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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
May 8, 2024
IVANHOE
ELECTRIC INC.
(Exact name of registrant as specified in its charter)
Delaware |
|
001-41436 |
|
32-0633823 |
(State or other jurisdiction of
incorporation or organization) |
|
(Commission File Number) |
|
(I.R.S. Employer
Identification No.) |
450 E. Rio Salado Parkway, Suite 130,
Tempe, AZ |
|
|
85281 |
(Address of principal executive offices) |
|
|
(Zip Code) |
|
|
|
|
Registrant’s telephone number, including
area code: (480) 656-5821
(Former name or former address, if changed since
last report)
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ |
Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ |
Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ |
Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ |
Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the
Act:
Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which
registered |
Common
Stock, par value $0.0001 per share |
|
IE |
|
NYSE
American |
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2
of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 1.01. Entry into a Material Definitive
Agreement.
Signing of an Exploration Alliance Agreement
with BHP Mineral Resources Inc.
On May 7, 2024, Ivanhoe Electric Inc.
(the “Company” or “IE”) entered into an Exploration Alliance Agreement (“Agreement”) with Sand
Hill Exploration Inc. (a direct wholly-owned subsidiary of the Company) and BHP Mineral Resources Inc. (“BHP”), which
sets out the framework for BHP and the Company to explore mutually agreed “Areas of Interest” in the United States to
identify copper and other critical metal exploration opportunities within those Areas of Interest that may become 50/50 owned
joint ventures. The initial Areas of Interest are in Arizona, New Mexico, and Utah. All capitalized terms that are not otherwise
defined in this Current Report on the Form 8-K shall have the meaning attributed to them in the Agreement.
The Agreement is for a term of three years, which
may be extended upon mutual agreement. BHP (through a wholly owned subsidiary) will provide the initial funding of $15 million and any
subsequent funding would be on a 50/50 basis. Pursuant to the Agreement, the Company will provide access to one Typhoon system of the
existing units which will be replaced by a new Generation 2 unit under construction from and after August 1, 2024, and with the most
recent related technology from time to time, all as directed by an Alliance Management Committee and in accordance with the requirements
specified in the initial work program and budget and other approved work programs and budgets.
The Agreement contemplates two stages –
a Project Generation Phase and a Joint Venture Phase. The Company will be the operator during the Project Generation Phase and the operator
of a project in the Joint Venture Phase will be mutually agreed upon in the future.
During the Project Generation Phase, the Alliance will conduct early-stage generative exploration activities in the six initial AOIs.
The goal of these initial activities is to identify and stake mineral rights within the AOIs to form a project and/or acquire such mineral
rights from third parties. For each Area of Interest,
an Area of Interest LLC will be created to hold the applicable rights and engage in all early-stage exploration. The Company will initially
own 100% of each Area of Interest LLC.
If agreed, an Area of Interest will be
progressed to the Joint Venture Phase, resulting in the creation of a Joint Venture with 50/50 ownership. The purpose of the Joint
Venture Phase is to further explore and evaluate the exploration results to assess its technical and economic merit, and if agreed
upon, to develop and operate a mine and associated infrastructure. During the Joint Venture Phase, each Party will contribute pro
rata to their respective interest in the Joint Venture in accordance with the applicable Joint Venture documents, with each party
having the right to take any product from the Joint Venture in kind in proportion to its equity interest existing at the relevant
time.
The Parties have agreed to six initial Areas of
Interest which cover an area of approximately 3,655 km2. Both parties have agreed that any activities within the Areas of Interest will
be conducted exclusively for the benefit of the Alliance. The Agreement establishes an Alliance Management Committee, which is composed
of an equal number of members from each the Company and BHP.
Either party may propose additional areas for
acquisition or exploration, the exclusion of certain areas, or the progression of an Area of Interest to the Joint Venture Phase. The
treatment of such proposals, and the rights of each party following acceptance or rejection of the proposal by the other party or the
Alliance Management Committee, are further described in the Agreement.
Customary provisions related to confidentiality, intellectual property
protection, representations, warranties and covenants, as well as termination, dispute resolution and indemnification are detailed in
the Agreement.
The termination
provisions of the Agreement include that:
| · | if this Agreement is terminated by BHP in accordance with certain provisions related to breach of the
Agreement by the Company, then BHP has the right to acquire each project then existing in the alliance for an amount equal to 50% of the
expenditures made on behalf of the alliance on the project; |
| · | if this Agreement is terminated by the Company in accordance with certain provisions related to breach
of the Agreement by BHP, then BHP has the right to either: |
| o | pay to the Company the balance of the BHP funding commitment not already advanced to the operator and
acquire a 50% interest in one or more Area of Interest LLCs for no further consideration; or |
| o | not pay to the Company the balance of the BHP funding commitment and acquire an earned interest in one
or more Area of Interest LLCs with such earned interest being that fraction of 50% which is in proportion to the amount of the BHP funding
commitment already advanced compared to the full BHP funding commitment, for no further consideration; |
| · | if this Agreement is terminated by BHP or the Company in accordance with certain provisions related to
deadlock, then BHP shall have the right to declare that a project shall become a Joint Venture project by payment to the Company and other
applicable parties of an amount equal to 50% of the expenditures made by the Company and other applicable parties on such project from
the date of termination of the Agreement to the date of BHP’s notice of election regarding this right (the “BHP Back-In Right”).
The BHP Back-In Right shall apply to any and all projects remaining in the alliance on the date of termination of this Agreement; and |
| · | if this Agreement is terminated in circumstances other than those specified above, |
| o | BHP shall have the right to form one or more Joint Ventures with respect to any one or more projects or
rights held for the benefit of the alliance, by providing written notice to the Company within thirty (30) business days following the
termination of the Agreement and upon receipt of such written notice one or more Joint Ventures will exist where BHP owns 50% and the
Company owns 50%; and |
| o | for each other project which does not become a Joint Venture project, the operator company or the relevant
Area of Interest LLC will retain ownership of that project and BHP and its affiliates will no longer have any rights or interest in such
project except for the BHP Back-In Right that shall apply to any and all such projects; |
in each case, subject to the terms and conditions
in the Agreement.
The information above is based on, or extracted
from, the Agreement. All figures are in U.S. dollars.
Agreement Incorporated by Reference
The foregoing description of the Agreement and
its schedules does not purport to be complete and is qualified in its entirety by reference to the text of the Agreement, which is filed
as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference into this Item 1.01.
The Agreement is filed herewith to provide investors
with information regarding its terms. The Agreement is not intended to provide any other factual information about the parties to such
agreement. In particular, the assertions embodied in the representations and warranties contained in the Agreement were made as of the
date of the Agreement only and may be subject to certain exceptions. Moreover, certain representations and warranties in the Agreement
may have been used for the purpose of allocating risk between the parties rather than establishing matters of fact. Accordingly, you should
not rely on the representations and warranties in the Agreement as characterizations of the actual statements of fact about the parties.
Item 7.01. Regulation FD Disclosure.
On May 8, 2024, the Company issued a press
release announcing the signing of an Exploration Alliance Agreement with BHP Mineral Resources Inc., a subsidiary of BHP. A copy of the
Company’s press release dated May 8, 2024, relating to the update is furnished as Exhibit 99.1 to this Form 8-K.
The information contained in Exhibit 99.1
hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference
into any other filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference
in such a filing.
Item 9.01 Financial Statements and Exhibits
## Certain schedules or portions thereof are omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to provide on a
supplemental basis a copy of any omitted schedule to the U.S. Securities and Exchange Commission or its staff upon request. |
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
IVANHOE ELECTRIC INC. |
|
|
|
Date: May 8, 2024 |
By: |
/s/ Taylor Melvin |
|
|
Taylor Melvin |
|
|
President and Chief Executive Officer |
Exhibit 10.1
Execution
Version
Exploration
Alliance Agreement
dated
May 7, 2024
Between
BHP MINERAL RESOURCES INC.
and
IVANHOE ELECTRIC INC.
and
SAND HILL EXPLORATION INC.
Table
of Contents
1. DEFINITIONS
AND INTERPRETATION |
3 |
1.1 |
Definitions |
3 |
1.2 |
Interpretation |
16 |
2. AREAS OF INTEREST |
17 |
2.1 |
Formation of Alliance in Areas of Interest |
17 |
2.2 |
New or Enlarged Areas of Interest |
17 |
2.3 |
Excluded Property |
18 |
2.4 |
Formation of Areas of Interest LLCs |
19 |
3. ALLIANCE ACTIVITIES |
20 |
3.1 |
Project Phases |
20 |
3.2 |
Typhoon System and CGI |
20 |
3.3 |
Other Business Activities and Non-Competition |
20 |
3.4 |
Sharing of Exploration Data and Records |
21 |
4. ALLIANCE PROPERTIES |
21 |
4.1 |
Pre-Existing Rights |
21 |
4.2 |
Acquisition of Rights in the Areas of Interest |
22 |
5. PROJECT GENERATION PHASE |
24 |
5.1 |
Term |
24 |
5.2 |
Main Objectives of Project Generation Phase |
24 |
5.3 |
Work Programs and Budgets |
25 |
5.4 |
Project Generation Phase Funding |
26 |
6. JOINT VENTURE PHASE |
27 |
6.1 |
Approval as Joint Venture Project |
27 |
6.2 |
Declining to Enter Into Joint Venture and Dealing with
Excluded Property |
28 |
6.3 |
Conversion of an Area of Interest LLC to a Joint Venture
LLC |
29 |
6.4 |
Main Objective of Joint Venture Phase |
31 |
6.5 |
Joint Venture Funding |
31 |
7. ALLIANCE MANAGEMENT COMMITTEE |
31 |
7.1 |
Formation of Alliance Management Committee |
31 |
7.2 |
Meetings |
32 |
7.3 |
Deadlock Resolution |
33 |
7.4 |
Alliance Management Committee Responsibilities |
34 |
7.5 |
Technical Subcommittee |
35 |
8. OPERATOR AND OPERATIONS |
35 |
8.1 |
Appointment of Operator |
35 |
8.2 |
Operator’s Obligations |
35 |
8.3 |
Right to Objections |
39 |
8.4 |
Carrying Out Work Programs and Budgets |
39 |
8.5 |
Maintenance of Projects |
39 |
8.6 |
Subcontractor Services Contracts |
40 |
8.7 |
BHP Secondees |
40 |
9. REPRESENTATIONS, WARRANTIES AND COVENANTS |
42 |
9.1 |
Representations and Warranties by Ivanhoe Parties |
42 |
9.2 |
Representations and Warranties by BHP |
42 |
10. COVENANTS OF IVANHOE PARTIES |
42 |
10.1 |
General Covenants |
42 |
10.2 |
Security and Notification of Interests |
43 |
11. INDEMNIFICATION |
43 |
11.1 |
Indemnification of Ivanhoe Parties |
43 |
11.2 |
Indemnification of BHP |
44 |
11.3 |
Indemnified Persons |
44 |
11.4 |
Third Party Legal Claims |
44 |
11.5 |
Exclusion of Consequential and Other Losses |
45 |
11.6 |
Waiver of Breach |
46 |
11.7 |
No Double Recovery |
46 |
12. TRANSFER OF INTEREST |
46 |
12.1 |
Scope |
46 |
12.2 |
Permitted Transfer to an Affiliate |
46 |
12.3 |
No Transfer to a Restricted Person |
46 |
13. CONFIDENTIALITY AND INTELLECTUAL PROPERTY |
47 |
13.1 |
Confidential Information |
47 |
13.2 |
News Releases |
48 |
13.3 |
Intellectual Property Rights; Exploration Data and
Records |
48 |
14. TAXES |
49 |
14.1 |
Refundable Taxes |
49 |
14.2 |
No Gross Up |
49 |
14.3 |
Tax Law Compliance |
49 |
14.4 |
Certain Tax Matters |
50 |
15. DISPUTE RESOLUTION |
50 |
15.1 |
Corporate Process |
50 |
15.2 |
Arbitration |
50 |
15.3 |
Equitable Remedies |
51 |
16. TERMINATION |
51 |
16.1 |
Termination of Agreement |
51 |
16.2 |
Post Termination Cooling-Off in Areas of Interest |
53 |
16.3 |
Effect of Termination on Projects |
54 |
16.4 |
No Effect on Termination |
57 |
17. FORCE MAJEURE AND DEFAULT |
57 |
17.1 |
Force Majeure |
57 |
18. REPRESENTATIONS, WARRANTIES AND COVENANTS
RELATING TO COMPLIANCE |
59 |
18.1 |
Not to Offer Anything of Value |
59 |
18.2 |
Acceptance of Gifts and other Advantages |
60 |
18.3 |
Beneficial Ownership |
60 |
18.4 |
Compliance policies and procedures and Maintaining
Accurate Books and Records |
61 |
18.5 |
Subcontractors |
61 |
18.6 |
Sanctions |
62 |
18.7 |
Ivanhoe Parties Compliance Training |
62 |
18.8 |
Breach of Compliance Requirements |
62 |
18.9 |
Anti-competitive Behaviour |
63 |
18.10 |
Other |
63 |
19. GENERAL |
63 |
19.1 |
Notices |
63 |
19.2 |
No Partnership or Joint Venture |
64 |
19.3 |
Entire Agreement |
65 |
19.4 |
Enurement |
65 |
19.5 |
Severability |
65 |
19.6 |
Waiver |
65 |
19.7 |
Amendment |
65 |
19.8 |
Applicable Law |
65 |
19.9 |
Further Assurances |
65 |
19.10 |
Cumulative Remedies |
65 |
19.11 |
Costs |
66 |
19.12 |
Counterparts and Facsimile Signature |
66 |
Schedule A - Joint Venture Terms |
A-1 |
Schedule B - Form of Royalty
Agreement |
B-1 |
Schedule C – Ivanhoe Parties
Representations and Warranties |
C-1 |
Schedule D – BHP Representations
and Warranties |
D-1 |
Schedule E – Form of Pledge
Agreement |
E-1 |
AGREEMENT SPECIFICS
Background |
Ivanhoe and BHP wish to form an Alliance
(defined herein) whereby BHP will fund the first $15 million, and thereafter Ivanhoe and BHP would provide funding on a 50-50 basis,
both in accordance with this Agreement to the extent applicable, for early-stage generative mineral exploration across the Areas
of Interest (defined herein) in the United States to identify nickel and copper exploration opportunities on the terms set out in
this Agreement.
Ivanhoe and BHP will each contribute different,
but complimentary, capabilities and resources to the Alliance. Ivanhoe will also make available to the Alliance the capabilities
of Ivanhoe’s team and Affiliates, including without limitation Computational Geosciences Inc. and the Typhoon System (defined
herein) on the terms set out in this Agreement.
Ivanhoe is a United States domiciled minerals
exploration and development company with a focus on developing mines from mineral deposits principally located in the United States.
BHP is a wholly-owned member of the BHP Group.
Ivanhoe, acting through the Operator Company,
will acquire interests in the Areas of Interest for the benefit of the Alliance on the terms set out in this Agreement.
|
BHP
|
BHP Mineral
Resources Inc., a corporation existing under the laws of Delaware. |
Ivanhoe
|
Ivanhoe
Electric Inc., a corporation existing under the laws of Delaware. |
Operator Company
|
Sand Hill
Exploration Inc., a corporation existing under the laws of Arizona and a direct wholly-owned
subsidiary of Ivanhoe.
|
Commencement Date
|
The date of
this Agreement. |
Initial Term
(clause 5.1)
|
Three (3) years
commencing on the Commencement Date. The Initial Term may be extended in accordance with
clause 5.1. |
Areas of Interest
(clause 2)
|
The areas
agreed to in writing by the Parties on the Commencement Date together with any additional
areas that may be agreed to by the Parties in accordance with subclause 2.2(a) but excluding
any Excluded Properties existing from time to time |
BHP Funding Commitment
(clause 5.4)
|
$15 million. |
Initial Ownership Interests in each Joint Venture
(subclause 6.3)
|
50% for each of BHP
and Ivanhoe. |
Governing Law
(clause 19.8)
|
The State of Arizona. |
Address for Notices
(clause 19.1) |
Address For Notice For BHP:
BHP Group Limited
Level 12, 160 Victoria Street
London, SW1E 5LB, United Kingdom
Attention: Ifigenia Gioka
Email: ifigenia.gioka@bhp.com
Phone: +44 (0) 7340 048 043
with a copy (which shall not be considered notice) to:
Fasken Martineau DuMoulin LLP
333 Bay Street, Suite 2400
Toronto, Ontario, Canada M5H 2T6
Attention: Nancy Eastman
Email: neastman@fasken.com
Phone: +1 416 865 4387
Address for Notice for Ivanhoe Parties:
Ivanhoe Electric Inc.
450 E Rio Salado Parkway, Suite 130
Tempe, Arizona, USA 85281
Attention: General Counsel
Email: generalcounsel@ivnelectric.com
Phone: + +1-720-933-1150
|
Date of Signing this Agreement
|
May 7, 2024 |
NOW THEREFORE, in consideration of the
mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged by the Parties hereto, the Parties mutually agree as follows:
| 1. | DEFINITIONS
AND INTERPRETATION |
For the purposes of this Agreement,
except as otherwise expressly provided herein:
“AAA” has the meaning set
out in subclause 15.2(b).
“AAA Rules” has the meaning
set out in subclause 15.2(b).
“Acquisition Proposal” has
the meaning set out in subclause 4.2(a)(i).
“acting improperly” has the
meaning set out in subclause 18.1(a)(iii).
“Affiliate” means any Person
which directly or indirectly Controls, is Controlled by, or is under common Control with, a Party.
“Agreement” means this exploration
alliance agreement.
“Alliance” has the meaning
set out in subclause 2.1.
“Alliance Management Committee”
has the meaning set out in subclause 7.1(a).
“Alliance IP” means: (a) any
and all Intellectual Property developed, if any, by or on behalf of an Area of Interest LLC, a Joint Venture LLC, and/or the Operator
Company in the course of, or as a result of, the operation of the Alliance (including any and all Exploration Data and Records or other
output created or generated by, or derived from, the use or application of the Typhoon System during the Project Generation Phase), but
expressly excluding any Typhoon IP; and (b) any and all Intellectual Property Rights associated therewith.
“AML/CTF Laws” means:
| (a) | the USA PATRIOT Act of 2001 and Anti-Money
Laundering Act of 2020 and Part II.1 and Part XII.2 of the Criminal Code
(Canada); and |
| (b) | for each of the Parties any other Laws
relating to anti-money laundering and counter-terrorism financing in the countries of each
such Party’s place of incorporation, principal place of business, and/or place of registration
as an issuer of securities, and/or in the countries of each such Party’s ultimate parent
company’s place of incorporation, principal place of business, and/or place of registration
as an issuer of securities. |
“Anti-Bribery Laws” means:
| (a) | the Foreign Corrupt Practices Act 1977
(United States of America), as amended and the Corruption of Foreign Public Officials
Act (Canada), as amended; and |
| (b) | for each of the Parties, any other Laws: |
| (i) | relating
to corruption, bribery, influence peddling, ethical business conduct, political contributions,
gifts and gratuities, or lawful expenses to public officials and private persons; and |
| (ii) | requiring
the disclosure of agency relationships or commissions and the anticorruption rules of
any public international organization or international financial institution with which a
Party does business, |
in the countries of each such Party’s
place of incorporation, principal place of business, and/or place of registration as an issuer of securities, and/or in the countries
of each such Party’s ultimate parent company’s place of incorporation, principal place of business, and/or place of registration
as an issuer of securities.
“Anti-competitive Behaviour”
means any conduct (including entering into, or giving effect to, an agreement or any other form of coordination or cooperation), whether
past, present or potential, that is unlawful or otherwise restricted or prohibited under any applicable Law on competition.
“AOI Proposal” has the meaning
set out in subclause 2.2(a)(ii).
“Areas of Interest” has the
meaning set out in the Agreement Specifics.
“Area of Interest LLC” means
each limited liability company established in accordance with the laws of a state within the United States to hold Rights within each
Area of Interest.
“Back-In Period” means the
period of time during which BHP can exercise a BHP Back-In Right being the twelve (12) month period following the end of the thirty (30)
Business Day period specified in subclause 16.3(e)(i), except in the case where:
| (a) | Ivanhoe has terminated this Agreement
under subclause 16.1(b)(iv) prior to the third (3rd) anniversary of the Commencement
Date, the period of time during which BHP can exercise a BHP Back-In Right shall be the period
commencing on the date of such termination and ending on the fourth (4th) anniversary
of the Commencement Date; or |
| (b) | BHP has terminated this Agreement under
subclause 16.1(a)(vii) with respect to subclause 7.3(c) (Anti-Bribery Laws,
Sanction Laws, AML/CTF Laws human rights and other business conduct matters, HSEC Performance
Deadlock), the period of time during which BHP can exercise a BHP Back-In Right shall
be the twenty-four (24) month period following the date of such termination. |
“Background IP” with respect
to any Party, means (a) that Party’s (or its Affiliate’s) pre-existing Intellectual Property prior to the Commencement
Date and any Intellectual Property created by such Party after the Commencement Date that is not developed in the course of, or as a
result of the Alliance; and (b) any and all Intellectual Property Rights associated therewith. For greater certainty, Typhoon IP
that is developed after the Commencement Date shall be Background IP.
“BHP” has the meaning set
out in the Agreement Specifics.
“BHP Back-In Right” is the
right of BHP, arising after a termination of this Agreement under subclause 16.3(d) or 16.3(e)(ii), to declare that a Project shall
become a Joint Venture Project by payment to Ivanhoe Parties of an amount equal to 50% of the Expenditures made by Ivanhoe Parties on
such Project from the date of termination of this Agreement to the date of BHP’s notice of election to exercise the BHP Back-In
Right.
“BHP Funding Commitment” has
the meaning set out in the Agreement Specifics.
“BHP Group” means BHP Group
Limited and all Persons Controlled by it from time to time other than a Joint Venture LLC and an Area of Interest LLC.
“BHP Indemnified Persons”
has the meaning set out in subclause 11.2(a).
“Budget” has the meaning set
out in subclause 5.3(a).
“Business Day” means any day
other than a Saturday, Sunday or a public or statutory holiday in the place where an act is to be performed or a payment or delivery
of notice is to be made.
“Cash Call” has the meaning
set out in subclause 5.4(d)(i).
“CGI” means Computational
Geosciences Inc.
“Change of Control” means:
| (a) | the acquisition by, or resulting ownership
of, a Person of a number of voting securities of Ivanhoe or BHP (including BHP Group Limited)
in one or more transactions such that such Person comes to own not less than 50% of the total
combined voting power of all classes of voting securities of Ivanhoe or BHP (including BHP
Group Limited), as the case may be, normally entitled to vote for the election of directors,
excluding any internal reorganization of BHP (or BHP Group Limited); or |
| (b) | the sale or disposition of all or substantially
all of the assets of a Party to a Person. |
“Close Family Member” means
spouses, children, parents, siblings and cousins of an individual.
“Commencement Date” has the
meaning set out in the Agreement Specifics.
“Control” means, in relation
to any Person, possession, directly or indirectly, of the power to direct or cause direction of management and policies of that Person
through ownership of voting securities, contract, voting trust or otherwise. For greater certainty, control shall be deemed to exist
if one Person owns, directly or indirectly, through shareholdings or otherwise, at least 50% of the voting shares or other voting units
of participation in another Person. “Controlled” or “Controlling” shall be construed accordingly.
