Summary of contract

• Negotiation, representation, and other relevant context

  Newmont Ghana Gold desires that the local communities benefit from its operations and has committed to contributing money towards the development of the Ahafo Mine Community. Newmont Ghana Gold and the Newmont Ahafo Development Foundation (“Foundation”) agree to utilize the funds, as set out in this agreement (Preamble, Art. 2). Newmont Ghana Gold and the Foundation shall procure the adoption by the Foundation of regulations that incorporate the terms of this agreement (Art. 3). The agreement defines the characteristics of a sustainable development project and establishes the order of priority of the projects to be financed: (i) human resource development (scholarships and pre-job training), (ii) provision of infrastructure (water, electricity, roads, clinics, schools, toilet facilities, incinerators), (iii) provision of social amenities (community centres, police posts, community libraries), (iv) economic empowerment (employment, establishment of factories and cottage industries, credit facilities, market stalls), (v) protection of natural resources, and (vi) support for cultural heritage and sports (festivales, palaces, cross cultural activities) (Art. 12).

• Governance, implementation, dispute resolution

  The checks drawn by the Newmont Ahafo Development Foundation (“Foundation”) shall be signed by 2 members of the board representing Newmont Ghana Gold and 2 members of the Ahafo Mine Community (Art. 4). The Foundation shall be managed by a board of trustees formed by 9 members: a chairman nominated by the forum upon the recommendation of Newmont Ghana Gold, 4 members nominated by Newmont Ghana Gold, and 4 members nominated by the Community. The board of trustees will have an executive secretary and this position shall be posted locally before it is given to a qualified citizen of the Ahafo Mine Community. The composition of the board shall be reviewed after 6 years such that the majority of members shall be appointed by the Ahafo Mine Community (Art. 5). The members of the board shall hold office for 3 years and can be re-elected only for 3 additional years. In case of vacation of a member of the board for any reason, the position shall be filled by the body that appointed that member (Art. 7). The board shall meet at least once every quarter and the quorum at the meeting shall be five members. The board may take its decisions by consensus or simple majority, but in the case of equality of votes, the chairman has the casting vote (Art. 8). There shall be a yearly joint meeting of the board and the Forum to discuss the annual report of the board and appoint the external auditor of the Foundation for the ensuing year (Arts. 8, 10). The board manages and controls the funds of the Foundation, is responsible for the accounts and financial investment, approve applications for allocations of funds for projects form the Ahafo Mine Community, and evaluate and monitor the progress of sustainable development projects (Art. 6). All community towns shall establish a sustainable development committee formed by: 1 member representing the youth, 1 representing the women, 1 representing the Unit Committee, 2 representing the traditional authorities, 1 of the assembly of the community town, and 1 person nominated by the traditional authority who does not belong to that authority (Art. 14). The board shall establish a secretariat and appoint an executive secretary and supporting staff including a project coordinator, who liaises with the district assemblies with regard to the execution of the projects, and shall appoint also a financial controller to manage the finances as directed by the board. The Foundation will have a tender board formed by 9 members: 2 representing the traditional authorities, 1 for each of the 2 district assemblies, 2 representing Newmont Ghana Gold, 2 representing the youth, and 1 appointed by the board of the Foundation who shall be the chairman of the tender board. To submit a project proposal for consideration and approval of the Foundation, the community town has to consult first with the district assembly and then the sustainable development committee has to complete the form provided by the secretariat of the Foundation. The proposal forms of the projects shall be presented to the secretariat of the Foundation before the end of June each year and the Foundation will notify the sustainable development committee of the approved projects by the end of December. The Foundation’s tender board shall evaluate the tenders received and shall recommend the successful applicants to the Foundation’s board. The district assembly shall provide technical supervision and prepare certificates during the execution of infrastructural projects for payment of the board. The completed projects shall be jointly owned by the community town and the district assembly through a memorandum of understanding which includes the management and maintenance plan that are the responsibility of the owners (Art. 9). The board shall present an annual report covering activities, operations, audited accounts and state of progress of projects (Art. 10). The Foundation has to obtain prior written consent from the Forum to enter into the operations and contracts listed in Article 15 (Art. 15). This agreement is assignable with the prior consent of the other party (Art. 19). Any dispute in connection with this agreement shall be resolved through amicably bona fide discussion, and if the dispute is not resolved, it will be settled through arbitration held in Accra, Ghana, in accordance with the Arbitration Act of Ghana (Art. 21).

• Fiscal obligations: content

  Newmont Ghana Gold shall pay to the Newmont Ahafo Development Foundation (“Foundation”) (i) US$1 for every ounce of gold sold in its operations under the Ahafo Mining Lease, and (ii) 1% of net pre-tax income after consideration of all intercompany transactions in each year derived from the Ahafo Mining Lease, any gains received from the sale of assets when such gains are equal to or more than US$ 100,000, in any such year. However, the number of ounces of gold sold and any net profit received by Newmont Ghana Gold on such sales shall, for purposes of this agreement be calculated each year based on results that are included in the annual financial statements of Newmont Mining Corporation as approved by its board of directors and shareholders. The number of ounces sold and the profit or loss obtained by Newmont from such sales of gold shall be separately calculated for each year without carrying forward or carrying back the sales amounts or cumulative profits or losses. The Foundation shall use any interest accruing from any investment to the benefit of the community by providing additional support for the projects (Art. 11). During the first 5 years of the agreement, 90% of the yearly money accruing to the Foundation shall be allocated and the remaining 10% shall be invested. During the second 5 years period the percentage for allocation and investment will be 85% and 15%, respectively, and during the third 5 years period will be 80% and 20%. During the fourth 5 years period the percentages will be 75% for allocating and 25% for investment (Art. 14). Article 14.3 sets the percentages of distribution of the money to be allocated for funding projects in the community towns. Annex 1 to the agreement sets the weighting factors for sharing the funds among the community towns.

• Environmental and social protection

  Newmont Ghana Gold shall produce at least once per year a map of its mining lease showing the area belonging to each community town (the community shall assist to map out this area), the area of the mining activities, the area intend to be used for mining in the following year, the area with free access and the area with restricted access (Arts. 11, 16).

• Transparency or confidentiality

  Newmont Ghana Gold and the Newmont Ahafo Development Foundation shall not divulge any confidential, financial or trading information relating to the Foundation or any of its subsidiaries which it acquires as a result of entering into this agreement. Each of the parties shall endeavor to prevent its employees from doing anything that would be a breach of this clause. This restriction shall continue to apply after the expiration of this agreement (Art. 17).

• Other noteworthy clauses

  Newmont Ghana Gold shall notify its contractors of the opportunity to make a donation, in cash or kind, to the Newmont Ahafo Development Foundation (“Foundation”) to support its projects. It is lawful for the Foundation to lobby and solicit further financial and development support form NGOs, international agencies, and the government. If government’s land is required for a project in a community town, the board shall assist the community town to pursue the due processes to acquire the said land for the project. The community shall provide skilled or unskilled labor and communal labor towards the execution of approved projects (Art. 11).