Merlin Project Agreement Ratification Act 1998 (Northern Territory)

Mechanically, the Merlin Project Agreement Ratification Act 1998 (NT) does three primary things. First, it ratifies and gives statutory force to the Merlin Project Agreement between the Northern Territory and Ashton Mining Limited by placing that Agreement in the Schedule and expressly authorising its implementation (s 4(1)-(2), Schedule cl 2). Second, it creates a bespoke security regime for the Merlin mineral lease and other land used for the Merlin Project, including the power for the Minister to declare "designated areas" and "controlled access points", to empower security officers (private security) with powers to control entry, search property and vehicles, detain persons and use reasonable force in particular circumstances, and to regulate entry conditions (ss 3, 6-11). Third, it alters the interplay of the Agreement with Territory law by making the Agreement operate according to its terms despite inconsistency with Territory Acts and by preventing later Territory Acts from amending or repealing Agreement provisions unless they expressly provide to do so (s 4(3)-(6)). The Act also permits a court to order specific performance against the Territory in relation to Agreement obligations in the same way as it could against a private subject (s 5).

The ratification locks in a set of commercial and regulatory arrangements captured in the Schedule, including royalty rules (modified Mineral Royalty Act application, Schedule cl 5), allocation of security responsibilities (Schedule cl 4), local content obligations (Schedule cl 7) and dispute resolution (Schedule cl 17). The Act subsequently clarifies how royalties are to be calculated in relation to GST (s 5A, inserted 2000), and delegates regulation-making power to the Administrator to prescribe operational and security details, including the physical infrastructure required, detention and search procedures, and penalties (s 15).

DEPARTMENT OF TREASURY AND FINANCE IS RESPONSIBLE FOR THE MERLIN PROJECT AGREEMENT RATIFICATION ACT 1998 (PROVISIONS ABOUT ROYALTIES) NORTHERN TERRITORY OF AUSTRALIA MERLIN PROJECT AGREEMENT RATIFICATION ACT 1998 As in force at 1 May 2016 Table of provisions Part 1 Preliminary 1 Short title ......................................................................................... 1 2 Commencement .............................................................................. 1 3 Definitions ........................................................................................ 1 Part 2 Ratification and authorisation of implementation of Agreement 4 Raftification of Agreement ............................................................... 2 5 Enforcement .................................................................................... 3 5A Calculation of royalties exclusive of GST ........................................ 3 Part 3 Security 6 Designated area .............................................................................. 3 7 Possessing uncut diamonds in designated area or mineral lease ................................................................................................ 4 8 Entering and leaving designated area ............................................. 4 9 Powers of security officers in designated area and mineral lease ................................................................................................ 7 10 Power to search vehices or property ............................................... 8 11 Detaining of persons in designated area or mineral lease ............... 8 12 Averments ..................................................................................... 11 13 Return of uncut diamonds.............................................................. 11 14 Protection of security officers and police ....................................... 12 15 Regulations.................................................................................... 12 Schedule ENDNOTES

Merlin Project Agreement Ratification Act 1998 ii

NORTHERN TERRITORY OF AUSTRALIA

As in force at 1 May 2016

MERLIN PROJECT AGREEMENT RATIFICATION ACT 1998 An Act to ratify an agreement between the Northern Territory of Australia and Ashton Mining Limited (A.C.N. 005 466 964) and to provide for security of diamonds produced from the Merlin Project Part 1 Preliminary 1 Short title This Act may be cited as the Merlin Project Agreement Ratification Act 1998. 2 Commencement This Act comes into operation on the date fixed by the Administrator by notice in the Gazette. 3 Definitions In this Act, unless the contrary intention appears: Agreement means the agreement between the Territory and the Company that is set out in the Schedule and includes the Agreement as varied from time to time in accordance with its provisions. authorised officer means a person who has a right to enter premises or land when exercising or performing his or her powers or functions under an Act, but does not include a member of the Police Force. Company has the same meaning as in the Agreement. Contractors has the same meaning as in the Agreement. controlled access point means an access point to a designated area declared to be a controlled access point under section 6. designated area means land or premises declared to be a designated area under section 6.

