Evaluation of Mineral Prospecting/Exploitation Rights

Evaluation of mineral prospecting/exploitation rights refers to the actions by the granter or assignor of the mineral prospecting/exploitation rights to hire an entrusted evaluation organization with mineral prospecting/exploitation rights evaluation qualifications according to law, so as to assess and evaluate the value of the mineral prospecting/exploitation rights in accordance with legal procedures and processes.

Evaluation shall be conducted and the evaluation results should be filed with (and acknowledged by) the geology and mineral resources authority of the State Council according to laws governing the transfer of mineral prospecting/exploitation rights generated from government investment.

The geology and mineral resources authority of the State Council may entrust the geology and mineral resources authorities of the people's government at the provincial, autonomous  region  and  municipality  levels  to  file (acknowledge)  the  evaluation  results  for  the  mineral prospecting/exploitation rights with licenses issued by the geology and mineral resources authorities of the people's government below the provincial level.

The evaluation of mineral prospecting/exploitation rights is based on the mineral resources reserve report or other geological reports related to the evaluation.  The mineral resources reserves indicated in the mineral resources reserve report shall be in compliance with the state regulations as stated in the relevant evaluation and acknowledgement measures on mineral resources reserves.

An evaluation entrustment contract should be signed between the evaluation entity and the entrusted evaluation organization for the evaluation of mineral prospecting/exploitation rights. The said contract shall contain information such as the name of the evaluated items, objectives of the evaluation, evaluation targets, evaluation scope, evaluation term, payment methods and amount, the two parties' rights and obligations, breach liabilities and so forth.

The evaluation entity shall provide the entrusted evaluation organization with complete and true background information for evaluation and shall shoulder the legal responsibilities of such information.  The entrusted evaluation organization shall  conduct an  onsite  assessment according to the information and asset status provided by the entrust or, in order to select a legal evaluation method and reasonable parameters in order to provide an independent evaluation report based on sound criteria and scientific findings.

Evaluation of Mineral Resource Reserves

The following mineral resource reserves shall be evaluated and filed accordina to the law:

i) Mineral resource reserves used as a base for application for mining rights or a water acquisition license for use in mine construction and design;

ii) Mineral resource reserves that are involved when an exploration/mining rights holder wants to transfer those rights;

iii) When the mineral resource reserves involved are used as a base for financing or raising funds through a public offering of the mineral resources exploration/mining project or in other ways;

iv) Mineral resource reserves that remain unexploited and have been unregistered when the mining ceased or the mine closed;

v) Mineral resources that have changed significantly that need to be re-evaluated and re-filed;

vi) Mineral resource reserves that the MLR decides need to be evaluated.

The  following  documents  are  reauired of the evaluation organization, when makina an application for the evaluation of mineral resource reserves:

i) The mineral resource reserves report;

ii) Written commitment concerning the truthfulness of the documents and information provided for evaluation by the declaration units. The initial examination and approval opinions provided by the relevant authority shall be submitted at the same time if there is a relevant authority;

iii) A photocopy of the exploration license or mining license;

iv) Superposition chart concerning the scopes of exploration license and evaluation of mineral resources reserves

v) A copy of qualification certificate for exploration.

vi) Related documents on the feasibility of deposit exploitation;

vii) Mineral resources exploration contract and other related documents  regarding  mining  area  exploitation  and construction, or construction related to the water origin;

viii) Other related documents that the evaluation organization deems relevant.