“Critical HSEC Activity” means:
| (a) | any activity that has at least the potential
to result in a single or multiple fatality or single or multiple chronic life threatening
illnesses; |
| (b) | any activity that has at least the potential
to generate serious impact to the environment and where recovery of the ecosystem function
takes between three (3) and up to ten (10) years or more; |
| (c) | any activity that has at least the potential
to generate serious impact on community lasting six (6) to twelve (12) months or a substantiated
human rights violation impacting one (1) to five (5) persons; and |
| (d) | any activity that is to be undertaken
within or adjacent to (where adjacent is within five (5) km) the boundaries of a World
Heritage listed property or within an International Union for Conservation of Nature (IUCN)
Protected Area Categories 1-4. |
“Deadlock” has the meaning
set out in subclause 7.3(a).
“Deadlock Sustaining Budget”
means a 60-day budget (which may be extended up to a further sixty (60) days if the Deadlock is still being considered as set out in
clause 7.3) to be implemented only during a Deadlock that provides for only the following Expenditures during such period:
| (a) | any fees, royalties, charges, payments
or other expenditures required to keep Rights in good standing; |
| (b) | any required taxes, government fees or
other mandatory payments to a Governmental Authority; |
| (c) | any payment required under any contract
material to the Alliance (excluding contracts with Ivanhoe Parties or their Affiliates) where
the failure to make any such payment would constitute an event of default under such contract,
or would give rise to a termination right under the contract of any counterparty thereto; |
| (d) | payments required to maintain all necessary
equipment, in its then current state, at any Project or Area of Interest to ensure no degradation
of such equipment from its then current state, subject to reasonable wear and tear; and |
| (e) | all payments required to prevent or address
injury to any individual or to prevent, address or mitigate the effects of any environmental
hazard, any occupational health, safety and welfare hazard, or any emergency. |
“Defence Notice” has the meaning
set out in subclause 11.4(a).
“Demand for Arbitration” has
the meaning set out in subclause 15.2(b).
“Dispute Notice” has the meaning
set out in clause 15.1.
“Encumbrance” means any mortgage,
pledge, lien (statutory or otherwise), assignment, hypothecation, charge or other form of security interest or interest in the nature
of a security interest or title retention agreement or arrangement, option, licence or licence fee, royalty, production payment, restrictive
covenant or other encumbrance of any nature or any agreement to give or create any of the foregoing, whether registered or not, but excluding
any such rights provided by the terms of the Rights or any interest of any Governmental Authority provided by Law and “Encumber”
has a corresponding meaning.
“Environmental Laws” means
all applicable Laws in all applicable states, municipalities, local or other codes, and regulations impacting the stated scope of the
recognized Laws noted herein, relating in any way to the environment, contaminants, environmental authorizations, occupational health
and safety or the health and safety of any Person or the public and having the force of law, in effect as at the date hereof and as may
be brought into effect or amended at a future date, including but not limited to the following: (including their implementing regulations
and any state analogs): the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601 et seq.; the Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act of 1976, as amended by the Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§ 6901 et
seq.; the Federal Water Pollution Control Act of 1972, as amended by the Clean Water Act of 1977, 33 U.S.C. §§ 1251 et seq.;
the Toxic Substances Control Act of 1976, as amended, 15 U.S.C. §§ 2601 et seq.; the Emergency Planning and Community Right-to-Know
Act of 1986, 42 U.S.C. §§ 11001 et seq.; the Clean Air Act of 1966, as amended by the Clean Air Act Amendments of 1990, 42
U.S.C. §§ 7401 et seq.; the Federal Insecticide, Fungicide and Rodenticide Act of 1910, as amended, 7 U.S.C. §§ 136
et seq.; the Oil Pollution Act of 1990, as amended, 33 U.S.C. §§ 2701 et. Seq.; and the Occupational Safety and Health Act
of 1970, as amended, 29 U.S.C. §§ 651 et seq.
“Excluded Property” means:
| (a) | the areas agreed to in writing by the
Parties on the Commencement Date; and |
| (b) | any additional area determined to be an
Excluded Property in accordance with subclauses 2.3(e) and 6.1(a)(vi)(A). |
“Excluded Property Proposal”
has the meaning set out in subclause 2.3(a).
“Expenditures” means, unless
otherwise provided in this Agreement, all costs, expenses and obligations funded, spent or incurred pursuant to approved Work Programs
and Budgets and in connection with Operations:
| (a) | in acquiring and holding any Project or
any acquired Rights in good standing (including land maintenance costs and any monies expended
as required to comply with applicable Law), in curing title defects and in acquiring and
maintaining surface and other ancillary rights; |
| (b) | in preparing for and in the application
for and acquisition of environmental and other permits necessary or desirable to commence
and complete Operations; |
| (c) | in undertaking geochemical, geophysical,
geological surveys and airborne surveys, drilling, assaying and metallurgical testing and
other Operations in, on or in respect of any Project, Rights or the Areas of Interest, including
costs of surface access, establishment of grids, assays, metallurgical testing and other
tests and analyses to determine the quantity and quality of Minerals, water and other materials
or substances; |
| (d) | in the preparation of Work Programs and
Budgets and the presentation and reporting of data and other results obtained from those
Work Programs including any program for the evaluation of any Project, Rights or the Areas
of Interest; |
| (e) | for environmental remediation and rehabilitation; |
| (f) | in acquiring, or obtaining the use of,
facilities, equipment or machinery, and for all parts, supplies and consumables; |
| (g) | for salaries and wages for employees to
the extent assigned to work with respect to and for the benefit of any Project, Rights or
Areas of Interest; |
| (h) | travelling expenses of all persons engaged
in work with respect to and for the benefit of any Project, Rights or Areas of Interest,
including for their food, lodging and other reasonable needs; |
| (i) | a reasonable allocation of overhead expenses
reflecting the benefit to any Project, Rights or Areas of Interest such as office space,
administration and information management; |
| (j) | payments to contractors or consultants
for work done, services rendered or materials supplied, including any applicable Tax, including,
without limitation, transaction privilege, privilege, gross receipts, compensating, sales,
and use taxes; |
| (k) | the cost of insurance premiums and performance
bonds or other security required for Operations; |
| (l) | all property or similar taxes levied against,
or in respect of, any Project, Rights or Areas of Interest, |
but excluding (a) any Taxes not
specifically mentioned in this definition but excepting any sales Taxes paid in connection with any of the foregoing and (b) any
costs or expenditures in connection with breaches of Environmental Laws or other applicable Laws, breaches of contracts, penalty fees
or other obligations, provided that the costs and expenses of goods or services supplied by any Affiliate of a Party will be charged
at the same rate as would be charged by a non-Related Party in a transaction at arm’s length for equivalent goods or services except
for the costs related to the services and capabilities of CGI and the Typhoon System which shall be charged as Expenditures in accordance
with subclause 3.2.
“Exploration Alliance Term Sheet”
means the USA exploration alliance and joint venture term sheet entered into by WMC Corporate Services Inc. and Ivanhoe Electric Inc.
dated as of December 6, 2022.
“Exploration Data and Records”
means, with respect to any Project, Rights or the Areas of Interest, the plans, 3D representation or models, assay maps, samples, drill
records and logs, drill core, geological, geophysical, geochemical or other technical data (in both raw and processed forms) or reports,
information and documents and any study, design, plan and financial or other data, information, books, records and accounts relating
thereto (whether in tangible or electronic form).
“Force Majeure” has the meaning
set out in subclause 17.1(a).
“Good Mining Practices” means
good exploration practices as would reasonably be exercised by an experienced mining company conducting exploration activities, operating
projects or conducting mining operations of the nature of a Project, all in accordance with sound industry practices, consistent with
the standards of the industry and in accordance with all terms and provisions of applicable Laws and applicable contracts and other agreements
pertaining to a Project.
“Governing Law” has the meaning
set out in the Agreement Specifics.
“Governmental Authority” means
any federal, provincial, state, territorial, regional, municipal, district or local government or authority, quasi-government authority,
including any governmental division, department, agency, body, instrumentality, official, fiscal or judicial body, government or self-regulatory
organization, commission, board, tribunal, organization, securities regulatory authority, stock exchange, court, arbitrator, arbitration
panel or tribunal, any central bank or similar monetary or financial regulatory authority, or any regulatory, administrative or other
agency, or any political or other subdivision, department, or branch of any of the foregoing, any wholly or partially state-owned or
government-owned entity or enterprise, or any public international organisation having jurisdiction or authority over the Parties or
the subject matter of this Agreement, and also includes any:
| (a) | individual who is employed by or acting
on behalf of a Governmental Authority; |
| (b) | individual who holds or performs the duties
of an appointment, office or position created by custom or convention; or |
| (c) | individual who holds themself out to be
the authorized intermediary of any person specified in paragraphs (a), (b) or (c) above,
(only with respect to the references to Governmental Authority in clause 18 and in the definition
of any term used in clause 18). |
“HSEC” means Health, Safety,
Environment & Communities.
“HSEC Performance” means Health,
Safety, Environment & Communities policies and performance requirements.
“Indemnitor” has the meaning
set out in subclause 11.4(a).
“Independent Expert” means
an independent engineering or other consulting firm of internationally recognized standing in the area most relevant to the subject matter
of the Deadlock, appointed by BHP and Ivanhoe by mutual agreement in writing or, to the extent that BHP and Ivanhoe cannot agree on any
such Person within fifteen (15) Business Days, the selection of the Independent Expert shall be referred to arbitration under subclause
15.2(b) (conducted before a single arbitrator); provided that, unless BHP and Ivanhoe agree otherwise, an Independent Expert shall
be a firm that (i) is independent of both of BHP and Ivanhoe and their respective Affiliates, and (ii) has not acted for either
of BHP or Ivanhoe or their respective Affiliates in any material capacity for at least one (1) year before the date of appointment
of such Independent Expert.
“Indigenous Group” means any
Indian or Alaska native tribe, band, nation, pueblo, village or community that the Secretary of Interior acknowledges to exist as an
Indian tribe as published by the Secretary of Interior pursuant to 25 U.S.C. subclause 5131 or any other body established by an Indigenous
Group or Indigenous Groups or by a Governmental Authority and an Indigenous Group, that is established to exercise or perform, or that
exercises or performs, a power, duty or function of a Governmental Authority including a treaty association, tribal council or chiefs’
council, board, commission, corporation or body that is established to exercise or perform a power, duty or function of a Governmental
Authority.
“Initial Ownership Interests”
has the meaning set out in the Agreement Specifics.
“Initial Term” has the meaning
set out in the Agreement Specifics.
“Initial Work Program and Budget”
has the meaning set out in subclause 5.3(e).
“Insolvency Event” means,
in relation to any Person, any one or more of the following events or circumstances:
| (a) | proceedings are commenced for its winding-up,
liquidation or dissolution, unless it in good faith actively and diligently contests such
proceedings resulting in a dismissal or stay thereof within sixty (60) days after the commencement
of such proceedings; |
| (b) | a decree or order of a Governmental Authority
is entered (i) adjudging it to be bankrupt or insolvent, or (ii) approving a petition
seeking reorganization, arrangement or adjustment of or in respect of it under applicable
Laws relating to bankruptcy, insolvency or relief of debtors; |
| (c) | (i) it makes an assignment for the
benefit of its creditors, or petitions or applies to any Governmental Authority for the appointment
of a receiver or trustee for itself or any substantial part of its property; or (ii) it
commences for itself or acquiesces in or approves the filing or commencement against it by
a creditor or other third party of any proceeding under any applicable Laws relating to bankruptcy,
insolvency, reorganization, arrangement or readjustment of debt or any proceeding for the
appointment of a receiver or trustee for itself or any substantial part of its assets or
property, or has a liquidator, administrator, receiver, trustee, conservator or similar Person
appointed with respect to it or any substantial portion of its property or assets; |
| (d) | a resolution is passed for its receivership,
winding-up or liquidation; or |
| (e) | anything analogous or having a similar
effect to an event listed in paragraphs (a) through (d) of this definition occurs
in respect of such Person. |
“Intellectual Property” means
any subject matter, whether tangible or intangible, that attracts, or is susceptible to protection by, Intellectual Property Rights,
including but not limited to, any works of authorship, data, results, technology, technical, scientific and business information and
other information of any type whatsoever, in any tangible or intangible form, techniques, methods, processes, inventions, developments,
specifications, formulations, formulae, designs, drawings, blueprints, sketches, 3D representations, models, maps, graphs, schematics,
flowcharts, software in any expressed form, including source code and object code, algorithms, computational tools, libraries, databases,
analysis, applications, simulations, systems, platforms, prototypes, plans, reports, documentation and records (whether in tangible or
electronic form).
“Intellectual Property Rights”
means (i) all copyright and analogous rights (including moral rights), all rights in relation to inventions (including patent rights),
registered and unregistered trademarks (including service marks), registered designs, confidential information (including trade secrets),
know-how, computer software, databases, circuit layouts and all other rights throughout the world resulting from intellectual activity
in the industrial, scientific or artistic fields, in each case whether registered or unregistered, (ii) all rights in all applications
to register the rights set out in paragraph (i) and any registrations to ensue therefrom and (iii) all renewals and extensions
of any of the foregoing.
“Ivanhoe” has the meaning
set out in the Agreement Specifics.
“Ivanhoe Parties” means Ivanhoe,
Operator Company and each Area of Interest LLC (upon becoming a party to this Agreement in accordance with subclause 2.4(f) and
until it becomes a Joint Venture LLC).
“Ivanhoe Indemnified Persons”
has the meaning set out in subclause 11.1.
“Joint Venture” means a joint
venture established by the Parties with respect to a Joint Venture Project which joint venture shall be conducted through a Joint Venture
LLC.
“Joint Venture Agreement”
means the agreement between the Parties (or their Affiliates) that will govern the relationship between the Parties (or their Affiliates)
with respect to each Joint Venture, which will reflect and incorporate the terms set forth in the attached Schedule A in all material
respects unless otherwise agreed by the Parties and, if the Joint Venture is conducted through a Joint Venture LLC, will be a multiple-member
operating agreement for such Joint Venture LLC.
“Joint Venture Documents”
means the Joint Venture Agreement and other documents governing or relating to the formation and governance of a Joint Venture and the
rights of the Parties in or with respect to the Joint Venture and the further exploration, development and mining of Projects, other
than this Agreement (except as otherwise provided herein), including incorporation documents, and/or other constating documents.
“Joint Venture LLC” means
an Area of Interest LLC for which a JV Designation Date has occurred.
“Joint Venture Management Committee”
has the meaning set out in subclause 6.4(b).
“Joint Venture Phase” has
the meaning set out in subclause 3.1(a)(ii).
“Joint Venture Project” has
the meaning set out in subclause 6.1(a).
“Joint Venture Proposal” has
the meaning set out in subclause 6.1(a)(i).
“JV Designation Date” has
the meaning set out in subclause 6.1(a)(v).
“Key Stakeholders” means communities,
landowners and holders of Other Rights in the Areas of Interest, Indigenous Groups, Governmental Authorities, and NGO’s.
“Law” in respect of any Person,
property, transaction or event, means all laws, statutes, treaties, regulations, and enforceable judgments, Environmental Laws, orders
and decrees, applicable to that Person, property, transaction or event and, in each case having the force of law, all applicable official
directives, rules, protocols, consents, approvals, authorizations, and orders of any Governmental Authority having or purporting to have
authority over that Person, property, transaction or event.
“Losses” means any and all
direct, indirect or consequential damages (other than losses of profits), fines, penalties, deficiencies, Taxes, losses, costs, fees
and expenses (including interest, court costs and reasonable fees and expenses of lawyers, accountants and other experts and professionals).
“Maintenance Payments” has
the meaning set out in subclause 8.5(a)(i).
“Mineral Rights” means mineral
claims (patented or unpatented), exploration licences, exploitation licences, mining leases, miscellaneous purpose licences, tenements,
concessions, notices, plans of operation, permits, agreements, and other forms of mineral tenure or other rights to Minerals, including
staking, or to work upon lands for the purpose of searching for, developing or extracting Minerals under any forms of mineral title or
right recognized under applicable Laws, whether contractual, statutory or otherwise, or any interest therein, and any applications for
such Mineral tenure or other rights to Minerals, and any Mineral tenure or other rights to Minerals derived from such applications.
“Minerals” means all ores,
solutions and concentrates or metals derived from them, containing precious, base and industrial minerals and which are found in, on
or under the Mineral Rights and may lawfully be explored for, mined and sold pursuant to the rights granted by such Mineral Rights and
other instruments of title under which any of the Mineral Rights are held.
“Monthly Reports” has the
meaning set out in subclause 8.2(r).
“NGO” means non-governmental
organization.
“Open Ground Rights” means
Rights other than Third Party Rights.
“Operations” means every kind
of work done, or activity performed pursuant to Work Programs and Budgets on or in respect of Projects, Rights or within the Areas of
Interest including investigating, prospecting, exploring, drilling, analyzing, developing, property maintenance, sampling, assaying,
metallurgical testing, preparation of reports, estimates and studies, filing assessment work, surveying, rehabilitation, reclamation
and environmental protection, and further including the management and administration necessary to conduct the foregoing work or activity.
“Operator” means the operator
under the Project Generation Phase, which shall be the Operator Company.
“Operator Company” has the
meaning set out in the Agreement Specifics.
“Other Rights” means:
| (a) | any interest in real property, whether
freehold, leasehold, license, right of way, easement including access rights; |
| (b) | any other surface or other right in relation
to real property including licenses and permits for forest lands and/or pasture areas; |
| (c) | any environmental rights, licences or
permits in relation to the activities, facilities and/or any areas relating to the Mineral
Rights; |
| (d) | any right, licence or permit in relation
to the use or diversion of water; and |
| (e) | any other licence, permit, authorization,
approval, consent, concession, exemption, grant, franchise, right or privilege required in
connection with Operations, |
but excludes any Mineral Rights.
“Parties” means BHP, on the
one hand, and Ivanhoe Parties, on the other hand, and a reference to a Party means one of them, as the context may require.
“Permitted Encumbrances” means
the following:
| (a) | Encumbrances that pre-existed or existed
at the date of this Agreement with respect to Pre-Existing Rights and in respect of which
the Operator Company will have no obligation to discharge or remove; |
| (b) | Encumbrances that pre-existed or existed
at the time of the acquisition of the applicable Rights, that were approved by the Alliance
Management Committee, and in respect of which the Operator will have no obligation to discharge; |
| (c) | easements, rights-of-way, servitudes or
other similar rights in land for sewers, drains, gas and water mains, electric light and
power and telephone or telegraph or cable television conduits, poles, wires and cables granted
to or reserved by other persons which in the aggregate do not materially impair the usefulness,
in the operation of the Joint Venture Project; |
| (d) | the right reserved to or vested in any
Governmental Authority by the terms of any lease, licence, franchise, grant or permit or
by any statutory provision, to terminate any such lease, licence, franchise, grant or permit,
or to require annual or other payments as a condition to the continuance thereof; |
| (e) | the restrictions, exceptions, reservations,
limitations, provisos and conditions, if any, expressed in any original patents or grants
from the Government of the United States or a jurisdiction of the United States, or any wholly-owned
entity of the Government of the United States or a jurisdiction of the United States, or
other Governmental Authority, and any statutory and common law limitations, exceptions, reservations
and qualifications; |
| (f) | title defects or irregularities which
are of a minor nature and in the aggregate will not materially impair the use of the Joint
Venture Project for Operations; and |
| (g) | applicable municipal and other Governmental
Authority restrictions affecting the use of land or the nature of any structures which may
be erected thereon, provided such restrictions have been complied with and will not materially
impair the use of the Joint Venture Project for the Operations. |
“Person” means any individual,
corporation, company, limited liability company, partnership, joint venture, enterprise, trust, Governmental Authority, other incorporated
or unincorporated association or organization, or any trustee, executor, administrator or other legal representative.
“Personnel” with respect to
a Party means any director, secretary, officer, employee, contractor, representative or agent of that Party.
“Political Party” means a
political party and includes any party official or candidate for office from such Political Party.
“Possible AOI” has the meaning
set out in subclause 2.2(a)(i).
“Pre-Existing Rights” means
those Rights within an Area of Interest owned by the Ivanhoe Parties prior to the Commencement Date as agreed to in writing by the Parties
on the Commencement Date.
“Project” means a geologically
cohesive area that has the potential footprint to host a mineral resource and is comprised of one or more Rights within an Area of Interest
that is part of the Alliance.
“Project Generation Phase”
has the meaning set out in subclause 3.1(a)(i).
“Quarter” means a period of
three consecutive months commencing on January 1, April 1, July 1 or October 1 in any year, other than the first
Quarter which commences on the Commencement Date and expires on the date immediately preceding the next to occur of January 1, April 1,
July 1 or October 1.
“Quarterly Reports” has the
meaning set out in subclause 8.2(r).
“Rejected Project” has the
meaning set out in subclause 4.2(a)(vi)(A).
“Related Party” has the meaning
set out in Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions of the Canadian Securities
Administrators.
“Release” has the meaning
set out in subclause 13.2.
“Restricted Person” means
any Person or entity:
| (a) | that is subject to, named, identified,
described on or included on any of: |
| (i) | the
lists made under Regulations Establishing a List of Entities pursuant to subsection 83.05(1) of
the Criminal Code (Canada), the Regulations Implementing the United Nations Resolutions
on the Suppression of Terrorism and under the United Nations Al-Qaida and Taliban Regulations; |
| (ii) | the
Denied Persons List, the Entity List or the Unverified List, compiled by the Bureau of Industry
and Security, U.S. Department of Commerce; |
| (iii) | the
List of Statutorily or otherwise Debarred Parties or Persons compiled by the U.S. Department
of State or Public Works and Government Services Canada; |
| (iv) | the
annex to, or is otherwise subject to the provisions of, U.S. Executive Order No. 13324;
or |
| (v) | the
International Emergency Economic Powers Act, 50 U.S.C. the Trading with the Enemy
Act, 50 U.S.C. App. 1 et seq.; or any other enabling legislation or executive order relating
thereto, including the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001, Title III of Pub. L. 107-56;
or |
| (vi) | any
other applicable Law relating to anti-terrorism; |
| (b) | for whom there are reasonable grounds
to believe is in breach, may be in breach or will be in imminent breach of any Anti-Bribery
Laws or AML/CTF Laws or has a personal or business reputation or dealings that would make
them unacceptable as a business partner as determined at the sole discretion of a Party acting
reasonably and in good faith; or |
| (c) | that is a Person who is an Affiliate of
or is in any other way owned or Controlled by or acting for or on behalf of a Person listed
above. |
“Rights” means any Mineral
Rights and Other Rights, or interest therein and including any options or rights to acquire such Mineral Rights and Other Rights.
“Royalty” means a net smelter
return royalty as described in the Royalty Agreement.
“Royalty Agreement” means
a royalty agreement substantially in the form of the royalty agreement attached hereto as Schedule B with such modifications made
to give effect to the Royalty contemplated under subclause 6.2 and Schedule A as applicable.
“Royalty Holder” has the meaning
set out in clause 6.2.
“Royalty Payor” has the meaning
set out in clause 6.2.
