RESOURCE CAPITAL FUND III L.P. NEWMONT FINANCE LIMITED IN PRINCIPLE TERM SHEET FOR DISCUSSION PURPOSES ONLY THIS TERM SHEET CONTAINS NEITHER EXPRESSED NOR IMPLIEDCOMMITMENTS ON THE PART OF RESOURCE CAPITAL FUND III L.P. OR NEWMONT FINANCE

Vendor

Acquired Assets

Funders

Acquisition

Financial Support

Closing Date

Equity

RCF Sub Debt

(i)     Tranche One: US$ equivalent of A$15 million debt facility to the Acquisition Entity on the Debt Facility Terms set forth below (the “RCF Tranche one Debt”).

(ii)    Tranche Two: A$7 million will be provided to fund capital expenditure requirements (‘Capital Program”) as described in the ABN AMRO Senior Debt (‘Senior Debt”) term sheet attached as appendix II. The terms of this tranche are described in the Debt Facility Terms. (the “RCF Tranche Two Debt”). The RCF Tranche Two Debt will not be drawn down until the RCF Tranche One Debt has been fully drawn down.

Newmont Sub Debt

Debt Terms

•      Expiry: 10 years after closing date.

•      Repayment: The Debt will be repaid from the cash flow of QMAG JV that is in excess of amounts required to be paid to the Senior Lender, or required by the Senior Lender to be maintained by the QMAG JV pursuant to the Senior Debt and that is in excess of the working capital requirements of the QMAG JV. Such available cash flow will be applied in the following order of priority -

(a)    accrued interest on all RCF Debt;

(b)    accrued interest on Newmont Debt;

(c)    principal and other amounts due with respect to the RCF Tranche Two Debt;

(d)    principal and other amounts due on the RCF Tranche One Debt; and

(e)    principal and other amounts due on the Newmont Debt. Each category must be fully discharged before funds are applied to the next category.

•      Prepayment: The Debt may be prepaid at any time, in whole or in part, provided that any prepayments will be applied as provided above.

•      Interest: RCF Debt: 2% per annum Newmont Debt: 1% per annum

•      Use of Proceeds: The proceeds of the Debt will be used exclusively:

(a)    to effect the Acquisition;

(b)    to repay the interim working capital loan of approximately $2.5 million provided to AMC and certain Subsidiaries at about the time of this term sheet (the “Bridge Loan”); and

(c)    fund the Capital Program.

•      Collateral Security: The RCF Tranche One Debt and the Newmont debt will be secured on a pari passu basis by all material real and personal property assets of the Acquisition Entity and the QMAG JV, now held or later acquired. The RCF Tranche Two Debt will hold the same security but rank senior to the Newmont and RCF Tranche One Debt.

•      Subordination to Senior Debt: All entitlements of RCF and Newmont to payment of the Debt, and all collateral security provided by the Acquisition Entity and the QMAG JV to secure

payment of the Debt, will be subject and subordinate to the Senior Debt and the collateral security therefore.

•      Covenants: Usual and customary, including maintenance of existence, compliance with laws, compliance with provisions of the Senior Debt, reporting requirements, including quarterly financial reporting, copies of audited financial statements etc.

•      Default: Usual and customary provisions, including cross default among the RCF Debt, the Newmont Debt and the Senior Debt.

•      Modifications: Neither RCF nor Newmont will modify the terms of the RCF Debt or the Newmont Debt without the consent of the other party, which will not be unreasonably withheld.

•      Transfer of Newmont Debt: Newmont may not transfer any interest in the Newmont Debt without the prior consent of RCF except that Newmont may transfer the Newmont Debt to related bodies corporate without RCF consent subject to giving notice to RCF.

•      Dividends can only be paid in the event that an equivalent amount is used to repay the Newmont Debt. For the avoidance of doubt and subject to the terms of the Senior Debt, Dividends may be paid prior to the full repayment of RCF Debt.

Senior Debt Facility

Conditions Precedent

i)       Receipt of legal opinions and execution of definitive documentation satisfactory to RCF and Newmont.

ii)     Release of all liens, encumbrances or other security arrangements associated with existing indebtedness at all corporate levels

iii)    Receipt by AMC, RCF and Newmont of all necessary regulatory approvals.

iv)    Absence of a material adverse change in the business or prospects of the QMAG JV .

v)      Concurrent closing of the Senior Debt and the Acquisition.

vi)    Concurrent payment in full of the Bridge Loan.

