MINE PROJECT DEVELOPMENT (60%) of the capital of which is owned by

DENR Administrative Order No. 96-40 Series of Filipino citizens.

1996
CHAPTER VI - Mineral Agreements
SECTION 33. Maximum Areas Allowed under a
Mineral Agreement. —
SECTION 31. Kinds of Mineral Agreements and
The maximum area that a Qualified Person may apply
Nature Thereof.
for or hold at any one time under a Mineral Agreement
— There are three (3) kinds of Mineral Agreements,
shall be as follows:
namely:
a. Onshore, in any one province —
1. For individuals — ten (10) blocks or
a. Mineral Production Sharing Agreement
approximately eight hundred ten (810)
(MPSA) — an agreement wherein the
hectares and
Government grants to the Contractor the
2. For corporations, partnerships,
exclusive right to conduct mining operations
associations or cooperatives — one
within, but not title over, the contract area and
hundred (100) blocks or approximately
shares in the production whether in kind or in
eight thousand one hundred (8,100)
value as owner of the minerals therein. The
hectares.
Contractor shall provide the necessary
financing, technology, management and
b. Onshore, in the entire Philippines —
personnel;
1. For individuals — twenty (20) blocks or
b. Co-Production Agreement (CA) — an
agreement between the Government and the approximately one thousand six hundred
Contractor wherein the Government shall twenty (1,620) hectares and
provide inputs to the mining operations other 2. For corporations, partnerships,
than the mineral resources; and associations or cooperatives — two hundred
c. Joint Venture Agreement (JVA) — an (200) blocks or approximately sixteen
agreement where a joint venture company is thousand two hundred (16,200) hectares.
organized by the Government and the
Contractor with both parties having equity c. Offshore, in the entire Philippines, beyond five
shares. Aside from earnings in equity, the hundred meters (500 m) from the mean low
Government shall be entitled to a share in the tide level —
gross output. 1. For individuals — fifty (50) blocks or
approximately four thousand fifty (4,050)
SECTION 32. Eligibility of Applicant for Mineral hectares,
Agreement. — The following Qualified Person may 2. For corporations, partnerships,
apply for a Mineral Agreement for the exploration, associations or cooperatives — five hundred
development and utilization of mineral resources: (500) blocks or approximately forty thousand
a. In case of an individual — must be a Filipino five hundred (40,500) hectares and
citizen of legal age and with capacity to 3. For the Exclusive Economic Zone — a larger
contract; or area to be determined by the Secretary upon
b. In case of a corporation, partnership, the recommendation of the Director.
association or cooperative — must be
organized or authorized for the purpose of
The above-mentioned maximum areas that a
engaging in mining, duly registered in
Contractor may apply for or hold under a Mineral
accordance with law, at least sixty percent
Agreement shall not include mining/quarry areas

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under operating agreements between the Contractor applicable, duly prepared, signed and
and a claimowner/Lessee/Permittee/licensee sealed by a licensed Mining Engineer,
entered into under P.D. No. 463. Geologist or Metallurgical Engineer;