“Sanctioned Person” means:
| (a) | any Person or entity or government that
is the target of or designated under any Sanctions Laws, including but not limited to any
Person identified in any Sanctions Laws-related list of designated persons maintained by
the United States (including the Office of Foreign Assets Control of the United States Department
of the Treasury (“OFAC”) or the United States Department of State), the
United Nations, the United Nations Security Council, Canada (including through Global Affairs
Canada), the European Union (“EU”), any EU member state, Switzerland,
the United Kingdom (including His Majesty’s Treasury), Australia or any other Governmental
Authority applicable to the Parties; |
| (b) | an entity owned or Controlled by or acting
for or on behalf of a resident of, or an entity incorporated under the laws of, a country
or territory against which country-wide or territory wide Sanctions Laws are imposed, administered
or enforced from time-to-time including, as at the Commencement Date, Iran, Cuba, Syria,
North Korea and the regions of Crimea, the Donetsk People’s Republic and the Luhansk
People’s Republic regions in Ukraine and the Kherson and Zaporizhzhia oblasts of Ukraine;
or |
| (c) | any Person or entity directly or indirectly
owned 50% or more or Controlled (as such term is used in the applicable Sanctions Laws and
any formal guidance associated with the same) by, or any Person or entity acting for or on
behalf of, or at the direction of, one or more of the Persons or entities in sub-paragraph
(a) or (b) of this definition. |
“Sanctions Laws” means any
trade, economic or financial sanctions, export control, or import laws, or other regulations, requirements, restrictive measures, embargoes,
orders, directives, designations, licenses, or decisions relating to the trade of goods, technology, software and services which are
enacted, imposed, administered or enforced from time to time by Australia, Canada (including Global Affairs Canada), the United States
(including through OFAC or the United States Department of State), the United Kingdom (including His Majesty’s Treasury), the EU,
EU Member States, Switzerland, the United Nations or United Nations Security Council and also includes U.S. anti-boycott laws and regulations
and includes, without limiting the generality of the foregoing the United Nations Act (Canada), the Special Economic Measures
Act (Canada) and the Freezing of Assets of Corrupt Foreign Officials Act (Canada); the United States List of Specially Designated
Nationals and Blocked Persons compiled by the OFAC, the United States Foreign Sanctions Evaders List, Australia’s Consolidated
List, the UK Consolidated List and the EU Consolidated List of Persons, Groups, and Entities Subject to EU Financial Sanctions.
“Subcontractor” means any
Person of any tier that has entered into a contract or subcontract with Ivanhoe Parties or another contractor or subcontractor of any
tier for the supply of goods and/or services in connection with this Agreement.
“Tax” means any U.S. or non-U.S.
taxes, customs, duties, charges, fees, levies, penalties or other assessments, fees and other governmental charges imposed by or payable
to any Governmental Authority, including income, gross income, profits, transaction privilege, municipal privilege, gross receipts, compensating,
gains, net proceeds, windfall profit, severance, property, real and personal property (tangible and intangible), production, sales, use,
leasing or lease, license, excise, interest equalization, duty, franchise, capital stock, net worth, employment, occupation, payroll,
employees’ income withholding, other withholding, Medicare and Social Security (or similar), unemployment, disability, payroll,
fuel, excess profits, occupational, premium, severance, estimated, alternative or add-on minimum, ad valorem, value added, turnover,
user, transfer, registration, stamp, interest equalization, or environmental tax, or any other tax, custom, duty, fee, levy or other
like assessment or charge of any kind whatsoever, together with any interest, penalty, addition to tax, or additional amount attributable
thereto.
“Tax Partnership Agreement”
means a tax partnership agreement in respect of each Area of Interest LLC or Joint Venture LLC, as the case may be, and consistent in
all material respects with subclause 14.4.
“Technical Committee” has
the meaning set out in subclause 7.5.
“Term” means the Initial Term
plus any extension of the Initial Term in accordance with subclause 5.1.
“Third Party” means a Person
that is not a Party or an Affiliate of a Party to this Agreement.
“Third Party Legal Claim”
has the meaning set out in subclause 11.1.
“Third Party Rights” means
Rights held by Third Parties and includes any options, earn-ins or rights to acquire such Rights.
“Transfer” means to transfer,
sell, convey, assign, or grant an option in respect of or a right to purchase or in any other manner transfer, assign, alienate or dispose
of (directly or indirectly).
“Typhoon Services Agreement”
means the typhoon services agreement between I-Pulse Inc., Ivanhoe Electric Inc. and WMC Corporate Services Inc. dated December 6,
2022.
“Typhoon IP” means all Intellectual
Property Rights related to the Typhoon System owned by, or licenced to, Ivanhoe or any Affiliate, and includes any Background IP
of such Persons, and whether or not created, acquired or developed before or after the date of this Agreement. For greater certainty,
Typhoon IP shall not include (a) Exploration Data and Records or other output created or generated by, or derived from, the use
or application of the Typhoon System during the Project Generation Phase, (b) any Intellectual Property Rights associated therewith
including for certainty, whether or not developed in the course of, or as a result of, the Operation of the Alliance, and (c) any
improvements to any of the foregoing exclusions.
“Typhoon System” means a 3D
DC-resistivity induced polarization and electromagnetic geophysical data acquisition system that can survey the subsurface and provide
data for three-dimensional modeling of subsurface geology and target maps.
“Work Program” has the meaning
set out in subclause 5.3(a).
“World Heritage” means any
natural sites or precisely delineated natural areas of outstanding universal value from the point of view of science, conservation or
natural beauty, or any other applicable designation in accordance with the UNESCO’s Convention Concerning the Protection of the
World Cultural and Natural Heritage.
In this Agreement, unless the context
otherwise requires:
| (a) | the singular includes the plural and vice-versa; |
| (b) | headings do not affect the interpretation
of this Agreement; |
| (c) | a reference to a Party includes that Party’s
successors and permitted assigns; |
| (d) | references to a part, subclause, schedule,
exhibit and annexure refers to a part, subclause, schedule, exhibit or annexure of, in or
to this Agreement; |
| (e) | the provisions as set out in the Agreement
Specifics form part of this Agreement; |
| (f) | a reference to this Agreement includes
all schedules, exhibits and annexures to this Agreement; |
| (g) | a reference to an agreement, deed, instrument
or other document includes the same as amended, novated, supplemented, varied or replaced
from time to time; |
| (h) | a reference to any legislation or legislative
provision includes any statutory modification or re-enactment of, or legislative provision
substituted for, and any subordinated legislation issued under, that legislation or legislative
provision; |
| (i) | a reference to a day, month or year is
relevantly to a calendar day, calendar month or calendar year; |
| (j) | a reference to $ or dollars is to the
lawful currency of the United States of America; |
| (k) | the expressions “including”,
“includes” and “include” have the meaning as if followed by “without
limitation”; |
| (l) | where a word or phrase is defined, its
other grammatical forms have a corresponding meaning; |
| (m) | a Party may exercise a right or remedy
or give or refuse its consent in its absolute and unfettered discretion (including by imposing
conditions), unless this Agreement expressly states otherwise; |
| (n) | no rule of construction is to apply
to the disadvantage of a Party on the basis that that Party drafted the whole or any part
of this Agreement; and |
| (o) | with respect to any obligations of Affiliates
of any Party that are not Parties to this Agreement, such obligations shall be interpreted
as obligations of the relevant Party to cause its Affiliate to perform. |
| 2.1 | Formation of Alliance in Areas of
Interest |
| (a) | Ivanhoe and BHP hereby form an alliance
for early-stage generative mineral exploration in the United States (the “Alliance”)
to identify nickel and copper exploration opportunities in the Areas of Interest. |
| 2.2 | New or Enlarged Areas of Interest |
| (a) | The addition of new Areas of Interest
(or any enlargement of an existing Area of Interest) will be subject to the following process: |
| (i) | prior to submitting an AOI Proposal a Party
must first provide the receiving Party with the geographic location (in the form of shape
files) of the possible new area of interest which must not be within or adjacent to (where
adjacent is within 5 km) the boundaries of a World Heritage listed property or within an
International Union for Conservation of Nature (IUCN) Protected Area Categories 1-4 (a “Possible
AOI”). Upon receipt of the geographic location (in the form of shape files), the
receiving Party will have thirty (30) days to either accept or reject the Possible AOI, in
its sole discretion without explanation. If the receiving Party rejects the Possible AOI
or does not accept the Possible AOI within such 30-day period, then the proposing Party is
not entitled to submit an AOI Proposal with respect to such Possible AOI, and for clarity
either Party is entitled to pursue any Rights within such Possible AOI without restriction; |
| (ii) | subject to subclause 2.2(a)(i) and
2.2(a)(iii), either Party may, at any time, and from time to time, submit a written proposal
to the Alliance Management Committee requesting the addition of a new area within the United
States as an Area of Interest under the Alliance (the “AOI Proposal”); |
| (iii) | a Party must not submit an AOI Proposal
to the Alliance Management Committee unless the date of submission is at least twelve (12)
months prior to the expiry of the Term; |
| (iv) | an AOI Proposal shall include all relevant
technical and commercial information reasonably available to, or in the possession of, the
submitting Party including details of any Rights the submitting Party holds in the proposed
Area of Interest which will be dedicated to the Alliance; |
| (v) | upon receipt of an AOI Proposal, any member
of the Alliance Management Committee may request additional information from the submitting
Party and the submitting Party shall use commercially reasonable efforts to provide such
additional information, if obtainable; |
| (vi) | within thirty (30) days after the delivery
of an AOI Proposal to the Alliance Management Committee, the Alliance Management Committee
shall meet to discuss such AOI Proposal and decide whether to approve, with or without amendments,
or reject such AOI Proposal; |
| (vii) | if an AOI Proposal is approved by the
Alliance Management Committee the new area shall become an Area of Interest effective as
of the date of the Alliance Management Committee’s approval and the Operator Company
will establish a new Area of Interest LLC for such new Area of Interest substantially on
terms as set out in clause 2.4; and |
| (viii) | if the Alliance Management Committee
rejects the new area as an Area of Interest or does not approve the new area as an Area of
Interest within such 30-day period, then such new area shall not become an Area of Interest
and for greater certainty the Party who did not submit the AOI Proposal shall be restricted
for a one (1) year period from acquiring any Rights in such proposed new area while
the submitting Party shall not be restricted from acquiring such Rights within the rejected
area of the AOI Proposal. |
| (b) | Notwithstanding the provisions of this
clause 2 and for greater certainty, if a Party, in breach of subclause 2.2(a)(i), submits
an AOI Proposal that includes an area that was previously rejected as a Possible AOI by the
other Party, then such other Party will not be restricted in any way with respect to acquiring
interests in the area covered by the previously rejected Possible AOI. |
| (a) | Either Party may submit, from time to
time, a written proposal to the Alliance Management Committee that the whole, or any part
of, an Area of Interest be excluded from the Alliance (“Excluded Property Proposal”). |
| (b) | The Excluded Property Proposal shall include
all technical and commercial information available to, or in the possession of, the submitting
Party with respect to such area. |
| (c) | Upon receipt of the Excluded Property
Proposal, any member of the Alliance Management Committee may request additional information
from the submitting Party or the Operator and the submitting Party or the Operator, as the
case may be, shall use commercially reasonable efforts to provide such additional information,
if obtainable. |
| (d) | Within ninety (90) days after the delivery
of the Excluded Property Proposal to the Alliance Management Committee, the Alliance Management
Committee shall decide whether to approve, with or without amendments, or reject the Excluded
Property Proposal. |
| (e) | If the Alliance Management Committee approves
the Excluded Property Proposal, such Area of Interest or part thereof, as applicable, will
become an Excluded Property; provided however, if the submitting Party subsequently acquires
an interest, directly or indirectly, in any area within such Excluded Property within a two-year
period after approval of the Alliance Management Committee, the other Party shall have the
option to reinstate the Alliance with respect to such acquired interest. |
| (f) | If the Alliance Management Committee does
not approve the Excluded Property Proposal within the 90-day period, the Area of Interest
or part thereof, as applicable, shall not be an Excluded Property and shall remain part of
the Areas of Interest and the Alliance. |
| (g) | Except as otherwise provided in subclause
6.1(a)(vi)(A) and subject to clause 2.3(e), each Party is entitled, directly or indirectly,
to acquire Rights or any other interests in an Excluded Property (as determined at the time
of such acquisition). |
| 2.4 | Formation of Areas of Interest LLCs |
| (a) | The Operations within each Area of Interest,
including the generation, development, acquisition, holding and retention of Rights within,
or with respect to, an Area of Interest, shall each be conducted through a special purpose
dedicated Area of Interest LLC to be created for each Area of Interest. |
| (b) | Within thirty (30) days of the Commencement
Date or within thirty (30) days of the addition of a new Area of Interest following the Commencement
Date (as the case may be), an Area of Interest LLC will be established by the Operator Company
with respect to each Area of Interest and thereafter established as contemplated under subclause
2.2(a)(vii). The cost of the formation of the Area of Interest LLC will be included in Expenditures. |
| (c) | The initial ownership interest in each
Area of Interest LLC shall be 100% legally owned by the Operator Company. |
| (d) | The documents respecting the formation,
operation and governance of each Area of Interest LLC shall be substantially in the form
as such documents to be agreed by the Parties in template form within thirty (30) days of
the Commencement Date. |
| (e) | Upon formation of each Area of Interest
LLC, the Operator shall Transfer all Rights it holds (if any) within, or with respect to,
such Area of Interest to the relevant Area of Interest LLC unless the Parties mutually determine
otherwise. |
| (f) | Upon the formation of each Area of Interest
LLC, Ivanhoe Parties will cause such Area of Interest LLC to deliver to the Parties
a written accession agreement, substantially in the form to be agreed by the Parties in template
form within thirty (30) days of the Commencement Date, providing such Area of Interest LLC
shall be bound by the terms of this Agreement as one of the “Ivanhoe Parties”. |
| (a) | The Parties will carry out the Alliance
in two phases, as follows: |
| (i) | the project generation phase (“Project
Generation Phase”), as more particularly described in clause 5; and |
| (ii) | the joint venture phase (“Joint
Venture Phase”), as more particularly described in clause 6 and which may occur
concurrently with the Project Generation Phase. |
| 3.2 | Typhoon System and CGI |
Ivanhoe agrees to provide and to ensure
that there is available, for the use and benefit of the Alliance the services and capabilities of Ivanhoe and its Affiliates, including
without limitation CGI and one (1) Typhoon System of the existing units which will be replaced by a new Generation 2 unit under
construction from and after August 1, 2024, and with the most recent related technology from time to time, all as directed by the
Alliance Management Committee and in accordance with the requirements specified in the Initial Work Program and Budget and other approved
Work Programs and Budgets, provided that the charges for such services and capabilities which shall be paid by the Operator as Expenditures
shall be the actual costs to Ivanhoe Parties or their Affiliates of performing such services and capabilities (including actual time
charges, travel costs, and contracted costs, without the addition of any overhead or margin) and shall not include any fees or costs
for depreciation or reimbursement of acquisition or leasing costs or the licensing of Intellectual Property Rights. For greater certainty
the Parties agree that services and capabilities provided using the Typhoon System are separate from and do not form part of Priority
Work Days (as defined in the Typhoon Services Agreement) that may be provided to BHP or its Affiliates under the Typhoon Services Agreement.
| 3.3 | Other Business Activities and Non-Competition |
| (a) | Except as otherwise expressly provided
in this Agreement, during the Term, |
| (i) | all Operations, Expenditures and activities
of Ivanhoe Parties and their Affiliates on the one hand, and BHP and its Affiliates on the
other, within the Areas of Interest will be undertaken for the benefit of the Alliance or
any applicable Joint Venture; and |
| (ii) | neither Ivanhoe Parties nor BHP will, directly
or indirectly, on its own behalf or through any of their Affiliates: |
| (A) | acquire, or enter into any negotiations
or discussions to acquire, any Rights within the Areas of Interest (other than Pre-Existing
Rights); |
| (B) | explore or conduct exploration activities,
or participate or enter into in any joint venture, alliance or other association for exploration
in the Areas of Interest with any Person; or |
| (C) | provide financial or other support or
services to any Person in connection with the Areas of Interest, |
provided however that Ivanhoe Parties
or BHP may acquire an indirect interest in land or mineral rights within the Area of Interest where such acquisition results from a Party’s
or its Affiliates’ acquisition of another entity which holds such interests at any time, provided that such interests are valued
at less than 10% of the total net assets of such other entity.
| (b) | Each Party acknowledges that the business
activities of the other Party include the evaluation and acquisition of mineral rights, interests
and properties and, except as otherwise expressly provided in this Agreement including in
subclause 2.2(a)(viii), nothing in this Agreement will restrict or prevent either Party from
evaluating and acquiring mineral rights, interests and properties outside of the Areas of
Interest. For further clarity, BHP and Ivanhoe Parties and their respective Affiliates shall
be free to engage in any business or other activity outside of the Areas of Interest, whether
or not competitive with the activities of each other or the Alliance, and whether or not
such business activity or acquisition includes geological, geophysical, geochemical or metallurgical
concepts, models or principles that may coincidentally share similar characteristics with
the ones that form part of the information shared pursuant to this Agreement. |
| 3.4 | Sharing of Exploration Data and
Records |
| (a) | The Parties acknowledge that Ivanhoe proposed
the Areas of Interest and that Ivanhoe may have Exploration Data and Records with respect
to such Areas of Interest in its possession and control. On the Commencement Date, Ivanhoe
shall share all such Exploration Data and Records in its possession and control with BHP
that has not previously been shared. |
| (b) | If the sharing and unrestricted use of
any Exploration Data and Records requires the consent or approval of any Third Party, then
the Party in possession or control of the Exploration Data and Records shall use commercially
reasonably efforts to obtain the required consents or approvals before sharing such Exploration
Data and Records. |
Pre-Existing Rights are included in
the Alliance at actual cost of acquisition and are deemed to be a Project. Acquisition costs related to the Pre-Existing Rights will
be included in the Initial Work Program and Budget and shall be paid by BHP to Ivanhoe when BHP funds the first Cash Call. For greater
certainty, such acquisition costs shall be part of the BHP Funding Commitment. Ivanhoe Parties shall Transfer, or shall cause the Transfer,
of the Pre-Existing Rights to the relevant Area of Interest LLC within thirty (30) days of the Commencement Date.
| 4.2 | Acquisition of Rights in the Areas
of Interest |
| (a) | The acquisition of Rights in the Areas
of Interest following the Commencement Date will be subject to the following process (other
than Pre-Existing Rights) following which, and if approved, will form a Project within the
relevant Area of Interest: |
| (i) | any Party may submit, from time to time,
a written proposal to the Alliance Management Committee for the acquisition of Rights in
the Areas of Interest (“Acquisition Proposal”); |
| (ii) | the Acquisition Proposal shall include
all relevant technical and commercial information reasonably available to, or in the possession
of, the submitting Party and shall include a proposed Work Program and Budget that sets out
the proposed acquisition cost and costs that allow any required obligations to be met, together
with the proposed generative and early-stage exploration activities to be undertaken and
associated costs; |
| (iii) | upon receipt of the Acquisition Proposal,
any member of the Alliance Management Committee may request additional information from the
submitting Party and the submitting Party shall use commercially reasonable efforts to provide
such additional information, if obtainable; |
| (iv) | within thirty (30) days for Open Ground
Rights and within ninety (90) days for Third Party Rights, as applicable, after the later
of (i) delivery of the Acquisition Proposal and (ii) delivery of all due diligence
materials and other information relevant to the Acquisition Proposal, to the Alliance Management
Committee, the Alliance Management Committee shall meet to discuss the Acquisition Proposal
and decide whether to approve, with or without amendments, or reject, the Acquisition Proposal,
provided however that if the due diligence materials and information provided lead to remedial
actions or requests for additional information such meeting of the Alliance Management Committee
will be postponed; |
| (v) | if an Acquisition Proposal for Open Ground
Rights is approved by the Alliance Management Committee, the Operator Company on behalf of
the applicable Area of Interest LLC, shall apply for and/or acquire (in the name of such
Area of Interest LLC) such Open Ground Rights within the Areas of Interest, in each instance
through the relevant Area of Interest LLC in accordance with the approved Work Program and
Budget and apply for or register such Rights in the relevant Area of Interest LLC’s
name for the benefit of the Alliance; |
| (vi) | if an Acquisition Proposal is rejected
or not approved by the Alliance Management Committee in accordance with subclause 4.2(a)(iv) then: |
| (A) | the area described in the Acquisition
Proposal will become a rejected project (“Rejected Project”) and except
for (1) acquisitions by the submitting Party under subclause 4.2(a)(vi)(B) or (2) as
set out in subclause 4.2(a)(vi)(C), no Party shall acquire any Rights or interests in such
Rejected Project; |
| (B) | notwithstanding any other provision herein,
if a Party’s representative on the Alliance Management Committee does not vote to approve
the Acquisition Proposal, and such rejecting Party subsequently acquires (in breach of subclause
4.2(a)(vi)(A)) any Rights or interests in such Rejected Project within a two (2) year
period after the Alliance Management Committee meeting at which the Acquisition Proposal
was rejected or not approved, the rejecting Party is required to Transfer such acquired Rights
or interests in the Rejected Project to the submitting Party for its own use and benefit
at a purchase price equal to the rejecting Party’s actual cost of acquisition if so
elected by the submitting Party; |
| (C) | notwithstanding any other provision herein,
if all of a Party’s representatives on the Alliance Management Committee vote to approve
the Acquisition Proposal such Party may acquire any Rights or interests in the Rejected Project
for its own use and benefit and, if so acquired, the acquiring Party shall send a written
notice immediately after the acquisition to the other Party. Upon the acquisition of such
Rights and interests the Rejected Project shall no longer be considered within the Areas
of Interest; and |
| (D) | despite being a Rejected Project, unless
and until clause 4.2(a)(vi)(C) has been invoked and Rights or interests subsequently
acquired in which case this subclause 4.2(a)(vi)(D) shall not apply), either Party may
submit a second Acquisition Proposal with respect to the same Rights to the Alliance Management
Committee if, and only if, there has been a material improvement in the above-ground risks
associated with the Rejected Project, and in such case the process set out in subclauses
4.2(a)(ii) to 4.2(a)(vi) will again be applicable; |
| (vii) | if an Acquisition Proposal is for, or
includes, Third Party Rights then the following provisions shall apply in addition to the
foregoing provisions: |
| (A) | the Acquisition Proposal for Third Party
Rights shall provide that the Operator Company shall acquire, on behalf of the Alliance and
through and in the name of an Area of Interest LLC, not less than a 50% interest in the Third
Party Rights unless otherwise approved by the Alliance Management Committee; |
| (B) | if an Acquisition Proposal for Third Party
Rights is approved by the Alliance Management Committee, the Operator Company shall negotiate
a transaction with the holder of the Third Party Rights in accordance with instructions from
the Alliance Management Committee and complete the acquisition of such Third Party Rights
in the name of the relevant Area of Interest LLC for the benefit of the Alliance; |
| (C) | both Parties shall have the right to participate
with the Operator Company in the negotiations with the holder of the Third Party Rights; |
| (D) | if the Acquisition Proposal for Third
Party Rights is not completed within six (6) months of the approval of the Alliance
Management Committee, then the negotiations shall be suspended until such time as a new approval
by the Alliance Management Committee is obtained to continue the negotiations; and |
| (E) | if the Third Party Rights are not acquired
as proposed in this subclause 4.2(a)(vii), such Third Party Rights shall remain part of the
Areas of Interest and the Alliance, and may be the subject of a further Acquisition Proposal,
and in such case the process set out in this subclause will again be applicable. |
| (b) | There shall be no more than one (1) Acquisition
Proposal with respect to Third Party Rights being considered by the Alliance Management Committee
at any one time. |
| (c) | The Work Program and Budget as originally
approved, and as may be subsequently amended by the Alliance Management Committee, in connection
with an Acquisition Proposal, will be effective upon the date of acquisition of the Rights
and subject to Cash Calls as set out herein. |
| 5. | PROJECT
GENERATION PHASE |
| (a) | The Project Generation Phase will be carried
out during the Term. The Initial Term will be extended: |
| (i) | automatically without any further action
by the Parties for a period of up to three (3) months to the extent necessary to enable
the Operator to complete a previously approved Work Program and Budget that is incomplete
at the end of the Initial Term, and then at BHP’s option should three (3) months
be insufficient to complete the previously approved Work Program and Budget; provided that,
during any such extension period, neither Party may propose any new Area of Interest nor
may any new activities be commenced; |
| (ii) | at BHP’s election, to the extent
necessary to account for delays in the Operator’s completion of various Work Programs
resulting from Force Majeure events or other agreed events outside the control of the Operator,
including delays in obtaining Rights, and only in such instances where the BHP Funding Commitment
is not fully advanced by BHP; and |
| (iii) | by mutual written agreement of the Parties, at any time. |
| 5.2 | Main Objectives of Project Generation
Phase |
The main objectives during the Project
Generation Phase are for Ivanhoe Parties, with the BHP Funding Commitment and thereafter joint funding from Ivanhoe and BHP, to carry
out generative and early-stage exploration in the form of geological reconnaissance, surveys, studies, initial mapping, field visits,
sampling, target definition, staking, initial drilling, and applying for, acquiring and/or obtaining Rights in the Areas of Interest
to explore for Minerals with a particular focus on nickel and copper mineralization including the use of the Typhoon System to rapidly
screen large areas under thick cover. For the avoidance of doubt, all such activities shall be engaged in by the applicable Area of Interest
LLC, and all Rights derived therefrom, shall be owned by such applicable Area of Interest LLC.
