(a)	Each attorney who signs this Agreement on behalf of a Party declares that the attorney has no notice from the Party who appointed him that the power of attorney granted to him, under which the attorney signs this Agreement, has been revoked or suspended in any way.

(b)	Each Party represents and warrants to each other that its respective attorney or authorised officer who signs this Agreement on behalf of that Party has been duly authorised by that Party to sign this Agreement on its behalf and that authorisation has not been revoked.

38.15

Taxes

Any value added or goods and services taxes (including TVA) that may be imposed by any authorities in connection with this Agreement and any registration taxes, imposts, fees and costs in relation to the registration of this Agreement or the Sublease Agreements or the rights created thereunder, will be for the account of and the liability of JV Company and JV Company will indemnify and hold the Beneficial Holder harmless against any liability for the same, provided that under no circumstances may JV Company be liable or accountable for any capital gains tax or income tax liability of any Beneficial Holder.

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Schedule 1 – Exploration Permits and Area of Interest

The Area of Interest within the Exploration Permits described below is set out using graticular block references in Annexure A to this Agreement.

Item	Exploration Permit
1.	12306
2.	12814
3.	12887
4.	12888

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Schedule 2 – Industrial Minerals

Vanadium

Lithium

Aggregates

Alunite

Barite

Bentonite

Vermiculite

Carbonatites

Corundum

Dimension stone, other than labradorite

Feldspar, other than labradorite

Fluorspar

Granite

Graphite

Gypsum

Kaolin

Kyanite

Limestone / Dolomite

Marble

Mica

Olivine

Perlite

Phosphate

Potash – Potassium minerals

Pumice

Quartz

Staurolite

Zeolites

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Schedule 3 – Map of Area of Interest

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Schedule 4 – Net Smelter Return Royalty

The royalties referred to in clause 4.1(b) and clause 24.1(a) of the Agreement are to be calculated and paid by the Payer to a Payee in accordance with this Schedule 4.

S4.1	Definitions

Adjustment means any adjustment that may be made by the Payer to the Royalty Records:

(a)	which arise from a subsequent adjustment to the amount paid to a Payer based on the actual Products recovered after refining;

(b)	to correct any accounting or recording errors from previous Quarters;

(c)	which are otherwise made in accordance with this Agreement; or

(d)	which are agreed by the Parties.

Carried Forward Deduction means the amount of Deductions that exceeds the Gross Revenue in a Quarter, which may then be carried forward and deducted from Gross Revenue in subsequent Quarters.

Deductions means all costs paid or incurred by the Payer, in US dollars or in US Dollar Equivalent, in relation to the sale of Product extracted and recovered from the Mining Area after mining and milling or other initial processing within or adjacent to the Mining Area, and include:

(a)	all costs of smelting and refining and retorting the ore and minerals extracted from the Mining Area, including Penalties for impurities and all umpire charges and other processor deductions;

(b)

all road, sea and rail freight, transportation, security and incidental costs and expenses, including forwarding, shipping, demurrage, delay and insurance costs, incurred between the outer boundary of, or adjacent to, the Mining Area and the point of delivery of the Products into a Refinery, including the cost of transport to and between any Refinery or other places of treatment;

(c)	handling and incidental costs and expenses including agency, banking, assaying, sampling, weighing, loading, unloading, stockpiling and storage;

(d)	actual sales costs, and reasonable marketing, representation, agency and brokerage costs in respect of the Product subject to the Royalty;

(e)	administrative and other general overhead costs that are directly attributable and reasonably allocable to the costs set out in paragraphs (a) to (d) above, as agreed with the Payee;

(f)	Carried Forward Deductions;

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(g)	shipping agency fees;

(h)	bank charges on sales receipts and payments;

(i)	government charges on banking transactions;

(j)

all taxes (excluding taxes based on income of the Payer), royalties, duties, levies and charges lawfully imposed by an Authority,, including carbon emission licence fees, charges, fuel excise (net of any fuel tax credits) and carbon trading taxes in any way connected with the transportation or sale of the Products from the Mining Area, including any value added or goods and services taxes (but not if subject to an input tax credit, which is actually claimed and received); and

(k)	any other incidental charge or expense incurred between the outer boundary of, or adjacent to, the Mining Area up to the point of delivery of the Products into a Refinery, including on-site transport and storage,

but does not include:

(l)	any exploration, development, construction, mining, crushing, treatment or concentrating costs incurred by the Payer within or adjacent to the Mining Area; or

(m)

where Products are loaded, treated, milled, processed, transported or unloaded outside the Area of Interest in a Refinery wholly or partially owned by the Payer or a shareholder, Related Body Corporate or Related Entity of the Payer, any costs and expenses that are in excess of those which would be paid or incurred by the Payer on arm’s length terms, or which would not be Deductions if those Products were processed by a third party.

Gross Revenue in respect of an expired Quarter means the aggregate of:

(a)

(b)

Month means calendar month.

Net Smelter Return means Gross Revenue and Adjustments (whether plus or minus) for the relevant Quarter minus Deductions for that Quarter.

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Payee means Energizer or any subsequent party entitled in accordance this Agreement to receive payment of the Royalty.

Payer means Madagascar Development JV Company, or any subsequent mining development company established by Malagasy and Energizer for the exploitation of Other Minerals within the Mining Area.

Refinery means a smelter, refinery or other processing facility.