Attachment:

By RCA III GP L.L.C., G.P

/s/ James McClements

James McClements, Senior Partner

Signature

Name/Title

Signed by an authorized representative of

Newmont Finance Ltd

/s/ Phillip James Garrard

Phillip James Garrard, Attorney Under Power

Signature

Name/Title

Provide an indemnity to the Acquisition Entity and RCF in respect of any loss they suffer with respect to claims made now or in the future by investors or any other persons in any way relating to the AMC distribution entitled securities (“Newmont Indemnity”). The Acquisition Entity and RCF agree to exhaust all reasonable recourse against AMC under the AMC Indemnity prior to enforcing the Newmont Indemnity but where the loss is

caused by the fraud or negligence of Newmont, the Acquisition Entity and RCF must exhaust all reasonable recourse against Newmont under the Newmont Indemnity prior to enforcing the AMC Indemnity.

Signed by an authorized representative of

Australian Magnesium Corporation Limited

/s/ C.D. Rawlings

C.D. Rawlings, Director

Signature

Name / Title

Signed by an authorized representative of

Australian Magnesium Operations Pty Ltd

/s/ C.D. Rawlings

C.D. Rawlings, Director

Signature

Name / Title

Signed by an authorized representative of

QMC Investments Pty Ltd

/s/ C.D. Rawlings

C.D. Rawlings, Director

Signature

Name / Title

Signed by an authorized representative of

QMC (Kunwarara) Pty Ltd

/s/ C.D. Rawlings

C.D. Rawlings, Director

Signature

Name / Title

Signed by an authorized representative of

QMC Refmag Pty Ltd

/s/ C.D. Rawlings

C.D. Rawlings, Director

Signature

Name / Title

Signed by an authorized representative of

Queensland Magnesia Pty Ltd

/s/ C.D. Rawlings

C.D. Rawlings, Director

Signature

Name / Title

By RCA III GP L.L.C., G.P.

/s/ James McClements

James McClements, Senior Partner

Signature

Name / Title

/s/ R. J. Perring

R. J. Perring, Attorney Under Power

Signature

Name / Title

/s/ P. H. Holden

P. H. Holden, Attorney Under Power

Signature

Name / Title

Description

Amount

•       to fund part of the acquisition of the Project (including upfront costs) and repayment of an interim working capital loan of up to A$2.5 million, provided equally as between the Sponsor and Newmont Mining Limited, prior to the acquisition of the Project;

•       to fund all or part of the deferred purchase consideration due to AMC as part of the acquisition;

•       to fund part of the capital expenditure program associated with optimising the Project on the various projects outlined below; and

•       to fund transaction interest and other financing costs associated with the Facilities being provided by the Lender.

Purpose

Sub
Commitment
Amount

(AUD
million)

1.      To fund part of the acquisition of the Project (including upfront costs)

2.      To fund all or part of the deferred consideration due AMC as part of the acquisition

3.      To fund part of the capital expenditure program associated with optimising the Project, including any combination of the following:

i)        Relocating and/or upgrading the processing equipment at KG2;

ii)      The purchase and construction of a new rotary kiln primarily used to produce a new single-burn magnesia product;

iii)     Acquisition of the Cement Australia plant;

iv)     Capital improvements to the Cement Australia plant (whether owned or to facilitate treatment of multiple streams on a tolling basis);

v)       Purchase of the Yaamba tenements;

vi)     Modifications to screening arrangements together with an alternate trucking fleet;

vii)    Relocating and/or upgrading the processing equipment at KG1; and

viii)   Improvements to the Parkhurst processing facilities to facilitate segregation of product streams

•       The date when the Term Facility has been fully repaid; and

•       The Facility Sunset Date.

•      for minimum amounts of AUD0.5 million; and

•      in multiples of AUD250 thousand

•      The date when the Subordinated Debt Facility has been fully repaid; and

•      The Subordinated Debt Facility Sunset Date.

•      On the Subordinated Debt Facility Maturity Date, the Amount of the Facility shall reduce to zero and any outstanding monies must be repaid.