| 5.3 | Work Programs and Budgets |
| (a) | The Alliance Management Committee will
be responsible for providing technical oversight over, establishing the parameters for, and
approving work programs (“Work Programs”) and budgets (“Budgets”)
regarding the activities of the Alliance. |
| (b) | During the Project Generation Phase all
Work Programs and Budgets for any Operations will be prepared by the Operator and presented
to the Alliance Management Committee at least thirty (30) days prior to the Alliance Management
Committee’s meeting at which such Work Programs and Budgets will be considered. The
Alliance Management Committee may approve (with or without its own revisions) or not approve
such Work Programs and Budgets. If the Alliance Management Committee does not approve a Work
Program and Budget, the Operator shall have five (5) Business Days to submit a revised
Work Program and Budget for approval by the Alliance Management Committee. |
| (i) | the Operator does not prepare and submit
a Work Program and Budget when required to do so; |
| (ii) | the Operator does not submit a revised
Work Program and Budget within the five (5) Business Day period as set out in subclause
5.3(b); or |
| (iii) | the Alliance Management Committee does
not approve a revised Work Program and Budget within ten (10) Business Days of receiving
a revised Work Program and Budget as set out in subclause 5.3(b), |
either BHP or Ivanhoe, or both, may prepare
and present a revised Work Program and Budget to the Alliance Management Committee within ten (10) Business Days after any
such event. If the process contemplated in this subclause 5.3(c) does not result in the Alliance Management Committee approving
a Work Program and Budget then clause 7.3 will apply.
| (d) | Budgets will be prepared on an annualized
basis and shall include a pro rata breakdown on a two Quarterly basis to align with
Cash Calls. All Work Programs and Budgets will include separate line items describing individualized
budgeted payments to be made to Indigenous Groups, the community or landowners including
Expenditures in connection with any rights to access land. |
| (e) | The initial Work Program and Budget will
cover the period starting on the Commencement Date and ending on June 30, 2025 (the
“Initial Work Program and Budget”). The Initial Work Program and Budget
will be prepared by the Technical Committee as soon as possible after the Commencement Date
with the aim of being submitted to the Alliance Management Committee with sufficient time
for approval within thirty (30) days following the Commencement Date. Additional Work Programs
and Budgets, following the Initial Work Program and Budget, will be prepared for each subsequent
12-month period during the Initial Term commencing July 1, 2025, except for the last
Work Program and Budget will cover the period starting on July 1, 2026 and ending on
the third (3rd) anniversary of the Commencement Date. |
| 5.4 | Project Generation Phase Funding |
| (a) | During the Project Generation Phase, subject
to the terms of this Agreement, BHP and Ivanhoe shall fund all Expenditures in the Work Programs
and Budgets approved by the Alliance Management Committee as follows: |
| (i) | BHP shall solely fund the Expenditures until
the BHP Funding Commitment is satisfied; and |
| (ii) | thereafter BHP and Ivanhoe shall each fund
50% of all such Expenditures. |
| (b) | If BHP funds Expenditures in excess of
the BHP Funding Commitment with the consent of Ivanhoe during the Project Generation Phase,
any excess funds shall be credited towards any future Cash Call for the benefit of BHP. |
| (c) | BHP shall transfer funds (which for greater
certainty will be deemed payment of a first Cash Call) to the Operator within fifteen (15)
days after the last to occur of: |
| (i) | the date the Alliance Management Committee
approves the Initial Work Program and Budget; |
| (ii) | the date the Parties agree on the template
agreement contemplated in subclause 2.4(d); |
| (iii) | the date the Parties agree on the template
agreement contemplated in subclause 2.4(f); and |
| (iv) | the date the Parties agree on the template
Tax Partnership Agreement for each Area of Interest LLC, |
in an amount sufficient to fund the Initial
Work Program and Budget through to December 31, 2024. For greater certainty, BHP shall not be required to fund any Operations within
any Area of Interest until such time that the Area of Interest LLC for such Area of Interest has been established and a Tax Partnership
Agreement for such Area of Interest LLC has been executed.
| (d) | After the initial funding as contemplated
in subclause 5.4(c), funding will be provided as follows: |
| (i) | on the basis of the applicable Work Program
and Budget approved by the Alliance Management Committee, the Operator shall submit to BHP
and Ivanhoe, as applicable, a cash call for the estimated cash requirements for the next
two Quarters (other than the final period ending on the 3rd anniversary of the
Commencement Date) on a rolling basis commencing January 1, 2025 for the period through
to June 30, 2026 (a “Cash Call”); |
| (ii) | each Cash Call will include an itemized
statement reconciling the actual, accrued, and forecasted Expenditures for such period of
the Work Program and Budget against the approved Work Program and Budget, and Cash Calls
made to date, including an explanation for any significant variances; and |
| (iii) | BHP and Ivanhoe, as applicable, shall
pay to the Operator the amount specified in the Cash Call within thirty (30) days after the
receipt of the Cash Call but provided that a Party is not required to fund a Cash Call unless
all reports required under clause 8.2, and the itemized statement described in subclause
5.4(d)(ii), have been timely delivered and are current. |
| (e) | Any funds advanced by BHP or Ivanhoe in
connection with a Cash Call that are in excess of the amount actually expended during the
relevant Quarters shall be carried forward and credited to the funding requirement for the
following Quarters. If there are excess funds not expended at the end of the Term, then such
excess funds shall be credited for the benefit of BHP and Ivanhoe in any applicable Joint
Venture or returned to BHP and Ivanhoe, as applicable. For greater certainty, if the full
BHP Funding Commitment is not expended and Ivanhoe has not advanced any funds pursuant to
a Cash Call then the excess funds would be payable to BHP but if both BHP and Ivanhoe have
advanced their portion of all Cash Calls any excess would be divided equally. |
| (f) | For each Project, a specific accounting
record shall be implemented in order to register the specific funds and expenses associated
with both BHP and Ivanhoe for such Project. The Operator will expend all monies advanced
by BHP and Ivanhoe on a pro rata basis. |
| (g) | Expenditures during the Project Generation
Phase incurred by the Operator will be considered to have been incurred solely for and on
behalf of the Party (or Parties) that funded or reimbursed such Expenditures, and such Party
(or Parties) will be the sole person (or persons) entitled to claim such Expenditures for
income tax purposes and will be subject to the relevant Tax Partnership Agreement. |
| 6.1 | Approval as Joint Venture Project |
| (a) | The approval of a Project as a Joint Venture
Project will be subject to the following process: |
| (i) | either Party may submit at any time, and
from time to time, a written proposal to the Alliance Management Committee for a Project
to become a joint venture project (such project a “Joint Venture Project”
and such proposal a “Joint Venture Proposal”); |
| (ii) | the Joint Venture Proposal shall include
all relevant technical and commercial information reasonably available to, or in the possession
of, the nominating Party and shall include any proposed area of interest (but within the
Area of Interest) surrounding the Project within which all business and other activities
will only be undertaken for the benefit of the Joint Venture Project; |
| (iii) | upon receipt of the Joint Venture Proposal,
any member of the Alliance Management Committee may request additional information from the
nominating Party or the Operator and the nominating Party or the Operator shall use commercially
reasonable efforts to provide such additional information, if obtainable; |
| (iv) | within thirty (30) Business Days after
the delivery of the Joint Venture Proposal to the Alliance Management Committee, the Alliance
Management Committee shall meet to discuss the Joint Venture Proposal and decide whether
to approve, with or without amendments, or reject the Joint Venture Proposal; |
| (v) | if a Joint Venture Proposal is approved
by the Alliance Management Committee, then, upon the date of receipt of the last to be obtained,
of any approvals, consents or clearances from a Governmental Authority assessed and mutually
agreed by the Parties as necessary for the legal formation of the Joint Venture or upon the
date it is confirmed that no such approvals, consents or clearances are required (the “JV
Designation Date”), a Joint Venture will be established and thereafter subclauses
6.3 to 6.5 will apply; |
| (vi) | if a Joint Venture Proposal is rejected
or not approved within the thirty (30) Business Day period by the Alliance Management Committee,
and: |
| (A) | the total Expenditures in the relevant
Area of Interest during the Project Generation Phase has exceeded $3 million, then the Project
will become an Excluded Property, provided however that any acquisition of Rights or other
interests in the Excluded Property may only be pursued by the nominating Party (and not the
other Party) and subclause 6.2 will apply; or |
| (B) | the total Expenditures in the relevant
Area of Interest during the Project Generation Phase has not exceeded $3 million, then the
Project shall remain part of the Areas of Interest and the Alliance and may become the subject
of a further Joint Venture Proposal. |
| (b) | Until the Joint Venture Phase commences
as determined in accordance with subclause 6.3(d), any outstanding approved Work Program
and Budget related to a Project that becomes a Joint Venture Project shall be completed in
accordance with the provisions governing the Project Generation Phase. |
| 6.2 | Declining to Enter Into Joint Venture
and Dealing with Excluded Property |
| (a) | If a nominating Party wishes to pursue
an Excluded Property on its own behalf in accordance with subclause 6.1(a)(vi)(A) then: |
| (i) | at the option of the nominating Party: |
| (A) | all Rights and other interests related
to the Excluded Property where the Excluded Property does not constitute the whole of the
Area of Interest will be Transferred from the relevant Area of Interest LLC to the nominating
Party (to the extent not already held by the nominating Party) or to an Affiliate, as determined
by the nominating Party; or |
| (B) | where the Excluded Property constitutes
the whole of the Area of Interest all the member interests in the relevant Area of Interest
LLC will be transferred to the nominating Party (to the extent not already held by the nominating
Party) or an Affiliate, as determined by the nominating Party and the non-nominating Party
shall abandon and/or forfeit any and all right, title, and interest in and to all equity
interests in the relevant Area of Interest LLC; in either case within sixty (60) days after
the date the Joint Venture Proposal was rejected or not approved, for no additional consideration; |
| (ii) | all of the rights, interests and obligations
in connection with the Excluded Property will be directly or indirectly (as applicable) assumed
by the nominating Party and the other Party will have no rights, interest or obligations
(direct or indirect) except pursuant to the Royalty Agreement, if applicable; and |
| (iii) | if the total Expenditures in the Area
of Interest that covers the Excluded Property during the Project Generation Phase has exceeded
$5 million, the nominating Party (the “Royalty Payor”) shall cause the
grant or conveyance, as the case may be, of a 1.0% Royalty in respect of the Excluded Property
to the other Party (the “Royalty Holder”) whether by the relevant Area
of Interest LLC or otherwise, and the Royalty Payor and the Royalty Holder will enter into
a Royalty Agreement. If the other Party is one of the Ivanhoe Parties, the Royalty Holder
will be Ivanhoe or an Affiliate of Ivanhoe that is not the Operator Company. |
| 6.3 | Conversion of an Area of Interest
LLC to a Joint Venture LLC |
| (a) | Except as otherwise agreed to by BHP and
Ivanhoe, if a Project operated by an Area of Interest LLC is approved by the Alliance Management
Committee to become a Joint Venture Project, then such Area of Interest LLC shall on and
from the JV Designation Date be treated as a Joint Venture LLC. Any other Rights within the
relevant Area of Interest LLC that do not form part of the Joint Venture Project, as agreed
to by the Parties, will be transferred with thirty (30) days of the JV Designation Date to
a newly formed Area of Interest LLC unless the Parties agree otherwise. |
| (b) | On the JV Designation Date, the Operator
Company shall cause the relevant Joint Venture LLC to issue solely for applicable corporate
and commercial purposes a sufficient number of membership interests to BHP or its designated
Affiliate so that the Initial Ownership Interest is reflected, it being agreed that such
issuance shall be a non-event for applicable income tax purposes as BHP will have already
been treated as the owner of such membership interests for applicable income Tax purposes
as more fully described in the Tax Partnership Agreement. |
| (c) | At any time that BHP determines it is
reasonable to expect that a Project may become a Joint Venture Project, BHP may prepare and
deliver to Ivanhoe initial drafts of the Joint Venture Documents that would be applicable
to such Project. Upon receipt of the initial drafts of the Joint Venture Documents, the Parties
shall use best efforts and shall work in good faith to agree on the final versions of the
Joint Venture Documents in order to approve, adopt, file, or execute the Joint Venture Documents,
as applicable, on or within 60 days after the JV Designation Date. The Joint Venture Agreement
shall reflect and incorporate the terms set forth in the attached Schedule A, incorporated
herein as part of this Agreement, in all material respects unless otherwise agreed by the
Parties. |
| (d) | The Joint Venture Phase will automatically
commence for the corresponding Joint Venture Project on the JV Designation Date and will
be subject to the terms set out in this Agreement and Schedule A, until superseded by
the Joint Venture Documents. |
| (e) | Upon the approval, adoption, filing, or
execution of the Joint Venture Documents, as applicable the Joint Venture Project will cease
to be subject to this Agreement but provided that in the time period between the approval
of the Joint Venture Project and the execution of the Joint Venture Documents, no substantial
matters shall be undertaken by the Joint Venture save for those activities contemplated by
subclause 6.1(b). |
| (f) | In connection with the conversion of an
Area of Interest LLC into a Joint Venture LLC and approval, adoption, filing or execution
of the Joint Venture Documents, Ivanhoe Parties will, subject to any required regulatory
approval or filings, Transfer to the Joint Venture LLC to the extent not already held by
the Joint Venture LLC: |
| (i) | all of its Rights in and to such Project
that has become a Joint Venture Project; |
| (ii) | the Exploration Data and Records developed,
acquired or created by BHP or Ivanhoe Parties in connection with the Joint Venture Project; |
| (iii) | all Alliance IP, if any, solely in connection
with such Joint Venture Project; and |
| (iv) | all other rights, assets and other data
related to such Joint Venture Project, |
free and clear of Encumbrances except
Permitted Encumbrances, provided however if any pending applications remain outstanding that are not transferable to the Joint Venture
LLC, Ivanhoe Parties shall hold all of its rights, title and interests in such pending applications as trustee in bare trust for
(or as the agent and/or nominee of) the Joint Venture LLC as beneficiary and shall continue to pursue such applications at the expense
of the Joint Venture and upon approval of such applications shall Transfer any Rights or other assets to the Joint Venture LLC, all of
which shall be reflected in the Joint Venture Documents.
| (g) | Prior to or concurrently with the establishment
of a Joint Venture, the Parties will mutually agree who will become the initial Joint Venture
operator, each acting reasonably and taking into reasonable consideration the nature of the
Joint Venture Project. If the Parties agree, the Joint Venture operator may assume Ivanhoe
Parties’ obligations under one or more contracts with independent contractors engaged
in Operations with respect to such Joint Venture Project. If the Parties are unable to agree
who will become the initial Joint Venture operator, the Parties will place the Joint Venture
Project on care and maintenance until an agreement has been reached and the Operator Company
shall be the interim Joint Venture operator until the Parties agree otherwise. The Parties
agree that they will take the dispute to successively higher levels of the Parties’
management up to and including the President and CEO of Ivanhoe and Vice President Metals
Exploration of BHP. |
| (h) | Provided that BHP and Ivanhoe have each
funded their full portion of all Expenditures in accordance with subclause 5.4(a) during
the Project Generation Phase with respect to a Project that becomes a Joint Venture Project
then each of BHP and Ivanhoe will have earned the Initial Ownership Interests on the JV Designation
Date, with such Initial Ownership Interests being reflected through the ownership of the
membership interests of the Joint Venture LLC for such Joint Venture Project. For greater
certainty, Ivanhoe shall be entitled to the Initial Ownership Interest with respect
to a Joint Venture Project even where it has not provided any funding as a result of it not
yet being required to do so under subclause 5.4(a), or where the BHP Funding Commitment has
not been exhausted at the time that a Project becomes a Joint Venture Project. |
| (i) | Except for any income taxes due by a Party,
the Joint Venture LLC shall bear the costs and expenses incurred for the transfer or contribution,
as the case may be, by any of the Parties to the Joint Venture LLC of: |
| (i) | all of the respective Rights in and to a
Joint Venture Project; |
| (ii) | the Exploration Data and Records developed,
acquired or created by BHP or Ivanhoe Parties in connection with a Joint Venture Project;
and |
| (iii) | all other rights, assets and other data
related to a Joint Venture Project. |
The aforementioned costs and expenses
include but are not limited to the preparation of documents, payment of governmental and filing fees and reasonable Third Party advisory
fees.
| 6.4 | Main Objective of Joint Venture
Phase |
| (a) | The main objective during the Joint Venture
Phase is to further explore and evaluate exploration results in the area of the Joint Venture
Project, to evaluate any identified copper or nickel deposits as to its technical, economic
and above ground merit, and if appropriate, to develop, operate and expand a mine and associated
infrastructure. |
| (b) | The Joint Venture will have a management
committee composed of three members appointed by each Joint Venture party for a total of
six members (the “Joint Venture Management Committee”). The Joint Venture
parties’ votes on the Joint Venture Management Committee will be proportional to their
participating interests in the Joint Venture. |
| (c) | Until the approval, adoption, filing,
or execution of the Joint Venture Documents, as applicable, the members of the Alliance Management
Committee will constitute the Joint Venture Management Committee. |
| (a) | During the Joint Venture Phase, each Party
will contribute pro rata to their respective interest in the Joint Venture in accordance
with the Joint Venture Documents. |
| (b) | Contributions, funding and reimbursements
shall be accounted for in respect of the Joint Venture Phase, separately for each Joint Venture
Project. Any such contributions shall be treated as contemplated in the Joint Venture Documents
and the relevant Tax Partnership Agreement. |
| 7. | ALLIANCE
MANAGEMENT COMMITTEE |
| 7.1 | Formation of Alliance Management
Committee |
| (a) | Upon execution of this Agreement, an Alliance
management committee (“Alliance Management Committee”) will be formed
comprised of a total of six members being three representatives appointed by BHP and three
representatives appointed by Ivanhoe, and it will have the responsibilities as set out in
subclause 7.4. Each member shall have an alternate appointed by each of BHP and Ivanhoe,
as applicable. |
| (b) | Each Party must notify the other Party
following execution of this Agreement of the names and contact details of their respective
representatives on the Alliance Management Committee and their respective alternates. Each
Party’s alternate shall be authorized to act on the representative’s behalf at
a meeting from which the representative is absent. Each of BHP and Ivanhoe, respectively,
may remove its appointed representatives and its alternates upon prior written notice to
the other Party. Every appointment and removal of an appointee or alternate by a Party takes
effect when notice of that appointment or removal is received by the other Party or at a
later time if specified in the notice. |
| (c) | For each Project, the Alliance Management
Committee will be in effect until the Project is designated a Joint Venture Project and the
Joint Venture Phase for such Joint Venture Project has commenced as determined in accordance
with subclause 6.3(d). |
| (a) | Meetings of the Alliance Management Committee
will be held each Quarter, or as otherwise determined by the Alliance Management Committee,
and shall be called on at least ten (10) days’ written notice by the Operator.
The Operator or any Party may on at least ten (10) days’ notice call an ad
hoc meeting of the Alliance Management Committee. The Alliance Management Committee,
acting unanimously, may waive or reduce the notice period to a period less than ten (10) days.
Subject to subclause 7.2(b)(i), for each meeting an agenda must, at least five (5) days
prior to that meeting, be distributed to the Operator and the Parties by the person calling
that meeting. |
| (b) | No material item of business will be transacted
at a meeting of the Alliance Management Committee meeting unless: |
| (i) | the item of business appears on an agenda
circulated at least five (5) days before the meeting by the person calling the meeting;
or |
| (ii) | subject to subclause 7.2(e), at least one
representative of each Party is present and those representatives unanimously agree to the
item being added to the agenda. |
| (c) | The Operator must cause minutes of each
meeting to be taken and distributed to the Parties for comments within ten (10) days
subsequent to that meeting. Each Party shall provide comments within an additional ten (10) days.