3. When applicable, a satisfactory

SECTION 34. Term of a Mineral Agreement. Environmental Management Record and
Community Relations Record as
A Mineral Agreement shall have a term not exceeding determined by the Bureau in consultation
twenty-five (25) years from the date of execution with the Environmental Management
thereof, and renewable for another term not Bureau and/or the Department Regional
exceeding twenty-five (25) years under the same Office. The detailed guidelines for the
terms and conditions thereof, without prejudice to determination and applicability of such
changes mutually agreed upon by the Government records shall be specified by the Secretary
upon the recommendation of the Director;
and the Contractor.After the renewal period, the
operation of the mine may be undertaken by the
4. Environmental Work Program (MGB
Government or through a Contractor. The contract for
Form No. 16-1 or MGB Form No. 16-1A)
the operation of a mine shall be awarded to the
during the exploration period as provided
highest bidder in a public bidding after due
for in Section 168 hereof or Environmental
publication of the notice thereof: Provided, That the Compliance Certificate prior to
original Contractor shall have the right to equal the development, construction and/or
highest bid upon reimbursement of all reasonable utilization and Environmental Protection
expenses of the highest bidder. and Enhancement Program (MGB Form
No. 16-2) as provided for in Section 169
hereof;
SECTION 35. Mandatory Requirements for Mineral
5. Proof of technical competence
Agreement Application.
including, among others, curricula vitae
The applicant shall submit at least five (5) sets of the and track records in mining operations
following mandatory requirements depending on the and environmental management of the
type of agreement applied for: technical personnel who shall undertake
the activities in accordance with the
a. For individuals submitted Exploration/ Development/
1. Location map/sketch plan of the Utilization Work Program and
proposed contract area showing its Environmental Work/ Environmental
geographic coordinates/meridional Protection and Enhancement Program, as
block(s) and boundaries in relation to deemed applicable;
major environmental features and other 6. Proof of financial capability to undertake
projects using NAMRIA topographic map the activities pursuant to
in a scale of 1:50,000 duly prepared, Exploration/Development/Utilization
signed and sealed by a deputized Work Program and Environmental
Geodetic Engineer; Work/Environmental Protection and
Enhancement Program, as deemed
2. Two-year Exploration Work Program applicable, such as statement of assets
(MGB Form No. 5-4) or three-year and liabilities duly sworn in accordance
Development/Utilization Work Program with existing laws, credit lines and income
(MGB Form No. 6-2), as deemed tax return for the preceding year;