•      with respect to the AUD:USD, AUD:EUR and AUD:JPY basket of currencies, 100% of all non-AUD capital expenditure, 90% of all AUD-denominated operating costs and finance charges for the period up to 12 months from Financial Close under the Facility Agreement, and 75% of AUD-denominated operating costs and finance charges for the period following the first 12 month period and up to 24 months, on an annual rolling basis; and

•      with respect to interest rates, hedge 90% of its floating interest rate exposure on the basis of forecasts generated by the BCFM;

(a.)    the rate determined by the Agent to be the average bid rate quoted on the page BBSY on Reuters, at 11:00am (Sydney time) on the first business day of the relevant period (rounded up to four decimal places), for a term equivalent to the period; or

(b.)    if:

(i)      for any reason that rate is not displayed for a term equivalent to that period; or

(ii)     the basis on which that rate is displayed is changed and in the reasonable opinion of the Agent it ceases to reflect the Lender’s cost of funding to the same extent as at the relevant date of the Finance Documents,

(a)     The Finance Documents; and

(b)     The Project Documents.

(a)     Sale and Purchase Agreement;

(b)     Equity Subscription Agreement;

(c)     Subordinated Funding Agreements with -;

(i)      the Lender;

(ii)     the Sponsor;

(iii)   Newmont,

(d)     Facility Agreement;

(e)     ISDA Master Agreement;

(f)      Security Trust Deed including subordination arrangements between the Lender, the Sponsor and Newmont;

(g)     Any Bank Guarantee;

(h)     Bank Account Deed;

(i)      The Security;

(j)      Deed of Priority in relation to Meridian Leveraged Lease; and

(k)     Any other documents reasonably ancillary to them.

(a)     Sponsor Tranche 1 Subordinated Debt: a facility to be provided by the Sponsor for up to the US Dollar equivalent of A$15 million to part fund the acquisition of the Project, which facility will rank for repayment after the Term Facility and ABN AMRO Subordinated Debt Facility but before the Newmont Subordinated Debt;

(b)     Newmont Subordinated Debt: a facility to be provided by Newmont for up to the US Dollar equivalent of A$30 million to part fund the acquisition of the Project, which facility will rank for repayment after the Term Facility, ABN AMRO Subordinated Debt Facility and the Sponsor Tranche 1 Subordinated Debt and Sponsor Tranche 2 Subordinated Debt (collectively the Sponsor Subordinated Debt); and

(c)     Sponsor Tranche 2 Subordinated Debt: a facility to be provided by the Sponsor for up to A$7 million to part fund future capital expenditure requirements for the Project, which facility will rank for repayment after the Term Facility and ABN AMRO Subordinated Debt Facility but before the Newmont Subordinated Debt.

•       ABN AMRO will be the first ranking beneficiary in respect of the obligations under the Senior Facilities and the Subordinated Debt Facility;

•       the Sponsor will be the second ranking beneficiary in respect of the obligations under its Sponsor Tranche 2 Subordinated Debt facility (expansion funding tranche); and

•       the Sponsor and Newmont will be the third ranking beneficiaries in respect of the obligations under the Sponsor Tranche 1 Subordinated Debt facility (acquisition funding tranche) and Newmont’s Subordinated Debt Facility.

(a)     First ranking registrable fixed and floating charge over all of the current and future assets of the Borrower and each wholly owned subsidiary of the Borrower (“Subsidiaries”), including first ranking charge over all production from the Project and sold by the Borrower (or its Subsidiaries) therefrom;

(b)     Guarantees from each of the Subsidiaries;

(c)     Security over all mining leases and exploration permits (and any other similar instrument);

(d)     First ranking share mortgage over the Sponsor’s shareholding in the Borrower;

(e)     Tripartite agreements in relation to material Project Documents;

(f)      Assignment of rights under insurance policies;

(g)     First ranking charge over all Accounts;

(h)     Assignment by way of security of Borrower’s hedging contracts;

(i)      Assignment by way of security of all material agreements, concessions and permits to operate the Project; and

(j)      Other security as required to perfect the Security and provide Project finance security for a transaction of this nature.

