National Environmental Management Act, 1998 (Act No. 107 of 1998)

Regulations

Financial Provisioning Regulations, 2015

Appendices

Appendix 1

Purchase

FINANCIAL GUARANTEE

(BANK OR GUARANTOR’S LETTER HEAD)

MINISTER RESPONSIBLE FOR MINERAL RESOURCES (or his/her successor)

........................................................................

Sir

DEMAND GUARANTEE FOR THE COMPLIANCE WITH THE STATUTORY OBLIGATION RELATED TO DETERMINING AND MAKING OF FINANCIAL PROVISON FOR PROSPECTING, EXPLORATION, MINING OR PRODUCTION OPERATIONS

In relation to the responsibility, in terms of the National Environmental Management Act, 1998 (Act No. 107 of 1998), as amended and/or replaced from time to time, (“the Act”),.................................................................................... (the “holder of a right or permit”) is required to determine and make the prescribed financial provision for prospecting, exploration, mining or production operations to the satisfaction of the Minister responsible for mineral resources in accordance with the provisions of the Financial Provisioning Regulations, 2015”, promulgated in terms of the Act, or any legislation or subordinate legislation which supplements, amends and/or replaces such regulations or deals with similar or related matters for the mine known as …………………................................................................................................................and situated at (give full description of property) …………………………………………….......................................................................... or any applicable part thereof (the “Mine”), and we, as Guarantor, confirm that the amount of R....................................... (.......................................................................................) (the “Guaranteed Sum”) is available to you for the purpose of executing the plans used to determine the prescribed financial provision.

2.	The Guarantor hereby unconditionally undertakes, as a principal obligation, to pay to you the Guaranteed Sum by no later than 2 working days (Mondays to Fridays, excluding weekends and public holidays) after receipt of a written claim from you (or made on your behalf) to do so, which claim:

2.1	must state that the holder of a right or permit:

2.1.1

has failed to execute the plans used to determine the financial provision in accordance with its terms; and/or

2.1.2

has failed to commence execution of the final rehabilitation, decommissioning and mine closure plan or the environmental risk assessment report within 10 working days (Mondays to Fridays, excluding weekends and public holidays) of the earlier of (i) the date on which such commencement is required by law or (ii) the date of written notice to the holder requiring such commencement, in circumstances in which prospecting, mining, exploration or production operations, (as the case may be) have ceased; and/or

2.1.3

has commenced execution of the final rehabilitation, decommissioning and mine closure plan or the environmental risk assessment report but has failed to make adequate progress with execution of such final rehabilitation, decommissioning and mine closure plan or environmental risk assessment report at any time prior to its completion in accordance with its terms; and/or

2.1.4

has become subject to an order of court placing him/her/it in or under sequestration, liquidation or bankruptcy (in any case whether voluntary or compulsory, provisional or final) or any analogous order is granted or resolution taken in any jurisdiction in relation to the holder of a right or permit; or

2.2	may be made without any statement required under clause 2.1 if the Guarantor gives written notice to you in terms of clause 5 of this guarantee.

2.3	A claim under this guarantee may be instituted by you at any stage commencing from the date of signature of this guarantee.

The Guaranteed Sum may be held and utilised by you on the condition that you, after having complied with all the provisions of the final rehabilitation, decommissioning and mine closure plan or environmental risk assessment report, will, within 1 year from the date of the payment of the sum by the Guarantor, give account to the Guarantor (in reasonable detail) of how the Guaranteed Sum was utilised and repay any portion of the Guaranteed Sum which was not so utilised to the Guarantor. All monies repaid to the Guarantor in terms of this Guarantee shall bear interest at the prime overdraft rate of your bank compounded monthly and calculated from the date payment was made by the Guarantor to yourself until the date of refund.

4.	This guarantee is not transferable, and –

(a)

must be returned to the Guarantor when giving account to the Guarantor in terms of clause 3 above or, if the original guarantee has been lost, must be accompanied by a statement that the applicable document cannot be located and that you indemnify the Guarantor against any direct loss that it may suffer (other than as a result of its own negligent or wilful act or omission) as a direct result of such original document not being returned to it;

(b)	shall lapse on the granting of a closure certificate in terms of the Mineral and Petroleum Resources Development Act, 2002 in respect of the whole of the mine; and

(c)	shall not be construed as placing any other responsibility on the Guarantor other than the paying of the Guaranteed Sum.

5.	The Guarantor reserves the right to withdraw from this guarantee after having given you, the Minister responsible for mineral resources and the Minister responsible for environmental affairs at least 4 months’ written notice in advance, by registered mail, of his/her/its intention to do so.

Yours faithfully

.......................................................... ..........................................................

(SIGNATURE) (SIGNATURE)

.......................................................... ..........................................................

(NAME) (NAME)

.......................................................... ..........................................................

(DESIGNATION) (DESIGNATION)

Who hereby warrants his/her authority Who hereby warrants his/her authority

ADDRESS: ..................................................................................

..................................................................................

DATE: ..................................................................................

PLEASE NOTE:

(1) No amendments and/or additions to the wording of this guarantee will be accepted.

(2)	The address of the addressee of this guarantee must be stated clearly.

(3)	This guarantee must be returned to:

.....................................................................................

National Environmental Management Act, 1998 (Act No. 107 of 1998)

Regulations

Financial Provisioning Regulations, 2015

Appendices

Appendix 1

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