ORDER OF THE GOVERNMENT OF THE REPUBLIC OF KAZAKHSTAN

of March 24, 2022 No. 152

About approval of Rules (technique) of pricing on zolotosulfidny concentrate of double persistence with the increased arsenic content

According to the subitem 3) of Item 10 of article 10 of the Law of the Republic of Kazakhstan "About transfer pricing" the Government of the Republic of Kazakhstan DECIDES:

1. Approve the enclosed Rules (technique) of pricing on zolotosulfidny concentrate of double persistence with the increased arsenic content.

2. This resolution becomes effective after ten calendar days after day of its first official publication.

Approved by the Order of the Government of the Republic of Kazakhstan of March 24, 2022 No. 152

Governed (technique) of pricing on zolotosulfidny concentrate of double persistence with the increased arsenic content

1. General provisions

1. These rules (technique) of pricing on zolotosulfidny concentrate of double persistence with the increased arsenic content (further – Rules) are developed according to the Law of the Republic of Kazakhstan "About transfer pricing" (further – the Law) and establish procedure for pricing in case of realization of zolotosulfidny concentrate of double persistence with the increased content of arsenic on the international business transactions made according to contracts of purchase and sale of such concentrate.

2. Action of these rules extends to deliveries of concentrate in case of simultaneous accomplishment of the following conditions:

1) lack of possibility of metallurgical conversion of low-carbon and high-carbonaceous zolotosulfidny concentrate of double persistence with the increased content of arsenic in the territory of the Republic of Kazakhstan for achievement of 90% and above end-to-end extraction of gold from concentrate in the affined metal that is confirmed by the conclusions of the domestic scientific organizations in the field of mining, enrichment of ores, metallurgy of non-ferrous and rare metals;

2) at least 90% of the alloy of Dore received as a result of metallurgical conversion of the exported low-carbon zolotosulfidny concentrate of double persistence with the increased arsenic content are processed at domestic refineries (this condition is confirmed by the relevant act signed by the plant processor of low-carbon zolotosulfidny concentrate of double persistence with the increased content of the arsenic and domestic refinery, with obligatory specifying processed and received for refining of amount of alloy of Dore);

3) availability of written refusals of subjects of production of the precious metals included in the list of subjects of production of precious metals approved by the order of the Minister of investments and development of the Republic of Kazakhstan of March 30, 2016 No. 303 (it is registered in the register of state registration of regulatory legal acts for No. 13635), from conversion of low-carbon and high-carbonaceous zolotosulfidny concentrate of double persistence with the increased arsenic content.

3. In these rules the following terms and determinations are used:

1) troy ounce of gold – gold weight unit of measure, equal 31,1034768 of gram;

2) the quoted period – the pricing period, but no more than thirty one calendar consecutive day for which quotations of the prices at the exchange are published established in the contract for sales of goods (works, services) during which in accordance with the terms of the transaction the parties of the transaction determine arithmetic-mean value of arithmetic-mean daily quotations of the prices of the corresponding exchange goods (works, services), and also not exchange goods, the prices for which are tied to quotations on exchange goods;

3) high-carbonaceous zolotosulfidny concentrate – zolotosulfidny concentrate of double persistence with the increased arsenic content, Bakyrchik made in case of enrichment by method of flotation of gold-bearing ores of the field, the following chemical composition: content of Au – 50-90 gr. \t.; S general - 16-28%; As-of 5-10%; From organizational 4-10%;

4) dry metric ton of concentrate (further – SMT) – metric ton of weight (1 000 (one thousand) kilograms), not including moisture content;

5) zolotosulfidny concentrate of double persistence with the increased arsenic content – the high-carbonaceous or low-carbon concentrate received as a result of primary conversion of persistent gold-bearing ores;

6) transaction price – the final price of realization of concentrate under the relevant contract of purchase and sale expressed in dollars of the United States of America (further – US dollars) for SMT of concentrate and calculated according to provisions of these rules;

7) low-carbon zolotosulfidny concentrate – zolotosulfidny concentrate of double persistence with the increased arsenic content, Bakyrchik made in case of enrichment by method of flotation of gold-bearing ores of the field, the following chemical composition: content of Au – 93-190 gr. \t; S general - 16-34%; As-of 12-23%; With organizational 0,3-1,3 of %;

8) LBMA – London association of participants of the market of precious metals.

4. In these rules for determination of the price of gold the quotations of LBMA Gold Price available on the lbma.org.uk website and also published on official source of information, the Metal Bulletin magazine (Great Britain) are used.

5. For reduction of the price from information source in compliance with transaction price the price from source is adjusted by means of differential which components are documented and (or) sources of information.

For the purposes of these rules as differential it is understood, including the cost of conversion of zolotosulfidny concentrate of double persistence with the increased arsenic content (deduction for conversion) and the coefficient of extraction of chemically pure gold from concentrate expressed as percentage of paid gold in concentrate, applied to reduction in comparable economic terms of transaction or the prices from information source according to the Law.

2. Procedure for pricing in case of realization of low-carbon or high-carbonaceous zolotosulfidny concentrate of double persistence with the increased arsenic content

6. For contracts on purchase and sale of high-carbonaceous or low-carbon zolotosulfidny concentrate of double persistence with the increased arsenic content pricing is performed on the following formula:

transaction price = (With / 31,1034768) * C gold * To - TS

where:

With – content (final) chemically pure gold in high-carbonaceous and low-carbon zolotosulfidny concentrate of double persistence with the increased arsenic content (gold grams on one SMT of concentrate);

31,1034768 – conversion factor of troy ounces in gold grams;

C gold – the gold price (final) LBMA (morning and evening) published on web the website lbma.org.uk and average for the quoted period (final) determined in the contract of purchase and sale with the buyer in US dollars for one troy ounce of gold;

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