Redflag - LDD - ET Asia Material Presentation - 29032021.pdf

LEGAL DUE DILIGENCE UPDATE REPORT
PT AGINCOURT RESOURCES
Prepared by ADCO Attorneys at Law
LEGAL
DUE
DILIGENCE
UPDATE
REPORT
PT
AGINCOURT
RESOURCES
LEGAL DUE DILIGENCE REPORT
[INITIAL STAGE]

CONFIDENTIAL
FOR INTERNAL USE ONLY
Table of Contents
CORPORATE MATTER....................................................................................................................................................................................... 5
Summary of PT XYZ (“Company”)................................................................................................................................................................... 5
Change of the company’s name ....................................................................................................................................................................... 6
Indonesian Shareholder of the Company.......................................................................................................................................................... 7
Shareholder Agreement ................................................................................................................................................................................... 7
Loan for ANA.................................................................................................................................................................................................... 8
Existing encumbrances over sahres in the Company ..................................................................................................................................... 10
OPERATIONAL LICENSE ................................................................................................................................................................................. 12
Pending confirmation from from the National Road Implementing Body on the requirement to obtain road utilisation permit (izin pemanfaatan
jalan) for the pipeline passes through Trans Sumatera highway and public road............................................................................................ 12
CONTRACT OF WORK..................................................................................................................................................................................... 13
Validity of the CoW......................................................................................................................................................................................... 13
Relinquishment............................................................................................................................................................................................... 13
Commercial Obligation ................................................................................................................................................................................... 13
Approval of the Government........................................................................................................................................................................... 14
Renegotiation process.................................................................................................................................................................................... 15
Obligations realization according to RKAB (as per June 2017)....................................................................................................................... 16
FORESTRY ....................................................................................................................................................................................................... 17
Large of the mining concession of the Company are located in protected forest areas................................................................................... 17
Borrow-Use Permit for the Forest Area (“IPPKH”) .......................................................................................................................................... 17
OVERLAPPING ISSUES ................................................................................................................................................................................... 18

CONFIDENTIAL
Overlapping with Mining Concession.............................................................................................................................................................. 18
Overlapping with Timber/forestry rights .......................................................................................................................................................... 18
Overlapping with Plantation Rights and Rights to Cultivate............................................................................................................................. 18
Overlapping with Geothermal Rights .............................................................................................................................................................. 19
BANK FACILITIES............................................................................................................................................................................................. 20
Senior Facility Agreement............................................................................................................................................................................... 20
Mandatory prepayment................................................................................................................................................................................... 20
Negative pledge on the Company’s assets..................................................................................................................................................... 22
Prior written consent from the Majority Lenders.............................................................................................................................................. 23
Existing Security and Guarantees................................................................................................................................................................... 23
SALE AND PURCHASE AGREEMENT ............................................................................................................................................................. 25
Gold and Silver Sale and Purchase Agreement.............................................................................................................................................. 25
HEDGING.......................................................................................................................................................................................................... 26
Hedging Agreement........................................................................................................................................................................................ 26
MATERIAL AGREEMENT ................................................................................................................................................................................. 29
Mining Service Agreement.............................................................................................................................................................................. 29
Others Agreement .......................................................................................................................................................................................... 31
Contract assigned for security purposes in favour of the finance parties under the Facility Agreement............................................................ 33
Expiring material contracts ............................................................................................................................................................................. 34
INDEPENDENT RESEARCH .............................................................................................................................................................................. 36
Information of the Company sourced based on the independent research ..................................................................................................... 36
DISPUTE ........................................................................................................................................................................................................... 38

CONFIDENTIAL
Disputes ......................................................................................................................................................................................................... 38

Page 5 of 40 Corporate Matter
CONFIDENTIAL
CORPORATE MATTER REMARKS
1. Summary of PT XYZ
(“Company”)
The Company, formely PT Danau Toba Mining was established under the laws of the
Republic of Indonesia, by Notarial Deed No. 281 dated 14 April 1997, made before Notary
Haji Muhammad Afdal Gazali, S.H., notary in Jakarta which has been approved by the
Minister of Law and Human Rights in his letter No. C2-3010.HT.01.01.TH.1997 dated 24
April 1997 (“Deed of Establishment”).
The Deed of Establishment has been changed for several times. The last amendment is
Deed No. 23 dated 26 April 2017, made before Moeliana Santoso, S.H., M.Kn.,notary in
Tangerang which has been notified to Minister of Law and Human Rights, pursuant its letter
No. AHU-AH.01.03-0131481 dated 27 April 2017 (“Deed 23/2017”).
Based on Deed No. 23/2017, the following are management of the Company:
Shareholder Structure:
Name Number of
Shares
Amount (Rp) Certificate of
Shares
Pledge of
Shares
XYZ (Singapore)
Pte. Ltd.
4,750,000
(Serie A)
76,000,000
(Serie B)
11,509,250,0
00
646,000,000,
000
Collective Shares
Certificate Number 4
100% is
pledged under
the Senior
Facility
Agreement
PT Artha Nugraha
Agung
250,000 (Serie
A)
4,000,000
(Serie B)
605,750,000
34,000,000,0
00
Collective Shares
Certificate Number 3
100% is
pledged under
the
Shareholder
Agreement
Board of Directors (“BoD”):
President Director: Timothy John Vincent Duffy
Director : Washington Tambunan
Change on shareholding, BoD and BoC are
subject to disclosure of beneficial owner of
the Company. Please see our futher note at
page 13 of this report.

Page 6 of 40
Corporate Matter
CONFIDENTIAL
Director : Peter John Chambers
Director : Navin Sonthalia
Director : Linda Helena Darmalina
Director : Edward John Cooney
Board of Commissioners (“BoC”):
President Commissioner : Owen Leigh Hegarty
Commissioner : Noke Kiroyan
Commissioner : Chien Min Chang
Commissioner : Benjamin Yrineo Encarnacion (Benjamin Yrineo Santos Encarnacion)
Commissioner : Ashish Gupta
Commissioner : Anwar Nasution
Commissioner : Antony James
2. Change of the company’s
name
We note that the name of the Company has changed several times. On the signing period
of the CoW, the name of the Company was PT Danau Toba Mining, but then it is changed
and currently the name of the Company is PT XYZ. We understand from Deed of
Establishment and its amendments, sequentially:
1. PT Danau Toba Mining (1997 – 2001) - Deed of Establishment No. 281 dated 14 April
1997 made before Muhammad Afdal Gazali, notary in Jakarta.
2. PT Horas Nauli (2001 – 2003) - Deed No. 64 dated 1 January 2001 made before
Muhammad Afdal Gazali, notary in Jakarta.
3. PT Newmont Horas Nauli (2003 – 2006) – Deed No.14 dated 28 February 2003 made
before Siti Safarijah, notary in Jakarta.
Please note that if PT Pama Persada Nusantara
(“PAMA”) intends to change the Company’s name
post acquisition, the change of the Company’s
name is subject to approval from Government.
[Please see at page 13 of this report]