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7. Declaration of the total area covered by exploration period as provided for in Section
approved/pending Mineral Agreement(s)/ 168 hereof or Environmental Compliance
application(s); and Certificate prior to development, construction
8. Other supporting papers as the and/or utilization and Environmental
Department/Bureau/concerned Regional Protection and Enhancement Program (MGB
Office may require or the applicant may Form No. 16-2) as provided for in Section 169
submit.
hereof;
7. Proof of technical competence including,
b. For corporations, partnerships, associations or among others, curricula vitae and track
cooperatives — records in mining operations and
environmental management of the technical
1. Duly certified Certificate of Registration personnel who shall undertake the activities
issued by the Securities and Exchange in accordance with the submitted
Commission or concerned authorized Exploration/Development/Utilization Work
Government agency; Program and Environmental
2. Duly certified Articles of Work/Environmental Protection and
Incorporation/Partnership/ Association and Enhancement Program, as deemed
By-Laws; applicable;
3. Location map/sketch plan of the proposed 8. Proof of financial capability to undertake
contract area showing its geographic the activities pursuant to
coordinates/meridional block(s) and Exploration/Development/Utilization Work
boundaries in relation to major environmental Program and Environmental
features and other projects using NAMRIA Work/Environmental Protection and
topographic map in a scale of 1:50,000 duly Enhancement Program, as deemed
prepared, signed and sealed by a deputized applicable, such as latest Audited Financial
Geodetic Engineer; Statement and where applicable, Annual
4. Two-year Exploration Work Program (MGB Report for the preceding year, credit lines,
Form No. 5-4) or three-year bank guarantees and/or similar negotiable
Development/Utilization Work Program (MGB instruments;
Form No. 6-2), as deemed applicable, duly 9. Declaration of the total area covered by
prepared, signed and sealed by a licensed approved/pending Mineral Agreement(s)/
Mining Engineer, Geologist or Metallurgical application(s); and
Engineer; 10. Other supporting papers as the
5. When applicable, a satisfactory Department/Bureau/concerned Regional
Environmental Management Record and Office may require or the applicant may
Community Relations Record as determined submit.If the applicant conducts or has
by the Bureau in consultation with the conducted mining operations in a foreign
Environmental Management Bureau and/or country(ies), the Department shall verify the
the Department Regional Office. The detailed relevant requirements through the Philippine
guidelines for the determination and Embassy(ies) or Consulate(s) based in such
applicability of such records shall be specified country(ies).
by the Secretary upon the recommendation of
the Director; c. For holders of valid and existing mining lease
6. Environmental Work Program (MGB Form contracts, operating agreements, Quarry
No. 16-1 or MGB Form No. 16-1A) during the Permits/licenses or unperfected mining/quarry
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claims, the following shall be submitted in addition to That any application with incomplete mandatory
the aforesaid requirements, whenever applicable, requirements shall not be accepted.
namely:
SECTION 37. Area Status/Clearance.
1. Certification from the concerned Regional Office
that the mining/quarry claims are valid and subsisting; Within fifteen (15) working days from receipt of the
Mineral Agreement application, the
2. Appropriate environmental report on the Bureau/concerned Regional Office(s) shall check in
rehabilitation of mined-out and/or mine the control maps if the area is free/open for mining
waste/tailings-covered areas and anti-pollution applications. The Regional Office shall also transmit a
measures undertaken during the mining operations; copy of the location map/sketch plan of the applied
area to the pertinent Department sector(s) affected by
3. Environmental Compliance Certificate for any new the Mineral Agreement application for area status,
phase outside of the originally approved operation copy furnished the concerned
under the mining project;
municipality(ies)/city(ies) and other relevant offices or
4. Mining Project Feasibility Study (MGB Form No. 5- agencies of the Government for their information.
3); Upon notification of the applicant by the Regional
Office as to the transmittal of said document to the
5. Three-year Development/ Construction/ Utilization concerned Department sector(s) and/or Government
Work Program (MGB Form No. 6-2), as deemed agency(ies), it shall be the responsibility of the same
applicable, duly prepared, signed and sealed by a applicant to secure the necessary area
licensed Mining Engineer, Geologist or Metallurgical status/consent/clearance from said Department
Engineer; sector(s) and/or Government agency(ies). The
concerned Department sector(s) must submit the
6. Approved Survey Plan of the mining area; and7.
area status/consent/clearance on the proposed
