AuKing Mining Limited Prospectus

AuKing Mining Limited Solicitor’s Report on Tenements HopgoodGanim Lawyers Page 26 of 46 mining tenement is entitled. This establishes a priority of first in time so where there is an overlap between the Company’s Tenements and a third party tenement, the Company should be aware that its right on its Tenements may be limited by the rights of the third party especially if that third party has first in time priority. 5. Land Access and Compensation Pastoral Leases 5.1 As set out in paragraph 3.40 above, parts of various Tenements overlap with pastoral leases in Western Australia. The Mining Act provides that, unless overruled by the mining warden, the written consent of these lease holders will be required for the holders to gain access within ‘buffer zones’ around certain restricted sites (e.g. water bores, dams etc.) on these leases. 5.2 The holder of a Tenement cannot explore or mine on Crown land that is the subject of a pastoral lease ‘which is the site of, or is situated within 400m of the outer edge of, any water works, race, dam, well or bore, not being an excavation previously made and used for mining purposes by a person other than a lessee of that pastoral lease’ without the written consent of the occupier under the lease, unless permission is granted by the mining warden or mining is being carried out at least 30m underground (section 20(5) of the Mining Act). 5.3 However, the holder of the Tenements may pass within these areas for the purpose of gaining access to other land to conduct exploration activities (section 20(5a) of the Mining Act). 5.4 Before passing through the buffer zones the holder must: (a) take all reasonable and practicable steps to notify the occupier of his intention to access the areas; and (b) take all necessary steps to prevent fire and damage to property, livestock or trees, (section 20(5a)(c),(d)(i) of the Mining Act). 5.5 The holder must also keep inconvenience to the occupier and use of the area to a minimum, comply with any reasonable requests of the occupier, and make good any damage to improvements or livestock (section 20(5)(d)(ii),(iii),(e) and (f) of the Mining Act). Compensation will be due from the holder where any damage is not repaired by the holder (section 20(5a) of the Mining Act). Safety 5.6 The Mines Safety and Inspection Act 1994 (WA) ( MSIA ) seeks to ensure that the risk to health and safety of persons at a mine is at an acceptable level. 5.7 The MSIA imposes a duty on employers to, so far as is practicable, provide and maintain at a mine a working environment in which that employer’s employees are not exposed to hazards, are properly trained, instructed and supervised, and provided with protective equipment and clothing as required (section 9(1) of the MSIA). The employer will not avoid this duty simply by appointing a ‘manager’ at the mine (section 9(5) of the MSIA). Breaches of these duties may result in penalties for a corporation of a fine up to $500,000 for a first offence and $625,000 for a subsequent offence (sections 4A and 9A of the MSIA). 5.8 Other noteworthy aspects of the MSIA include that the MSIA still applies to contractors and employees of contractors as if they were employees of the principal who controls site. These obligations apply to exploration activities as well as mining activities. AuKing Mining Limited | PROSPECTUS 181