Page 7 of 40
Corporate Matter
CONFIDENTIAL
4. PT XYZ (2006 – present) – Deed No. 40 dated 29 September 2006 made before Mala
Mukti, notary in Jakarta.
3. Indonesian Shareholder of
the Company
PT Artha Nugraha Agung (“ANA”), a company duly established under the laws of the
Republic of Indonesia, domiciled at South Jakarta, has 5% (five percent) shares in the
Company. 100% (one hundred percent) of its shares is owned by the Regional Owned
Enterprises (Badan Usaha Milik Daerah, BUMD). Pursuant to Deed No. 25 dated 20 July
2012, the following are shareholders of ANA:
Name Number of
shares
Percentage
(%)
PT Tapanuli selatan Membangun 350 70
PT Pembangunan Prasarana Sumatra
Utara
150 30
BUMD Status
PT Tapanuli Selatan Membangun (“TSM”) is a BUMD company incorporated by the
Government Tapanuli Selatan Regency. TSM is established based on Local Regulation
(“Perda”) No. 7 of 2014 on Investment of Local Government to PT Bank Sumut, PT
Tapanuli Selatan Membangun and PDAM Tambusai.
PT Pembangunan Prasarana Sumatra Utara (“PPSU”) is a BUMD company incorporated
by the Government of Sumatera Utara Province Based on Perda No. 11 of 2017 on
Establishment of PT Pembangunan Prasarana Sumatra Utara.
Based on Article 1 paragraph 40 of Law No. 23 of 2014 on Local Government (“Law
23/2014”), a BUMD is company established and owned by local government (regency /
province), and the establishment of a BUMD must be through local regulation (Perda). The
ownership of a BUMD must be directly with the local government (regency / province), and
therefore, ANA is not categorized as BUMD because it is owned not directly by the local
government.
4. Shareholder Agreement ANA, XYZ (Singapore) Pte. Ltd. (“ARS”) and the Company have entered into Shareholders
Agreement dated 24 July 2012 (“Shareholders Agreement”).
Key terms under the Shareholders Agreement:
1. ANA shall not sell its shares in the Company

Page 8 of 40
Corporate Matter
CONFIDENTIAL
2. The Shareholders Agreement opens a door of possibility for other local governments
to come in as indirect shareholders of the Company. Under Article 3.2 of the
Shareholders Agreement, if the Company commences mineral production in an area
of the CoW outside the jurisdiction of tha Province of Sumatera Utara or Tapanuli
Selatan Regency, the Provincial Government of Sumatera Utara and the Government
of Tapanuli Selatan Regency agree (including ANA and its shareholders) that the
relevant local or provincial government having jurisdiction over the area in which the
Company commences operation production will receive a pro rata interest at the level
of ANA or its shareholders and that they will also be entitled to the dividend in the
Company.
Based on the Minister of Energi and Mineral Resources (“MEMR”) Decree No.
649.K/30/DJB/2013 dated 21 March 2013 on the commencement of the production
stage of the Company, we understand that the mining area of the Company
encompasses not only the Tapanuli Selatan regency, but also other four regencies,
namely: (a) Tapanuli Utara; (b) Tapanuli Tengah; (c) Mandailing Natal,; and (d) Padang
Sidempua. If mineral production commences in these areas, the local government in
those areas would likely request to hold a share interest either at ANA’s level or its
shareholders’s level.
3. Inconsistencies of ANA’s rights as minority shareholder under the CoW and the
Shareholders Agreement
Under Article 24.6 of the CoW, ANA is entitled to appoint members of the BoC in the
proportion to their shareholding in the Company. Under the Shareholders Agreement,
however, only ARS has the right to nominate all members of the BoD and BoC of the
Company.
(1) Amendment of the Shareholders
Agreement to reflect the CoW provision,
and giving ANA a right to appoint 1
(one) commissioner
(2) ANA may demand its right as an
Indonesian participant pursuant to
clause 24.6 of the COW, where the
Indonesian participant is entitled to
appointing members of BoC.
5. Loan for ANA (1) Loan from ARS
ANA purchased the shares using loan provided by XYZ (Singapore) Pte. Ltd. (“ARS”)
in the amount of USD4,000,000 pursuant to Deed No. 05 dated 7 February 2013 on
(1) PAMA has to confirm whether the rights
of ARS under the loan agreement with
ANA is part of the transaction and will be
transfered to the PAMA

Page 9 of 40
Corporate Matter
CONFIDENTIAL
Loan Agreement, made before Siti Safarijah, S.H., M.Kn. With respect to loan from
ARS, ANA further enter the following agreements:
a. Shares pledge over its all 5% shares in the Company pursuant to Deed No. 7
dated 7 February 2013, made before Notaris Siti Safarijah, S.H., M.Kn.
b. Assignment of 50% of its dividend in the Company, pursuant to Deed No. 6
dated 7 February 2013, made before Notaris Siti Safarijah, S.H., M.Kn.
(2) Loan from the Company
ANA obtained loan in the amount Rp15,000,000,000 of the Company based on Deed
No. 19 dated 20 December 2013 made before Notaris Siti Safarijah, S.H., M.Kn. The
only security for this loan is an Acknowledgement of Indebtedness by ANA under Deed
No. 20 dated 20 December 2017 made before Notaris Siti Safarijah, S.H., M.Kn.
The loan will be used by ANA to fund development of government infrastructure and
facilities of Tapanuli Selatan Regency pursuant to Letter No. 910/6315/2013 dated 3
December 2013 issued by the Regent of Tapanuli Selatan.
Repayment of this loan shall be conducted by the company by reducing 70% of dividen
obtained by TSM as shareholder ANA.
(2) We advise taking over account
receivable of ARS againts ANA under the
loan agreement.
(a) Cessie of account receivable from
ARS to PAMA
(b) Termination of pledge and make a
new and fresh pledge agreement
between PAMA and ARS for the
5% of shares in the Company
Reasons:
If PAMA keeps the loan structures between
ARS and ANA, there are risks of ARS
exercising the pledge of shares due to ANA’s
default in payment / loan / other agreement
related to USD 4,000,000 loan. By exercising
the pledge agreement, technically ARS may
re-acquire 5% of shares directly or indirectly.

Page 10 of 40
Corporate Matter
CONFIDENTIAL
Pursuant to the flowchart of dividend payment above, the following formula of loan
payment conducted by ANA to the Company monthly:
6. Existing encumbrances
over sahres in the
Company
We note that 100% of the issued shares in the Company are subject to the following pledge
of shares:
N/A
50%
100% ANA’s
dividend
(-) 50% - Loan Payment to ARS
30%
(-) 40%[50%] - Community Development
(-) x - Operational cost of ANA)
30% - x
TSM = 70% [30% - x] PPSU = 30% [30% - x]
Loan Payment = 70% [70% (30% - x)]

Page 11 of 40
Corporate Matter
CONFIDENTIAL
(1) 5% of shares owned by ANA in the Company were pledged to ARS under the pledge
of shares agreement dated 7 February 2013 between ANA (as pledgor) and ARS as
(pledgee); and
(2) 95% pf shares owned by ARS in the Company were pledged to the finance parties
under the Facility Agreement under the pledge of shares agreement dated 3 July 2017
between ARS (as pledgor) and Bank Sumitomo Indonesia (as pledgee).
Any transfer of shares in the Company that are subject to pledge will need prior consent
from the respective pledgee or lender.