1.       Drawings under the ABN AMRO Subordinated Debt Facility and Term Facility;

2.       Drawings under the Sponsor’s Subordinated Debt Facility;

3.       Drawings under the Working Capital Facility;

4.       All operating revenues;

5.       Any amounts received by the Borrower in respect of the sale or disposal of all or any parts of its assets;

6.       Any interest received;

7.       Net proceeds of any interest rate or foreign exchange rate;

8.       Any insurance proceeds, including in respect of business interruption; and

9.       Any amount received by way of damages, liquidated or otherwise.

1.       Operating and sustaining capital expenditures;

2.       Royalties and taxes payable;

3.       Capital expenditure for Approved Projects;

4.       Amounts payable under the Minimum Hedging Program;

5.       Finance charges including interest costs, fees and expenses payable under the Senior Debt Facilities;

6.       Finance charges including interest costs, fees and expenses payable under the ABN AMRO Subordinated Debt Facility;

7.       RLA obligations;

8.       Voluntary principal repayments of the Working Capital Facility;

9.       100% of cashflow available for Subordinated Debt Service (being the amount available after allowing for an amount of approximately A$[3] million for operating expenses), as mandatory principal repayment of the ABN AMRO Subordinated Debt Facility;

10.     To the extent a payment is made, rateably to each of the Term Facility and the Sponsor’s Subordinated Debt Facility (both tranches), where such a payment is applied as a principal repayment payable under the Sponsor’s Subordinated Debt Facility;

11.     Finance charges including interest costs, fees and expenses payable under the Newmont Subordinated Debt Facility;

12.     Newmont Subordinated Debt principal repayment obligations;

13.     Other Discretionary Hedging payments if any; and

14.     Distributions to the Sponsor.

1.       Initial Technical Audit: Provide a comprehensive review of the Life of Mine Plan (“LoMP”) and ADP including:

(a)     an audit of the Reserve Statement;

(b)     confirmation of the operating and capital cost forecasts;

(c)     review of the mining, plant and metallurgical performance predictions;

(d)     review of management structure and succession plans;

(e)     review of all technical components of offtake contracts; and

(f)      review of applicable contractual arrangements from a technical standpoint.

2.       Initial Environmental and Socio-Economic Assessment: Provide a comprehensive initial review of the Project with respect to compliance with the State environmental requirements and the Equator Principles, implications for future rehabilitation as a result of past & present impact, and the socio-economic impact of the Project to the communities in which it operates.

3.       Ongoing Technical and Environmental Compliance, at least quarterly during any future construction phase and otherwise annually, in conjunction with the BCFM reviews, perform such site visits and desktop reviews, utilising management reports, as the Lender may deem necessary. For the avoidance of doubt, this does not act to restrict the ability of the Lender to investigate matters it believes are relevant to updating its appraisal of the Project.

(a)     a Life of Mine Plan for the Project (“LoMP”); and

(b)     Base Case Cash Flow Model for the Borrower (“BCFM”).

•       actual financial and operating performance; and

•       the forecast performance, to be determined after reference to the assumptions, for the remainder of the Project Life.

(a)     under these Facilities;

(b)     the facilities being provided by the Sponsor;

(c)     the facilities being provided by Newmont;

(d)     any indebtedness existing on the Completion Date where such indebtedness has been disclosed to the Lender;

(e)     credit given on the purchase of goods and services required for the carrying on of its day to day business; or

(f)      with the written consent of the Lender.

(a)     a lien or right of set-off arising by operation of law;

(b)     any security interest that existed over any assets prior to its acquisition provided that the amount secured is not increased;

(c)     deposits or pledges to secure contracts in the ordinary course of business; or

(d)     any security interest approved by the Lender.

(a)     in the ordinary course of business on arm’s length terms;

(b)     where the aggregate book value of assets disposed of over the previous 12 month period does not exceed AUD1 million;

(c)     if the disponee or transferee is a Subsidiary; or

(d)     with the prior approval of the Lender.

(a)     (proper books) keep proper and adequate books of account to Australian GAAP which provide a true and fair view of its state of affairs;

(b)     (breach of representation) notify the Lender promptly if any representation, action or warranty made or taken to be made by it is found to be incorrect or misleading;

(c)     (notify Events of Default) notify the Lender promptly after becoming aware of an Event of Default or Potential Event of Default, including the provision of full details (as required by the Lender) in respect of the Event of Default or Potential Event of Default and the steps being taken to remedy it;

(d)     (notify defaults, proceedings etc) advise the Lender promptly after it becomes aware of:

(i)      any pending or threatened action, claim, or proceeding against it which will have a material adverse effect;

(ii)     any dispute or default by any party under or in respect of a Project document which will have a material adverse effect; and

(iii)   any demand under any guarantee for an amount greater than AUD0.25 million.