Product means the Payer’s share of any Other Minerals or product derived from the processing of Other Minerals extracted and recovered from the Miining Area which is capable of being sold or otherwise disposed of..

Quarter means the period of three consecutive Months commencing 1 January, 1 April, 1 July or 1 October in any year, other than the first Quarter which commences on the date the Payee become entitled to the Royalty under clause 24.1(a) of the Agreement and expires on the date immediately preceding the next to occur of 1 January, 1 April, 1 July or 1 October, and Quarterly has the corresponding meaning.

Royalty means:

(a)	in the case of a Royalty under clause 24.1(a) of this Agreement, 2% of the Net Smelter Return; and

(b)	In the case of a Royalty under clause 4.1(b) of this Agreement, 1.5% of the Net Smelter Return.

S4.2	Calculation of Net Smelter Return

The Payer will calculate the Net Smelter Return Quarterly from the date on which Product is first produced from the Mining Area.

S4.3

Reporting

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S4.4	Time for payment of Royalty

Within 30 days of the end of each Quarter, the Payer must pay to the Payee the Royalty plus or minus any adjustments in accordance with paragraph S4.3.

S4.5	Audits and adjustments

(a)

(b)	If an audit carried out pursuant to paragraph S4.5(a) ( Audit ) discloses that the Payer has made an overpayment of the Royalty or has made an underpayment of the Royalty of 5% or less, then the Payee will be responsible for payment of the costs of the Audit and the Payer will (as the case may be):

(i)	deduct the amount of any such overpayment from its next Royalty payment to the Payee; or

(ii)	add the amount of any such underpayment to the next Royalty payment it makes to the Payee.

(c)	If an Audit discloses an underpayment by the Payer of more than 5%, then the costs of the Audit shall be borne by the Payer and the amount of the underpayment will be paid by the Payer to the Payee within 14 days after delivery of the Audit report to the Payer.

S4.6	Assignment

(a)

The Payer must not sell, assign or otherwise dispose of or encumber the whole or part of its interest in the Mining Area without first requiring the assignee or other such party to enter into a covenant with the Payee on terms to the satisfaction of the Payee (acting reasonably) binding it to observe and perform all the terms and conditions of these procedures as from the effective date of assignment or encumbrance.

(b)

Subject to the Payer not exercising the Royalty Option in accordance with clause 24.2(a), the Payee may only assign, sell or otherwise dispose of the whole (but not a part) of its rights and interest in or under the Royalty ( Relevant Interest ), other than to a Related Body Corporate of the Payee to which this paragraph (b) does not apply, if it first offers to the Payer the opportunity to acquire the Relevant Interest for consideration equal to that offered by the proposed assignee. If the Payer does not accept the offer within 30 days, the Payee may proceed with the assignment, sale or disposal to the proposed assignee within 90 days and on terms no more favourable to the proposed assignee than those offered to the Payer. If the Payer accepts the offer then settlement of the assignment of the Relevant Interest to the Payer shall occur within 60 days thereafter.

S4.7	Hedging and Disposal of Intermediate Product

(a)	All profits and losses resulting from the Payer engaging in any commodity futures trading, option trading, metals trading, gold loans or any combination thereof, or other hedging or price protection arrangements or mechanisms are excluded from calculations of the Net Smelter Return.

(b)	The Payer must not dispose of, or allow for commingling of, any ore from the Mining Area or any intermediate product unless it has ensured that it has access to all information necessary in order to calculate the Royalty.

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S4.8	Reference to expert

(a)	If any dispute or difference arises between the Parties in connection with, the calculation of the Net Smelter Return or the Royalty, the Parties undertake with each other to use all reasonable endeavours, in good faith, to settle the dispute or difference by negotiation.

(b)	If any dispute referred to in paragraph S4.8(a) has not been resolved within a reasonable time of not less than 14 days, either Party may refer the matter in issue to an Independent Expert for determination and clause 33 of the Agreement applies.

(c)	Prior to resolution of the dispute, the Parties must continue to perform their respective obligations under this Agreement including all pre-existing obligations the subject of the dispute, except only:

(i)	an obligation to make a payment to the other Party, where that payment is a subject of the dispute; or

(ii)	to the extent that lack of resolution of the dispute prevents such performance.

(d)	Nothing in this clause prevents a Party from commencing proceedings in any court where proceedings are required to obtain urgent interlocutory relief.

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Executed as an agreement

Executed by Energizer Resources Inc. by its duly authorised representative:

/s/ Richard Schler		/s/ Peter Liabotis
Richard Schler CEO		Peter Liabotis CFO

Executed by Malagasy Minerals Limited ACN 121 700 105 in accordance with section 127 of the Corporations Act 2001 (Cth) by or in the presence of:

/s/ Graeme Raymond Boden		/s/ Natasha Lee Forde
Signature of Director		Signature of Director or Secretary

Graeme Raymond Boden		Natasha Lee Forde
Name of Director in full		Name of Director or Secretary in full

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Annexure A – Form of Sublease Agreement

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Certification of CEO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 and 906 of the Sarbanes-Oxley Act of 2002.

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I, Richard Schler, certify that:

1. I have reviewed this annual report on Form 10-Q of Energizer Resources Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Dated: May 14, 2014	By:	/s/ Richard Schler
		Richard Schler, Chief Executive Officer

Dated: May 14, 2014	By:	/s/ Peter D. Liabotis
		Peter D. Liabotis, Chief Financial Officer (Principal Accounting Officer)