Page 12 of 40 Operational License
CONFIDENTIAL
OPERATIONAL LICENSE REMARKS
7. Pending confirmation from
from the National Road
Implementing Body on the
requirement to obtain road
utilisation permit (izin
pemanfaatan jalan) for the
pipeline passes through
Trans Sumatera highway
and public road
Based on the decision of the members of the Investment and Management Commitee of
G-Resources dated 12 April 2012 on contract approval for installation/placement of a
water discharge pipeline in the PTPN III plantation area, we understand that the Company
installed its water discharge pipeline (for disposal to Batang Toru river) with the alignment
passing under the Trans-Sumatera highway and public road which, according to such
decision, were considered to be a national road and a regency doar respectively.
Based on Regulation of the Minister of Public Work number 20/PRT/M/2010, the use of
public roads is subject to the requirement to obtain a road utilisation permit (izin
pemanfaatan jalan) issued by the National Road Implementing Body (Balai Pelaksanaan
Jalan Nasional). In practice, the requirement to obtain a road utilisation permit (izin
pemanfaatan jalan) is determined by the National Road Implementing Body (Balai
Pelaksanaan Jalan Nasional) considering the construction of the water discharge pipeline.
Pursuant to the Ginting & Reksodiputro Law Firm (“LDD Report”), the Company is
checking with the National Road Implementing Body (Balai Pelaksanaan Jalan Nasional)
or whether it is necessary for the Company to obtain a road utilisation permit.
Under Law No. 38 of 2004 on Road Law, any
use of public roads without a licence (including
the road utilisation permit and the dispensation
letter as discusses above) is subject to criminal
sanctions or fines of up to Rp 2,000,000,000.

Page 13 of 40 Contract of Work
CONFIDENTIAL
CONTRACT OF WORK REMARKS
8. Validity of the CoW PT Danau Toba Mining signed the Contract of Work with the Government of Indonesia dated
28 April 1997 (“CoW”). The CoW is basis for PT XYZ (“Company”) to conduct mining
operation now in Tapanuli Tengah and Tapanuli Selatan, North Sumatera.
Based on the CoW, the following are periods of each stage:
a. General survey : 1 year and may be extended 1 year
b. Exploration : 3 years and may be extended 2 years
c. Feasibility study : 1 year and may be extended 1 year
d. Construction : 3 years
e. Operation production : 30 years
Pursuant to Decree of the Ministry of Energy
and Mineral Resources Number
649.K/30/DJB/2013 on Commencement of
Operation Production Stage of PT XYZ
(“Decree 649/2013”), the Company granted
30 years to conduct its operation production
process, valid until 24 April 2042.
9. Relinquishment The initial area of the COW is 669,020 Ha. Under the CoW, the Company must relinquish
its mining area and before the completion of the mining feasilibility study, the Company may
retain the mining area up to 25% of the initial contract area. Based on the Decree No.
51.K/30/DJB/2008 on Relinquishment III of Area of Contract of Work at the Feasibility Study
Phase of PT XYZ, the retained mining area of the Company is 163,927 Ha or 24.87% of the
initial contract area.
N/A
10. Commercial Obligation Under the CoW, the Company has obligations related to tax, as follows:
1. Deadrent
2. Royalty
3. Corporate Income Tax
4. Employee Income Tax
(1) The data which we obtain from the
Virtual Data Room (VDR) and also from
our independent search in the MEMR
does not show detail of the compliance
of the company againts its financial
obligation.
(2) We advise obtaining further documents
to clarify the compliance level of the
company with respect to financial and

Page 14 of 40
Contract of Work
CONFIDENTIAL
5. Witholding Tax;
6. Value Added Tax (PPN) and Sales Tax and Luxurious Goods (PPnBM)
7. Stamp Duty
8. Import duty;
9. Property tax;
10. Any taxes and administrative charges imposed by the Local Government which has
been approved by the Central Government.
reporting obligation to the Government
as regulated under the CoW.
11. Approval of the
Government
Pursuant to the provisions under the COW and Regulation of the MEMR No. 18 of 2009 on
Guidelines on Investments in Contracts of Work and Coal Contracts of Work Companies
(“MR 19/2009”) the Company must obtain approval from the Government of the Republic of
Indonesia to conduct the following:
a. change the Articles of Association;
b. change of shareholder;
c. change of investment and financing source;
d. change status of the Company from foreign investment to domestic investment, vice
versa;
e. change of Board of Directors and Commissioners;
f. change objective and purpose of the Company;
g. liquidation of the Company;
h. merger or consolidate the Company with others company;
i. burden the mineral reserve with any security
(1) Pursuant to current internal policy of the
MEMR, any approval from the
government in the coal and mineral
sector (eg. Change of BOD/BOC, AOA)
is subject to disclosure of the information
related to the benefecial owner of the
company and also tax registry number of
the beneficial owner (if such party is an
Indonesian individual). The MEMR
defines the benefecial owner is the
ultimate individual owner of the
company, pre or post the transaction.
(2) We advise having a confirmation from
the seller that it will be cooperative in
disclosing the benefecial ownership of
the company as required by the MEMR.

Page 15 of 40
Contract of Work
CONFIDENTIAL
12. Renegotiation process The Company has been negotiating with the Government of Indonesia with respect of the
CoW since 2010 until present. The following are the main pending items which are still being
discussed and negotiated between the Company and the government:
Issues Government’s Standing Company’s Standing
Extension Extension of CoW can be
extended in a form of IUPK OP
and max only for 2 times of
extension
Extension must take a form as
extension of CoW, not converting
into IUPK OP
State revenue Corporate Income Tax (CIT) – the
Government of Indonesia (“GoI”)
ask for 30%.
Royalty – Pursuant to
Governmenyt Regulation No. 9 of
2012, the royalty for the sale of
gold is at the rate of 3,75% of the
sale price, while the rate for silver
is 3.25% of the sale price.
Dead rent – USD4,00 per
ha/annum
CIT - Nailed down (as stated in the
CoW), as follows:
a. 10% for taxable income up
to Rp. 25 million;
b. 15% for taxable income
exceeding Rp. 25 million up
to Rp. 50 million;
c. 30% or lower rate as set
forth by the Government
Regulations fo taxable
income exceeding Rp. 50
million
Royalty – USD225-235/kg
depending on the weight and
quality of gold it produces
Dead rent – USD3.00 per
ha/annum
Divestment As per prevailing laws and
regulation (ie. 51%)
5% as per the CoW