Other supporting papers as the
contract area within thirty (30) working days from
Department/Bureau/concerned Regional Office may
receipt of the notice: Provided, That the concerned
require or the applicant may submit.
Department sector(s) can not unreasonably deny area
SECTION 36. Filing of Mineral Agreement clearance/consent without legal and/or technical
Applications. basis: Provided, further, That if the area applied for
falls within the administration of two (2) or more
The Mineral Agreement application (MGB Form No. 6- Regional Offices, the concerned Regional Office(s)
1) shall be filed by the applicant either personally or which has/have jurisdiction over the lesser area(s) of
through its duly authorized representative with the the application shall follow the same procedure.
Bureau/concerned Regional Office:
In reservations/reserves/project areas under the
Provided, That any application that transcends into jurisdiction of the Department/Bureau/Regional
two (2) or more regions shall be filed with the Regional Office(s) where consent/clearance is denied, the
Office which has the largest area covered by the applicant may appeal the same to the Office of the
application, copy furnished the other concerned Secretary.
Regional Office(s) by the applicant:
If the proposed contract area is open for mining
Provided, further, That a Mineral Agreement applications, the Bureau/concerned Regional
application shall be accepted only upon payment of Office(s) shall give written notice to the applicant to
the required fees (Annex 5-A) to the pay the corresponding Bureau/Regional Office(s)
Bureau/concerned Regional Office: Provided, finally, clearance fee (Annex 5-A): Provided, That if a portion
H.E.N.M.
of the area applied for is not open for mining and in the concerned province(s) and
applications, the concerned Regional Office shall, municipality(ies), copy furnished the barangay(s)
within fifteen (15) working days from receipt of said where the proposed contract area is located. Where
written notice, exclude the same from the coverage of necessary, the Notice shall be in a language generally
Mineral Agreement application: Provided, further, understood in the concerned locality where it is
That in cases of overlapping of posted.
claims/conflicts/complaints from landowners,
NGOs, LGUs and other concerned stakeholders, the The radio announcements shall be made daily for two
(2) consecutive weeks in a local radio program and
Regional Director shall exert all efforts to resolve the
same. shall consist of the name and complete address of the
applicant, area location, duration of the agreement
applied for and instructions that information
regarding such application may be obtained at the
SECTION 38. Publication/Posting/Radio
Bureau/concerned Regional Office(s). The publication
Announcement of a Mineral Agreement and radio announcements shall be at the expense of
Application. the applicant.
Within fifteen (15) working days from receipt of the Within thirty (30) calendar days from the last date of
necessary area clearances, the Bureau/concerned publication/posting/radio announcements, the
Regional Office(s) shall issue to the applicant the
authorized officer(s) of the concerned office(s) shall
Notice of Application for Mineral Agreement for issue a certification(s) that the
publication, posting and radio announcement which publication/posting/radio announcement have been
shall be done within fifteen (15) working days from complied with. Any adverse claim, protest or
receipt of the Notice. The Notice must contain, among opposition shall be filed directly, within thirty (30)
others, the name and complete address of the
calendar days from the last date of
applicant, duration of the agreement applied for, publication/posting/radio announcement, with the
extent of operation to be undertaken, area location, concerned Regional Office or through any concerned
geographical coordinates/meridional block(s) of the PENRO or CENRO for filing in the concerned Regional
proposed contract area and location map/sketch plan Office for purposes of its resolution by the Panel of
with index map relative to major environmental
Arbitrators pursuant to the provisions of the Act and
features and projects and to the nearest these implementing rules and regulations. Upon final
municipalities. resolution of any adverse claim, protest or opposition,
The Bureau/concerned Regional Office(s) shall cause the Panel of Arbitrators shall issue a Certification to
the publication of the Notice once a week for two (2) that effect within five (5) working days from the date of
consecutive weeks in two (2) newspapers: one of finality of resolution thereof. Where no adverse claim,
general circulation published in Metro Manila and protest or opposition is filed after the lapse of the
another published in the municipality or province period for filing the adverse claim, protest or
where the proposed contract area is located, if there opposition, the Panel of Arbitrators shall likewise
be such newspapers; otherwise, in the newspaper issue a Certification to that effect within five (5)
published in the nearest municipality or province. working days therefrom.

