Annex The conditions and procedure of holding tenders for the right of subsoil use with the purpose of development of deposits of gypsum Nookat (Western flank of the Eastern section) and the criteria for determining the winner. 1. General provisions 1. The competition is held to determine the winner, who offered the most favorable conditions for the Kyrgyz Republic in the development of Nookat deposits of gypsum (Western flank of the Eastern section). 2. The right to use the earth interior with the purpose of developing Nookat deposits of gypsum (Western flank of the Eastern section) for a period of 20 years, with subsequent renewal according to the technical project if the winner of the competition fulfills the provisions, with the following corner points in a rectangular coordinate system, is put up for the tender: Points № 1 2 3 4 5 6 7 X 4468000 4468140 4467820 4467430 4467320 4467200 4467190 S=0,4167km2 или 41,67 га Y 13305160 13305560 13305680 13305730 13305620 13305400 13305195 2. General information 3. Nookat gypsum deposits (Western flank of the Eastern section) are located in the territory of Nookat district of the Osh region in the Kyrgyz Republic, in the low foothills of Kichik-Alay range, 28 km south of the Osh city, in the vicinity of the Osh - Nookat motorway. The nearest train station is 30 km from the deposits, the absolute height of the surface of the Nookat depression varies from 1,100 to 1,400 m. 4. Economically the area is poorly developed, relatively close to the village of Yatan and Uchbai. The main occupation of the population is agriculture - grain growing, tobacco growing, and live stock breeding. Major waterways of the deposits are the river Karakol and Chile-Sai, which flow from the South to the North, crossing the bridge of Kyzyl-Kungey, and then merge to form the most full-flowing river Aravan-Sai. 5. Nookat gypsum deposits (Western flank of the Eastern section) were discovered in the spring of 1943, by the geologist I.A. Shamrai and at the same time three gypsum-bearing areas were selected by the Rostov State University; Western, Central and Eastern, with an estimated total earth interior of about 50 million tones. 6. Bukhara Paleogon layers are considered to be productive on the deposits. There are three gypsum-bearing soil units among them, the lower unit of which has the industrial interest, which is folded of thin-interlayed gypsum. Gypsum deposits of white & grayish-white, fine-grained with interlayers and lenses of clay and clay – gypsum: capacity of the gypsum layers ranges from 3.10 m (borehole No. 6), to 28.39 m (borehole No. 7), and the average capacity is 15.21 km, the capacity of the internal capping rocks varies from 0.00 m (borehole No. 6) to 3.19 m (borehole No. 9), and the average is 16.14 m. 7. The study of gypsum raw was conducted in accordance with the requirements of AUSS (all union state standards) 4013-82 "Gypsum and gypsum-anhydrite rock for the manufacture of binders. Specifications", AUSS 125-79 "" and Standards of CMEA 826-77 "Gypsum Binders". Qualitative characteristics of gypsum blocks as a raw material for production of binders produced according to the content of sulfuric acid dehydrate salt of calcium (CaS042H20). The content of calcium sulphate in the gypsum blocks should not be less than: - for the 1st grade - 95 %; - for the 2nd grade - 90 %; - for the 3rd grade - 80 %; - for the 4 th grade - 70 %. 8. According to the results of chemical analysis and terms of minerals, gypsum blocks of the Nookat gypsum deposits refer to 1 - 3 grades. 9. The calculation of earth interior of a gypsum block and measuring of internal and external capping quantities of the Western flank of the Eastern section of Nookat deposits produced on the basis of geological materials obtained during the exploration (Zakirov, 1984) and follow-up exploration (Pimenov, 1988) as of 1st January, 1988. 10. In 1983-1984 preliminary and detailed exploration by forces of non-metallic geological searching party "South-Kyrgyz geological expedition" and by the "Kyrgyz geological expedition of non-metallic minerals", in the southern section, have been carried out on the Western flank of the Eastern section of Nookat deposits, located 0.7 km to the west of the previously diluted area. On the 15th of June in 1984 the territorial commission for the stock in the Department of Geology of the Kyrgyz SSR approved the stock of gypsum blocks in the following amounts: - for category A – 1293.6 kt; - for category B - 728 kt. A+B – 2021.6 kt 3. The main requirements for the participants in the tender 11. The following participants are considered to be acceptable: - legal entities registered in the Kyrgyz Republic; - legal persons registered in a foreign state (hereinafter - foreign legal entities); -individuals, including foreign citizens registered as individual businessmen according to the legislation of the Kyrgyz Republic. 12. The persons referred to paragraph 11 of these terms and conditions must meet the following requirements to get admission to participation in tender: - to have experience in geological and mining industries for at least one year, possess and apply modern technologies of development of deposits and processing of earth interior; - to have own funds and/or be able to obtain additional financing required for the development of the Western flank of the Eastern section of the Nookat deposits of gypsum. These persons must act in compliance with international standards and standards of the Kyrgyz Republic in the deposits of industrial safety, environmental safety, and protection of subsoil and rational use of earth interior. 