Page 16 of 40
Contract of Work
CONFIDENTIAL
Domestic processing
and refining
If Logam Mulia fails to deliver and
there is no local refining company
that can meet the Company’s
criteria and qualification, then it
should be acceptable for the
Company to use offshore refining.
the Company has built a smelter.
However, the Company does not
feel that there is a necessity to
build a refinery at the moment,
because the Company has
already engaged with Logam
Mulia (Antam Subsidiaries). But it
is difficult for the Company to
commit with Logam Mulia as it is
far from being reliable.
Mining Area if CoW is
converted to IUPK
OP
Under the Law No. 4/2009
regarding Mineral and Coal
Mining total area for IUPK OP is
25,000 Ha
the Company willing to relinquish
another 31,310 ha of the current
CoW area.
14. Obligations realization
according to RKAB (as per
June 2017)
We understand from data provided to us that there there are gaps between the targeted
achievement of the company as stated in the RKAB and the actual performance:
Target Realization
Deadrent USD 491,781 USD 491,781
Royalty USD 2,022,485 USD 1,177,252.70
Production Gold : 9.534 kg
Silver : 82.411 kg
Gold : 5.291 kg
Silver : 43.961 kg
Purchase of
Local Product
USD 50,089,411.19 USD 729,796
N/A

Page 17 of 40 Forestry
CONFIDENTIAL
FORESTRY REMARKS
15. Large of the mining
concession of the
Company are located in
protected forest areas
Pursuant to the LDD Report, the status of the land where the mining concession of the
Company is located are as follows:
No. Forest Area Total Area (in hectares)
1. Conservation forest 1,664
2. Protected forest 60,808
3. Limited production forest 53,586
4. Permanent production forest 5,801
5. Convertible production forest 999
6. Area for other use (non-forest land) 41,069
N/A
16. Borrow-Use Permit for the
Forest Area (“IPPKH”)
a. IPPKH is granted to the company to carry out exploration activities within approximately
19,250.61 ha of convertible production forest area located in South Tapanuli and
Mandailing Natal Regencies, North Sumatera Province pursuant to the Letter of Decree
of Chairman of the Investment Coordinating Board (BKPM) No. 7/1/IPPKH/PMA/2015
dated 7 April 2015.
b. We noted that the Company’s IPPKH has expired as of 7 April 2017. We understand
that the Company is in the process of applying the extension for IPPKH of said
19,250.61 ha of convertible production forest area.
c. We also note that the Company does not have any IPPKH for production operation
activities.
d. We understand the granting of new IPPKH for primary natural forest areas of the
Company is currently suspended pursuant to Presidential Instruction No. 6 year 2017
on Moratorium and Improvement of Governance of Granting New Permit for Primary
Natural Forest and Peatland. The moratorium, however, allows the continuation of
activities if the applicant is seeking the renewal of an existing permit.
The technical team of PAMA to confirm
whether the on going mining activities is not
within the production forest area. The reason
is the IPPKH (which appears to be expired)
is not allowing the company to do
commercial operation within the forest area,
instead the IPPKH is allowing the company
to do the exploration works only.

Page 18 of 40
Ovelapping Issues
CONFIDENTIAL
OVERLAPPING ISSUES REMARKS
17. Overlapping with Mining
Concession
Pursuant to the LDD Report, the 8,207.32 Ha of the Company’s mining area is overlaping
with the mining area of a coal mining company, namely PT Pancaran Bukit Batubara
(“PBB”). The Company and PBB has an Memorandum of Understanding dated 5 April 2012
(“MoU”) with respect to the overlapping issue, pursuant to which the Company allows PBB
to undertake coal exploration activties within the overlaping area only.
Pursuant to the LDD Report, the management has confirmed that PBB did not find any coal
and has stopped mining activities in the overlapping area and the MoU with PBB has been
terminated.
The seller to provide a specific warranties
that there is no overlaping between the
Company’s mining area and other mining
concession area, whether gold mine or other
mine (eg. coal, copper).
18. Overlapping with
Timber/forestry rights
The Company has several timber/forestry overlaps with various company, as follows:
- PT Teluk Nauli – to the extent of 13,548 ha;
- PT Paneilika Sejahtera – to the extent of 12,616 ha; and
- PT Anugerah Rimba Makmur – to the extent of 7,558 ha
The Company is only required to enter into settlment with the above companies when The
Company starts the production operation activities within the overlaping area.
(1) We need to do further research in the
relevant government agency to obtain
situation map showing the exact
overlaping area.
(2) The Technical team of PAMA is also
required to review and confirm whether
the overlaping area is a potential gold
bearer location, and if so, PAMA need to
consider additional costs as settlement
with the timber companies overlaping
the company’s potential area.
Plantation Rights and
Rights to Cultivate
We understand from the LDD Report that part of the COW area overlaps the area of Right
to Cultivate (HGU) owned by PTPN III.
We have been provided with the land lease agreement between the Company and PTPN
III dated 3 December 2012 regarding the lease of land of land for the placement of the
Company’s treated water disposal pipeline.
Key terms under the agreement:
(1) Period of the agreement is 9 (nine) years and will expire on 3 May 2021
(2) Lease fee under the agreement is Rp 256,133,000 (inclusive Income Tax)
(1) Technical team to further clarify whether
the gold potential area is located in the
area overlaping PTPN III.
(2) We suggest putting a condition in the
offer letter that the overlaping with PTPN
III will have no change to business and
costs model of the company, in terms of
land compensation, cultivated trees
compensation etc.

Page 19 of 40
Ovelapping Issues
CONFIDENTIAL
(3) Restriction under the agreement:
(a) The Company shall not transfer, lease and/or put as security a part of the entire
HGU PTPN III land to the third party
(b) The Company is prohibited to change the area boundary mark
(c) The Company is not allowed to use the HGU PTPN II land for purpose other than
as agreed under the agreement
(d) The Company is prohibited to use the land for purpose that contradicts public
order and prevailing laws and regulations
(e) The Company is not allowed to store and/or stockpile fire weapons, ammunitions,
explosive materials or other hazardous objects on HGU PTPN III land.
The LDD Report also mentions that the Company has constructed transimission line (power
grid) on the land owned by PTPN III. PTPN III has consented the construction but no written
evidence.
Based on the Letter on the Letter from the Minister of State Owned Company dated 24
October 2016, we understand that PTPN III is currently under the process of transferring
the land on which the transmission line is constructed to PLN.
Geothermal Rights
We note that 81,780 ha of the Company CoW Area is overlapping with geothermal work
area of Sibual-Buali, in which is operated by Sarulla Operations Ltd.
The technical team of PAMA to confirm
whether there is gold potential within the
overlapping area with Sarulla area.

