Bislig Coal Mining Contract

KNOWN ALL MEN BY THESE PRESENTS: This CONTRACT is made and entered into by and between: PILLAR GEOMINES, INC. identify, locate and secure oil and gas prospects anywhere within the Philippines , a company duly organized and existing under the laws of the Republic of the Philippines with office address at with office address at ______________________, represented in this act by its _____________, (hereinafter referred to as the FIRST PARTY). -andBISLIG VENTURE CONSTRUCTION & DEVELOPMENT, INC., a company duly organized and existing under the laws of the Republic of the Philippines with office address at with office address at Brgy. Tabon, Bislig City, Surigao del Sur, represented in this act by its, President, Peter Paul Jed C. Falcon (hereinafter referred to as the SECOND PARTY). WITNESSETH That: WHEREAS the FIRST PARTY desires to engaged the services of a competent mining and hauling contractor to load and transport and deliver materials from its mining operations in Bislig City, Province of Surigao del Sur and to deliver coal and waste material to the designated areas; WHEREAS the SECOND PARTY represents that it is technically and financially competent, capable and in the best position to provide the required services; NOW THEREFORE, for and in consideration of the foregoing premises and in mutual covenants hereinafter set forth, the FIRST PARTY and the SECOND PARTY hereby agrees as follows: ARTICLE I OBJECTIVES OF THE CONTRACT 1.1 The main objective of this contract is to engage the services of a competent mining contractor to develop, mine, and ship marketable coal from the Bislig Coal Operating Contract No. 127 open pit mining operations at Bislig City, Province of Surigao del Sur, using all equipments required to achieve the forecasted volume of production. ARTICLE II DURATION OF WORK 2.1. 2.2 The commencement date of the services to be rendered is ____________. The Contract is valid for a period of _______ years.

ARTICLE III SCOPE OF WORKS

3.1

The Scope of Works of the SECOND PARTY shall consist of the following services: 3.1.1 Development of Mining Areas 3.1.1.1 Clearing and Grubbing 3.1.1.2 Stripping of waste/overburden down to top of coal seam and hauling or dumping to adjoining designated mined out block as part of mine rehabilitation program. 3.1.1.3 Road and Drainage System 3.1.1.4Main Haul Road Maintenance 3.1.2 Coal Mining 3.1.2.1 Pit Dewatering 3.1.2.2 Coal Extraction 3.1.2.3 Hauling to stockyard for coal preparation. 3.1.3 Coal Preparation- washing and sun drying 3.1.4 Hauling of Clean Coal to Barge/LCT 3.1.5 Trimming of Barges

3.2

The following major activities are the responsibility of the SECOND PARTY subject to compensation by the FIRST PARTY based on equipment rental to be agreed upon by both parties: 3.2.1 Environmental mitigating measures, such as road and mine pit drainage system, including silt ponds and dikes.

3.3

Responsibility of the FIRST PARTY 3.3.1 Government share 3.3.2 NCIP 3.3.3 Land Owner 3.3.4 Sample preparation and assaying

ARTICLE IV COMPENSATION 4.1

SECOND PARTY shall be paid P1,690.00 per WMT FOB Barge/LCT. The SECOND PARTY shall be paid on a per ton basis loaded to barges reckoned on the draft survey of barges. In case of shipside loading of barges to a foreign vessel, the draft survey of a foreign vessel shall be the basis of payment.
4.1.1 Based on draft survey documents and payable scope of works, billings of SECOND PARTY shall be paid after fifteen (15) days from receipt of billing at FIRST PARTYs office. ARTICLE V SECOND PARTYS LIABILITY

5.1

The workers employed in this undertaking shall be SECOND PARTY employees. SECOND PARTY shall be exclusively responsible for them and shall be liable for any claim or damage resulting from any accident, injury or sickness they may suffer while performing their duties. There shall be no employer-employee relationship between SECOND PARTY workers and FIRST PARTY. SECOND PARTY shall have all its employees covered under all legally required benefit programs, including the Social Security System, Medicare and Employees Compensation Fund. SECOND PARTY hereby holds FIRST PARTY free and harmless from any claim for injury and damage caused to the person or the property of third parties, including its representatives and employee. It is SECOND PARTY responsibility to provide Personal Protective Equipment (PPE) to their employees. SECOND PARTY shall impose and follow FIRST PARTY Safety rules and regulation, security and administrative policies.

5.2

ARTICLE VI TERMINATION OF CONTRACT 6.1 FIRST PARTY shall, by written 30-days notice, terminate the services of SECOND PARTY for the following reasons: 6.1.1 If SECOND PARTY is unable to provide the equipment required and agreed upon. 6.1.2 If, SECOND PARTY without reasonable excuse, has failed to proceed with the performance of the works specified in the Contract. ARTICLE VII ARBITRATION 7.1 In the event of any dispute involving the interpretation of the terms and stipulations in this Agreement and in the event of breach by either party of the provisions, representations and warranties under this Agreement, the Parties agree to resolve such disputes or seek redress for such breach through Arbitration. For this purpose, there shall be a panel of arbitrators composed of three (3) members with each Party hereto entitled to nominate one (1) member. The decision of the panel of Arbitrators shall be final and binding to the Parties, subject to the provisions of the Arbitration Act.

In any event, the arbitration shall be conducted in _____ City applying the substantive laws of the Philippines. Each party shall pay fifty (50%) percent of the fees and the expenses of the arbitrators and the cost of arbitration. Each party shall pay each own cost and attorney's fees.

IN WITNESS WHEREOF, the parties have signed this CONTRACT this ______ day of April, 2011. ___________________________________ By: _______________________________ By:

SIGNED IN THE PRESENCE OF:

_________________________________

________________________________

ACKNOWLEDGEMENT Republic of the Philippines ) ) S.S. Before Me a Notary Public for and in the City of _______, personally appeared the following: Name: Drivers License /Passport No. Date/ Place of Issue

known to me the same person who executed the foregoing instrument, and who acknowledged to me that the same is their free and voluntary act and deed, as well as the free and voluntary act and deed of the entities represented therein. This Instrument, which is the sales and purchase contract consists of ____ pages including this page, where the acknowledgement is written, and is signed or seal/stamped by the parties and their instrumental witness on each and every page thereof. WITNESS MY HAND AND SEAL this__________________________________ at the place first above written.

Doc. No. Page No. Book No. Series of 2011