13. Contestants may submit additional information and documents about the level of specialists' qualification, production, financial and other capabilities, necessary to implement the rights of the exploitation of the earth interior resources to develop Nookat deposits of gypsum (Western flank of the Eastern section), for the consideration of the tender committee. 4. Basic conditions of the earth interior use 14. The main conditions of the earth interior use are the fulfillment of the number of commitments by the person recognized as the winner of the tender and received a license for the earth interior use with the purpose of developing the Nookat deposits of gypsum (Western flank of the Eastern section), (hereinafter license), including: 1) to pay the price for the right to use the earth interior of the contest area in the amount specified in the corresponding application form for participation in the tender, but not less than 132000 (one hundred thirty-two thousand) US dollars (further - the price for the right to use the earth interior object of the competition); 2) to provide, not later than 1 year from the date of issuance of the license, preparation and negotiation with the public authorities of the technical project of Nookat deposits of gypsum development (Western flank of the Eastern section) with the positive expert conclusions on industrial and environmental safety and the earth interior protection; 3) in case of violation of term of the beginning of the deposits development, the licensee agrees to pay a fine in the amount of 5 % of the final price for the right to use the earth interior object of competition for each full month of delay (50 % - to the Republican budget, 30 % - to the Fund for the development of the Nookat district of Osh region of the Kyrgyz Republic, 20 % - to the local budget of Zulpuevsk rural district), with the exception of circumstances of insuperable force, defined by The Law of the Kyrgyz Republic "On the earth interior"; 4) to include in the technical project the program of deposits, measures to ensure industrial and environmental safety, protection and rational utilization of earth interior, the project of mind-land reclamation and subsequent monitoring, with the creation of an appropriate fund, project of liquidation of mining facilities, a description of other actions of the licensee necessary for the most rational, safe and effective use of earth interior, complying with international standards which entered into force in accordance with international treaties where the Kyrgyz Republic and its legislation system take part ; 5) to use modern technology, eliminating drilling and blasting experience (to avoid cracks on the highway Osh - Nookat) in the extraction of gypsum; 6) to use modern mining and crushing and screening equipment to eliminate dust emissions into the atmosphere during the field development; 7) to provide for investment, including by attracting financing from the banking and financial institutions according to the project, not including the price for the right to use the earth interior contest area, specified in paragraph 20 of these terms and conditions, and license fees for the first 3 years from the date of issuance of the license; 8) to follow the provisions of the technical designs in coordination with the authorized state bodies, and to fulfill the requirements of the legislation of the Kyrgyz Republic, including the requirements for the rational use of the earth interior, environmental protection and industrial safety; 9) to prepare and submit the project social package (hereinafter - the Agreement) to local authorities not later than 2 months from the date of receipt of licenses for their further consideration and approval, including the program of socio-economic development of local communities and territories, the program of investments into development of local infrastructure, providing employment for the population living in the project area, maximum use of local labor resources in the development of the deposits, the organization of training of population to implicate it to the carrying out of works associated with the development of the deposits, assistance in resolving other issues related to the socio - economic development of the Nookat district. The size of annual investments in the development of the local community in cash must not be less than 1,000,000 (one million) KGS; 10) to implement the purchase of goods (inventory) that meet established quality standards, works and services in the territory of the Kyrgyz Republic necessary to ensure licensee's business, except for the procurement of goods, works and services in the Kyrgyz Republic which are not performed, not executed and not provided. Thus, to carry out mainly procurement of goods, works and services produced on the territory of Osh district all other things are equal. 11) to attract foreign experts, not more than 10 % of the total number of employees of the licensee, taking into account contractors and subcontractors. 15. Conditions for granting the right to earth interior use, including the above basic conditions are fixed in the license agreement added to the license issued to the tender winner. Failure to comply with the above conditions of the earth interior use is the basis for application of measures of responsibility stipulated by the legislation of the Kyrgyz Republic. 16. The participant recognizes the above basic conditions of the earth interior use and consents to be included in the license agreement issued to the successful tenderer by the act of filing applications for participation in the tender. 