Page 20 of 40
Bank Facilities
CONFIDENTIAL
BANK FACILITIES REMARKS
21. Senior Facility Agreement The Company has entered into the following agreements:
A. PT XYZ Facility Agreement
The Parties has entered into US$425,000,000 term facility Senior Facility Agreement
dated 3 July 2017 by and between: (i) PT XYZ (Borrower), (ii) XYZ (Singapore) Pte.
Ltd. and Marlin Enterprise Limited (Original Guarantors), (iii) PT Bank Mandiri
(Persero) Tbk., Singapore Branch, Sumitomo Mitsui Banking Corporation (Arrengers),
Maybank Kim Eng Securities Pte. Ltd. and The Bank of Tokyo-Mitsubshi UFJ. Ltd.,
Singapore Branch (Agent), (iv) Sumitomo Mitsui Banking Corporation (Agent), and (v)
PT Bank Sumitomo MitsuPTia (Onshore Security Agent), Sumitomo Mitsui Banking
Corporation (Offshore Security Agent). The interest of the loan is LIBOR plus 3.7% per
annum for offshore lenders and LIBOR plus 4.2% per annum for onshore lenders.
B. Marlin Enterprise Limited Facility Agreement
The Parties has entered into US$135,000,000 term facility Senior Facility Agreement
dated 3 July 2017 by and between: (i) Marlin Enterprise Limited (Borrower), (ii) XYZ
(Singapore) Pte. Ltd. and the Company (Original Guarantors), (iii) PT Bank Mandiri
(Persero) Tbk., Singapore Branch, Sumitomo Mitsui Banking Corporation (Arrengers),
Maybank Kim Eng Securities Pte. Ltd. and The Bank of Tokyo-Mitsubshi UFJ. Ltd.,
Singapore Branch (Agent), (iv) Sumitomo Mitsui Banking Corporation (Agent), and (v)
PT Bank Sumitomo Mitsui Indonesia (Onshore Security Agent), Sumitomo Mitsui
Banking Corporation (Offshore Security Agent)
The Company’s SFA and Marlin’s SFA refinance debt facilities consisting of senior
and mezannie debts:
This refinance also cover USD25,000,000 working capital facility agreement provided
by PT Bank Mandiri (Persero) Tbk, Singapore branch.
N/A
22. Mandatory prepayment Under the Senior Facility Agreement (SFA), “Change of Control” will trigger mandatory
prepayment of the loan:
N/A

Page 21 of 40
Bank Facilities
CONFIDENTIAL
(i) Change of control in respect of Indonesian Sponsor
In case the Indonesian Sponsor (together) cease to hold, direcly or indirectly,
the legal and beneficial of at least 7% of the total issued share capital of the
Company:
• the Company must deliver written notification to the facility agent no less
than 30 days prior to any proposed sale, transfer, disposal or assignment
of any direct or indirect interest in the group to a Permitted Sponsor
Transferee together with all relevant details relating to the identity of any
such Permitted Sponsor Transferee. If such Permitted Sponsor Transferee
is likely to hold more than 10% of the total outstanding direct or indirect
interest in the Group, the Agent shall conduct “know your costumer”
checks; and
• The obligors or the sponsors must have procured that a replacement
Indonesian Sponsor(s) acceptable to the majority lenders becomes a direct
or indirect shareholder of the Company within a 90 days or 180 days.
(ii) Change of Control in respect of Sponsor (other than Indonesian Sponsor)
If any Sponsor (other than an Indonesian Sponsor) individually ceases to hold,
directly or indirectly, the legal and beneficial ownership of at least 10% of the
total issued share capital of the Company:
• the Company must promptly notify the facility agent upon becoming aware
of that event;
• Provided the Sponsors continue to (i) collectively hod, directly or indirectly,
the legal and beneficial ownership of at least 51% od the total issued
shares capital in the Company,or (ii) directly or indirectly control the
Company, the Company and the facility agent will renegotiate the required
amendment to the SFA within a 90-day period; and
• If within the 90-day period, the parties are unable to agree on the terms of
the amendment the facility agent based on instruction of the majority
lenders may request for mandatory prepayment of the loan.

Page 22 of 40
Bank Facilities
CONFIDENTIAL
Change of Control is:
(a) Marlin does not, or ceases to, directly hold the legal and beneficial ownership of all the issued
share capital of ARS;
(b) ARS does not, or ceases to, directly hold the legal and beneficial ownership of 95% of the
issued share capital of the Company;
(c) The Sponsors cease to collectively hold, directly or indirectly, the legal and beneficial
ownership of at least 51% of the total issued share capital of the Company, or to directly or
indirectly control the Company.
(d) Any Sponsor (other than any Indonesian Sponsor) individually ceases to hold, directly or
indirectly, the legal and beneficial ownership of at least 10% of the total issued share capital
of the Company; or
(e) The Indonesian Sponsors (together) cease to hold, directly or indirectly, the legal and
beneficial ownership of a least 7% of the total issued share capital of the Company.
Indonesian Sponsors means, collectively:
(i) Robert Budi Hartono and (ii) Michael Bambang Hartono, any other member of their
immediate family, or an entity wholly owned by any of them; and
(ii) Any other person approved by the facility agent (acting on the instructions of the majority
lenders)
Permitted Sponsor Transferee means any director indirect acquirer or transferee of shares from a
Sponsor.
Sponsor mens each of EMR Capital GP 1, Farallon Capital and the Indonesian Sponsor.
23. Negative pledge on the
Company’s assets
Unless permitted under the SFA, the Company, Marlin and ARS are not allowed to:
(a) Create any security interest over its present or future assets;
(b) Sell, transfer or otherwise dispose of any of its assets on terms whereby they are or
may be leased or re-acquired;
(c) Sell, transfer or otherwise dispose of any of its receivables on recourse terms;
N/A

Page 23 of 40
Bank Facilities
CONFIDENTIAL
(d) Enter into any arrangement under which money or the benfit of a bank ot other account
may be applied, set off or made subject to a combination of accounts;
(e) Enter into any other preferential arrangement having a similiar effecct; or
(f) Enter into a single transaction or a series of transactions (whether related or not) or
whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any
aset.
24. Prior written consent from
the Majority Lenders
The Company must obtain written consent from the majority lenders for:
(a) The amendment of its articles of association; or
(b) The entering into of any agreements or arrangements with regard to the shares of any
Obligor with any person whether in relation to voting arrangements or the beneficial or
economic ownership of such shares;
(c) Voluntarily relinquish all or any parts of the CoW area;
(d) Make any amendment of the CoW.
N/A
25. Existing Security and
Guarantees
The Company has provided the following securities under the SFA:
(a) ARS pledge of shares agreement
(b) Pledge over bank accounts
(c) Assignment for security puposes over contracts
(d) Fiducia security over insurance proceeds
(e) Fiducia security over movable assets
(f) Fiducia security over fixed assets
(g) Fiducia security over receivables
N/A

Page 24 of 40
Bank Facilities
CONFIDENTIAL
26. Restriction on Dividend
payment
Under the Cash and Account Management Agreement dated 3 July 2017 (“CAMA”), an
annual dividend is permitted for an amount equal to the grater of (i) USD4,000,000 and (ii)
20% of the aggregate amount of the excess cash flow in that calender year (Permitted
Annual Dividend). Further, a quarterly dividend is permitted so long as there is no breach
of any finansial covenants under the Company’s SFA in an amount equal to the greater of
(i) USD4,000,000 multiplied by a fraction based on the cash sweep dates for that calender
year and (ii) 20% of the amount standing to the kredit of the USD excess cash account at
that time minus any dividend payment to ANA (Permitted Quarterly Dividend).
The aggregate amount of the Permitted Quarterly Dividend in any calender year may not
exceed the Permitted Annual Dividend
N/A