Part 2 Ratification and authorisation of implementation of Agreement Merlin Project Agreement Ratification Act 1998 2 Merlin Project has the same meaning as in the Agreement. mineral lease has the same meaning as in the Agreement and includes any mineral lease granted to the Company under clause 10 of the Agreement. property includes goods and articles of any kind. security officer means a person who is: (a) the holder of a security officer's licence granted under the Private Security Act 1995; and (b) employed by the Company or a Contractor. uncut diamond includes any crushed diamond, diamond dust, diamond fragment or partly cut or partly processed diamond. vehicle has the same meaning as in the Traffic Act 1987. Part 2 Ratification and authorisation of implementation of Agreement 4 Raftification of Agreement (1) The Agreement is ratified for the purposes of clause 2(1) of the Agreement. (2) The implementation of the Agreement is authorised. (3) The provisions of the Agreement operate and take effect according to their terms despite anything to the contrary in any Act or law in force in the Territory. (4) If a provision of the Agreement provides for an Act or law in force in the Territory to be modified, the Act or law operates and takes effect for the purposes of the Agreement as if the Act or law had been modified as provided for in the Agreement. (5) An Act passed after the commencement of this Act cannot amend, modify or repeal a provision of the Agreement or affect the operation of a provision of the Agreement unless the Act expressly provides accordingly. (6) The Territory, its Ministers, instrumentalities and authorities and any local government authority are authorised, empowered and required to do all things necessary or expedient to carrying out or give full effect to the Agreement.

Part 3 Security Merlin Project Agreement Ratification Act 1998 3 (7) Subject to this Act and the Agreement, the Company, its servants, agents and Contractors must observe and comply with all Acts or laws in force in the Territory applying in any way to the Merlin Project. 5 Enforcement (1) A decree of specific performance may be granted and enforced against the Territory in respect of its obligations under the Agreement in the same circumstances and on the same conditions as a decree of specific performance could be granted and enforced against a subject of the Crown. (2) Subsection (1) applies despite any Act or law in force in the Territory to the contrary. 5A Calculation of royalties exclusive of GST (1) For the purpose of calculating or recalculating an amount of royalty under clause 5 of the Agreement, subject to subsection (2), an amount or value that affects the calculation or recalculation is to be taken to be the amount or value exclusive of the amount of GST (if any) payable in relation to a supply to which that amount or value relates. (2) Where an amount or value that affects the calculation or recalculation referred to in subsection (1) is directly attributable to an acquisition that relates to a supply that is input taxed, the amount or value is to be taken to be the amount or value inclusive of the amount of GST (if any) payable in relation to the acquisition to which that amount or value relates. (3) For the purposes of section 4(5), the Agreement is to be taken to be amended to the extent necessary to give effect to subsections (1) and (2). (4) In subsections (1) and (2), acquisition, GST, input taxed and supply have the same respective meanings as in the A New Tax System (Goods and Services Tax) Act 1999 of the Commonwealth. Part 3 Security 6 Designated area (1) The Minister may declare land or premises in the Territory to be a designated area.

Part 3 Security Merlin Project Agreement Ratification Act 1998 4 (2) A declaration under subsection (1) is to be made: (a) by notice in the Gazette; and (b) only if the Minister is satisfied that diamonds are to be mined, treated, processed, sorted, stored or cut on the land or premises for the purposes of the Merlin Project. (3) The declaration is to define the boundaries of the land or the premises. (4) The Minister may, by notice in the Gazette, declare an access point to a designated area to be a controlled access point. (5) A declaration takes effect on the day it is published in the Gazette or on a later date that is specified in the declaration. 7 Possessing uncut diamonds in designated area or mineral lease (1) A person must not have an uncut diamond: (a) in his or her possession; or (b) under his or her control, in a designated area or the mineral lease without lawful authority or excuse. Maximum penalty: 170 penalty units or imprisonment for 2 years. (2) The burden of proving lawful authority or excuse lies on the person claiming it. 8 Entering and leaving designated area (1) A person must not: (a) enter or leave a designated area; (b) drive a vehicle into or out of a designated area; or (c) take or consign any property into or out of a designated area, other than through a controlled access point. Maximum penalty: 85 penalty units or imprisonment for 12 months.