5. The amount, order, and payment time of charges, guarantee fee, prices, taxes and other payments 17. The fee for a package of brief geological information; 1) The executive body of the commission submits a package of brief geological information for each applicant. Applicants must obtain this package of brief geological information for a fee of 37,645 (thirty-seven thousand six hundred forty-five) KGS to participate in the tender 2) The fee for a package of brief geological information arrives on a special account of the State Agency on Geology and Earth Interior at the Government of the Kyrgyz Republic (hereafter the State Geology Agency) executive body of the tender commission, according to the details specified in present paragraph 21, and remains in its possession; 3) After determining the winner of the tender, a package of brief geological information which costs 395 423 (three hundred ninety-five thousand four hundred twenty-three) KGS (taking into account the cost of a package of brief geological information) is passed to the winner. The cost of this package is included into the final price of the right to use the interior of the tender object. 18. The charge for participation in the tender. The participants of tender are obliged to pay the charge for participation in tender in the amount of 100,000 (one hundred thousand) KGS or dollar equivalent of the US at the National Bank of the Kyrgyz Republic rate on the day of payment (hereinafter - the fee for participation). The fee for participation in tender is not included in the final price of the right to use the interior of a tender object and returns irrespective of results of documents consideration and/or results of carrying out competition consideration of documents and/or results of holding a tender. The Indicated funds will be submitted to the Designated Account of the executive body of the tender commission, referred to in present paragraph 21 of these Terms and remain in its possession. 19. Guarantee fee of the participant. The participants of tender are obliged to pay the charge in the amount of 50,000 (fifty thousand US dollars. In the case of subsequent payment of the winner of the price for the right to use, as provided by paragraph 20 of these Terms, the guarantee fee is included into the fee for the right to use the interior of a tender object. The guarantee fee will be returned to the tender winner if he/she fully or partially pays the price for the right to use the interior of a tender object within the period prescribed by paragraph 20 of these Terms. This guarantee fee will be transferred to the national budget. 20. Payment for the right to use the interior of a tender object. 1) The amount of payment for the right to use the interior of a tender object cannot be less than the minimum threshold, which is 132,000 (one hundred thirty two thousand) US dollars. The price includes the bonus sum (tax for the right to use the earth interior) and the price for a package of geological information on earth interior, while participants may offer a higher price. The total amount less the bonus and price for a package of geological information on earth interior is distributed in accordance with the Regulations on the order and terms of holding a tender for the right to use the earth interior, approved by Resolution № 834 of the Government of the Kyrgyz Republic as of December 14, 2012. The price for the right to use the interior of a tender object is a single non-refundable fee; 2) The winner is obliged to pay the price that he/she proposed for the right to use the interior of a tender object (less the guarantee fee) within 30 working days from the date of publication of the decision of the tender commission about the winner of tender on the official web-sites of the Government of the Kyrgyz Republic and the State Geology Agency. 21. Details for making payment. The Fee for geological information, the fee for participation in a tender , guarantee fee of the winner, as well as the price for the right to use the interior of a tender object With an indication of the Designated account must be submitted to the account of State Geology Agency on the following details: Recipient: Oktyabrsky Regional Treasury Department of Bishkek city Bank: Oktyabrsky branch of JSC “RSK Bank", Bishkek city BIC 129053 Current account 1290534132810077 Private account 4402032100002327 Purpose of payment: [to the private account of State Geology Agency, the fee for geological information] / [to the private account of State Geology Agency, the fee for participation in a tender] / [to the private account of State Geology Agency, the guarantee fee of the winner] / [to the private account of State Geology Agency, the fee for the right to use the interior (the price for the right to use the interior of a tender object)]. 22. The winner will be obliged to pay royalties, taxes, non-tax payments and other obligatory payments, charges and fees in accordance with the legislation of the Kyrgyz Republic. 6. Stages of the competition and the documents submitted by the participants of the tender 23. The tender is held in two stages. At the first stage the tender committee receives and evaluates the documents given by the participants of the tender for compliance with the requirements set forth in these Terms, in order of their admission or refusal of admission to the second stage. In the second stage tender committee receives and evaluates the documents given by the participants of the competition, admitted to the second stage of the tender, for their compliance with the requirements specified in these Terms and Conditions, and will distinguish the winner of the tender in accordance with the established criteria. 