Page 25 of 40 Sale and Purchase
Agreement
CONFIDENTIAL
SALE AND PURCHASE AGREEMENT REMARKS
27. Gold and Silver Sale and
Purchase Agreement
The Company and ICBC Standard Bank PLC entered into a sale and purchase agreement
for gold and silver on 9 April 2015 which has been amended by Gold and Silver Sale and
Purchase Amendment Agreement No. IS-PTAGR20150402 dated 16 April 2015. The
period of the agreement is 12 months and will be extended automatically unless the party
terminate the agreement.
Under the agreement, the Company shal provide a minimum quantity of 200,000 fine troy
ounces of gold and 1,000,000 fine troy ounces of silver (+/- 10%) per annum (or as
otherwise agreed in writing). If the Company is unable to reach minimum volume, then the
parties will extend the period for carrying out the Company’s obligation.
The purchase price shall be calculated as follows:
a. the quantity of goods (measured in fine troy ounces) multiplied by either the official
USD LBMA gold or silver price or USD Loco London spot bid price per fine troy ounce
for gold or silver (as applicable) (as agreed between the parties before the delivery of
goods.
b. For gold grains to be delivered to the Singapore delivery location, the purchase shall
be calculated as at the pricing date and subject to a deduction of USD0,20 (or
otherwise agreed in writing) per fine troy ounce delivered in each transaction.
c. For gold bullion bars to be delivered to the Singapore delivery location, the purchase
shall be calculated as at the pricing date and unless otherwise agreed in writing shall
not be subject to any deduction.
d. For silver to be delivered to the Singapore delivery location, the purchase shall be
calculated as at the pricing date and subject to a deduction of USD0,10 (or otherwise
agreed in writing) per fine troy ounce delivered in each transaction.
(1) Any party under the agreement may
terminate this agreement by giving
notification letter 1 (one) month prior to
the termination date.
(2) PAMA to confirm with the Company
whether the Gold and Silver Sale and
Purchase Agreement is extended or not
by the parties.

Page 26 of 40
Hedging
CONFIDENTIAL
HEDGING REMARKS
28. Hedging Agreement Under the Senior Facility Agreement, the Company must provide Hedging Letter.
Pursuant to Hedging Letter dated 3 July 2017 from the Company, the intentions and
obligations of the Company with regard to their hedging strategy are:
(1) Not to enter into any speculative Hedging Agreements in relation to any discretionary
hedging;
(2) Gold hedging
(3) Interest rate hedging
(4) Fuel price hedging
Related to the hedging obligations, we note that the Company has forward transaction
agreement with BNP Paribas commenced on 12 May 2014. The following are details of
the agreement:
Trade date : 12 May 2014
Forward Rate : 12020
Amount and Currency payale by Party A : IDR 18,030,000,000.00
Amount and Currency payale by Party B : USD 1,500,000
Settlement : Deliverable
Settlement Date: 14 August 2015
The Company also has several agreements related to the commodity hedging, as
follows:
1. Gold put options
Counterparty Number of
agreements
Hedging
period
Strike price
per ounce
(USD)
Total quantity
(ounces)
HSBC 2 1 March
2016 – 28
February
1,050 99,114
N/A

Page 27 of 40
Hedging
CONFIDENTIAL
2019
SMBC 4 1 March
2016 – 30
November
2019
1,050 – 1,600 57,764
Morgan
Stanley & Co
International
plc
16 1 March
2016 – 30
November
2019
1,050 – 1,100 241,801
Macquarie
Bank Limited
2 3 Juni
2016 – 30
November
2019
1,100 12,000
Goldman
Sachs
International
1 1
September
2016 – 30
November
2019
1,084 4,275
2. Gold forwards
agreement
s
Hedging
period
Strike price per
ounce (USD)
Total quantity
(ounces)
Maybank 1 1 April 2016
– 30
December
2019
1,248 5,229
HSBC 2 1 April 2016
– 28
February
2019
1,218 – 1,248 77,349

Page 28 of 40
Hedging
CONFIDENTIAL
3. Interest rate swaps
agreements
Hedging
period
Fixed interest
rate per annum
Total natioanl
amount (US
Dollars)
Maybank 4 3 May 2016
– 30 June
2019
0.71% - 1.29% 111,770,000
HSBC 1 3 May 2016
– 30 June
2019
0.71% - 1.29% 304,242,188
SMBC 2 31 March
2017 – 31
March
2018
1.04% 31,007,813

Page 29 of 40 Material Agreement
CONFIDENTIAL
MATERIAL AGREEMENT REMARKS
29. Mining Service Agreement The Company, PT Nusa Konstruksi Enjiniring and Machmahon Indonesia has entered into
Martabe Mining and Leasing Serives Contract 2015 dated 9 November 2015. The period of
such mining service is 5 years (January 2016 – 31 December 2020 (five years). Scope of
work of the contractor are provide mining and leasing services to develop and maintain the
mine, extract ore, mineralised waste and haul, stcokpile and rehandle ore from the mining
titles. With contract value is IDR. 2.289.112.614.543.
(1) Change control
Under Article 22.3 (d) of the Macmahon Mining and Leasing Services Contract, if (i)
there is a change of control in the Company, or (ii) the Company or its ultimate parent
company publicly announces a transacion likely to rsult in a change of control, the
Company is subject to the following obligations:
(a) The Company must advise PT Macmahon Mining Services of that event within 7
(seven) days (subject to any confidentially obligations that may apply to the
Company);
(b) Upon request from PT Macmahon Mining Services, the Company must provide such
further information as it reasonably can to allow the contractor to assess the impact
of the change of control in the Company’creditworthiness; and
(c) If PT Macmahon Mining Services forms the view (acting reasonably) that the
creditworthiness of the Company has decreased or will decrease as a result of the
change of control, then PT Macmahon Mining Services may request the Company
to provide a security (in a form and amount acceptable to PT Macmahon Mining
Services) which secures the performance of the Company’s obligations under the
Macmahon Mining and Leasing Services Contract. Once a request is made by PT
Macmahon Mining Services, the Company must provide such security within 14
days of the later of the date of request or the date where the relevant change of
control is confirmed.
Change of control in the Macmahon Mining and Leasing Services Contract is defined as
(1) The Company, PT Nusa Konstruksi
Enjiniring Tbk and PT Macmahon
Indonesia signed deed of novation
tranfering rights and obligations under
the agreement only to PT Macmahon
Indonesia.
(2) PAMA to consider evaluating this
contract as to the terms, costs efficiency,
projected business development etc. If
PAMA finds the terms of the
Machmahon contract do not fit its
business plan, PAMA needs to consider
termination / adjustment of the
Machmahon contract as condition to the
transaction.
(3) PAMA to communicate with PT
Macmahon Mining Services to
understand whether it will request a
security related to the credit worthiness
the company post acquisition