Part 3 Security Merlin Project Agreement Ratification Act 1998 5 (2) A security officer may require a person: (a) who is entering or leaving a designated area – to stop; (b) driving a vehicle into or out of a designated area – to stop the vehicle; (c) taking or consigning property into or out of a designated area – to permit the security officer to examine the property. (3) A security officer may direct a person: (a) to enter or leave a designated area; (b) to drive a vehicle into or out of a designated area; or (c) to take or consign any property into or out of a designated area, through a controlled access point specified by the security officer. (4) A person must not: (a) enter a designated area; (b) drive a vehicle into a designated area; or (c) take or consign any property into a designated area, without the permission of a security officer who is on duty at a controlled access point. Maximum penalty: 8 penalty units. (5) A security officer who is on duty at a controlled access point: (a) may refuse a person permission to enter a designated area; and (b) is not required to give the person a reason for the person being refused permission to enter the designated area. (6) A security officer who is on duty at a controlled access point must not refuse a member of the Police Force who is acting in the course of his or her duty permission to enter a designated area unless the member fails to produce to the security officer evidence that the member: (a) is a member of the Police Force; or

Part 3 Security Merlin Project Agreement Ratification Act 1998 6 (b) has permission from the Company to enter the designated area. (7) A security officer who is on duty at a controlled access point must not refuse an authorised officer permission to enter a designated area unless the authorised officer fails to: (a) state his or her name and address; (b) state and provide evidence of his or her authority to enter the designated area; or (c) state the purpose for which he or she wishes to enter the designated area. (8) Before permitting a person to enter a designated area, a security officer who is on duty at a controlled access point may require the person to agree in writing to comply with the conditions of entry that the security officer considers necessary for the security of the designated area and of the operations, persons and property in the designated area. (9) The conditions may include that the person will allow a security officer to search: (a) the person (other than a search by way of an examination of his or her body cavities); (b) the person's vehicle or the vehicle the person is driving or is a passenger in; or (c) any property that is in the person's possession or under the person's control. (10) A person who contravenes or fails to comply with a direction given or a requirement imposed by a security officer under this section commits an offence. Maximum penalty: 85 penalty units or imprisonment for 12 months. (11) In subsection (8), a person does not include a member of the Police Force referred to in subsection (6) or an authorised officer referred to in subsection (7).

Part 3 Security Merlin Project Agreement Ratification Act 1998 7 9 Powers of security officers in designated area and mineral lease (1) A security officer may do any of the following in a designated area or the mineral lease: (a) direct a person (except a member of the Police Force) entering or in the designated area or mineral lease not to enter or remain in a part of the designated area or mineral lease specified by the security officer, either absolutely or unless he or she is accompanied by a security officer; (b) require a person in the designated area or mineral lease to stop or require a person driving a vehicle in the designated area or mineral lease to stop the vehicle; (c) require a person in the designated area or mineral lease to state: (i) his or her name and address; (ii) his or her authority for being in the designated area or mineral lease; or (iii) the purpose for which he or she is in the designated area or mineral lease; (d) direct or require a person entering or in the designated area or mineral lease to do anything that the security officer considers necessary for the security of the designated area or mineral lease and of the operations, persons and property in the designated area or mineral lease. (2) A security officer may require a person (except a member of the Police Force in the execution of his or her duty) who is in a designated area or the mineral lease to leave the designated area or mineral lease if: (a) the person contravenes or fails to comply with a direction given or requirement imposed under subsection (1); or (b) the security officer is not satisfied that a person has a need to remain in the designated area or mineral lease. (3) A person who fails without lawful authority or excuse to comply with a direction given or a requirement imposed under subsection (2) commits an offence. Maximum penalty: 8 penalty units.