24. First stage of the tender. In the first stage, the participants of the tender no later than 30 calendar days after publication of the announcement in the official press on holding the tender apply following documents in 2 copies to the State Geology Agency at the address; Office № 311/2; 2, Erkindik boulevard, Bishkek city, The Kyrgyz Republic 1) application for participation in the tender for the name of the chairman of the tender committee in the form according to Annex I; 2) a copy of the document (the original for verification) confirming the payment for the package of short geological information; 3) a copy of the document (the original for verification), confirming the payment of fee for participation in the tender; 4) a copy of the document (and the original for verification), confirming the deposit guarantee fee. The following documents must be provided in a sealed envelope: а) for legal entities, registered (recorded) in the Kyrgyz Republic notarized copies of state registration certificates and copies of the charter and founding agreement, certified by its stamp; b) for foreign legal entities - a copy of constituent documents and registration certificate and apostilled or legalized extract from the state register or other document proving that it is an operating legal entity under the laws of their country. The constituent documents and certificate of registration submitted by foreign legal entities in a foreign language must be submitted with a notarized translation into the state or official language. The validity of submitted statement from the state register or other document proving that the legal entity is operating under the laws of their country, should not exceed six (6) months from the date of issue of the said documents. Note: Legalization is not required: - For the Member States of the Convention Abolishing the Requirement of Legalization for Foreign Public Documents of 5 October 1961 ("the Hague Convention"), except for the member countries, which objected to the accession of the Kyrgyz Republic to the Hague Convention, - For the Member States of the Convention on Legal Assistance and Legal Relations in Civil, Family and Criminal Matters of 7 October 2002 ("Kishinev Convention"); c) for individuals - passport copy and a certificate of registration as an individual entrepreneur. Foreign individuals also apply notarized translation of the passport to the national or official language; d) the information and documents that reveal the persons who are the owners and / or beneficiaries of the participants, in compliance with Annex 2; e) documents confirming the authority of the legal person or authorized representative of a legal entity; f) a written commitment according to the Annex which provides that: - Participant in the case of winning the tender agrees to pay all penalties provided for in these Terms; - Participant in the case of winning the tender agrees that his proposed price for the earth interior use of the tender object is non-refundable payment; - Participant agrees to compensate the damage caused to the environment caused by his activities, and conducts activities to restore the disturbed state of the environment if such harm was made as a result of environmental offenses. 25. Participant of tender must submit a document containing the full name and address of the participant in the same envelope, an indication of the participation in the first stage of the tender, the list of submitted documents. The submitted documents must be sewn, comma separated, all the pages contained in the envelope shall be numbered. Documents are served on state and / or official language. In the case of submission of documents in a forei gn language it must be accompanied by a notarized translation into the state or official language. Tender Commission reviews the documents submitted by the national or official language. Changes and additions to the documents presented by the participants of the tender after the deadline for submission of documents are not accepted. The documents submitted are non-refundable and are stored in the State Geology Agency. 26. Opening the documents produced by the tender commission on the next working day after the expiry of the deadline for receipt of documents and registered in the minutes, which shall include the name of participants and number of pages of documents provided by them. The tender commission shall review the submitted documents in the envelope for 5 working days after the opening and decides on the admission or refusal of admission to participate in the second stage of the tender. Participants are allowed to participate in the second stage, if the applied documents correspond to the requirements specified in these Terms and Conditions. If some questions in relation to the list of requirements, the type and form of the documents submitted by the tender commission occur, the tender commission has the right to give additional explanations, issued in the form of a protocol.. 27. The decision of the tender commission on the admission or refusal of admission to participate in the second stage is published on the official web sites of the Government of the Kyrgyz Republic and the State Geology Agency, as well as in other official publications. 