(e)     (good standing) do all things necessary to maintain its corporate existence in good standing and not transfer its jurisdiction or incorporation or enter into any merger, amalgamation or consolidation without the prior consent of the Lender;

(f)      (compliance with laws) duly and punctually comply with all laws binding upon it;

(g)     (pay taxes) pay when due all taxes payable by it except to the extent that they are being contested in good faith;

(h)     (continue business) the Borrower will not enter into any contracts or dealings other than in the ordinary course of its existing business;

(i)      (maintain authorisations) obtain and maintain in full force and effect all authorisations required for the operation of the Project;

(j)      (pay debts) pay or cause to be paid its financial obligations including without limitation all rates, rents and other outgoings payable by it as and when the same respectively become due and payable;

(k)     (operate business) take or procure to be taken, all action necessary or desirable in order to:

(i)      operate the Project in accordance with the LoMP and good mining practice; and

(ii)     ensure that all material Project assets are maintained in good and efficient operating condition.

(l)      (comply with the Transaction Documents) duly and punctually comply with each of its obligations under or in respect of the Transaction Documents to which it is expressed to be a party;

(m)    (environmental issues) ensure at all times that the Project complies in all respects with local environmental approvals and environmental laws;

(n)     (Project tenements) ensure that all conditions and requirements relating to Project tenements are observed or performed in all

          material respects and that tenements remain valid and are in full force and effect;

(o)     (operation) operate the Project in accordance with good mining practice, the LoMP and BCFM;

(p)     (insurance) ensure that the Borrower’s assets are adequately insured over the term of the Facilities, and that the Lender is noted as an insured party under insurance policies;

(q)     (project accounts) maintain all relevant accounts with the bank at which they were originally opened and not to change the accounts to another bank without the consent of the Lender (such consent not to be unreasonably withheld); and

(r)      (other) other such undertakings as are reasonably required for facilities of this nature.

(a)     (audited accounts) audited annual accounts, and semi annual accounts prepared in accordance with Australian and International Accounting Standards (as applicable) and any applicable corporate laws within 90 days after the close of the relevant period;

(b)     (corporate notices) a copy of all notices, circulars and other written information and documents given to its shareholders in their capacity as shareholders;

(c)     (operating reports) copies of management reports in respect to the operating performance of the Project on a monthly basis in a format approved by the Lender;

(d)     (LoMP and BCFM) in each year of the Facilities, provide an updated LoMP and BCFM for review and approval;

(e)     (access and assistance) assist in the preparation of any report which the Lender reasonably requires in relation to the Project, the Security or the Project Assets (including, without limitation, engineering, Reserves and Resources, financial, marketing, transportation, environmental, operational and other technical matters); and

(f)      (other information) any other information reasonably requested in relation to the Project, or the Borrower.

(a)     (corporate power) provision of the Borrower’s constitution and evidence of all necessary corporate authorisations;

(b)     (execution) execution of all relevant Transaction Documents, including the perfection of Security;

(c)     (approvals) evidence of all necessary governmental, title and other material authorisations and consents in respect of the Project;

(d)     (Equity) Sponsor Equity of at least A$18 million has been deposited into the Disbursement Account in full;

(e)     (Subordinated Debt) Sponsor Tranche 1 Subordinated Debt (to the extent necessary according to the funding plan) and Newmont Subordinated Debt (in full), have been deposited into the Disbursement Account;

(f)      (legal due diligence report / good title) a detailed due diligence report that amongst other things states that the Borrower has good title to the Project assets and all offtake contracts;

(g)     (Project contracts) satisfactory review of material Project contracts, including (but not limited to) any residual mining contract(s), all utilities contracts (natural gas, water and electricity) and material Project agreements, together with evidence that they are in full force and effect;

(h)     (Borrower insurances) confirmation and satisfaction of the Borrower’s insurance policies by the Lender’s insurance broker;

(i)      (technical review) satisfactory technical review of the Project and the LoMP including environmental issues, confirmation that the Project meets the State of Queensland’s regulatory requirements, with all due diligence reports addressed to, and for the benefit of, the Lender;

(j)      (Base Case Cash Flow Model) a cash flow model for the Borrower, specifically covering the Project and agreed by the Lender;

(k)     (Bank Accounts) the project accounts have been established with the Lender;