Part 3 Security Merlin Project Agreement Ratification Act 1998 8 (4) The burden of proving lawful authority or excuse lies on the person claiming it. (5) A security officer may use reasonable force: (a) to stop a person who fails to comply with a direction given to or a requirement imposed on the person under this section; (b) to remove a person from a designated area or the mineral lease who fails to comply with a direction given to or a requirement imposed on the person under this section; (c) to remove a vehicle or other property from a designated area or the mineral lease; and (d) to enter a vehicle for the purpose of removing it under paragraph (c) or section 10(2)(b). 10 Power to search vehices or property (1) A security officer may search a vehicle or other property that is: (a) in the possession or under the control of a person in a designated area or the mineral lease; or (b) being driven, taken or consigned out of a designated area or the mineral lease. (2) For the purposes of subsection (1), the security officer may do the following: (a) dismantle the vehicle or other property; (b) take the vehicle or property to a place and detain it there pending the search or a further search. (3) In this section, property does not include clothing worn by a person. 11 Detaining of persons in designated area or mineral lease (1) A security officer may detain a person who is in a designated area or the mineral lease for a reasonable period if: (a) the security officer suspects that the person has an uncut diamond on his or her person or in his or her possession or under his or her control without lawful authority or excuse; (b) the security officer suspects that the person has stolen or is concealing an uncut diamond; or

Part 3 Security Merlin Project Agreement Ratification Act 1998 9 (c) the person does not have permission to be in the designated area or mineral lease. (2) As soon as practicable after a person is detained, the security officer must notify a member of the Police Force that the person has been detained. (3) The security officer must: (a) detain the person in a place set aside for that purpose in the designated area; and (b) deliver the person into the custody of a member of the Police Force as soon as practicable after the member arrives at the designated area or mineral lease. (4) Without limiting subsection (1)(b), a security officer has reasonable grounds for suspecting a person of stealing or concealing an uncut diamond if the person refuses to permit a search to be conducted after having agreed under section 8(8) to it being conducted. (5) A member of the Police Force may search a person who is detained under this section and any clothing worn by the person. (6) The search must be carried out by a member of the Police Force of the same sex as the person to be searched. (7) If it is not immediately practicable for subsection (6) to be complied with, the member of the Police Force: (a) may cause the search to be carried out under the direction of the member by a security officer of the same sex as the person to be searched; or (b) may: (i) detain the person until the search can be conducted by a member of the same sex as the person to be searched; or (ii) take the person to a place where the search can be conducted by a member of the same sex as the person to be searched. (8) Subsections (5) and (7) do not authorise a search of a person by way of an examination of the body cavities of the person by the member of the Police Force or security officer conducting the search.

Part 3 Security Merlin Project Agreement Ratification Act 1998 10 (9) However, a member of the Police Force may arrange for a medical practitioner nominated by the member to examine the body cavities of a person detained under this section. (10) The examination by a medical practitioner can only be conducted if: (a) the person consents in writing to it being conducted; or (b) a Local Court Judge approves it being conducted. (11) The member of the Police Force may apply to a Local Court Judge for the approval in person or by telephone. (12) The Local Court Judge may approve the examination being conducted if he or she is satisfied that the examination may provide evidence of an offence. (13) For the purposes of subsection (9), the member of the Police Force may: (a) detain the person until the medical practitioner conducts the examination; or (b) take the person to a place where the medical practitioner will conduct the examination. (14) The examination by the medical practitioner is to be conducted: (a) in the presence of a member of the Police Force of the same sex as the person to be examined; or (b) if that is not immediately practicable – in the presence of a security officer of the same sex as the person to be examined. (15) A member of the Police Force may use reasonable force, and may call on any assistance that he or she considers necessary, in order: (a) to detain a person under this section; (b) to carry out a search under this section; or (c) to facilitate a search or examination being carried under this section. (16) A person must not: (a) resist being detained under this section;