The Bureau/concerned Regional Office shall also No Mineral Agreement shall be approved unless the
cause the posting for two (2) consecutive weeks of the requirements under this Section are fully complied
Notice on the bulletin boards of the Bureau, the with and any adverse claim/protest/opposition
concerned Regional Office(s), PENRO(s), CENRO(s) thereto is finally resolved by the Panel of Arbitrators.

H.E.N.M.
e. A stipulation that each mining area after final
relinquishment shall not be more than five thousand
SECTION 39. Terms and Conditions of a Mineral (5,000) hectares for metallic minerals and two
Agreement.
thousand (2,000) hectares for nonmetallic minerals:
The following terms and conditions shall be Provided, That the Director, with the approval of the
incorporated in the Mineral Agreement, namely: Secretary, may allow a Contractor to hold a larger
mining area depending upon the nature of the deposit
a. A stipulation that the Contractor shall not, by virtue subject to technical verification and evaluation by the
of the Mineral Agreement, acquire any title over the Bureau as to the technical/financial capability of the
contract/mining area without prejudice to the Contractor;
acquisition by the Contractor of the land/surface
rights through any mode of acquisition provided for by f. A stipulation that the mining operations shall be
law; conducted in accordance with the provisions of the
Act and these implementing rules and regulations;
b. Representations and warranties that the
Contractor has, or has access to, all the financing and g. A stipulation that the Contractor shall give
technical capability and technology required to preference to goods and services produced and
promptly and effectively carry out the objectives of the offered in the Philippines of comparative quality and
Agreement with the understanding to timely utilize cost. In particular, the Contractor shall give
these resources under its supervision pursuant to the preference to qualified Filipino construction
periodic work programs and related budgets, and enterprises, construction materials and skills
when proper, providing an exploration period up to available in the Philippines, Filipino sub-contractors
two (2) years from date of issuance thereof, for road construction and transportation, and
renewable for like periods but not to exceed a total Philippine household equipment, furniture and food;
term of six (6) years, subject to annual review by the
h. A stipulation that the Contractor is obliged to give
Director in accordance with these implementing rules preference to Filipinos in all types of mining
and regulations; employment for which they are qualified and that the
c. Representations and warranties that the applicant technology shall be transferred to the same;
has all the qualifications and none of the i. A stipulation that the Contractor shall not
disqualifications for entering into the Agreement;
discriminate on the basis of gender and that the
d. A stipulation that the Contractor may relinquish Contractor shall respect the right of women workers
totally or partially the original contract area during the to participate in policy and decision-making
exploration period. After the exploration period and processes affecting their rights and benefits;
prior to or upon approval of declaration of mining j. A stipulation requiring the Contractor to effectively
project feasibility, the Contractor shall finally
use the best available appropriate anti-pollution
relinquish to the Government any portion of the technology and facilities to protect the environment
contract area which shall not be necessary for mining and to restore or rehabilitate mined-out areas and
operations and not covered by any declaration of other areas affected by mine waste/mill tailings and
mining feasibility with the corresponding submission
other forms of pollution or destruction in compliance
to the Bureau/concerned Regional Office of geologic with the requirements of the ECC and P.D. No. 984.
report and pertinent maps in the scale of 1:50,000. This should be undertaken in coordination with the
The minimum exploration expenditures for the EMB/Department Regional Office;
remaining area after relinquishment shall be based on
the approved Exploration Work Program;
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k. A stipulation that the Contractor shall furnish the Contractors/Lessees/operators/Permittees/Permit
Government an annual report of its mining operations Holders;
and records of geologic, accounting and other
s. A stipulation that the Contractor shall recognize
relevant data, and that book of accounts and records
shall be open for inspection by the Government; and respect the rights, customs and traditions of local
communities, particularly Indigenous Cultural
l. A stipulation requiring the Contractor to dispose of Communities;
the minerals and by-products produced at the highest
market price and to negotiate for more advantageous t. A stipulation that the Contractor shall contribute to
the development of the host and neighboring
terms and conditions subject to the right to enter into
long-term sales or marketing contracts or foreign communities of the mining area, local geoscience and
exchange and commodity hedging contracts which mining technology in accordance with Chapter XIV
the Government acknowledges to be acceptable hereof;
notwithstanding that the sale price of the minerals u. A stipulation that the Contractor shall comply with
may from time to time be lower, or the terms and its obligations under its Environmental Protection and
conditions of sales are less favorable, than that Enhancement Program (EPEP) and its Annual EPEP,
available elsewhere: Provided, That the Bureau is including the allocation of the prescribed annual
furnished a copy of the said Sales Agreement subject environmental expense pursuant to Section 171
to confidentiality between the Bureau and the hereof;
Contractor;
v. A stipulation that the Contractor shall utilize the
m. A stipulation providing for consultation and best available appropriate and efficient mining and
arbitration with respect to the interpretation and processing technologies;
implementation of the terms and conditions of the
Agreement; w. A stipulation that the Contractor shall undertake
exploration work on the area as specified in its
n. A stipulation that the Contractor shall pay fees, Agreement based on an approved Work Program:
taxes, royalties and other obligations in accordance Provided, That a negative variance of at least twenty
with existing laws, rules and regulations; percent (20%) in the Work Program and
o. A stipulation that alien employment shall be limited corresponding expenditures shall be subject to
approval of the Director/concerned Regional Director;
to technologies requiring highly specialized training
and experience subject to the required approval x. A stipulation that the Contractor shall submit
under existing laws, rules and regulations; annually starting from the date of approval of the
p. A stipulation that in every case where foreign Agreement, progress reports of the exploration
technologies are utilized and where alien executives activities in the prescribed form. This shall be
accompanied by raw geologic, geophysical and
are employed, an effective program of training
understudies shall be undertaken; geochemical data plotted in a 1:50,000 scale map, at
a minimum. A quarterly report containing activities
q. A stipulation that the Contractor shall conform with and accomplishments for each quarter shall also be
laws, rules and regulations regarding, among others, submitted. At the end of the exploration term, the
labor, safety and health standards; Contractor shall submit the final report with the
detailed list of activities with the corresponding
r. A stipulation that the Contractor shall confine its expenditures. The final report shall be accompanied
mining operations to its contract/mining area and that by a 1:50,000 geologic map of the contract area
it shall not interfere with the rights of other acceptable by international standards. All reports
H.E.N.M.
referred to herein shall be submitted to the consideration/approval within fifteen (15) working
Bureau/concerned Regional Office; days from receipt of such endorsement.