Page 30 of 40
Material Agreement
CONFIDENTIAL
the change or acquisition of direct or indirect (howsever far remove), control of : (i) the
composition of more than half of the members of any party’s BoD or BoC; or (ii) more
than half of the maximum number of votes that may be cast at as General Meeting of
Shareholders of any party; or (iii) more than half of the issued share capital of any party;
or (iv) the making of decisions by any party’s BoD or BoC.
(2) PT Agincourt must provide a security, if the contractors form the views (acting reasonbly)
that the creditworthness of PT XYZ has decreased or will decrease as a result of change
of control.
- Rise and Fall
The following costs for the provision of Mining and Leasing Service are subject to
rise and fall adjustment:
(1) Diesel fuel cost for the operation of contractor’s plant and equipment
(2) Spare parts and consumables costs for the operation of contractor’s plant and
equipment
(3) Explosives, explosive ingredients and explosive accesories costs
(4) Labour, supervision and management costs
(5) General materials and supplies subject to Indonesia CPI
(6) Truck tyre costs
- Early termination
PT XYZ at its sole discretion and for any reason may terminate this agreement, by
giving the contractor 60 days written notice in which case PT XYZ (without prejudice
to any other rights or remedies it has) must pay to the contractor early termination
amount within 30 days of the date of termination.
- Penalty
For the early termination, PT XYZ must pay compensation cost with the following
calculation:

Page 31 of 40
Material Agreement
CONFIDENTIAL
Period up to Amount (USD)
March 2016 19,822,468
Juni 2016 18,381,860
September 2016 17,413,069
December 2016 15,500,643
March 2017 15,947,307
Juni 2017 14,506,699
September 2017 13,537,909
December 2017 11,652,482
March 2018 12,072,146
Juni 2018 10,631,538
September 2018 9,662,748
December 2018 7,750,321
March 2019 8,196986
Juni 2019 6,756,377
September 2019 5,787,587
December 2019 3,875,161
March 2020 4,321,825
Juni 2020 2,881,217
September 2020 1,912,426
December 2020 Nil
30. Others Agreement (1) Service Agreement
The Company and Knight Piesol Pty. Ltd has entered into Service Agreement No. M-
13-014 on Tailing Storage Facility (TSF) Design, Construction Supervision and
Technical Review last amended by Amendment C dated 1 July 2017. The scope of
work is services related to provide consultancy services in relation to the tailings
management system. Under the last amendment, the period of service is 2 years (1
July 2017 – 30 June 2019). Pursuant to the agreements and its amendments, the
contract value is AUD 5,608,432.35. The following is cost estimates of scope of work
under the Amendment C:
N/A

Page 32 of 40
Material Agreement
CONFIDENTIAL
Activity Engineering
AUD
Disbursement
s
AUD
Total
AUD
DSU Meetings (Provisional) 18,000.00 5,540.00 23,540.00
Final Design and Documentation 93,950.00 5,040.00 98,990.00
Construction Supervision 1,660,020.00 187,632.00 1,847,652.00
Annual Technical Audit 42,600.00 7,310.00 49,910.00
Technical Support 97,160.00 3,708.00 100,868.00
Total AUD 2,120,960.00
(2) Power Plant
- Parties :
a. The Company; and
b. PT Bima Golden Powerindo (“BGP”)
- Contract duration : 1 November 2011 as lastly amended by variation order No. 9
dated 17 June 2016, has already been expired on 30 November 2017
- Description – supply, install and operate temporary power plant services –
lowlands/highlands.
- Value of contract USD 50.2 Mio
- Early Termination
The Company may at any time, in its absolute discretion, terminate this
Agreement by giving BGP not less than 30 (thirty) days’ prior notice to the effect

Page 33 of 40
Material Agreement
CONFIDENTIAL
- Penalty
The Company shall pay in the event of early termination to BGP:
a. All amounts due in respect of Services provided in accordance with their
agreement at the date of termination; and
b. The costs of materials properly ordered for the services but not incorporated
therein for which BGP has paid, or for which it is legally bound to pay.
31. Contract assigned for
security purposes in
favour of the finance
parties under the Facility
Agreement
The following contracts have been assigned by the Company for security purposes in favour
of the finance parties under the Finance Agreement:
(a) Macmahon Mining and Leasing Services Contract;
(b) Sodium Cyanide Supply Agreement dated 17 July 2011 No. SP1.1/2010 as
amended by variation agreement dated 18 December 2014 entered into between
the Company and Orica Limited;
(c) Sodium Cyanide Equipment/Hire Agreement entered unto in 2011 as amended by
variation agreement which is effective drom 1 December 2014 entered into and
between the Company and PT Indodrill Indonesia;
(d) Diamond Drilling No. M-15-051 dated 18 March 2016 as amended with an
amendment letter dated 25 Juni 2016 entered into between the Company and PT
Indodrill Indonesia;
(e) Diamond drilling Mp. M-15.052 dated 1 May 2016 entered into between the
Company and PT Promincon Indonesia;
(f) Services Agreement No. 2011-0112 dated 1 November 2011 as amended several
times lastly by variation order No. 9 dated 17 Juni 2016 entered intobetween the
Company and PT Bima Golden Powerindo;
(g) Services Agreement No. M-15-029 dated 16 December 2015 entered into between
the Company and PT Trans Continent;
N/A

Page 34 of 40
Material Agreement
CONFIDENTIAL
(h) Refining Agreement No. 896/2515/PLM/2016 dated 15 March 2017 entered into
between the Company and ANTAM;
(i) Sale and Purchase pf Gold and Silver No. IS-PTAGR 20150402 dated 16 April
2015 as amended on 18 May 2015 entered into between the Company and ICBC
Standard Bank Plc;
(j) Services Agreement for Concrete Bund Remediation and Chemical Resistant
Coating Installation Contract No. M-16-012 entered into between the Company and
PT Suprabakti Mandiri;
(k) Provisions of Domestik Feeder Services No. M-0003-16 entered into between the
Company and PT Trans Continent;
(l) Provisions of Transportation and Logistics Services No. M-0008-16 entered into
between the Company and PT Trans Continent;
(m) Supply and Delivery of Bio Diesel (B20) Contract No. M-0011-16 dated 1 November
2016 entered into between the Company and PT AKR Corporindo Tbk;
(n) Services Agreement for RefurbishmentARS Additional Tanks No. M-16-011
entered into between the Company and PT Suprabakti Mandiri; and
(o) Supply Goods Agreement for Supply and Delivery of Bio Diesel (B20) No. M-16-
001 dated 1 May 2015 as amended by amendment agreement dated 1 May 2017
entered into between the Company and PT Indra Angkola.
32. Expiring material contracts The following contracts are expiring by the end of 2017:
(a) Service Agreement No. 2011-0112 (Supply, Install and Operate Temporary Plant
Services Low land/Highlands) with PT Bima Golden Powerindo dated 1 November
2011 as lastly amended by variation order No. 9 date 17 Juni 2016 and expired on
30 November 2017;
N/A

Page 35 of 40
Material Agreement
CONFIDENTIAL
(b) Services Agreement No. M-16-012 (Concrete Bund Remediation and Chemical
Resistant Coating for the Martabe Gold Mine) with PT Suprabakti Mandiri
commencing from 1 August 2016 and expired on 3 December 2017;
(c) Services Agreement No. M-0003-16 (Provision of Domestik Feeder Services with
PT Trans Continent commencing from 15 December 2016 and expired on 14
December 2017;
(d) Supply Goods Agreement No. M-0011-16 (Supply and Delivery of Bio Diesel (B20))
with PT AKR Corporindo dated 1 November 2016 and expired on 31 October 2017;
(e) Services Agreement No. M-0013-005 (Security Services at Expatriate Residence)
with PT Nawakara Persada Nusantara dated 1 January 2013 as lastly amended by
Amendment E dated 22 August 2016 and expired on 31 December 2017;
(f) Services Agreement No. M-15-043 (Trades and Labour Hires for Conveyor Belt
Maintenance and Ribber Work) with PT Minindo Jaya dated 1 September 2015 as
lastly amended by Amendment A dated 28 August 2016 and expired on 31
September 2017;