Part 3 Security Merlin Project Agreement Ratification Act 1998 11 (b) escape or attempt to escape: (i) from a place where he or she is being detained under this section; or (ii) from the custody of a member of the Police Force or a security officer; (c) obstruct or hinder a member of the Police Force or a security officer who is carrying out a search under this section; or (d) obstruct or hinder a medical practitioner who is carrying out an examination under this section. Maximum penalty: 170 penalty units or imprisonment for 2 years. (17) A medical practitioner is authorised to carry out an examination of the body cavities of a person under this section. (18) No action lies against a medical practitioner for anything reasonably done by him or her for the purposes of the examination. (19) The burden of proving lawful authority or excuse in subsection (1)(a) lies on the person claiming it. 12 Averments In a prosecution for an offence against this Act, an averment in the complaint that: (a) the place where the offence is alleged to have occurred was, or was in, a designated area or the mineral lease; (b) a place was a controlled access point for a specified purpose; or (c) a person was at a material time a security officer, is to be taken to have been proved in the absence of proof to the contrary. 13 Return of uncut diamonds (1) On finding a person guilty of an offence committed within a designated area or the mineral lease and involving the stealing, receiving or possession of uncut diamonds, a court must order the uncut diamonds to be delivered to the Company.

Part 3 Security Merlin Project Agreement Ratification Act 1998 12 (2) Subsection (1) applies: (a) to an offence under this or any other Act; and (b) notwithstanding any other law or Act. 14 Protection of security officers and police A security officer or member of the Police Force cannot be charged with or be found guilty of an offence of obstructing or hindering a person in exercising a power or performing a function conferred on the person under an Act or law in force in the Territory in respect of anything done by the security officer or member in exercising a power or performing a function under this Act. 15 Regulations (1) The Administrator may make regulations, not inconsistent with this Act, prescribing all matters: (a) required or permitted by this Act to be prescribed; or (b) necessary or convenient to be prescribed for carrying out or giving effect to this Act. (2) Without limiting subsection (1), the Regulations may: (a) require the Company to erect and maintain fences, walls and other physical barriers around a designated area in accordance with the Regulations; (b) require the Company to provide and designate places in accordance with the Regulations for: (i) persons to enter and leave a designated area; (ii) vehicles to be driven into and out of a designated area; and (iii) taking or consigning of property into and out of a designated area; (c) require the Company to erect and maintain notices and signs at or near the perimeter of a designated area in accordance with the Regulations; (d) prohibit the damaging, defacing, removal or destruction of fences, barriers, signs and notices erected under the Regulations;

Part 3 Security Merlin Project Agreement Ratification Act 1998 13 (e) regulate how persons are to be detained under the Act and, in particular, requiring that areas or places be set aside in designated areas to detain persons; (f) regulate how searches and examinations of persons are to be carried out under this Act; (g) regulate how any vehicle and property detained under this Act is to be searched and stored; (h) provide for offences, including regulatory offences, against the Regulations; (j) provide for penalties of not more than 85 penalty units for offences against the Regulations. (3) The Regulations may be made to apply: (a) generally or in a particular class of case or particular classes of cases; (b) at all times or at specified time or specified times; or (c) to all designated areas or to a specified designated area or specified designated areas. (4) The Regulations may be made to require a matter affected by the Regulations to be: (a) in accordance with a specified standard or requirement; or (b) as approved by, or to the satisfaction of, a specified person or body or a specified class of person or body. (5) The Regulations may confer a discretionary authority on a specified person or body or a specified class of persons or bodies.

Schedule Merlin Project Agreement Ratification Act 1998 14 Schedule section 4 THE NORTHERN TERRITORY OF AUSTRALIA MERLIN PROJECT AGREEMENT THIS AGREEMENT is made the 12th day of October 1998 BETWEEN: The NORTHERN TERRITORY OF AUSTRALIA care of the Department of Mines and Energy of Paspalis Centrepoint Building, Smith Street, Darwin 0800 in the Northern Territory of Australia (the Territory) AND: ASHTON MINING LIMITED (A.C.N. 005 466 964) whose registered office is situated at Level 4, 441 St Kilda Road, Melbourne 3000 in the State of Victoria (the Company) WHEREAS: A. In 1992, the Company discovered diamond bearing kimberlites called the Merlin prospect in the Boomerang Creek District in the Northern Territory of Australia. B. On 19 December 1996, the Company made application for the grant of a mineral lease known as MLN 1154 for the mining of diamond bearing ore in the Boomerang Creek District. The lease was granted on 15 June 1998. C. The Company wishes to commence development of the Merlin Project. D. The Parties wish to enter into this Agreement in respect of the Merlin Project for the purposes of:– (a) facilitating the development, construction and operation of the Merlin Project; (b) ensuring that adequate security procedures are in place in respect of the Merlin Project; and (c) dealing with the manner in which royalties are to be calculated and paid to the Territory in respect of the Merlin Project.