The Operator will incorporate comments from the Parties and circulate a final draft within
a further ten (10) days that will be the subject of approval by the Alliance Management
Committee on or before the next meeting. |
| (d) | Any member of the Alliance Management
Committee may attend any meeting by conference telephone or web-based audio or video call,
so long as all attendees at that meeting can hear and be heard by all other attendees. |
| (e) | A quorum for a meeting of the Alliance
Management Committee will be a majority of the representatives (or alternates) including
at least one representative from each of BHP and Ivanhoe; provided, however, that if BHP
or Ivanhoe, through their duly appointed Alliance Management Committee representatives or
alternates, fail to attend two consecutive properly called meetings, then a quorum will exist
at a third duly called meeting if the other Party is represented by all of its appointed
Alliance Management Committee representatives, and a vote of such other Party’s representative
will be considered the vote required for the purposes of the conduct of all business properly
notified even if such vote would otherwise require unanimity of both BHP and Ivanhoe’s
representatives. |
| (f) | Each representative of BHP and of Ivanhoe
will have one vote on the Alliance Management Committee. All items to be approved by the
Alliance Management Committee shall require unanimous approval. Where the approval is not
unanimous, the representatives of Ivanhoe will have the deciding vote with respect to matters
to be approved by the Alliance Management Committee, unless such matter relates to the following,
in which case, unanimous approval is still required: |
| (i) | taking any action or any other matter which
relates to HSEC Performance, compliance with Anti-Bribery Laws, Sanctions Laws and AML/CTF
Laws, human rights and other business conduct matters which may expose the Alliance or the
Parties to material legal or reputational risk; |
| (ii) | any decision to surrender or relinquish
any Rights in an Area of Interest held on behalf of the Alliance (other than as part of an
Excluded Property Proposal which shall be determined in accordance with clause 2.3); |
| (iii) | approval of a Work Program and Budget; |
| (iv) | entry into, or amendment, or termination
of Related Party transactions exceeding $1,000,000 unless such transactions are included
in an approved annual Work Program and Budget (which may include the provision of services
from CGI to the Alliance and services related to the Typhoon System); and |
| (v) | approval of an AOI Proposal, an Acquisition
Proposal, an Excluded Property Proposal or a Joint Venture Proposal. |
| (g) | In lieu of a meeting, the Alliance Management
Committee may pass resolutions in writing signed by all members of the Alliance Management
Committee. |
| (h) | The Alliance Management Committee may
establish such rules of procedure for itself as the Alliance Management Committee deems
fit, provided that such rules are not inconsistent with this Agreement. |
| (a) | If a matter contemplated under subclause
7.2(f)(i) (Anti-Bribery Laws, Sanction Laws, AML/CTF Laws, human rights and other
business conduct matters, HSEC Performance), 7.2(f)(ii) (Rights Relinquishment),
7.2(f)(iii) (Work Program and Budget) (only after exhausting the steps set out
in subclause 5.3(c)) or 7.2(f)(iv) (Related Party Transactions) is submitted
for approval to the Alliance Management Committee and the representatives of Ivanhoe and
BHP cannot come to a unanimous decision, then the matter may be raised by either Party to
the other Party for further discussion and resolution. If the Parties fail to agree as to
the disposition of the matter within a period of sixty (60) days after a non-unanimous vote,
then a deadlock will be deemed to have occurred in relation to that matter (a “Deadlock”). |
| (b) | A Deadlock (other than a Deadlock referenced
in subclause 7.3(c)) shall be considered by successively higher levels of the Parties’
management up to and including the President and CEO of Ivanhoe and Vice President Metals
Exploration of BHP for resolution, and if the Deadlock has not been resolved within a further
period of sixty (60) days after a Deadlock has been deemed to have occurred under subclause
7.3(a) then: |
| (i) | if the Deadlock relates to a matter under
subclauses 7.2(f)(ii) (Rights Relinquishment) or 7.2(f)(iv) (Related
Party Transactions) each Party will prepare an alternate proposal in writing to dispose
of or resolve such Deadlock and each proposal shall be submitted to an Independent Expert
within twenty (20) Business Days after the 60-day period and the Independent Expert shall
chose, within a further twenty (20) Business Days after the last received proposal, one of
the proposals as the determinative resolution which will be binding on the Parties taking
into consideration complying with the highest standards of HSEC Performance, anti-corruption,
human rights and other business conduct matters; and |
| (ii) | if the Deadlock relates to a matter under
subclause 7.2(f)(iii) (Work Program and Budget) the Parties shall implement a
Deadlock Sustaining Budget and shall continue to seek to resolve the Deadlock within a further
sixty (60) days and if the Deadlock is not resolved by the end of such 60-day period, each
Party shall have the right, but not obligation, to terminate this Agreement by sending written
notice to the other Party. |
| (c) | A Deadlock which comprises or includes
a matter referred to in subclause 7.2(f)(i) (Anti-Bribery Laws, Sanction Laws, AML/CTF
Laws, human rights and other business conduct matters, HSEC Performance) shall be considered
by the President and CEO of Ivanhoe and Vice President Metals Exploration of BHP for resolution
and if the Deadlock has not been resolved within a further period of six (6) months
after a Deadlock has been deemed to have occurred under subclause 7.3(a) then each Party
shall have the right, but not obligation, to terminate this Agreement by sending written
notice to the other Party. |
| 7.4 | Alliance Management Committee Responsibilities |
The Alliance Management Committee will
have the exclusive responsibilities:
| (a) | to oversee, supervise and direct all Operations
conducted by the Operator; |
| (b) | to review Expenditures and technical work
progress, including to determine the form of and review the Monthly Reports and Quarterly
Reports; |
| (c) | to determine the form of and approve Work
Programs and Budgets and any amendments thereto developed by the Operator; |
| (d) | for reviewing the Operator’s performance
of the approved Work Program and Budgets; |
| (e) | for reviewing the Operator’s performance
in maintaining Mineral Rights; |
| (f) | for reviewing Operator’s implementation
of compliance policies and procedures (including, without limitation policies and procedures
for compliance with the Anti-Bribery Laws, Sanctions Laws and AML/CTF Laws); and |
| (g) | for providing direction in relation to
any other matters concerning the Operations, including but not limited to establishing (or
reviewing Operator’s implementation of) policies and procedures incorporating Good
Mining Practices with respect to: |
| (i) | environmental and social governance; |
| (ii) | health, safety and environmental compliance; |
| (iv) | human rights, community, indigenous affairs
(including land access and cultural heritage impacts) and government relations; |
| (v) | contractor engagement and management (including,
without limitation, specifying those contracts or categories of contracts requiring the approval
of the Alliance Management Committee); |
| (vi) | resource identification; and |
| (vii) | geological drilling. |
| 7.5 | Technical Subcommittee |
| (a) | The Alliance Management Committee may
establish and delegate responsibilities to subcommittees. |
| (b) | The Alliance Management Committee will
establish a technical steering committee of not more than two members from each of Ivanhoe
and BHP (the “Technical Committee”) to which subclause 7.2 will apply
mutatis mutandis other than subclause 7.2(f) which will apply such that the Technical
Committee shall operate by unanimous vote without exceptions. If the Technical Committee
is unable to make a recommendation on a unanimous basis the matter shall be considered by
the Alliance Management Committee and representatives from the Technical Committee will have
an opportunity to present different positions. The Technical Committee will, among other
things, focus on providing technical guidance, expertise and commentaries on the Work Programs
and Budgets, ongoing Operations and any other technical consideration with respect to the
Alliance for recommendation to the Alliance Management Committee. |
| (c) | Each of BHP and Ivanhoe will designate
its members of the Technical Committee as soon as practical after the Commencement Date.
If the Technical Committee has not been established with the required members from each of
Ivanhoe and BHP and held its first meeting prior to the date on which the second Cash Call
is due, BHP will be entitled to delay payment of such Cash Call until the Technical Committee
has been properly established and has held its first meeting. |
| 8. | OPERATOR
AND OPERATIONS |
| 8.1 | Appointment of Operator |
The Operator Company will act as Operator
during the Project Generation Phase and shall be fully responsible for all Operations pursuant to approved annual Work Programs and Budgets,
subject to any changes as approved and directed by the Alliance Management Committee.
| 8.2 | Operator’s Obligations |
At all times while the Operator Company
is the Operator, Ivanhoe Parties are obligated to do, or cause to be done, the following (and Ivanhoe Parties shall be fully responsible,
on a joint and several basis, for such obligations save that Ivanhoe Parties shall not be fully responsible for such obligations (and
shall not be required to indemnify BHP) to the extent that the taking of any of the following actions requires unanimous approval of
the Alliance Management Committee, the BHP representatives have been provided with all information reasonably requested and the BHP representatives
do not provide the necessary approval for Ivanhoe Parties to carry out such actions):
| (a) | to carry out Operations in a prudent, workmanlike and efficient manner, with the degree of effort, skill
and judgment that is in accordance with Good Mining Practices and in accordance with all applicable Laws and all Rights relating to the
Projects; |
| (b) | to apply for or acquire all Rights in the name of the relevant Area of Interest LLC, unless the Parties
mutually determine otherwise; |
| (c) | to make all payments, including Taxes, governmental fees and any other disbursements related to the Operations
(other than income Taxes of the members or partners of the Area of Interest LLCs) and as further required by applicable Laws to evidence
the satisfaction of any minimum work/investment obligations required by the Rights and the Laws; |
| (d) | if Ivanhoe Parties enters into any contracts with any Third Party for goods or services relating to the
Operations, all such contracts shall be in writing and be reviewed by legal counsel to Ivanhoe and be in form and substance consistent
with Good Mining Practices; |
| (e) | to pay and discharge all wages and accounts for materials and services and all other costs and expenses
that may be incurred by the Operator in connection with its Operations and to save BHP harmless from and against all liens in respect
of such Operations which may be filed against any Project and in the event of any liens being so filed, to proceed forthwith to have the
same removed, provided that the foregoing provision will not prevent the Operator from properly contesting in good faith any claims for
liens which the Operator considers unjustified; |
| (f) | without limiting subclause 8.5, to do all things necessary to maintain Mineral Rights or cure title defects
pertaining to a Project as may be advisable in its reasonable judgment to continue to advance a Project; |
| (g) | for the purposes of this Agreement, to apply for all necessary Rights and approvals, comply with all applicable
Laws and notify all members of the Alliance Management Committee promptly of any allegations of violations thereof; |
| (h) | unless consistent with an approved Work Program and Budget, not to undertake any Operations or other activities
within the Areas of Interest except in accordance with this Agreement and as approved and directed by the Alliance Management Committee; |
| (i) | to maintain and keep in force and, upon request by BHP provide reasonable documentary verification of,
levels of insurance in accordance with Good Mining Practices taking into consideration the nature of the Operations at the relevant time; |
| (j) | to permit BHP, its employees or duly authorized representatives, at their own expense and on reasonable
notice to the Operator, access to any areas being explored during the Project Generation Phase, any Project, the information, maps, drill
logs, core tests, reports, surveys, analyses, technical, accounting and financial records, and Exploration Data and Records with respect
to same, the Operator’s books and records in relation thereto, and such other information and documentation as BHP may reasonably
request related thereto, in order to examine and inspect any Operations carried out by or on behalf of the Operator and results obtained
therefrom and to conduct other technical evaluations and assessments; |
| (k) | to carry out engagement plans with Key Stakeholders as set out in each Work Program; |
| (l) | to document engagement with Key Stakeholders for each Work Program and, if requested by the Alliance Management
Committee to make the relevant documentation available; |
| (m) | to carry out Operations and all activities associated with this Agreement in conformity with Anti-Bribery
Laws, Sanctions Laws and AML/CTF Laws and to promptly, and in any event within five (5) Business Days, notify BHP and the Alliance
Management Committee of any actual or suspected violations of any such Anti-Bribery Laws, Sanctions Laws and AML/CTF Laws in connection
with such Operations and activities; |
| (n) | to carry out and comply with Good Mining Practices in respect of health, safety, the environment, community
engagement, human rights and other business conduct matters; |
| (o) | to consider, develop and submit to the Alliance Management Committee for consideration and approval, all
Work Programs and Budgets, use all commercially reasonable efforts to achieve the objectives set out in Work Programs and Budgets and
to incorporate any feedback provided from the Alliance Management Committee in the performance of Operations; |
| (p) | without limiting subclause 18.4, to maintain true and correct books, accounts and records of Expenditures
in accordance with generally accepted accounting principles in the United States consistently applied in addition to those to be maintained
in accordance with the requirements of any applicable Law or Right and to provide access to, and copies of, such books, accounts and records,
and such other information and documentation as each Party may reasonably request, to such requesting Party or a certified public accountant
or chartered accountant appointed by such requesting Party to audit such books, accounts, records information and documentation. For greater
certainty, all Expenditures must be supported by documents that accurately, completely and properly describe such Expenditure and the
reason for the Expenditure and no accounts can be kept ‘off-book’ to facilitate or conceal payments; |
| (q) | to deliver to the Alliance Management Committee within ten (10) Business Days following the end of
each calendar month during the Term (or at such other time and frequency as determined by the Alliance Management Committee), monthly
finance and activity reports (the “Monthly Reports”) containing information on: |
| (i) | an itemized statement of actual and accrued Expenditures for the relevant month and from the beginning
of the Work Program and Budget to the end of the relevant month, including a reconciliation to the original Budget and an explanation
of any significant variances, and forecasted Expenditures until the end of the Work Program and Budget; |
| (ii) | current cash balance available to the Operator Company; |
| (iii) | any anticipated or forecast shortfalls in funding that may require a Cash Call earlier than that required
by the approved Budget and the reason for such anticipated or forecast shortfalls. |
| (iv) | a summary of health, safety, environment and community matters, and matters pertaining to compliance with
Anti-Bribery Laws, Sanctions Laws and AML/CTF Laws, for the month including key performance metrics as established by the Alliance Management
Committee and any incidents which occurred during the month or actions from previous incidents which are ongoing, correspondence with
Governmental Authorities and communities; |
| (v) | such other financial information as the Alliance Management Committee or a Party’s representative
requests to be included in such Monthly Reports from time to time; and |
| (vi) | at the discretion of the Operator with respect to the level of disclosure, any information related to
Operations, the Projects or other exploration matters that would be considered material to each Party’s full understanding of the
exploration activities taking place within any Area of Interest or at any Project. |
| (r) | to deliver to the Alliance Management Committee, within fifteen (15) Business Days following the end of
each Quarter during the Term, financial and Operations reports (the “Quarterly Reports”) that shall include comprehensive
reports for the preceding Quarter of: |
| (i) | the Operations completed during such period; |
| (ii) | an itemized statement of actual and accrued Expenditures for the relevant Quarter and from the beginning
of the Work Program and Budget to the end of the relevant Quarter, including a reconciliation to the original Budget and an explanation
of any significant variances, and forecasted Expenditures until the end of the Work Program and Budget; |
| (iii) | current cash balance available to the Operator Company; |
| (iv) | any anticipated or forecast shortfalls in funding that may require a Cash Call earlier than that required
by the approved Budget and the reason for such anticipated or forecast shortfalls. |
| (v) | a summary of all relevant results from Operations, including all information related to geophysics, geochemistry,
drilling work completed, assays received and any significant intercepts made, all interpretations, models and reports, and confirmation
that all technical data has been stored in a common server or storage unit and is available for the Parties to access; |
| (vi) | a summary of health, safety, environment and community matters, correspondence with Key Stakeholders,
and matters pertaining to compliance with Anti-Bribery Laws, Sanctions Laws and AML/CTF Laws, including key performance metrics as established
by the Alliance Management Committee and any incidents which occurred during the Quarter or actions from previous incidents which are
ongoing; and |
| (vii) | such other information as the Alliance Management Committee or a Party’s representative requests
to be included in such Quarterly Reports from time to time; |
| (s) | notify as soon as reasonably possible the Parties and the Alliance Management Committee, and any Governmental
Authority to whom notice is required by applicable Law, in the event of: |
| (i) | any spills, discharges, releases or deposits of hazardous substances which occur in connection with Operations
or which could give rise to environmental liabilities; |
| (ii) | any incidents involving the actual or potential death or serious injury to Persons or damage to property,
which occur in connection with Operations or which could give rise to any Third Party claims; |
| (iii) | significant technical data learned or obtained related to the Project Generation Phase; and |
| (iv) | any other adverse event on any Project, including any issues related to compliance with HSEC Performance,
any incident regarding Critical HSEC Activities, any lost time incident, or otherwise, |
and copy the Parties on any such notifications
to Governmental Authorities, together with details of the information provided, forthwith.
BHP will have the right to raise objections
with the Operator concerning the Quarterly Reports and the Monthly Reports within forty-five (45) days following receipt of a Quarterly
Report and within fifteen (15) days following receipt of a Monthly Report, as applicable. The Operator will be obliged to respond in a
reasonably timely manner to such objections by providing all details necessary or required by BHP acting reasonably.
| 8.4 | Carrying Out Work Programs and Budgets |
Upon approval of a Work Program and
Budget in accordance with this Agreement, the Operator shall, subject to clause 17.1, carry out such Work Program and Budget within the
time periods set out therein subject to any changes approved by the Alliance Management Committee.
| 8.5 | Maintenance of Projects |
| (a) | Subject to receipt of necessary funds and in accordance with the applicable Work Program and Budget: |
| (i) | the Operator covenants to keep acquired Rights and Projects in good standing at all times, including by
conducting all required assessment work and making all required tax, expenditures and other maintenance payments, as well as any earn-in
or option payments that may be required in respect of Third Party Rights (“Maintenance Payments”) and curing any defects
in title that may be revealed; |
| (ii) | the Operator covenants to make application for the renewal of (where renewable and required to be renewed),
and file any required document for, the Mineral Rights comprising a Project as required in accordance with any timeframe imposed by applicable
Law, and shall take all commercially reasonable efforts to pursue and obtain such renewal; |
| (iii) | the Operator will be reimbursed for the Maintenance Payments it has properly made through the Budget (which
will include Maintenance Payments as Expenditures) if not included in a current Budget. The Operator must provide the Alliance Management
Committee with written evidence of the Maintenance Payments, subsequent to payment thereof; |
| (iv) | if the Operator or Ivanhoe fails to take any action required by this subclause 8.5, BHP shall have the
right but not the obligation to take any action (in the name of Ivanhoe Parties or any Area of Interest LLC if the effectiveness of such
actions require that they be done in the name of Ivanhoe Parties or an Area of Interest LLC), including to: |
| (A) | cure any title defects; |
| (B) | take all necessary action to bring the Rights and Projects into good standing including making all required
Maintenance Payments; and |
| (C) | make application for the renewal of, and file any required document for, the Mineral Rights comprising
the Projects, |
and Ivanhoe Parties shall at BHP’s
request take any and all such actions that are reasonably necessary to assist BHP in such efforts. Any costs incurred by BHP in undertaking
such curative actions shall be considered Expenditures under the Work Programs and Budgets.
| (b) | Except as contemplated in this Agreement, the Operator covenants to keep the Projects free of all Encumbrances
except Permitted Encumbrances. |
| 8.6 | Subcontractor Services Contracts |
| (a) | The Operator shall have the right to carry out its responsibilities hereunder through Subcontractors. |
| (b) | If the Ivanhoe Parties subcontracts activities that are the responsibility of the Operator under this
Agreement, Ivanhoe Parties shall retain the services of Subcontractors pursuant to written agreements on terms and conditions that
are no less onerous to the Subcontractor than the obligations, covenants and duties of the Operator under this Agreement. Subject to subclause
3.2, any such written agreement entered into with a Related Party of Ivanhoe shall be on terms and conditions based on an arm’s
length relationship. |
| (c) | Any contract or subcontract existing between the Operator and its Affiliates or Subcontractors in connection
with the performance of the Operator’s obligations under this Agreement shall not reduce, relieve or otherwise diminish the Operator’s
obligations hereunder. |
| (d) | Notwithstanding the foregoing, Ivanhoe Parties shall not enter into any contracts with Subcontractors
who are Sanctioned Persons or related to Governmental Authorities to the extent this obligation is not otherwise inconsistent with Sanctions
Laws or any other applicable Laws. |
| (a) | BHP shall, at its own expense be entitled (but not required) to second an employee or contractor of BHP
(or any of its Affiliates) from time to time (each a “BHP Secondee” and if more than one BHP Secondee the “BHP
Secondees”) to the Operator. Not more than one (1) BHP Secondee may be seconded at any time without the consent of Ivanhoe. |
| (b) | Prior to an employee or contractor of BHP (or its Affiliate) being seconded to the Operator, BHP must
deliver to the Operator the name and job title of the proposed BHP Secondee. |
| (c) | Subject to clause 8.7(b), BHP shall be entitled to change the employees or contractors that constitute
the BHP Secondees. |
| (d) | The Operator and Ivanhoe Parties shall: |
| (i) | permit any relevant BHP Secondees to provide technical support to the Operations; |
| (ii) | permit the BHP Secondees such access to Ivanhoe Parties and Operator information that is related to the
Alliance, an Area of Interest, a Project, or a Joint Venture, as is reasonable in the context of each BHP Secondee’s role within
the Operator (including, for the avoidance of doubt, reasonable access to all offices of Ivanhoe Parties and the Operator), and actively
involve each BHP Secondee in workstreams, meetings, discussions or similar relevant to such BHP Secondee’s expertise and experience,
including adding each BHP Secondee to appropriate email distribution lists for workstreams relevant to their expertise and experience; |
| (iii) | provide BHP with all reasonable assistance required in respect of procuring such labour and immigration
approvals that may be required (from time to time) in respect of each BHP Secondee; and |
| (iv) | agree to release BHP, other members of the BHP Group and the BHP Secondee from all claims and Losses arising
out of or in connection with the secondment including any technical support provided by the BHP Secondee, except to the extent such claims
or Losses are attributable to the gross negligence or wilful misconduct of BHP, other members of the BHP Group or the BHP Secondee, or
result from the wilful breach by the BHP Secondee of any Ivanhoe policies regarding HSEC matters. |
| (i) | no BHP Secondee shall be entitled to access any mineral property or project of Ivanhoe or its Affiliates
that are not a part of the Alliance, nor to any information or documents related thereto; |
| (ii) | the Ivanhoe Parties and the Operator may implement such policies and procedures necessary to ensure compliance
with subclause 8.7(e)(i) including limitations on access to information technology, electronic storage and similar systems; and |
| (iii) | each BHP Secondee shall comply with all Ivanhoe policies regarding HSEC matters and the failure of the
BHP Secondee to comply will be grounds for the Operator and the Ivanhoe Parties to immediately terminate the secondment and return the
BHP Secondee to BHP. |
| 9. | REPRESENTATIONS, WARRANTIES AND COVENANTS |
| 9.1 | Representations and Warranties by Ivanhoe Parties |
| (a) | Ivanhoe Parties acknowledging that BHP is entering this Agreement in reliance thereon, make the representations
and warranties to BHP as set out in Schedule C. |
| (b) | The representations and warranties set out in Schedule C are provided for the exclusive benefit of
BHP and a breach or inaccuracy of any one or more of them may only be waived by BHP in writing (in whole or in part and in its sole discretion)
at any time without prejudice to its rights in respect of any other breach or inaccuracy of the same or any other representation or warranty. |
| 9.2 | Representations and Warranties by BHP |
| (a) | BHP acknowledging that Ivanhoe Parties are entering this Agreement in reliance thereon, makes the representations
and warranties to Ivanhoe Parties as set out in Schedule D. |
| (b) | The representations and warranties set out in Schedule D are provided for the exclusive benefit of
Ivanhoe Parties and a breach or inaccuracy of any one or more of them may only be waived by Ivanhoe Parties in writing (in whole or in
part and in its sole discretion) at any time without prejudice to their rights in respect of any other breach or inaccuracy of the same
or any other representation or warranty. |
| 10. | COVENANTS OF IVANHOE PARTIES |
| (a) | During the Term, each of the Ivanhoe Parties covenants, on a joint and several basis, to BHP as follows,
except where such prohibited action is otherwise expressly required or mandated by this Agreement: |
| (i) | to ensure that the incorporation documents and by-laws of Operator Company, any Area of Interest LLC or
any Joint Venture LLC are not changed or amended without the prior written consent of BHP; |
| (ii) | to ensure that the outstanding shares of Operator Company and the equity interests in and respecting each
Area of Interest LLC and Joint Venture LLC are not Transferred to Third Parties; |
| (iii) | to ensure that the Operator Company, any Area of Interest LLC and any Joint Venture LLC does not carry
on any business other than in connection with the Alliance and as contemplated by this Agreement; |
| (iv) | to ensure that the Operator Company, an Area of Interest LLC and/or a Joint Venture LLC shall be the only
legal and registered owners of the Rights being held for the benefit of the Alliance except as may be permitted by this Agreement; |
| (v) | to maintain all legal and beneficial ownership over Operator Company, and not alter the ownership, debt,
or equity of Operator Company without the prior written consent of BHP; |
| (vi) | to maintain all legal and beneficial ownership of each Area of Interest LLC or Joint Venture LLC in a
manner consistent with the provisions as more particularly set forth elsewhere in this Agreement and the relevant Tax Partnership Agreement,
and not to alter the legal or beneficial ownership, debt, or equity of any Area of Interest LLC or any Joint Venture LLC without the prior
written consent of BHP or except as may be permitted by this Agreement; |
| (vii) | to not cause (or allow any Related Party to cause) any Transfer of any Rights or other interests respecting
the Areas of Interest; |
| (viii) | to not Encumber or agree to Encumber (or allow any Related Party to Encumber or agree to Encumber) any
Rights or other interests in the Areas of Interest except for Permitted Encumbrances; |
| (ix) | to perform its, and to cause its Subcontractors to carry out Operations and perform their, activities
contemplated by this Agreement in compliance with all applicable Laws (including, without limitation, Anti-Bribery Laws, Sanctions Laws
and AML/CTF Laws), and in compliance with the provisions of this Agreement including, without limitation, compliance with clause 18 and
HSEC Performance; and |
| (x) | in the event that a Work Program and Budget relates to activities in an area that is or comes to be claimed
or asserted by an Indigenous Group or in respect of which Indigenous Groups hold or come to hold rights pursuant to applicable Laws or
in the event that places or sites linked to their identity, culture or worldview are found, Ivanhoe Parties declare and covenant
to BHP that it will adopt all measures and necessary safeguards, in accordance with applicable Laws to avoid any damage to the area and
to carry out exploration work and other activities of the Alliance with the consent of the respective Indigenous Groups, to the extent
possible, or at least having made all efforts in good faith to obtain such consent. |
| 10.2 | Security and Notification of Interests |
The Parties further agree that in order to protect
and secure the interests and rights of BHP, and the obligations of Ivanhoe Parties under subclauses 6.3, 16.3(b)(v) and (vi), 16.3(d),
16.3(e)(i) and (ii), and 16.3(f). Ivanhoe Parties shall grant and pledge a security interest in fifty percent (50%) of the limited
liability company interests or membership interests held by Operator Company in each Area of Interest LLC and consent and assist BHP with
effecting (or causing to effect) any filings required to perfect such security interest. The grant and pledge of the security interests
will be governed by a pledge agreement entered into by BHP and Operator Company for each Area of Interest LLC, substantially in the form
as Schedule E.