y. A stipulation that the Mineral Agreement shall be In case of Mineral Agreement applications in areas
canceled, revoked or terminated for failure of the within Mineral Reservations, within fifteen (15)
Contractor to comply with the terms and conditions working days from receipt of the Certification issued
thereof or for other grounds as provided for in Section by the Panel of Arbitrators as provided for in Section
230 hereof; 38 hereof, the same shall be evaluated and endorsed
by the Director to the Secretary for
z. A stipulation that withdrawal by the Contractor from
consideration/approval within fifteen (15) working
the Mineral Agreement shall not release it from any days from receipt of such endorsement.
and all financial, environmental, legal and fiscal
obligations under the Agreement;aa. A stipulation SECTION 42. Temporary Exploration Permit.
that the Contractor shall comply with all other
While awaiting for the approval of the Mineral
applicable provisions of the Act and these
implementing rules and regulations; andab. Such Agreement application by the Secretary, the Director
other terms and conditions not inconsistent with the may, upon the request of the applicant, issue a one-
Constitution, the Act and these implementing rules time non-renewable Temporary Exploration Permit
and regulations, as well as those which the Secretary (TEP) with a term not exceeding one (1) year to
undertake exploration subject to the applicable
may deem to be for the national interest and public
welfare. provisions of Chapter V of these implementing rules
and regulations: Provided, That the term of the TEP
SECTION 40. Transfer or Assignment of Mineral shall be deducted from the exploration period of the
Agreement Application. Mineral Agreement: Provided, further, That in the
event that the Mineral Agreement application is
Transfer or assignment of Mineral Agreement
disapproved by the Secretary, the TEP is deemed
applications shall be allowed subject to the approval automatically canceled.
of the Director/concerned Regional Director taking
into account the national interest and public welfare: SECTION 43. Registration of Mineral Agreement.
Provided, That such transfer or assignment shall be
subject to eligibility requirements and shall not be Upon approval of the Mineral Agreement by the
Secretary, the same shall be forwarded to the Bureau
allowed in cases involving speculation.
for numbering. The Director shall notify the Contractor
SECTION 41. Evaluation of Mineral Agreement to cause the registration of its Mineral Agreement with
Application. the Bureau for areas inside Mineral Reservations or
with the concerned Regional Office for areas outside
Within fifteen (15) working days from receipt of the Mineral Reservations within fifteen (15) working days
Certification issued by the Panel of Arbitrators as
from receipt of the written notice. Registration is
provided for in Section 38 hereof, the concerned effected only upon payment of the required fees
Regional Director shall initially evaluate the Mineral (Annex 5-A). The Bureau/concerned Regional Office
Agreement applications in areas outside Mineral shall officially release the Mineral Agreement to the
Reservations. He/She shall thereafter endorse his/her
Contractor after registration of the same.Failure of the
findings to the Bureau for further evaluation by the Contractor to cause the registration of its Mineral
Director within fifteen (15) working days from receipt Agreement within the prescribed period shall be a
of forwarded documents. Thereafter, the Director sufficient ground for cancellation of the same.
shall endorse the same to the Secretary for