Page 36 of 40 Independent Research
CONFIDENTIAL
INDEPENDENT RESEARCH REMARKS
33. Information of the
Company sourced based
on the independent
research
a. Industry Office of Tapanuli Regency
Pursuant to verbal information from staff of the Industry Office, we note that the
Company has tax dispute. The dispute is still going on in the tax court.
b. Local Development Planning Office of Tapanuli Selatan Regency
Pursuant to verbal information from staff of the Local Development Planning
Office, most of the mining concession of the Company located protected forest
and dry agriculture field (pertanian lahan kering). He further stated that there is
no plan of Tapanuli Selatan Regency to change its spatial planning.
c. Environment Office of Tapanuli Selatan Regency
Pursuant to Decree No. SK.2936 /Menlhk-PHLHK/PPSA/GKM.0/5/2017 dated 17
May 2017 (“SK 2936/2017”), the Company was imposed administrative sanctions
from the Ministry of Environment and Forestry for the following actions:
- the Company does not install flow meter and inappropriately set BSD point
in the dumping place;
- the Company does not monitor the wastewater disposal which come from
oil catcher workshop;
- the Company does not have leachate well (sumur pengumpul lindi)
according to the Decree of the Ministry of Environment and Forestry No.
Sk.611/Menlhk/Setjen/PLB.3/8/2016 on Hazardous and Toxic Waste
Management Permit for B3 storing activities in the facilities and tailing of PT
XYZ;
- the Company does not record the leachate volume which enter into Water
Disposal Processing Installation (Instalasi Pengolahan Air Limbah, IPAL);
N/A

Page 37 of 40
Independent Research
CONFIDENTIAL
- The leachate partially is reused by the Company fand the rest is disposed to
the environment;
- the Company disposes processing water of the tailing regardless the
provision under Decree of the Ministry of Environment and Forestry No.
Sk.611/Menlhk/Setjen/PLB.3/8/2016 on Hazardous and Toxic Waste
Management Permit for B3 storing activities in the facilities and tailing of PT
XYZ;
- the Company does not report change of leachate well location to the Ministry
of Environment and Forestry.

Page 38 of 40 Dispute
CONFIDENTIAL
DISPUTE REMARKS
34. Disputes We note that the Company was involved in several disputes, as follows:
a. Employment Disputes
The Company was involved in one sided termination of employment disputes with
Zulhadi Sadi and Indra Budiman which both parties had sign a settlement agreement
and registered by the signatories in the Industrial Relations Medan City District Court.
This settlement agreement is final and legally binding in which the Company must pay
a compensation for both employees for the amount of Rp. 942,146,579,- (nine hundred
forty two million one hundred forty six thousand five hundred seventy nine Rupiah)
b. Tax Disputes
We note that the Company is undergoing certain tax disputes, as follows:
a. Lawsuit against Tax Director General Decree No KEP-
02543/NKEB/WPJ.19/2016 dated June 29th, 2016;
b. Lawsuit against Tax Director General Decree No KEP-
c. Lawsuit against Tax Director General Decree No KEP-
d. Lawsuit against Tax Director General Decree No KEP-
02540/NKEB/WPJ.19/2016 dated June 29th, 2016.
We understand that all of the said lawsuits above is against Tax Director General
Decree to taxpayer No. 01.072.081.1-091.000 on behalf PT XYZ were rejected by
Jakarta Tax Court. To the merit of the Jakarta Tax Court, on May 9th, 2017, the
Company has submitted 4 (four) Judicial Review to the Supreme Court of the Republic
of Indonesia. We have not been provided with further documents in the VDR.
c. Land Dispute
N/A

Page 39 of 40
Dispute
CONFIDENTIAL
1. LDD Report mentions that from the weekly report ending 26 September 2014 that
there are several ongoing land claims or disputes over land which has been
acquired by the Company:
(a) Claim by Syawal Laiya in the Hutamosu area;
(b) Claim by Habonaran Siregar in the Aek Pahu area; and
(c) Land dispute with Masran and Marwan Harahap near Pelangi Camp.
Based on the LDD Report the parties have settled the cases amicably.
2. Lawsuits No. 22/Pdt.G/2016/Pn.Psp, submited to Padang Sidempuan District
Court on May 16th, 2016 between:
a. Berlian Pulungan (Plaintiff 1)
b. Seriya Pulungan (Plaintiff 2)
c. Megawati Pulungan (Plaintiff 3)
d. Hamdan pulungan (Plaintiff 4)
Against
a. PT XYZ (Defendant)
The case was rejected by the District Court of Padang Sidempuan, and the plaintiffs
has appealed to the High Court of Medan on 9 May 2017. We have not been
provided any information as to whether the Hight Court has issued any decision on
this case.
3. Lawsuits No. 145/Pdt.G/2015/Pn.Jkt.Pst, submited to Central Jakarta District
Court on April 10th, 2015 between:
a. Drs. Harun Pasaribu, AK, M.M. (Plaintiff)
Against

Page 40 of 40
Dispute
CONFIDENTIAL
a. The Government of the Republic of Indonesia C.q. Ministry of Forestry
(Defendant 1)
b. The Government of the Republic of Indonesia C.q. Ministry of Energy and
Mineral Resources (Defendant 2)
c. The Government of the Republic of Indonesia C.q. Ministry of Finance
(Defendant 3)
d. PT Teluk Nauli (Defendant 4)
e. PT XYZ (Defendant 5)
The case was rejected by the District Court of Jakarta Pusat and also by the High
Court of Jakarta. The plaintiff has appealed to the High Court of Jakarta High
Court under lawsuit No. 115/Pdt/2017/PT.DKI Jo. No. 145/Pdt.G/2016/PN.Jkt.Pst
dated May 9th, 2017. With the merit of the case was granted the appeal of plaintiff
and strenghtening the Central Jakarta District Court verdict.
The plaintiff has appealed to the Supreme Court and we understand that the case
is still on going.
4. Lawsuit No. 7/Pdt.G/2017/PN.Sbg submited to Sibolga District Court on February
17th, 2017 between:
a. Drs. Harun Pasaribu, AK. M.M (Plaintiff)
Against
a. President of the Republic of Indonesia (Defendant 1)
b. PT XYZ (Defendant 2)
c. PT Teluk Nauli (Defendant 3)
d. The Government of the Republic of Indonesia C.q. Ministry of Environment
and Forestry (Defendant 4)
e. The Government of the Republic of Indonesia C.q. Ministry of Energy and
Mineral Resources (Defendant 5)
f. The Government of the Republic of Indonesia C.q. Ministry of Finance
(Defendant 6)

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