| 11.1 | Indemnification of Ivanhoe Parties |
BHP will indemnify and save harmless the Ivanhoe
Parties and their Representatives (the “Ivanhoe Indemnified Persons”) from and against (a) any and all legal claims
by a Third Party (a “Third Party Legal Claim”) asserted against, and (b) all Losses suffered or incurred by, any
Ivanhoe Indemnified Person directly or indirectly arising as a result of, in respect of, in connection with, or arising out of, under
or pursuant to any breach or inaccuracy of any representation or warranty made by BHP in this Agreement, or as a result of any breach
of any covenant or agreement made by BHP under this Agreement (other than any Joint Venture Agreement or Royalty Agreement).
| 11.2 | Indemnification of BHP |
| (a) | The Ivanhoe Parties will jointly and severally indemnify and save harmless BHP, BHP Affiliates and their
directors, officers, employees, agents, representatives, consultants, other Related Parties and the successors and assigns of all the
foregoing Persons (“BHP Indemnified Persons”) from and against all liabilities (joint and several), claims (including
securityholder or derivative actions, arbitration proceedings or otherwise), losses (other than losses of profit), costs, damages, expenses,
investigations, fines, penalties, proceedings, suits or actions (and to reimburse such Persons for any legal fees reasonably incurred
by such Persons in connection with investigating or defending any such action or claim as such expenses are incurred), in any way related
to, caused by, or arising directly or indirectly from, or in consequence of Ivanhoe Parties’ actions, omissions or activities as
Operator except in respect of a BHP Indemnified Person, where that BHP Indemnified Person has committed fraud, gross negligence, wilful
misconduct or has committed a breach of any Anti-Bribery Laws, Sanctions Laws and/or AML/CTF Laws and as qualified in the introduction
to clause 8.2; and |
| (b) | The Ivanhoe Parties will jointly and severally indemnify and save harmless the BHP Indemnified Persons
from and against (i) any and all Third Party Legal Claims asserted against, (ii) all Losses suffered or incurred by, any BHP
Indemnified Person directly or indirectly arising as a result of, in respect of, in connection with, or arising out of, under or pursuant
to any breach or inaccuracy of any representation or warranty made by Ivanhoe Parties in this Agreement, or as a result of a breach by
Ivanhoe Parties of any covenant or agreement made by Ivanhoe Parties under this Agreement (other than any Joint Venture Agreement or Royalty
Agreement). |
Each Party accepts the above indemnities in favour
of its representatives as agent and trustee for each such Ivanhoe Indemnified Person or BHP Indemnified Person which are not a Party hereto,
and each Party agrees that each other Party may enforce such indemnity in favour and for the benefit of Ivanhoe Indemnified Persons or
BHP Indemnified Persons respectively.
| 11.4 | Third Party Legal Claims |
| (a) | Promptly after the assertion of any Third Party Legal Claim against any Person entitled to be indemnified
pursuant to subclause 11.1 or 11.2, as the case may be, that results or may result in the incurrence by such Ivanhoe Indemnified Person
or BHP Indemnified Person of any Losses for which such Ivanhoe Indemnified Person or BHP Indemnified Person would be entitled to indemnification
pursuant to this Agreement, such Ivanhoe Indemnified Person or BHP Indemnified Person shall, to the extent permitted by applicable Laws
promptly notify the Party from whom such indemnification is or may be sought hereunder (the “Indemnitor”) of such Third
Party Legal Claim. Such notice shall also specify with reasonable detail (to the extent the information is reasonably available) the factual
basis for the Third Party Legal Claim, the amount of the Third Party Legal Claim or, if such amount is not then determinable, a reasonable
estimate of the likely amount of the Third Party Legal Claim. The failure to promptly provide such notice due to a prohibition under applicable
Laws, shall not relieve the Indemnitor of any obligation to indemnify the Ivanhoe Indemnified Person or BHP Indemnified Person, except
to the extent that such failure prejudices the Indemnitor. Thereupon, the Indemnitor shall have the right, upon written notice (the “Defence
Notice”) to the Ivanhoe Indemnified Person or BHP Indemnified Person within thirty (30) days after receipt by the Indemnitor
of notice of the Third Party Legal Claim (or sooner if such Third Party Legal Claim so requires), to conduct, at its own expense, the
defence against the Third Party Legal Claim in its own name or, if necessary, in the name of the Ivanhoe Indemnified Person or BHP Indemnified
Person; provided that: |
| (i) | the Indemnitor acknowledges and agrees in the Defence Notice that as between the Indemnitor and the Ivanhoe
Indemnified Person or BHP Indemnified Person, the Indemnitor is liable to pay for all Losses arising from or relating to such Third Party
Legal Claim; and |
| (ii) | the Indemnitor provides to the Ivanhoe Indemnified Person or BHP Indemnified Person adequate security
(approved by the Ivanhoe Indemnified Person or BHP Indemnified Person, acting reasonably) in respect of such Losses. |
| (b) | The Defence Notice shall specify the counsel the Indemnitor shall appoint to defend such Third Party Legal
Claim, and the Ivanhoe Indemnified Person or BHP Indemnified Person shall have the right to approve such defence counsel, which approval
shall not be unreasonably withheld. Notwithstanding any Defence Notice, any Ivanhoe Indemnified Person or BHP Indemnified Person shall
have the right to employ separate counsel in any Third Party Legal Claim and to participate in the defence thereof, but the fees and expenses
of such counsel shall not be included as part of any Losses incurred by the Ivanhoe Indemnified Person or BHP Indemnified Person unless: |
| (i) | the Indemnitor failed to give the Defence Notice; |
| (ii) | the Ivanhoe Indemnified Person or BHP Indemnified Person have received an opinion of counsel, reasonably
acceptable to the Indemnitor, to the effect that the interests of the Ivanhoe Indemnified Person or BHP Indemnified Person and the Indemnitor
with respect to the Third Party Legal Claim are sufficiently adverse to prohibit the representation by the same counsel of both parties
under applicable ethical rules; or |
| (iii) | the employment of such counsel at the expense of the Indemnitor has been specifically authorized by the
Indemnitor. |
| (c) | The Indemnitor shall keep the other Party apprised of all significant developments and shall not enter
into any settlement, compromise or consent to judgment with respect to such Third Party Legal Claim unless such other Party and the Ivanhoe
Indemnified Person or BHP Indemnified Person consents, which consent shall not be unreasonably withheld or conditioned. |
| 11.5 | Exclusion of Consequential and Other Losses |
| (a) | No Party will be liable to the other under or in connection with this Agreement in respect of Losses in
the nature of punitive damages, incidental, indirect or consequential loss, loss of opportunity, loss of profit, or loss of goodwill;
provided that the foregoing shall not exclude any Losses claimed under any Third Party Legal Claim, even if such Losses include or consist
of such punitive damages, incidental, indirect or consequential loss, loss of opportunity, loss of profit, or loss of goodwill. |
| (b) | Subject to subclause 11.5(a) and excluding all rights of indemnification agreed to under this Agreement
which for greater certainty shall not be subject to a cap or threshold, the aggregate liability of any Party to any other Party for any
Losses otherwise arising in relation to the Agreement, shall not exceed $15,000,000 and further provided that no Party shall bring a claim
for damages against any other Party unless such claim exceeds $200,000 (two hundred thousand) in Losses, in which event the other Party
shall pay or be liable for all such Losses from the first dollar. Notwithstanding the foregoing, the limitations on amounts of Losses
set forth in this subclause shall not apply to fraud, gross negligence, wilful misconduct, or to the extent prohibited by applicable Law. |
Any Party may waive any breach of any representations,
warranties, covenants, agreements or conditions made by any other Party and contained in this Agreement, in whole or in part, at any time,
without prejudice to its right in respect of any subsequent breach or any other breach of any representation, warranty, covenant, agreement
or condition.
No Party may recover under this Agreement, for
breach, under an indemnity or otherwise, more than once in respect of the same Losses suffered.
Except as permitted under this Agreement,
no Party will Transfer or Encumber, whether directly or indirectly, any or all of its rights under this Agreement.
| 12.2 | Permitted Transfer to an Affiliate |
| (a) | Each of BHP or Ivanhoe may Transfer all but not less than all of its rights under this Agreement to a
respective Affiliate provided that such Affiliate: |
| (i) | assumes and agrees in writing to be bound by the terms of this Agreement; |
| (ii) | shall make the same representations as the Party it is an Affiliate of, herein set forth in Schedule C
or Schedule D, as applicable, with the representations as to entity form, and otherwise, modified as necessary to be factually accurate
for such Affiliate; and |
| (iii) | agrees with the non-transferring Party in writing to re-transfer such interests to the transferring Party
before ceasing to be an Affiliate of the transferring Party. |
| 12.3 | No Transfer to a Restricted Person |
Notwithstanding any other provision
of this Agreement, no Party may Transfer, whether directly or indirectly, any or all of its rights under this Agreement to a Restricted
Person.
| 13. | CONFIDENTIALITY AND INTELLECTUAL PROPERTY |
| 13.1 | Confidential Information |
| (a) | Except as specifically otherwise provided for herein, the Parties will, and will cause their respective
Affiliates to, keep confidential all data and information provided, exchanged or generated in connection with the Alliance, this Agreement,
any Projects, the Areas of Interest, any Joint Venture Projects, any Alliance IP, Exploration Data and Records, and other assets in connection
with this Agreement and will refrain from using such data and information other than in connection with this Agreement or as contemplated
hereunder, or publicly disclosing it, unless: |
| (i) | required by Law or by the rules and regulations of any Governmental Authority having jurisdiction,
including the requirements of any stock exchange or securities regulatory authority; |
| (ii) | in relation to any and all Exploration Data and Records acquired or developed for the benefit of the Alliance
during the Project Generation Phase and all Alliance IP, to any Third Party to the extent reasonably required to carry on business related
to the Alliance or to any Third Party to whom a Party has granted a license to use such Exploration Data and Records or Alliance IP, provided
that Third Party has agreed to maintain the confidentiality of the data and information and agrees that no rights of ownership shall be
acquired by the Third Party to such data and information; |
| (iii) | to any Affiliate of a Party that has a bona fide need to be informed provided that such Affiliate is advised
by the disclosing Party of the confidential nature of such data or information; |
| (iv) | to a bank, lender, investor or other financial institution considering the provision of or, which has
provided financial accommodation to, a Party or to a trustee, representative or agent of such a bank, lender, investor or financial institution
provided that such bank, lender, investor or other financial institution is advised by the disclosing party of the confidential nature
of such confidential data and information; |
| (v) | by a Party to legal, financial and other professional advisers, auditors and other consultants, officers
and employees of a Party or a Party’s Affiliates, provided that such legal, financial and other professional advisers, auditors
and other consultants, officers and employees of a Party or a Party’s Affiliates have first been made aware that the data or information
is confidential and have agreed, or are required by their professional governing bodies, to maintain the confidentiality of the data and
information; or |
| (vi) | with the consent of the other Party, such consent not to be unreasonably withheld. |
| (b) | The restrictions set out in subclause 13.1(a) do not apply to information that is or becomes part
of the public domain other than through a breach of the terms hereof. |
The Parties will consult with each other
prior to issuing any news release or making or filing any other public statement (collectively, a “Release”) to a non-Party
except as contemplated by this Agreement or as required for the ordinary course conduct of the Operations by the Operator (including a
Governmental Authority) regarding this Agreement, any matter contemplated herein, the Alliance, the Areas of Interest, a Project or a
Joint Venture Project or the activities of either Party with respect thereto, with the disclosing Party advising the other Party of the
text of the proposed Release. The other Party will have four (4) Business Days to provide the disclosing Party with comments on the
proposed Release, and if comments are received from the other Party within such time the disclosing Party will incorporate the other Party’s
reasonable changes to the Release before the Release is issued, made or filed. If such comments are not received by the disclosing Party
within four (4) Business Days, the disclosing Party is then free to proceed with disclosure of the Release as originally drafted.
For greater certainty, the Parties agree that to the extent a statement in a previously approved Release is included or repeated in another
Release, the disclosing Party shall not have to seek consultation with and approval from the other Party but shall inform the other Party
of the expected date of release. In the event that a Release is required by Law or by the rules and regulations of any Governmental
Authority or stock exchange having jurisdiction, and in the opinion of the disclosing Party is required by such Law or rules and
regulations to be released earlier than would permit the other Party four (4) Business Days to provide comments, then the disclosing
Party shall confirm the time available to review the Release and other Party will provide its comments at the earliest possible time following
receipt of the text of the proposed Release, provided that nothing herein will prevent a Party from issuing a Release without having received
the comments of the other Party if such immediate Release, in the reasonably held opinion of the disclosing Party, is required by such
Law or rules and regulations of such Governmental Authority or stock exchange.
| 13.3 | Intellectual Property Rights; Exploration Data and Records |
| (a) | BHP and Ivanhoe will own undivided equal shares in all Exploration Data and Records acquired or developed
for the benefit of the Alliance during the Project Generation Phase and in any Alliance IP except, where applicable, that any specific
Exploration Data and Records and Alliance IP primarily relating to: |
| (i) | an Excluded Property shall be owned by the Party, if any, who acquires the Excluded Property for its own
use and benefit; and |
| (ii) | a Joint Venture Project shall be owned by the Joint Venture LLC, or to the extent not owned by the Joint
Venture LLC, Transferred to, and owned by, the Joint Venture LLC upon the formation of the Joint Venture LLC. |
| (b) | Subject to 13.1, each Party will be entitled to use or exploit, and license to others for use or exploitation,
without restriction and without accounting to the other Party, any and all Exploration Data and Records acquired or developed for the
benefit of the Alliance during the Project Generation Phase and any Alliance IP. |
| (c) | No Party will acquire any ownership interest or other interest (including any licenses) in the other Parties’
Background IP or other Intellectual Property (except for Alliance IP), and for certainty, neither BHP nor any of its Affiliates will acquire
any interest of any nature in the Typhoon IP. |
| (d) | Any improvements to a Party’s Background IP resulting from the activities of the Alliance will be
owned by that Party. |
| (e) | The Typhoon IP and any improvements to the Typhoon IP will be exclusively owned at all times by Ivanhoe. |
| (f) | If one of the Parties becomes the owner of an Excluded Property, such Party will not be subject to the
restrictions in subclause 13.1 with respect to confidential information relating primarily to the Excluded Property. |
| (i) | agrees to assign and does hereby assign and will cause its Affiliates to assign; and |
| (ii) | will ensure that it includes a provision in contracts with any relevant employee or independent contractor
of a Party or its Affiliates to allow the Party to assign, |
to the other Party such title, right and
interest in and to any and all Exploration Data and Records acquired or developed for the benefit of the Alliance during the Project Generation
Phase and any Alliance IP, as are necessary to vest ownership of same in such other Party as contemplated by the provisions of subclause
13.3(a). Each Party shall execute such documents, render all necessary assistance as the other Party (or its Affiliates) may reasonably
request, at the other Party’s expense, to obtain, prosecute, perfect, maintain the rights in and to such other Party’s interest
in such Exploration Data and Record or Alliance IP.
Any tax credit or refundable Tax that
may arise in favour of the Operator due to Expenditures during the Project Generation Phase will be retained by the Operator Company to
be subsequently used by the Operator Company or Operator in accordance with this Agreement. For this purpose, the Operator will take all
commercially reasonable efforts to seek reimbursements from the relevant Governmental Authority as soon as practicable.
All amounts and Expenditures to be funded,
paid or incurred by BHP as described in this Agreement are inclusive of any Tax incurred by Operator in funding a Work Program and Budget
and no tax gross up will be made.
The Ivanhoe Parties will cause each
Area of Interest LLC and Joint Venture LLC to comply at all times in all material respects with all Laws respecting Taxes that are applicable
to such entities, and will cause each such entity to comply with the relevant Tax Partnership Agreement.
Despite being single member limited
liability companies for applicable corporate and commercial law purposes, the Parties agree that each Area of Interest LLC shall be treated
for applicable income tax purposes as a partnership with BHP and Ivanhoe as 50:50 partners, which tax partnership shall be governed by
the provisions of the Tax Partnership Agreement. The Tax Partnership Agreement shall set forth the Parties’ agreement on certain
Tax matters with respect to the Area of Interest LLCs including, without limitation, the maintenance of capital accounts, allocations
of profit, gain and loss, and the conduct of each Area of Interest LLC’s partnership representative. The Parties will work together
in good faith to ensure the necessary tax filings are made to this effect.
Other than matters subject to the
Deadlock resolution in subclause 7.3 which shall be addressed in accordance with subclause 7.3, either Party may provide the other
Party with written notice of a dispute (“Dispute Notice”) indicating that there is a dispute to be resolved
according to this subclause 15.1. Following delivery of a Dispute Notice, the Parties agree that they will take the dispute to
successively higher levels of the Parties’ management up to and including the President and CEO of Ivanhoe and Vice President
Metals Exploration of BHP. If there is no resolution of the dispute within thirty (30) days of the Dispute Notice, then either Party
may refer the matter to arbitration under subclause 15.2. The arbitration will not be deemed to have commenced until one of the
Parties is duly served with a Demand for Arbitration as provided under subclause 15.2.
| (a) | The Parties shall not refer a dispute to arbitration under this subclause 15.2 unless the Parties have
first complied with subclause 15.1 and may not refer a matter to arbitration that is addressed in subclause 7.3. |
| (b) | Except as otherwise provided in subclause 15.3, all disputes arising out of or in connection with this
Agreement, including any question regarding its existence, validity, performance, effect, interpretation, breach or termination not resolved
pursuant to subclause 15.1, will be referred to and finally resolved by arbitration and such arbitration procedure will be strictly conducted
in conformance with the Commercial Arbitration Rules published by the American Arbitration Association (“AAA”) in
effect on the date the request for Arbitration (“Demand for Arbitration”) is made (the “AAA Rules”),
except as such rules may be modified herein or by mutual written agreement of the Parties. All arbitrators involved in the arbitration
will be AAA qualified and will be provided for selection by AAA. Any final award shall be entered and enforced consistent with the
AAA Rules. |
| (c) | BHP on the one hand or Ivanhoe and Operator Company on the other hand, either separately or together with
the other Party, may initiate arbitration proceedings pursuant to subclause 15.2 by sending a Demand for Arbitration pursuant to the AAA
Rules to all other Parties to this Agreement and to the AAA. The arbitration will commence when the recipient Party receives such
Demand for Arbitration. |
| (d) | The place of arbitration will be Phoenix, Arizona. The language of arbitration will be English. Any
arbitration to be held under this Agreement will be heard by one arbitrator, appointed by mutual agreement of the Parties or failing
agreement between the Parties within thirty (30) days of the receipt of a Demand for Arbitration the arbitrator will be selected by
the AAA. |
| (e) | The award of the arbitrator shall be final and binding. In the event a Party seeks confirmation of an
award, or if there is a failure to abide by any award, any Party may seek any remedy at law or equity for failure to comply with the award,
but in no event shall the award be reviewed de novo. |
| (f) | The Parties agree that any dispute, controversy or claim involving any Third Party may (with that party’s
consent), upon a request to the arbitrator by one of the Parties pursuant to the AAA Rules, be consolidated with any dispute, controversy
or claim herein. |
| (g) | Unless otherwise provided for, the Parties agree that the arbitration will be confidential. |
| (a) | The provisions in this clause 15 do not preclude either Party from applying for any preliminary or injunctive
remedies available from a court of competent jurisdiction. |
| (b) | Without limiting the remedies available for a breach of any other provision of this Agreement, each Party
acknowledges and agrees that (a) a breach or threatened breach by such Party of clause 6 (Joint Venture Phase), clause 12
(Transfer of Interest), clause 13 (Confidentiality and Intellectual Property), and clause 18 (Representations, Warranties
and Covenants Relating to Compliance) would give rise to irreparable harm to the other Party for which monetary damages would not
be an adequate remedy, and (b) if a breach or a threatened breach by such Party of any such obligations occurs, the other Party hereto
will, in addition to any and all other rights and remedies that may be available to such Party at law, at equity, or otherwise in respect
of such breach, be entitled to equitable relief, including an injunction, specific performance, and any other relief that may be available
from a court of competent jurisdiction, without any requirement to post a bond or other security, or prove actual damages or that monetary
damages will not afford an adequate remedy. Each Party to this Agreement agrees that such Party shall not oppose or otherwise challenge
the appropriateness of equitable relief or the entry by a court of competent jurisdiction of an order granting equitable relief, in either
case, with respect to the clause 6 (Joint Venture Phase), clause 12 (Transfer of Interest), clause 13 (Confidentiality
and Intellectual Property), and clause 18 (Representations, Warranties and Covenants Relating to Compliance), consistent with
the terms of this subclause 15.3(b). |
| 16.1 | Termination of Agreement |
| (a) | Termination by BHP. This Agreement may be terminated at any time by BHP by written notice to Ivanhoe
Parties: |
| (i) | if any representation or warranty of Ivanhoe Parties under this Agreement is inaccurate in any material
respect as at the date hereof and such inaccuracy is not remedied within a period of sixty (60) days following the delivery by BHP to
Ivanhoe Parties of written notice of such inaccuracy, or such longer period of time as BHP may determine acting reasonably, having regard
to the inaccuracy; |
| (ii) | if any of the Ivanhoe Parties is in material breach or default of a covenant or obligation under this
Agreement, except with respect to clause 18 or in circumstances where a breach or default by Ivanhoe Parties is the result solely of the
failure of the BHP representatives on the Alliance Management Committee to provide the necessary approval for the Ivanhoe Parties to carry
out its covenants or obligations under this Agreement, and such breach or default is not remedied within a period of sixty (60) days following
the delivery by BHP to Ivanhoe Parties of written notice of such breach or default, or such longer period of time as BHP may determine
acting reasonably, having regard to the material breach or default of a covenant or obligation; |
| (iii) | in accordance with subclause 18.8(b)(iii) (Compliance); |
| (iv) | if a Force Majeure impedes Ivanhoe Parties from meeting its obligations related to Operations for a period
of twelve (12) consecutive months; |
| (v) | after the BHP Funding Commitment has been advanced in full; |
| (vi) | if there is a Change of Control of Ivanhoe where Control of Ivanhoe is acquired by a Sanctioned Person; |
| (vii) | in accordance with subclauses 7.3(b)(ii) (Work Program and Budget Deadlock) or subclause 7.3(c) (Anti-Bribery
Laws, Sanction Laws, AML/CTF Laws, human rights and other business conduct matters, HSEC Performance Deadlock); or |
| (viii) | if an Insolvency Event occurs with respect to any of the Ivanhoe Parties. |
| (b) | Termination by Ivanhoe. This Agreement may be terminated at any time by Ivanhoe by written notice
to BHP: |
| (i) | if any representation or warranty of BHP under this Agreement is untrue or inaccurate in any material
respect as at the date hereof and such inaccuracy is not remedied within a period of sixty (60) days following the delivery by Ivanhoe
to BHP of written notice of such inaccuracy, or such longer period of time as Ivanhoe may determine acting reasonably having regard to
the inaccuracy; |
| (ii) | if BHP is in material breach or default of a covenant or obligation under this Agreement, including any
failure of BHP to advance the BHP Funding Commitment as and when required hereunder, but excepting in circumstances where a breach or
default by BHP is the result solely of the failure of the Ivanhoe representatives on the Alliance Management Committee to provide the
necessary approval for BHP to carry out its covenants or obligations in this Agreement, and such breach, default or failure is not remedied
within a period of sixty (60) days following the delivery by Ivanhoe to BHP of written notice of such breach, default or failure, or such
longer period of time as Ivanhoe acting reasonably, having regard to the material breach or default of a covenant or obligation; |
| (iii) | if a Force Majeure impedes Ivanhoe Parties from meeting its obligations related to Operations for a period
of twelve (12) consecutive months; |
| (iv) | after the BHP Funding Commitment has been advanced in full to the Operator and has been fully expended
on Expenditures; |
| (v) | if there is a Change of Control of BHP where Control of BHP is acquired by a Sanctioned Person; |
| (vi) | in accordance with subclauses 7.3(b)(ii) (Work Program and Budget Deadlock) or subclause 7.3(c) (Anti-Bribery
Laws, Sanction Laws, AML/CTF Laws, human rights and other business conduct matters, HSEC Performance Deadlock); or |
| (vii) | if an Insolvency Event occurs with respect to BHP. |
| (c) | This Agreement may be terminated at any time upon the mutual written agreement of BHP and Ivanhoe. |
| (d) | This Agreement shall terminate automatically upon the expiry of the Term. |
| (e) | Upon the termination of this Agreement each of Ivanhoe Parties and BHP releases the other from all obligations,
liabilities, claims and demands under, in relation to or in connection with this Agreement, except for those which arose or accrued or
were accruing on or before the date of termination and those that accrued after the date of the termination in connection with any provisions
of this Agreement that survive termination. |
| 16.2 | Post Termination Cooling-Off in Areas of Interest |
| (a) | Breach By Ivanhoe and Cooling-Off Period. If this Agreement is terminated by BHP in accordance
with subclauses: |
| (i) | 16.1(a)(i) (Reps and Warranties), |
| (ii) | 16.1(a)(ii) (Covenants), |
| (iii) | 16.1(a)(iii) (Compliance), |
| (iv) | 16.1(a)(vi) (Ivanhoe Controlled by Sanctioned Person), or |
| (v) | 16.1(a)(viii) (Ivanhoe Parties Insolvency), |
then none of the Ivanhoe Parties nor any
Affiliate may pursue or acquire, directly or indirectly, any exploration opportunity, Mineral Rights or project in the Areas of Interest
(excluding for purposes of this subclause 16.2(a) any Joint Venture Project or Rejected Project within an Area of Interest) for a
period of one (1) year following such termination. If the Ivanhoe Parties or any Affiliate in breach of this subclause 16.2(a) pursues
and acquires any exploration opportunity, Mineral Rights or project in violation of this provision, BHP will have the right to require
the Ivanhoe Parties or their Affiliates to assign such interests and ownership to BHP, to an Affiliate of BHP or to a Third Party, each
as may be designated by BHP in its sole discretion forthwith upon such acquisition for consideration of $10.00. The foregoing remedy does
not affect or preclude any other remedies that BHP may be entitled to.