(l)      (Purpose) evidence that funds being advanced under the Senior Facilities and Subordinated Debt Facility will be used for their approved Purpose(s);

(m)    (stamp duty) evidence of payment of documentary stamp tax and any other stamp duty in relation to the Transaction Documents;

(n)     (legal opinion) satisfactory legal opinion as to the Finance Documents and Project Documents (as required) from the Lender’s legal counsel;

(o)     (tax and accountancy) satisfactory tax and accountancy opinion in relation to the Borrower and confirming that the tax treatment in the BCFM is correct;

(p)     (model audit) an independent model audit of the BCFM;

(q)     (Fees) the payment of all outstanding fees payable to the Lender, Security Trustee, Lender’s legal counsel and other consultants;

(r)      (Minimum Hedging Program) the Minimum Hedging Program has been entered into;

(s)     (Hedging Policy) provision of the Borrower’s hedging policy in a form satisfactory to the Lender including a risk disclosure statement;

(t)      (Event of Default) no Event of Default or Potential Default is subsisting;

(u)     (Material Contracts) those contracts defined as material to the effective operation of the Project over the Project Life are in full force and effect;

(v)     (Subordinated Debt Subscription) evidence that the remaining subordinated debt commitment of the Sponsor pursuant to the Sponsor Tranche 2 Subordinated Debt facility is available on its terms;

(w)    (Interim Working Capital Loan) evidence of the financial accommodation afforded any of the Guarantors, Australian Magnesium Operations Pty Ltd or Newco by the Sponsor or Newmont Mining Limited in the three month period immediately preceding Financial Close; and

(x)     (other) any other documents, assurances, opinions and information the Lender may require.

(a)     (Purpose) evidence that funds being advanced under the Term Facility will be used for the approved Purpose;

(b)     (Hedging) the Borrower’s hedging is in good standing;

(c)     (Event of Default) no Event of Default or Potential Default is subsisting;

(d)     (Material Contracts) those contracts defined as material to the effective operation of the Project over the Project Life are in full force and effect; and

(e)     (other) any other documents, assurances, opinions and information the Lender may require.

(a)     (Purpose) evidence that funds being advanced under the Facility will be used for the approved Purpose;

(b)     (Event of Default) no Event of Default or Potential Default is subsisting;

(c)     (Capital Subscription) evidence that the Sponsor’s Equity, Sponsor Tranche 1 Subordinated Debt and Newmont Subordinated Debt has been fully drawn down by the Borrower; and

(d)     (other) any other documents, assurances, opinions and information the Lender may require.

(a)     (due incorporation) it has been duly incorporated in accordance with the laws of the place of its incorporation, is validly existing under those laws and has the power and authority to carry on its business as it is now being conducted;

(b)     (power) it has corporate power under its constitution to enter into and observe its obligations under the Transaction Documents;

(c)     (authorisations) all authorisations necessary to enter into the Transaction Documents and to operate the Project are in full force and effect;

(d)     (valid obligations) its obligations under the Transaction Documents are valid and binding and are enforceable against it;

(e)     (no contravention) the Transaction Documents and the transactions under them do not contravene its constituent documents or any law, or any of its obligations or undertakings;

(f)      (accounts) its most recent audited accounts give a true and fair view of its financial position as at the date to which they are prepared, include all material liabilities (contingent or otherwise), are prepared in accordance with Australian accounting principles generally accepted, and relevant corporate laws;

(g)     (no material adverse change) there has been no material adverse change in the Borrower’s financial position or operation of the Project;

(h)     (no Event of Default) no Event of Default is subsisting under the Facilities;

(i)      (no legal default) it is not in default under any law, authorisation, undertaking or obligation which will have a material adverse effect;

(j)      (no action) there is no pending or threatened action or proceeding affecting it or any of its assets before a court or other authority which will have a material adverse affect;

(k)     (no immunity) it does not have immunity from the jurisdiction of a court or from legal process in relation to any Transaction Document;

(l)      (no trust) it does not enter into any Transaction Document in the capacity of a trustee or any trust or settlement;

(m)    (solvency) there is no act of insolvency continuing in respect of itself;

(n)     (no contractual default) it is not in default under any contract which may have a material adverse affect;

(o)     (corporate benefit) it benefits by executing the Transaction Document to which it is a party;

(p)     (good title) it is the sole beneficial owner of all assets included in its latest audited accounts, free and clear of any other third party right or interest whatsoever;