28. Second stage of the tender. The tender participants allowed to the second stage must apply to State Geology Agency: Kyrgyzstan, Bishkek, Erkindik Boulevard, 2 room number 217 the following documents no later than in 10 calendar days from the date of the decision on admission in a sealed envelope: 1) program to develop Nookat deposits of gypsum western flank of the eastern section) contains the preliminary proposals by: - Technical and economic calculations with respect to capital expenditures, operating costs and profitability of the project; - Activities for land reclamation; - Calculation of the required investments; - Calculation and payment of tax and non-tax revenues to the republican and local budgets as a result of development of the field; other additional information at the discretion of the participant; 2) proposals and a set of measures on the application of modern technologies of mineral exploration, mining and mineral processing, industrial and environmental safety, and rational use of the earth interior; 3) Information and documents proving the existence of experience in the exploration and development of at least two years; 4) Evidence of its own funds and / or the possibility of raising funds for the initial capital investment, including copies of accounting reports for the last 2 years, bank references, agreements on a loan, the documents attesting to the absence of tax arrears and other similar documents; 5) proposals for the social package that includes a program of socioeconomic development of local communities and territories, the program of investment in local infrastructure, the organization of jobs for people living in the region of the work, maximum use of local human resources in the development field, training the population in order to attract them to conduct work related to the development of the field, assist in addressing other issues related to the program of socio-economic development of the Nookat district; 6) Proposal for the right to use the earth interior of the object of the tender is not less than the minimum amount specified in paragraph 20 hereof; 7) Any additional information and documentation of work experience in the mining industry, the level of professional development, production, financial and other capabilities of the participant required to develop deposits of Nookat gypsum (western flank of the eastern section). 29. The participant admitted to participate in the second stage of the tender must submit documents in one envelope containing the full name and address of the participant, an indication of the filing of documents in the framework of participation in the second stage of the tender, the list of submitted documents. The submitted documents must be sewn, comma separated, all the pages contained in the envelope shall be numbered. Documents are served on state and / or in the official language. In the case of submission of documents in a foreign language it must be accompanied by a notarized translation into the state or official language. Changes and additions to the documents presented by the participants of the tender after the deadline for submission of documents are not accepted. The documents submitted are non-refundable and are stored in the State Geology Agency. Documents are accepted by the Secretary of the tender committee, which issues a receipt for the documents indicating therein the date and the time of their adoption. 30. Opening the documents produced by the tender commission on the next working day after the expiry of the deadline for receipt of documents and issued in the protocol, which shall include the name and address of the participant, the number of pages of documents and their proposed price for the right to use the tender object – the earth interior. Participants have the right to be present at the opening the envelopes. 31. Protocol of the tender commission on opening envelopes shall be published on the official web sites of the Government of the Kyrgyz Republic and the State Geology Agency. 7. The criteria for determining the tender winner 32. Within 5 working days after the publication of the protocol of the tender committee on the opening the envelopes the tender commission considers proposals of participants, prepares protocols of the voting results on the results of the second stage of the tender and on the basis of this protocol shall distinguish the winners. In reviewing the documents submitted by the participants of the tender, the tender commission has the right to invite the authorized representative of the participant to provide additional clarification in the framework of the submitted documents. 33. The winner of the tender is determined by evaluating the submitted documents and information. Assessment of the documents is produced by the tender commission on the following criteria: № 1 2 3 4 5 6 Criteria designation Points The quality of the presented program of the development of Nookat gypsum deposits (western flank of the eastern section), including its compliance with the requirements specified in these Terms and Conditions Proposals for the application of modern technologies of deposits exploration, mining and processing of minerals, industrial safety, environmental safety and rational use of mineral resources Financial opportunities for the development of the Nookat gypsum deposit (western flank of the Eastern region) (own and borrowed funds) Up to 3 points The volume (amount) of funds allocated for social benefits referred to in subparagraph 9 of paragraph 14 hereof, in excess of the amount The excess of the minimum amount of payment for the right of the use of the earth interior – the tender object Up to 3 points Up to 5 points Up to 5 points 1 point for every additional 10,000 (ten thousand US dollars) paid in excess of the amount of payments for the use of the earth interior – the tender object The term of beginning of field development and the Up to 6 months – 6 points; construction of infrastructure facilities during a year – 4 points 34. For each participant the tender commission shall draw up the protocol indicating the scoring points received by participants for each criterion and a total score of the participant. 