| (b) | Breach by BHP and Cooling-Off Period. If this Agreement is terminated by Ivanhoe in accordance
with subclauses: |
| (i) | 16.1(b)(i) (Reps and Warranties), |
| (ii) | 16.1(b)(ii) (Covenants), |
| (iii) | 16.1(b)(v) (BHP Controlled by Sanctioned Person), or |
| (iv) | 16.1(b)(vii) (BHP Insolvency), |
then none of BHP nor any Affiliate may
pursue or acquire, directly or indirectly, any exploration opportunity, Mineral Rights or project in the Areas of Interest (excluding
for purposes of this subclause 16.2(b) any Joint Venture Project or Rejected Project within an Area of Interest) for a period of
one (1) year following such termination. If BHP or any of its Affiliates, in breach of this subclause 16.2(b), pursues and acquires
any exploration opportunity, Mineral Right or project in violation of this provision, Ivanhoe will have the right to require BHP
or its Affiliates to assign such interests and ownership to Ivanhoe, to an Affiliate of Ivanhoe or to a Third Party, each as may be designated
by Ivanhoe in its sole discretion forthwith upon such acquisition for consideration of $10.00. The foregoing remedy does not affect or
preclude any other remedies that Ivanhoe may be entitled to.
| (c) | General Cooling-Off Post Termination. If this Agreement is terminated in circumstances other than
those specified in clauses 16.2(a) or (b), except for a termination by BHP in accordance with subclause 16.1(a)(vii) (Deadlock)
or by Ivanhoe in accordance with subclause 16.1(b)(vi) (Deadlock) which are addressed in subclause 16.2(d), neither Party
may pursue or acquire, directly or indirectly, any exploration opportunity, Mineral Rights or project in the Areas of Interest (excluding
for purposes of this subclause 16.2(c) any Joint Venture Project or Rejected Project within an Area of Interest, or any Projects
dealt with under clause 16.3,) for a period of one (1) year following such termination. If either Party or any of its Affiliates,
in breach of this subclause 16.2(c), pursues and acquires any exploration opportunity, Mineral Right or project in violation of this provision,
the non-breaching Party may elect to re-establish the Alliance with respect to such exploration opportunity, Mineral Right or project
and thereafter the Alliance shall be deemed re-established on the same terms as this Agreement mutatis mutandis interests and ownership.
For the avoidance of doubt, if the BHP Funding Commitment has previously been advanced in full, BHP and Ivanhoe shall each fund 50% of
all Expenditures under the re-established Alliance. |
| (d) | Cooling-Off following a Deadlock Termination. If this Agreement is terminated by BHP in accordance
with subclause 16.1(a)(vii) (Deadlock) or by Ivanhoe in accordance with subclause 16.1(b)(vi) (Deadlock) in each
case with respect to subclause 7.3(b)(ii) (Work Program and Budget Deadlock), then there shall be no restriction on either
Party pursuing or acquiring, directly or indirectly, any exploration opportunity, Mineral Rights or project in the Areas of Interest.
If, however, this Agreement is terminated by BHP in accordance with subclause 16.1(a)(vii) (Deadlock) or by Ivanhoe in accordance
with subclause 16.1(b)(vi) (Deadlock) in each case with respect to subclause 7.3(c) (Anti-Bribery Laws, Sanction Laws,
AML/CTF Laws human rights and other business conduct matters, HSEC Performance Deadlock) then the restrictions in subclause 16.2(a) shall
apply to the Ivanhoe Parties and their Affiliates. |
| 16.3 | Effect of Termination on Projects |
| (a) | Acquisition by BHP As Non-Breaching Party. If this Agreement is terminated by BHP in accordance
with subclauses: |
| (i) | 16.1(a)(i) (Reps and Warranties), |
| (ii) | 16.1(a)(ii) (Covenants), |
| (iii) | 16.1(a)(iii) (Compliance) but excluding a termination based on a breach of subclauses 18.5
or 18.7, |
| (iv) | 16.1(a)(vi) (Ivanhoe Controlled by Sanctioned Person), or |
| (v) | 16.1(a)(viii) (Ivanhoe Parties Insolvency), |
then BHP has the right exercisable for
a period of 90 days after termination of this Agreement, to require Ivanhoe Parties or the relevant Area of Interest LLC to, subject to
any applicable regulatory approval, transfer and deliver to, and quitclaim any interest they may have in each Project then existing in
the Alliance, in favour of BHP, or an Affiliate of BHP, each as may be designated by BHP in its sole discretion, who will be entitled
to the entire right, title and interest in such Project solely for its own use and benefit for consideration payable by BHP to Ivanhoe
equal to 0.5 times the expenditures made on behalf of the Alliance on the Project. Such consideration may be set off against any amounts
owing by Ivanhoe Parties to BHP.
| (b) | Earn-in by BHP As Breaching Party. If this Agreement is terminated by Ivanhoe in accordance with
subclauses: |
| (i) | 16.1(b)(i) (Reps and Warranties), |
| (ii) | 16.1(b)(ii) (Covenants), |
| (iii) | 16.1(b)(v) (BHP Controlled by Sanctioned Person), or |
| (iv) | 16.1(b)(vii) (BHP Insolvency), |
then BHP has the right exercisable for
a period of 90 days after termination of this Agreement, to either:
| (v) | pay to Ivanhoe the balance of the BHP Funding Commitment not already advanced to the Operator and acquire
(by a Transfer of equity interests by Ivanhoe Parties) a 50% interest in one or more Area of Interest LLCs as nominated by BHP for no
further consideration; or |
| (vi) | not pay to Ivanhoe the balance of the BHP Funding Commitment not already advanced to the Operator and
acquire (by a Transfer of equity interests by Ivanhoe Parties) an earned interest in one or more Area of Interest LLCs as nominated by
BHP with such earned interest being that fraction of 50% which is in proportion to the amount of the BHP Funding Commitment already advanced
compared to the full BHP Funding Commitment, for no further consideration. As an example, if BHP has advanced $6,000,000 of the BHP Funding
Commitment to the Operator, then BHP shall be entitled to acquire an earned 40% interest in the 50% interest of each Area of Interest
LLC (or in other words a 20% interest in each Area of Interest LLC). |
| (c) | Projects Remaining with Operator Company/Area of Interest LLC. If a Party does not exercise its
right in subclause 16.3 in respect of any Projects, then the Project shall remain with the Operator Company or the relevant Area of Interest
LLC. |
| (d) | BHP Back-In Right following Deadlock Termination. If this Agreement is terminated by: |
| (i) | BHP in accordance with subclause 16.1(a)(vii) (Deadlock) with respect to subclause 7.3(b)(ii) (Work
Program and Budget Deadlock); |
| (ii) | BHP in accordance with subclause 16.1(a)(vii) (Deadlock) with respect to subclause 7.3(c) (Anti-Bribery
Laws, Sanction Laws, AML/CTF Laws human rights and other business conduct matters, HSEC Performance Deadlock); or |
| (iii) | Ivanhoe in accordance with subclause 16.1(b)(vi) (Deadlock) with respect to subclause 7.3(c) (Anti-Bribery
Laws, Sanction Laws, AML/CTF Laws human rights and other business conduct matters, HSEC Performance Deadlock), |
then the BHP Back-In Right shall apply
to any and all Projects remaining in the Alliance on the date of termination of this Agreement.
| (e) | Other Termination Provisions. If this Agreement is terminated in circumstances other than those
specified in clauses 16.3(a), (b), (d)(i) or (d)(ii), the following will apply: |
| (i) | BHP shall have the right to form one or more Joint Ventures with respect to any one or more Projects or
Rights held for the benefit of the Alliance, by providing written notice to Ivanhoe within thirty (30) Business Days following the termination
of the Agreement and upon receipt of such written notice one or more Joint Ventures will exist where BHP owns 50% and Ivanhoe owns 50%;
and |
| (ii) | for each other Project which does not become a Joint Venture Project under subclause 16.3(e)(i), the Operator
Company or the relevant Area of Interest LLC will retain ownership of that Project and BHP and its Affiliates will no longer have any
rights or interest in such Project except for the BHP Back-In Right that shall apply to any and all such Projects. |
| (f) | Exercise of a BHP Back-In Right. At any time during the Back-In Period, BHP may request, and Ivanhoe
Parties shall provide within thirty (30) days of such request, a detailed written report of all Operations carried out and all Expenditures
to date on a Project subject to the BHP Back-In Right, intended future work program and budget with respect thereto and such other information
reasonably requested related to the Project to enable BHP to complete due diligence. BHP shall have sixty (60) days from the date of receipt
of a complete, accurate and detailed report referred to above, to notify Ivanhoe Parties in writing that it elects, subject to any applicable
regulatory approval, to exercise its BHP Back-In Right with respect to such Project. Within fifteen (15) days of electing to exercise
its BHP Back-In Right or such longer period of time required to comply with any applicable regulatory approval process, BHP shall make
a cash payment to Ivanhoe Parties in an amount equal to 50% of the Expenditures made by Ivanhoe Parties on the relevant Project from the
date of termination of this Agreement to the date of BHP’s notice of election to exercise the BHP Back-In Right. Upon exercise of
the BHP Back-In Right including payment to Ivanhoe Parties, the Project identified in such written notice shall become a Joint Venture
Project and a Joint Venture will exist where BHP owns 50% and Ivanhoe owns 50%. If a Joint Venture is formed in accordance with this subclause
16.3(f) then the provisions of subclauses 6.3 to 6.5 will apply mutatis mutandis each time BHP exercises its BHP Back-In Right. |
| 16.4 | No Effect on Termination |
| (a) | Termination of this Agreement will not affect any Joint Venture, any Joint Venture Documents or the BHP
Back-In Rights. For greater certainty, any provisions of this Agreement required to govern: |
| (i) | the Joint Venture until the Joint Venture Documents have been entered into shall survive termination of
this Agreement and remain in full force and effect until replaced by the Joint Venture Documents; and |
| (ii) | the BHP Back-In Right shall survive termination of this Agreement and remain in full force and effect
until the Back-In Period, if applicable, expires without the exercise of a BHP Back-In Right. |
| (b) | Notwithstanding the termination of this Agreement, the provisions of subclause 4.2(a)(vi) and clauses
13, 14.4, 16 and 19 will survive termination and remain in full force and effect. |
| (c) | If Ivanhoe terminates the Agreement in accordance with subclause 16.1(b)(iv), Ivanhoe Parties hereby
covenant to deliver to BHP within fourteen (14) days after termination, all relevant Exploration Data and Records regarding the Expenditures
using the full BHP Funding Commitment, including all reports and other reporting obligations contemplated under subclause 8.2. |
| 17. | FORCE MAJEURE AND DEFAULT |
| (a) | No Party will be liable to any other Party and no Party will be deemed in default under this Agreement
for any failure or delay to perform any of its covenants and agreements when such performance is directly prevented as a consequence of
an event of Force Majeure, and if a Party notifies the other Parties of an event of Force Majeure, the performance of its obligations
will be suspended and the time for performance of such obligations will be extended for a period equivalent to the total period from the
time the notice of Force Majeure is delivered until the event of Force Majeure is remedied or completed (subject to subclause 17.1(b)).
For the purposes of this Agreement, “Force Majeure” means any event or circumstance, or a combination of events and
circumstances: |
| (i) | that causes or results in the prevention or delay of a Party from performing any of its obligations in
this Agreement; |
| (ii) | which is beyond the reasonable control of that Party; and |
| (iii) | which could not, or the effects of that event or circumstance could not, have been prevented or delayed,
overcome or remedied by the relevant Party acting commercially reasonably, including: |
| (A) | acts of war (whether war be declared or not), public disorders, insurrection, rebellion, revolution, terrorist
acts, sabotage, riots or violent demonstrations; |
| (B) | civil disobedience caused by Indigenous Groups, environmental lobbyists, NGO’s or local community
groups or other Persons; |
| (C) | injunctions imposed by any Governmental Authority except if caused by a breach of the Law or a court order; |
| (D) | explosions, fires or floods not caused by or attributable to a Party; |
| (E) | floods, earthquakes, hurricanes or other natural calamities or acts of God; |
| (F) | travel and access restrictions imposed by any Governmental Authority or other Third Parties, or other
delays caused by endemics, epidemics or pandemics; |
| (G) | pandemics, endemics, epidemics or any outbreak of any viral or other disease (except for the current effects
of COVID-19 but which will not except any escalation in the current effects of COVID-19 or any increase in Governmental Authority restrictions
regarding COVID-19); |
| (H) | denial of access to the Mineral Rights by any surface-landowner or occupant in the area where the Mineral
Rights are located; |
| (I) | strike or lockout or other industrial labour action or disruption (including unlawful but excluding lawful
strikes or lockouts or other industrial labour action) which: |
| (I) | have national, regional, provincial or state-wide application, |
| (II) | directly affect the performance of the obligations under this Agreement, and |
| (III) | lasts for more than seven consecutive days, |
| (J) | any action or failure to act within a reasonable time without justifiable cause by any Governmental Authority,
its employees or agents including the denial of or delay in granting any land tenure, concession, authorization, licence, permit, lease,
consent, approval or right which denial or delay will imply a material adverse effect on the activities contemplated under this Agreement,
upon due application and diligent effort by the Party to obtain same, or the failure once granted to remain (without justifiable cause)
in full force and effect or to be renewed on substantially similar terms; |
| (K) | discovery of artefacts or archaeological ruins or any historic heritage that effectively prohibit exploration
activities from starting or continuing under applicable Law; and |
| (L) | injunctions not caused by any breach of this Agreement by any Party whether of the kind enumerated above
or whether foreseen, foreseeable or otherwise unforeseeable. |
| (b) | So far as possible, the Party affected will make all reasonable commercial efforts to remedy the delay
caused by the events referred to above as soon as practicable and at the cost of the Operator Company on behalf of the Alliance as approved
by the Alliance Management Committee, provided, however, that nothing contained in this subclause 17.1 will require any Party to settle
any industrial dispute, to test the constitutionality of any Law or to expend any of its own monies in order to seek to remedy a Force
Majeure. For greater certainty, all costs incurred in seeking to remedy a Force Majeure shall be paid for by the Operator Company on behalf
of the Alliance as approved by the Alliance Management Committee. |
| (c) | A lack of funds will not be considered an event of Force Majeure, and the payment of monies from one Party
to the other Party will be deemed to be within the reasonable control of the Party who is to pay and the lack of funds for any such payment
will not be considered an event of Force Majeure. |
| (d) | The Party suffering Force Majeure will notify the other Parties in writing of the expected period during
which the Force Majeure is expected to persist. |
| 18. | REPRESENTATIONS, WARRANTIES AND COVENANTS RELATING TO COMPLIANCE |
| 18.1 | Not to Offer Anything of Value |
| (a) | The Parties represent, warrant, covenant and agree that neither Party, nor any of their Affiliates or
their respective directors, secretaries, officers, employees, nor to their knowledge, any Subcontractor, agent, representative, or other
person or entity acting on such Party’s behalf, has (directly or indirectly) authorised, offered, promised or given, or will authorise,
offer, promise or give, any money, benefit, advantage or thing of value (including a facilitation payment) to: |
| (i) | any Governmental Authority, Political Party or Indigenous Group, in order to obtain or maintain business
or to influence or reward official action or inaction relating to either, or both, the Parties or this Agreement; |
| (ii) | any Close Family Member of any Governmental Authority, Political Party or Indigenous Group, in order to
obtain or maintain business or to influence or reward action by or at the behest of such Governmental Authority, Political Party or Indigenous
Group relating to the Parties or this Agreement; |
| (iii) | any person (whether or not a Governmental Authority, Political Party or Indigenous Group) to influence
that person to act in breach of a duty of good faith, impartiality or trust (“acting improperly”) in relation to either,
or both, the Parties or this Agreement, to reward the person for acting improperly or in circumstances where the recipient would be acting
improperly by receiving the thing of value; or |
| (iv) | any other person while knowing, or while he or she ought reasonably to have known, that all or any portion
of the money or other thing of value that was authorised, offered, promised or given or will be offered, promised or given to: |
| (A) | a Governmental Authority or Political Party in order to obtain or maintain business or to influence or
reward official action relating to either, or both, the Parties or this Agreement; or |
| (B) | any person, including an Indigenous Group, in order to influence or reward such person for acting improperly. |
| (b) | Each of the Parties represents, warrants, covenants and agrees that there are no voluntary or mandatory
disclosures, claims, investigations or other proceedings in progress or, to their knowledge, pending or threatened against it or its directors,
secretaries, officers, employees, or to their knowledge, any Subcontractor, agent, representative, or other person or entity acting on
such Party’s behalf relating to a breach of any Anti-Bribery Laws in connection with this Agreement or its contemplated activities. |
| (c) | Each of Ivanhoe Parties and BHP will promptly notify the other, and in any event within five (5) Business
Days: |
| (i) | of any request or demand for any payment, gift or other advantage that violates any Anti-Bribery Laws
received by Ivanhoe Parties or BHP, or any of their respective Affiliates or their Personnel, and/or Third Parties, agents or representatives
acting on its behalf in relation to Ivanhoe Parties or BHP or this Agreement, in each case only in relation to the activities contemplated
under this Agreement; or |
| (ii) | of any suspected violation of Anti-Bribery Laws, Sanctions Laws and/or AML/CTF Laws by Ivanhoe Parties
or BHP, or any of their respective Affiliates, Personnel, and/or Third Parties, agents or representatives acting on its behalf, in each
case only in relation to the activities contemplated under this Agreement; |
| (d) | Ivanhoe Parties will inform BHP of all payments made to Indigenous Groups by Operator Company with respect
to matters within an Area of Interest: |
| (i) | that are not included in the Work Programs and Budgets; and |
| (ii) | in the reports submitted periodically to the Alliance Management Committee according to subclause 8.2,
in the case of payments made that have been included in the Work Programs and Budgets. The payments shall be informed in a separate line
item within the reports together with an explanation of why they were not included in the Work Program and Budget. |
| (e) | Neither BHP nor Ivanhoe Parties shall make or agree to make any charitable or political donations (including
to a Political Party), contributions or similar on behalf of or in relation to the Alliance, the Areas of Interest or otherwise in connection
with this Agreement, unless expressly provided for in an approved Work Program and Budget or with the prior written consent of the other
Party. |
| 18.2 | Acceptance of Gifts and other Advantages |
Each Party must ensure that neither it, nor any
of its Affiliates nor their respective directors, secretaries, officers, employees and, to their knowledge, any Subcontractors, representatives
or agents will offer, promise, provide, solicit, receive or agree to accept any thing of value including any payment, gift, benefit, or
other advantage that violates any applicable Anti-Bribery Laws in relation to such Party or in relation to this Agreement.