H.E.N.M.
SECTION 44. Rights and Obligations of the the transferor/assignor under the Agreement. Any
Contractor. transfer or assignment of rights and obligations under
any Mineral Agreement shall be subject to the
The Contractor, its heirs or successors-in-interest
approval of the Secretary upon the recommendation
shall have the right to exclusively conduct mining of the Director: Provided, That any transfer or
operations within the contract area with full rights of assignment of a Mineral Agreement shall not be
ingress and egress, the right to occupy the same, all approved unless the transferor/assignor or
other rights provided for in the Act and these Contractor has complied with all the terms and
implementing rules and regulations; and the
conditions of the Agreement and the provisions of the
obligation to fully comply with the terms and Act and these implementing rules and regulations at
conditions of the Mineral Agreement. the time of transfer/assignment: Provided, further,
SECTION 45. Conversion of a Mineral Agreement That any transfer or assignment shall be deemed
into Any Other Mode of Mineral Agreement or FTAA. automatically approved if not acted upon by the
Secretary within thirty (30) calendar days from official
A Contractor may at its option convert totally or receipt thereof, unless patently unconstitutional,
partially its Mineral Agreement into another mode of illegal or where such transfer or assignment is
Mineral Agreement or FTAA by filing a Letter of Intent violative of pertinent rules and regulations: Provided,
with the Bureau, copy furnished the concerned finally, That the transferee assumes all the obligations
Regional Office. All revisions to the Mineral and responsibilities of the transferor/assignor under
Agreement required by its conversion into any other the Mineral Agreement.
mode of Mineral Agreement or FTAA shall be
submitted to the Director within sixty (60) calendar
days from the date of filing the Letter of Intent.Upon SECTION 47. Withdrawal from a Mineral
compliance by the Contractor with all the
Agreement.
requirements and payment of conversion fee (Annex
5-A), the application for conversion shall be evaluated The Contractor shall manifest in writing its request to
and approved subject to Chapters VI and VII and all the Director, copy furnished the concerned Regional
other applicable provisions of the Act and these Director, for withdrawal from the Mineral Agreement,
implementing rules and regulations: Provided, That if in its judgment the mining project is no longer
the term of the new Mineral Agreement or FTAA shall economically feasible, even after it has exerted
be equivalent to the remaining period of the original reasonable diligence to remedy the cause(s) or
Agreement. situation(s).

SECTION 46. Transfer or Assignment of Mineral After verification and validation by the Bureau and
Agreement. upon compliance or satisfaction of all the
Contractor's financial, fiscal, environmental and legal
A Contractor may file an application for the total or obligations at the time of withdrawal, the Director
partial transfer or assignment of its Mineral within a period of thirty (30) calendar days shall send
Agreement to a Qualified Person(s) upon payment of an acceptance notice of withdrawal to the Contractor,
an application fee (Annex 5-A) with the
cause the opening of the subject area to mining
Bureau/concerned Regional Office for evaluation. No applications and release the Contractor's financial
application shall be accepted for filing unless guaranty/performance bond.
accompanied by the pertinent Deed of Assignment
that shall contain, among others, a stipulation that SECTION 48. Issuance of Special Mines Permit.
the transferee/assignee assumes all obligations of

H.E.N.M.
All holders of lease contracts which are about to Permits covering the subject areas for the purpose of
expire and Quarry Permits/licenses with pending computing the share of the Government from
Mineral Agreement applications may file an production as provided for in Chapter XXI hereof.
application for Special Mines Permit with the Such share of the Government shall be the excise tax
Bureau/concerned Regional Office. A Special Mines as provided for in R.A. No. 7729.
Permit (SMP) may be issued by the
Director/concerned Regional Director upon
clearance by the Secretary and shall be for a period of
one (1) year from the expiration of the lease contract
or Quarry Permit/license, renewable once, subject to
the following conditions and requirements:

a. That the applicant is already operating or has

completed the development/construction stage and
is ready to begin operations subject to verification by
the Bureau;

b. That the applicant has already submitted a

proposed Mineral Agreement;

c. That the applicant has submitted a one-year Work

Program duly prepared, signed and sealed by a
licensed Mining Engineer, Geologist or Metallurgical
Engineer;

d. Submission of Environmental Compliance

Certificate, including proof of compliance therewith,
if applicable;

e. Submission of Environmental Protection and

Enhancement Program (MGB Form No. 16-2) as
provided for in Section 169 hereof;

f. Submission of proof of satisfactory Environmental

Management Record and Community Relations
Record, if applicable;

g. Posting of Surety Bond prior to registration of the

SMP; and

h. Such other conditions and requirements not

inconsistent with the Act and these implementing
rules and regulations, as well as those which the
Secretary may deem to be for the national interest and
public welfare.

Provided, That quarterly progress production reports

shall be submitted by the holders of Special Mines
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