35. Based on the analysis of all the proposals of the participants and to determine points on the criteria the commission draws up a protocol on the results of voting on the results of the second stage of the competition and on the basis of this Protocol shall decide on the winners. 36. The winner is the participant with the highest number of points. In case of equality of points of two or more participants, the members of the commission shall appoint the chairman of the open voting procedure. Voting is conducted for each participant individually. In addition, each member of the commission shall be entitled to cast their vote for only one party. The winner is the participant with the highest number of votes. In case of two or more participants will be given an equal number of votes, then such participants shall be additional ballots according to the rules of the first stage to determine the winner. In all rounds of voting, the equality of votes of the members of the tender committee vote of the chairman of the tender committee is crucial. 37. The decision of the tender committee shall be in writing, signed by all members of the tender committee and the winner, the name is declared on the commission meeting, inviting participants and the media. Decision of the tender commission on determining the tender winner shall be published in the official websites of the Kyrgyz Republic and the State Geology Agency. 38. Protocols of the tender commission are considered valid if signed by a majority of the members of the tender committee. 39. Protocol of the tender commission is the basis for the issuance of license to the winner of the tender for the right to use the earth interior for the development of Nookat gypsum deposits (western flank of the eastern section). Licensing agreements for the licenses should include the conditions set for the tender. 40. In the event that the tender winner is recognized to be a foreign legal entity, a license shall be issued to a subsidiary company, established and registered to be the tender winner - a foreign legal entity in the territory of the Kyrgyz Republic on the location of the Nookat gypsum deposits (western flank of the eastern section). A subsidiary company created by a foreign legal entity must be registered no later than one month from the date of the announcement of a foreign legal entity winner. The subsidiary company has to be 100% owned foreign entity the tender winner. In the case of the winner being a foreign individual, he must register as an individual entrepreneur in accordance with the legislation of the Kyrgyz Republic. 41. The license shall be issued to the tender winner within 5 days after the payment of its proposed rates for the use of the 5 object of the tender. If the winner is the foreign entity, the grant of a license shall be made within 5 working days after (a) payment of its proposed price of the use of the earth interior – the object of the tender and (b) submission of the original or a notarized copy of the certificate of registration on the territory of the Kyrgyz Republic location of Nookat deposit (western flank of the eastern section), a subsidiary company of a foreign legal entity, whichever date comes later. 42. In the event of failure of the tender winner to sign the protocol on the results of the tender or non-payment of their stated price for the right to use the earth interior of the object within the prescribed period of the tender winner will lose the right to obtain licenses, and the winner will be the participant with the winner who gained the highest number of votes after the refused winner with the additional vote if the tender commission not decided otherwise. 8. Cancellation and recognition of the tender to be invalid, void. 43. Prior to the publication in the media announcement of the tender and make the tender commission decision on determining the winner of the Kyrgyz Government has the right to cancel the tender. And the tender committee shall be disbanded. If after the announcement the tender did not take place, the Government of the Kyrgyz Republic has the right to disband the tender committee and announce a new tender with a new line-up of the tender committee. 44. In the absence of applications for participation in the tender or if the tender is received a request from only one party, or if the documents submitted by all participants of the tender, do not meet the basic conditions and requirements for the participants of the tender, the tender is declared invalid by the decision of the tender committee, registered in the minutes and published in the official press and on the official web sites of the Government of the Kyrgyz Republic and the State Geology Agency. 45. The participant may withdraw its application for participation in the tender, pending tender commission decision on the winner. At the same time the fee for participation in the tender in the amount of 1 000 000 (one million) soms and payment for the package of geological information in a short amount of 37645 (thirty-seven thousand six hundred forty-five) soms is not returned, and a guarantee fee is refundable. For more information call: (+996 312) 909876, 909864. With this information, you can visit the official website of State Geology Agency: www.geology.kg. _______________________________________________________