| (a) | Save for any ownership interest in respect of shares listed on a recognised stock exchange and save for
the share ownership interests of Saudi Arabian Mining Company Ma’aden held in the joint venture entity in respect of its joint venture
with Ivanhoe, each Party represents and warrants that: |
| (i) | neither it, nor its Affiliates nor any other entity in which such Party has an ownership interest is directly
or indirectly owned or controlled, in whole or in part, by any Governmental Authority or Political Party in a position to take or influence
official action for or against the Parties whether collectively or individually; and |
| (ii) | no officer, director or employee of each Party is, or currently expects to become, such a Governmental
Authority or Political Party during the term of this Agreement. |
| (b) | Each Party will notify the other Party promptly and in any event within five (5) Business Days, upon
becoming aware that any of the first Party’s officers, directors or employees becomes, or expects to become, a Governmental Authority
or Political Party in a position to take or influence official action for or against it in connection with this Agreement and its contemplated
activities. |
| 18.4 | Compliance policies and procedures and Maintaining Accurate Books and Records |
| (a) | Ivanhoe Parties will for the purposes of this Agreement and their contemplated activities implement and
maintain appropriate, risk-proportionate policies, controls and procedures which are effective to promote and achieve compliance by it
and its respective directors, secretaries, officers, employees, Subcontractors, representatives and agents with Anti-Bribery Laws, Sanctions
Laws and AML/CTF Laws. |
| (b) | Ivanhoe Parties will keep and maintain: |
| (i) | accurate and reasonably detailed books and financial records in connection with its performance under,
and payments made pursuant to or in connection with this Agreement; and |
| (ii) | internal accounting, financial, and compliance controls to ensure that any payments made pursuant to or
in connection with this Agreement, or transactions which relate to this Agreement or the performance of it, are properly, accurately and
completely recorded in the relevant books and financial records and are not in violation of Anti-Bribery Laws. |
| (c) | Each Party will promptly respond in reasonable detail to any request by the other Party for information
or documentation relating to the first-mentioned Party’s compliance with its obligations under this clause 18. |
| (i) | prior to appointing or engaging any Subcontractor, conduct appropriate, risk-proportionate due diligence
including such contractor’s ability to perform the proposed work properly, on time, within budgeted cost and in compliance with
all relevant Laws (including Anti-Bribery Laws, Sanctions Laws and AML/CTF Laws); and |
| (ii) | (without limiting subclause 8.6(b)) include in its contracts with Subcontractors provisions that: require
such Subcontractors to comply with Anti-Bribery Laws, Sanctions Laws and AML/CTF Laws; entitle Ivanhoe Parties to obtain information and/or
documents from such Subcontractors to verify the Subcontractor’s compliance with Anti-Bribery Laws, Sanctions Laws and AML/CTF Laws;
and require such Subcontractors to impose, on their subcontractors of any tier, substantially similar compliance obligations and information
rights in favour of Ivanhoe Parties. |
Each Party represents, warrants, covenants
and agrees that:
| (a) | it and its respective directors, secretaries, officers and employees are not a Sanctioned Person; |
| (b) | it will not take any actions that causes it to become a Sanctioned Person, but if it becomes or expects
to become a Sanctioned Person then it will promptly notify the other Party; |
| (c) | there are no voluntary or mandatory disclosure or current or, to their knowledge, threatened or pending
investigations, inquiries or enforcement actions against it relating to any actual or alleged violation or potential violation of any
Sanctions Laws; |
| (d) | it is in material compliance with all applicable Sanctions Laws; and |
| (e) | it will in connection with this Agreement and its contemplated activities comply with the Sanctions Laws. |
| 18.7 | Ivanhoe Parties Compliance Training |
| (a) | Ivanhoe Parties will cause its Personnel engaged or participating in the activities contemplated by this
Agreement to complete periodic training on compliance with Anti-Bribery Laws, Sanctions Laws and AML/CTF Laws. |
| (b) | Ivanhoe Parties will appoint an appropriate member of their Personnel to meet annually (at a
mutually convenient time) with a representative of BHP´s compliance function to discuss and share information related to
Ivanhoe Parties and their Affiliates’ activities carried out to comply with the obligations in this clause 18. |
| 18.8 | Breach of Compliance Requirements |
| (i) | a breach of this clause 18 occurs; or |
| (ii) | notice is given pursuant to subclause 18.3(b), |
| (b) | then BHP may (without prejudice to any other rights that it might have): |
| (i) | provide written notice to Ivanhoe Parties of the matter contemplated in subclause 18.8(a); |
| (ii) | suspend its obligations under this Agreement for a period of sixty (60) days in order to permit Ivanhoe
Parties the opportunity to cure the breach or matter; and |
| (iii) | if the matter with respect to: |
| (A) | a notice given pursuant to subclause 18.3(b) is not cured within such 60-day period to the satisfaction
of BHP; or |
| (B) | a breach of clause 18 is a material breach and is not cured within such 60-day period to the satisfaction
of BHP, |
terminate this Agreement, in which event,
BHP will not be obliged to pay, reimburse or indemnify Ivanhoe Parties for any liability or cost connected with the breach of this clause
18.
| (c) | Each Party must notify the other Party promptly upon becoming aware of any breach, imminent breach or
suspected breach of this clause 18 by it, its Subcontractors, or any of their Personnel. |
| 18.9 | Anti-competitive Behaviour |
| (a) | Each Party represents, warrants, covenants and agrees that, as at the Commencement Date and on each subsequent
occasion that it performs obligations under this Agreement, it has not engaged in any Anti-competitive Behaviour in relation to the potential
or actual terms and conditions of this Agreement or in carrying out activities pursuant to this Agreement. |
| (b) | The Parties will implement a ring-fencing protocol on terms reasonably acceptable to the Parties restricting
or regulating the flow of competitively sensitive information if the Parties agree this is required by applicable competition laws. The
Parties acknowledge that this protocol may require that an independent third party auditor be appointed to aggregate and audit competitively
sensitive information and that the costs of such auditor will be considered an Expenditure. |
Nothing in this Agreement requires a
Party to take any action or refrain from taking any action where doing so is or would be prohibited by, or subject to, penalty under any
Anti-Bribery Laws, Sanctions Laws or AML/CTF Laws and no Party shall be held in violation of any covenant or obligation under this Agreement,
or suffer any liability in connection therewith, where this clause applies.
| (a) | Any notice required or permitted to be given hereunder shall be given in writing and in English and shall
be delivered: |
| (ii) | by registered mail; or |
to the address set out in the Agreement
Specifics.
| (b) | Each Party may notify each other Party, in writing, of alternative details to be used in notices. |
| (c) | A notice is regarded as being given by the sender and received by the addressee: |
| (i) | if delivered in person, when delivered to the addressee; |
| (ii) | if posted, five (5) Business Days from and including the date of postage or fourteen (14) Business
Days if posted from outside the country; or |
| (A) | when the sender receives an automated message confirming delivery; or |
| (B) | twenty-four hours after the time sent (as recorded on the device from which the sender sent the email)
unless the sender receives an automated message that the email has not been delivered, |
whichever happens first,
but if the delivery or receipt is on a
day which is not a Business Day or is after 4:00 pm (addressee’s time), it is regarded as received at 9:00 am on the following Business
Day.
| (d) | A notice can be relied on by the addressee and the addressee is not liable to any other person for any
consequences of that reliance if the addressee believes it to be genuine, correct and authorised by the sender. |
| (e) | A notice by email must be sent in pdf or other format that is a scanned image of the original of the communication,
including a handwritten signature and is attached to the email stating that the attachment is a notice under this Agreement. |
| 19.2 | No Partnership or Joint Venture |
| (a) | Notwithstanding any other terms of this Agreement, but subject to subclause 14.4 and each Tax Partnership
Agreement, the Parties do not intend to create an association, legal partnership or co-investment and nothing contained in this Agreement
constitutes either Party as the partner, agent or legal representative of the other Party or creates a fiduciary relationship between
the Parties. Neither Party will have any authority to act for, or to assume any obligation or responsibility on behalf of the other Party
except as otherwise expressly provided under this Agreement. |
| (b) | Nothing in this Agreement is intended to, or shall be construed as, granting BHP Control over Ivanhoe
Parties or otherwise create any type of relationship that would entail that Ivanhoe becomes an Affiliate of BHP. |
This Agreement and the Tax Partnership
Agreement contains everything the Parties have agreed in relation to the subject matter of this Agreement and this Agreement supersedes
any prior agreement or understanding on anything connected to the subject matter of this Agreement including the Exploration Alliance
Term Sheet.
The provisions of this Agreement enure
for the benefit of and are binding on each Party and their respective successors and permitted assigns.
If any provision of this Agreement is
void, illegal or unenforceable, it may be severed without affecting the enforceability of the other provisions in this Agreement.
A waiver of any right, obligation, breach,
power or remedy under this Agreement must be in writing signed by the Party granting it. A waiver is only effective in relation to the
particular obligation or breach in respect of which it is given. It is not to be taken as an implied waiver of any other obligation or
breach or as an implied waiver of that obligation or breach in relation to any other occasion.
No modification, variation or amendment
of this Agreement is of any force unless it is in writing and has been signed by each of the Parties.
Except for matters of title to Mineral
Rights and property rights, or their Transfer which will be governed by the laws of the relevant State and federal laws of the United
States as applicable, this Agreement is governed by and must be construed in accordance with the Governing Law without giving effect to
the conflict of laws principles.
Each Party must execute all documents
and do all things reasonably necessary or desirable to give full effect to this Agreement and any matter or thing contemplated pursuant
to this Agreement.
| 19.10 | Cumulative Remedies. |
All rights and remedies provided in
this Agreement are cumulative and not exclusive, and are in addition to and without prejudice to any other rights or remedies available
at law, in equity, by statute or otherwise, and the exercise by either Party of any right or remedy does not preclude the exercise of
any other rights or remedies that may now or subsequently be available at law, in equity, by statute.
Each Party must bear its own costs for
the preparation, execution, delivery and performance of this Agreement.
| 19.12 | Counterparts and Facsimile Signature |
This Agreement may be executed in any
number of counterparts and by different Parties in separate counterparts. Each counterpart when so executed is deemed an original but
all of which together constitute one and the same instrument. This Agreement may be executed and transmitted by facsimile, pdf or electronic
transmission and if so transmitted this Agreement shall be for all purposes as effective as if the Parties had delivered an executed original
of this Agreement.
[REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY
BLANK]
IN WITNESS WHEREOF, the Parties hereto
have executed this Agreement as of the date first set forth above.
|
BHP MINERAL RESOURCES INC. |
|
By: |
/s/ Sonia Scarselli |
|
|
Name: |
Sonia Scarselli |
|
|
Title: |
Director |
|
By: |
/s/ Taylor Melvin |
|
|
Name: |
Taylor Melvin |
|
|
Title: |
President and Chief Executive Officer |
|
SAND HILL EXPLORATION INC. |
|
By: |
/s/ Cassandra Joseph |
|
|
Name: |
Cassandra Joseph |
|
|
Title: |
Director |
[Execution Page for Exploration
Alliance Agreement]
Schedule A
- Joint Venture Terms
Schedule B
- Form of Royalty Agreement
Schedule C
– Ivanhoe Parties Representations and Warranties
Schedule D
– BHP Representations and Warranties
Schedule E – Form
of Pledge Agreement
Exhibit 99.1
May 8, 2024
Ivanhoe Electric
Announces Exploration Alliance with BHP to
Accelerate the Search for Copper and Other Critical Minerals in the
United States
The Alliance
Will Focus Initially on Six Areas of Interest in the Southwest United States
BHP to Contribute
$15 Million of Exploration Capital over Initial Three-year Term
Ivanhoe Electric
will Provide Access to its New Generation
Typhoon™ Geophysical Survey System and Computational
Geosciences’ Inversion Software
Ivanhoe Electric
will Operate the Alliance During the Exploration
Phase, with any Joint Ventures Formed Owned 50/50
PHOENIX, ARIZONA – Ivanhoe
Electric Inc. (“Ivanhoe Electric”) (NYSE American: IE; TSX: IE) Executive Chairman Robert Friedland, and President and Chief
Executive Officer Taylor Melvin, are pleased to announce the signing of a definitive Exploration Alliance Agreement or “the Alliance”
with a subsidiary of BHP (ASX: BHP, NYSE: BHP, LSE: BHP).
The Exploration Alliance Agreement
sets out the framework for BHP and Ivanhoe Electric to explore mutually agreed “Areas of Interest” or AOIs in the United
States to identify projects within those AOIs that may become 50/50 owned joint ventures. The initial AOIs are in Arizona, New Mexico,
and Utah.
The Alliance is for a term of three
years, which may be extended. BHP (through a wholly owned subsidiary) will provide the initial funding of $15 million and any subsequent
funding would be on a 50/50 basis. Ivanhoe Electric will provide the Alliance with access to one of its new generation Typhoon™
geophysical survey systems as well as the machine learning algorithmic software and data inversion services of its subsidiary, Computational
Geosciences (CGI).
Mr. Friedland commented: “Today
we announce an important Alliance with BHP, one of the world’s leading mining companies, to explore the untapped mineral wealth
of the United States using our Typhoon™ and CGI technologies. BHP and Ivanhoe Electric have a common goal to find new sources of
the critical minerals necessary to meet growing demand associated with the energy transition and the electrification revolution. We are
excited to work together.”
Mr. Melvin commented: “Partnering
with BHP to explore for new discoveries of critical metals in the United States is a tremendous opportunity for Ivanhoe Electric. Our
Alliance with BHP is an important confirmation of Ivanhoe Electric’s disruptive exploration technologies and our experienced team
of exploration professionals. Our teams have been working together to identify the first exploration areas for the Alliance, and we see
today’s announcement as the first step in what we expect to be a long and successful partnership between Ivanhoe Electric and BHP.”
Sonia Scarselli, BHP’s Vice
President Exploration said: “BHP’s exploration alliance with Ivanhoe Electric supports our strategy to pursue growth in future-facing
commodities such as copper. Technology is set to play an increasingly important role in discovering the resources the world will need
in the decades to come. This alliance offers a great opportunity to work with Ivanhoe Electric and the innovative technologies they have
built.”
Key Terms of the Exploration Alliance
| · | BHP
(through a wholly owned subsidiary) will provide $15 million to fund the Alliance for its
initial three-year term, which term may be extended by mutual agreement. |
| · | Any
funding beyond the initial $15 million provided by BHP would be on a 50/50 basis. |
| · | Ivanhoe
Electric will provide access to one of its new generation Typhoon™ geophysical surveying
systems and CGI inversions for use by the Alliance. |
| · | The
Alliance will operate in two stages – a Project Generation Phase and a Joint Venture
Phase. |
| · | Ivanhoe
Electric will be the operator of the Alliance during the Project Generation Phase. Operatorship
of any project in the Joint Venture Phase will be mutually agreed upon in the future. |
| · | The
parties have agreed to six initial AOIs which cover an area of approximately 3,655 km2.
Both parties have agreed that their activities within the AOIs during the Project Generation
Phase will be conducted exclusively for the benefit of the Alliance. |
| · | The
Alliance will be governed by an Alliance Management Committee, composed of an equal number
of members from Ivanhoe Electric and BHP. |
| · | Any
Joint Venture that is agreed to be established will have 50/50 ownership. |
Exploration Alliance in the United
States
During the Project Generation Phase,
the Alliance will conduct early-stage generative exploration activities in the six initial AOIs. The goal of these initial activities
is to identify and stake mineral rights within the AOIs to form a project and/or acquire such mineral rights from third parties. Except
for one AOI where an affiliate of Ivanhoe Electric currently holds staked mineral rights that will be transferred to the Alliance, no
mineral rights are presently held in the initial AOIs.
Early-stage activities currently
contemplated by the Alliance’s initial work plan for 2024 include airborne geophysical surveys, supporting geological fieldwork,
as well as ground-based geophysical surveys, including with Ivanhoe Electric’s proprietary Typhoon™ system.
Once mineral rights are acquired
a “project” will be formed which the Alliance will continue to fund and explore. There may be multiple projects identified
within a single AOI.
The Alliance will operate through
an Alliance Management Committee in the Project Generation Phase, as well as through a Technical Committee. The Alliance Management Committee
will be composed of an equal number of members from Ivanhoe Electric and BHP. Ivanhoe Electric will, however, have a deciding vote in
this phase where the matter does not require unanimous approval. Unanimous matters include certain health, safety, and environmental
matters, approval of the annual work plan and budget, and proposals to form new AOIs or acquire rights within an AOI.
The Joint Venture Phase will commence
when a project within an AOI is approved by the Alliance Management Committee to become a “Joint Venture Project”. With that
approval, a Joint Venture will be formed between Ivanhoe Electric and BHP over that specific Joint Venture Project within an AOI. Until
a joint venture is formed, Ivanhoe Electric through affiliates will be the legal owner of the various project rights. If formed, each
Joint Venture will be conducted through a special purpose limited liability company.
If a proposal to form a Joint Venture
is not approved by the Alliance Management Committee and more than $3 million has been spent in the relevant AOI, then the nominating
party may independently pursue the project, and the mineral rights will be transferred to the nominating party for no consideration,
ending the Alliance concerning that project. However, if more than $5 million has been spent in the relevant AOI, then the other party
will retain a 1% net smelter royalty over the project should it not wish to proceed to form a joint venture.
The purpose of the Joint Venture
Phase is to further explore and evaluate the exploration results to assess its technical and economic merit, and if agreed upon, to develop
and operate a mine and associated infrastructure.
The Alliance will deploy Typhoon™
on a wide scale across the United States in the search for deep, undercover mineral deposits
Typhoon™ is the brand name
for Ivanhoe Electric’s proprietary electrical geophysical surveying transmitter. Typhoon™ achieves its results through its
unique specifications, which include a current output of up to 200 amps and a voltage output of up to 10,000 volts. The transmitter uses
switches and capacitance systems, which generate a very pure and stable transmitted signal, resulting in an extremely high signal-to-noise
ratio.
Typhoon™ was developed specifically
to identify deep geophysical anomalies in environments that have highly resistive surface conditions and to detect the presence of sulfide
minerals containing copper, nickel, gold and silver in areas where potential deposits are hidden by cover and where target depths exceed
the range of conventional geophysical surveying systems. Ivanhoe Electric has deployed Typhoon™ at its Santa Cruz, Tintic, Hog
Heaven and White Hill projects in Arizona, Utah, Montana and Nevada respectively, as well as its 50/50-owned joint venture with Saudi
Arabian Mining Company Ma’aden in Saudi Arabia.
The new generation of Typhoon™
that the Alliance will deploy has more modern switches, diodes, capacitors and transformers in the unit, as well as improved cooling
systems, which will increase reliability and running time in hotter environments, such as the Southwest United States and Saudi Arabia.
Figure 1. Typhoon™ in resource
exploration.
Ivanhoe Electric believes the next
generation of major mineral discoveries in the United States will likely be made deep beneath the surface, in areas where younger, unmineralized
cover overlays the older underlying prospective geology. Typhoon™ is well-suited to identify sulfide mineral deposits at great
depths using its proprietary design. TyphoonTM has the ability to deliver a stronger, cleaner electrical current than competing
systems, allowing it to achieve industry-leading effective depth penetration to over 1.5 km. CGI’s advanced, machine learning-based
inversion software utilizes complex algorithms to quickly and efficiently convert the data provided by TyphoonTM into detailed
images of chargeability anomalies.
Other Terms of the Alliance
Other terms of the Exploration Alliance
Agreement during the Project Generation Phase include:
| · | Either
party may terminate the Alliance once the initial $15 million BHP funding commitment has
been spent or the three-year initial term has ended. In these circumstances, neither party
may pursue any activities in the AOIs for one year. If a party breaches this requirement,
the non-breaching party may call for the re-establishment of the Alliance in respect of any
interest acquired. |
| · | If
the agreement terminates once the initial funding commitment from BHP is spent, BHP retains
a 12-month back-in right over projects that are not joint ventures. BHP can back into a project
by paying Ivanhoe Electric 50% of its expenditures following the date of termination. In
limited circumstances the back-in right may extend for two years. For more detailed information
related to the terms of the Exploration Alliance Agreement, please see the Form 8-K filed
with the SEC. |
About Ivanhoe Electric
We are a U.S. company that combines
advanced mineral exploration technologies with electric metals exploration projects predominantly located in the United States. We use
our accurate and powerful Typhoon™ geophysical surveying system, together with advanced data analytics provided by our subsidiary,
Computational Geosciences Inc., to accelerate and de-risk the mineral exploration process as we seek to discover new deposits of critical
metals that may otherwise be undetectable by traditional exploration technologies. We believe the United States is significantly underexplored
and has the potential to yield major new discoveries of critical metals. Our mineral exploration efforts focus on copper as well as other
metals including nickel, vanadium, cobalt, platinum group elements, gold and silver. Through the advancement of our portfolio of electric
metals exploration projects, headlined by the Santa Cruz Copper Project in Arizona and the Tintic Copper-Gold Project in Utah, as well
as other exploration projects in the United States, we intend to support United States supply chain independence by finding and delivering
the critical metals necessary for the electrification of the economy. We also operate a 50/50 joint venture with Saudi Arabian Mining
Company Ma’aden to explore for minerals on ~48,500 km2 of underexplored Arabian Shield in the Kingdom of Saudi Arabia.
Website: www.ivanhoeelectric.com.
About BHP
BHP is a world-leading resources
company. We work in more than 90 locations worldwide and our products are sold globally. We've positioned our business to support the
megatrends shaping our world. Iron ore and metallurgical coal for the steel needed for global infrastructure and the energy transition.
Copper for renewable energy and potash to support more sustainable farming. A resource mix for today – and critical to the future.
Website: www.BHP.com.
Contact Information
Ivanhoe Electric:
Email: info@ivanhoeelectric.com
BHP
Email: investor.relations@bhp.com
Follow us on |
|
Ivanhoe Electric’s Executive
Chairman Robert Friedland: @robert_ivanhoe
Ivanhoe Electric: @ivanhoeelectric
Ivanhoe Electric’s investor relations
website located at www.ivanhoeelectric.com should be considered Ivanhoe Electric’s recognized distribution channel for purposes
of the Securities and Exchange Commission’s Regulation FD.
Forward-Looking Statements
Certain statements in this news release
constitute “forward-looking statements” or “forward-looking information” within the meaning of applicable US
and Canadian securities laws. Such statements and information involve known and unknown risks, uncertainties and other factors that may
cause the actual results, performance or achievements of Ivanhoe Electric, its projects, or industry results, to be materially different
from any future results, performance or achievements expressed or implied by such forward-looking statements or information. Such statements
can be identified by the use of words such as “may”, “would”, “could”, “will”, “intend”,
“expect”, “believe”, “plan”, “anticipate”, “estimate”, “scheduled”,
“forecast”, “predict” and other similar terminology, or state that certain actions, events or results “may”,
“could”, “would”, “might” or “will” be taken, occur or be achieved. These statements
reflect Ivanhoe Electric’s current expectations regarding future events, performance and results and speak only as of the date
of this news release.
Such statements in this news release
include, without limitation statements regarding subsequent funding of the Alliance, exploration activities in the six initial AOIs,
including geophysical surveys and supporting geological fieldwork, the addition of new AOIs, the results of exploration activities within
the AOIs, the establishment of a joint venture for any of the AOIs, the operatorship of any Joint Venture if established, and the use
of and effectiveness of Typhoon™ for exploration activities within the AOIs.
Forward-looking statements are based
on management’s beliefs and assumptions and on information currently available to management. Such statements are subject to significant
risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements due
to various factors, including changes in the prices of copper or other metals Ivanhoe Electric is exploring for; the results of exploration
and drilling activities and/or the failure of exploration programs or studies to deliver anticipated results or results that would justify
and support continued exploration, studies, development or operations; the final assessment of exploration results and information that
is preliminary; the significant risk and hazards associated with any future mining operations, extensive regulation by the US government
as well as local governments; changes in laws, rules or regulations, or their enforcement by applicable authorities; the failure of parties
to contracts with Ivanhoe Electric to perform as agreed; and the impact of political, economic and other uncertainties associated with
operating in foreign countries, and the impact of the COVID-19 pandemic and the global economy. These factors should not be construed
as exhaustive and should be read in conjunction with the other cautionary statements and risk factors described in Ivanhoe Electric’s
Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission.
No assurance can be given that such
future results will be achieved. Forward-looking statements speak only as of the date of this news release. Ivanhoe Electric cautions
you not to place undue reliance on these forward-looking statements. Subject to applicable securities laws, Ivanhoe Electric does not
assume any obligation to update or revise the forward-looking statements contained herein to reflect events or circumstances occurring
after the date of this news release, and Ivanhoe Electric expressly disclaims any requirement to do so. No assurance can be given that
such future results will be achieved. Forward-looking statements speak only as of the date of this news release. Ivanhoe Electric cautions
you not to place undue reliance on these forward-looking statements. Subject to applicable securities laws, Ivanhoe Electric does not
assume any obligation to update or revise the forward-looking statements contained herein to reflect events or circumstances occurring
after the date of this news release, and Ivanhoe Electric expressly disclaims any requirement to do so.
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