PRIVILEGED & CONFIDENTIAL

Draft with suggested D&P edits 22 June 2014

Lubumbashi, on ..
Copy for information:

CONGO ENERGY SA
.

City of Lubumbashi
SNEL SA
Directorate General
Kinshasa
For the attention of Mr. Eric MBALA MUSANDA, Director-General
Subject: Notification of breaches in relation to a receivables pledge contract between SNEL SA
and CONGO ENERGY SA
Dear Director-General,
The Company TENKE FUNGURUME MINING (TFM) informs you that it has received a
notification by writ by a court officer on June 15, 2015 of a receivables pledge contract between
SNEL SA and CONGO ENERGY SA.
Under this contract and the provisions of the Uniform Act on the Organization of Securities, your
company has made a pledge on a receivable in the amount of $ 15,508,853.61 that it would hold
against TFM under the terms of the Contract between TFM and SNEL SA for the supply of highvoltage electricity. This pledge aims to guarantee the pre-financing by CONGO ENERGY SA of
the development of MV and LV electric networks in Katuba and Manono.
TFM has also received a letter dated June 17, 2015 from CONGO ENERGY SA indicating that,
under the pledge contract of May 8, 2015 between SNEL SA and CONGO ENERGY SA,
TENKE FUNGURUME MINING is now indebted to the pledged debt in the order of
$15,508,853.61. . . to the benefit of Congo Energy SA, secured creditor. . . Therefore, we ask
your company to perform its obligations to pay the amounts agreed on the agreed terms under
the pledge referenced above.
Our company hereby intends to notify the following breaches by SNEL SA of the contract of
December 5, 2006 between SNEL SA and TFM. TFM believes that such breaches are likely to
impede the execution of the pledge that SNEL SA signed with CONGO ENERGY SA on May 8,
2015.

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Pursuant to Article 20.4 of the Contract of December 5, 2006 for the supply of electric
energy, any assignment or security can only be achieved by mutual agreement of the
parties, namely SNEL SA and TFM. The receivables pledge contract with CONGO
ENERGY SA as of May 8, 2015 aims to achieve such assignment or security, yet TFM
has received no request for the agreement, and has given no agreement to this operation.
SNEL SA has thus breached its contractual obligations toward TFM.

On the notification of the pledge agreement of May 8, 2015 between SNEL SA and
CONGO ENERGY SA, TFM has learned of a previous pledge by SNEL SA of debts
arising under the contract of December 5, 2006. The pledge contract of May 8, 2015
states that [a] receivables pledge contract on claims from the same contract for the
Supply of Electrical Energy concluded with TFM currently exists between SNEL as
pledgor and Finance Concept Ltd, as pledgee, to be terminated by July 2015. TFM has
never received notification of SNEL SA of this receivables pledge contract by SNEL SA
and has not agreed to this operation. That SNEL SA has concluded a previous receivables
pledge contract with Finance Concept Ltd. also constitutes a breach of the Contract of 5
December 2006 with TFM.
The payment by TFM of amounts due to SNEL SA for the supply of electric energy is
followed by addendum No. 1 of the Contract for the supply of high-voltage energy of
December 5, 2006 between SNEL SA and TFM, which stipulates that the payment of the
invoice on Net Energy consumption will be allocated and deposited directly on the
authorized bank accounts of the SUPPLIER, opened and administered under the terms
agreed by the Parties in the Financing Agreements and the Maintenance Agreement.
Any agreement between SNEL SA AND CONGO ENERGY SA, under their receivables
pledge contract of May 8, 2015, which would have to oblige TFM to change the payment
terms agreed with SNEL SA would also be a breach by SNEL SA of the clauses of the
Contract of December 5, 2006 with TFM.

Article 20.5 of the Contract of December 5, 2006 was also breached. In fact, this article
organizes the general confidentiality of information exchanged for the purposes of the
Contract and even more so of the Contract itself, if not intended for the development and
operation of the project. Article 5(e) of the pledge violates this provision in that the
pledgor, SNEL SA, was obliged to CONGO ENERGY SA to hand over thereto any
securities or other documents supporting the pledged claims that it owns or that it has
come to hold for the duration of the Pledge Contract and any other securities or
documents relating thereto that comes into its possession. The Contract between SNEL
SA and TFM of December 5, 2006 was specifically followed by the parties to the pledge
contract of May 8, 2015 as these define the debt pledged as one, existing or future, that
the pledgor holds against TFM, the pledgee.

The above breaches of the Contract of December 5, 2006 between SNEL SA and TFM are
attributable to SNEL SA. TFM acknowledges and hereby notifies SNEL SA that said violations
are likely to make inaccurate representations and invalidate these representations and warranties
stipulated in the pledge contract it concluded with CONGO ENERGY SA, in particular Article
4(c) and 4(g).

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Furthermore, the existence of the receivables pledge contract between SNEL SA and CONGO
ENERGY SA, governed by the OHADA Uniform Act on Organization of Securities of
December 15, 2010, makes it necessary to examine the impact of the application of the OHADA
Act on the Contract of December 5, 2006 between SNEL SA and TFM, in accordance with its
Article 20.3. We are at your disposal to examine together the question pursuant to the provision.
This also applies as a notification of the events referred to herein, in accordance with Article 16.2
of the Contract for the supply of electric energy of 5 December 2006. TFM reserves all rights.
In hoping to hearing from you soon. I thank you for your kind attention to this matter.
Yours faithfully,
Claude Polet
Director-General

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