(q)     (taxes not delinquent) it has complied with all law in jurisdictions in which it is subject to Taxation and has paid taxes due and payable by it and no claims are being asserted against it in respect of taxes;

(r)      (no default under Project documents) no event has occurred or condition exists which would permit the cancellation, termination, forfeiture or suspension of any material Project document nor is any party to any Project document in default under any material term;

(s)     (environment) the Project and the occupation, use and development of the Project complies with Queensland regulatory requirements, and it is complying with all approvals and environmental laws;

(t)      (rehabilitation funds) sufficient provision has been made in the Borrower’s accounts in accordance with Australian accounting standards and good industry practice to progressively fund rehabilitation activities pursuant to full rehabilitation of the Project to that consistent with adjacent land use as a function of the requirements of Queensland regulatory authorities and the Project End Date;

(u)     (land claims) except as disclosed to the Lender no caveats, land claims, sacred site applications or claims of any other nature whatsoever have been lodged or made in respect of the Project;

(v)     (full disclosure) it has fully disclosed in writing to the Lender all material facts relating to it, the Transaction Documents and anything in connection with them which are material to the assessment of the nature and amount of the risk undertaken by the Lender in entering into the Transaction Documents;

(w)    (Financial Model) the BCFM is a fair and reasonable representation of the expected future performance of the Project and the Borrower from Financial Close until the Project End Date; and

(x)     (other) other representations and warranties as reasonably required for facilities of this nature.

(a)     (failure to pay) it does not pay on time any money payable under any Transaction Document;

(b)     (acceleration)

(i)      any indebtedness of an amount not less than AUD250,000 is validly declared due and payable prior to its stated maturity and that declaration is not withdrawn within 10 days;

(ii)     it fails to pay within 10 days after it becomes due and payable or, if applicable, after the expiration of any grace period, any indebtedness of an amount not less than AUD250,000;

(iii)   any stock or share issued by it is validly required to be redeemed or repurchased in advance of its stated maturity (other than at its option) in an amount not less than AUD250,000; or

(iv)    it fails to pay within 10 days a demand or claim under any guarantee issued by it exceeding AUD250,000.

(c)     (distress and execution) distress is levied or a judgement, order or encumbrance is enforced against any property the subject of the security in respect of an amount in excess of AUD250,000;

(d)     (breach of representation) a representation or warranty made by it or on behalf of it is found to be incorrect or misleading in a material respect;

(e)     (insolvency event) an act of insolvency occurs in respect of it;

(f)      (void Transaction Document) a Transaction Document is, or becomes, wholly or partly void or unenforceable;

(g)     (breach of undertaking) an undertaking given to the Lender, or its solicitors by it or another person in connection with a Transaction Document is breached or not wholly performed;

(h)     (security enforceable) any event occurs which renders a security enforceable;

(i)      (changes of constitution) without the prior written consent of the Lender, its constitution is amended;

(j)      (compulsory acquisition) all or a material part of the Borrower’s property is compulsorily acquired by any governmental agency;

(k)     (expropriation event) there occurs any expropriation, restraint, restriction, prohibition, intervention, law, decree or other order of any governmental agency which wholly or in material part prevents or hinders the performance of any Transaction Document or the operation of the Project;

(l)      (abandonment)

(i)      all or any material part of the Project is abandoned or is placed on a care and maintenance basis; or

(ii)     mining of ore at the mine site or processing of ore at the processing plant site ceases for more than 10 days other than in accordance with routine maintenance requirements.

(m)    (destruction of mortgaged property) all or any material part of the mortgaged property is destroyed, lost or damaged beyond repair or proves to be materially defective in circumstances not fully covered by insurance;

(n)     (Material Adverse Change) any event or change occurs which has a material adverse effect on the Project, the Borrower’s ability to comply with obligations under the Transaction Documents or the Borrower generally;

(o)     (cross default) any default under the Facilities which are not remedied within 5 business days;

(p)     (Project contracts) termination of a material Project contract (other than by expiration of its term) without the Lender’s consent;

(q)     (Project shareholding) the Sponsor disposes of any part of their direct or indirect shareholding in the Borrower, without the prior written consent of the Lender;

(r)      (Change of Control) any change of ownership or control occurs in respect of the Borrower; and

(s)     (other) other events of default as reasonably required for facilities of this nature.