Schedule Merlin Project Agreement Ratification Act 1998 15 NOW THIS AGREEMENT WITNESSES as follows:

Definitions and Interpretation (1) In this Agreement, unless the contrary intention appears: Agreement means this Agreement as varied from time to time. Contractors includes Sub-Contractors. Merlin Project means the project to be developed by the Company for the purposes of the mining and processing of diamond bearing ore to enable the recovery of diamonds, and all related activities on the mineral lease. mineral lease means mineral lease N1154 granted to the Company on 15 June 1998, and includes any renewal or replacement lease in respect of the whole or part of the original area of the mineral lease. Mortgage means any mortgage, charge, assignment, encumbrance or other dealing by way of security provided in relation to finance and facilities arranged for the purpose of developing or operating the Merlin Project. ore means ore known as kimberlite containing diamonds together with any associated minerals which must necessarily be mined in conjunction with the kimberlite. Services means the services of engineers, surveyors, architects and other professional consultants, experts and specialists, project managers, manufacturers, wholesalers, retailers, suppliers and Contractors and includes any other service necessary or incidental to the construction, continued operation or care and maintenance of the Merlin Project. (2) This Agreement shall be interpreted in accordance with the Interpretation Act 1978 as if it were a document subject to interpretation in accordance with that Act.
Ratification by Parliament (1) This Agreement, other than subclause (2) (which shall commence on the date this Agreement is signed by all parties), shall have no force or effect and shall not be binding on any party unless and until it is signed by all parties and ratified by the Legislative Assembly of the Northern Territory of Australia, with the assent as provided by the Northern Territory (Self Government) Act 1978 (Commonwealth).

Schedule Merlin Project Agreement Ratification Act 1998 16 (2) The Territory shall take all necessary action to have submitted to the Legislative Assembly at the earliest practicable date a Bill for an Act to ratify this Agreement. 3. Term This Agreement shall commence on the date that it has been ratified in accordance with clause 2 and shall continue for the term of the mineral lease unless the Agreement is terminated earlier in accordance with the terms of this Agreement. 4. Security (1) The Territory shall enact and maintain legislation to give effect to any agreement between the Territory and the Company for the provision of security for the Merlin Project. (2) In order to give effect to the security provisions, the Territory shall, at its discretion, make available such personnel as it considers appropriate from the Northern Territory Police Force Gold Squad. Nothing in this provision shall require the Territory to meet the cost of any personnel or medical practitioners required for the implementation of the security provisions other than the provision of Northern Territory Police Force personnel. (3) The Company shall enter into an arrangement with the Northern Territory Minerals Council to provide a contribution to the costs of any assistance provided by the Northern Territory Police Force Gold Squad. 5. Royalty under Mineral Royalty Act 1982 (1) The Company shall not, by virtue only of this Agreement, be exempt from rent, royalty, duties, fees, levies, taxes or any other impost except as may be provided in this clause 5. (2) Royalty shall be payable in respect of the Merlin Project in accordance with the provisions of the Mineral Royalty Act 1982, and, for the purpose of calculating such royalty, the Mineral Royalty Act 1982 is modified to the extent necessary to give effect to this clause. (3) For the purposes only of determining gross realization and operating costs in respect of the Merlin Project: (a) the production unit is to be treated as though it includes the treatment and sorting facility or facilities at Perth in the State of Western Australia used by the Company for the purposes of the Merlin Project; and

Schedule Merlin Project Agreement Ratification Act 1998 17 (b) the saleable mineral commodity is to be deemed to have left the production unit at the time that treatment and sorting at the treatment and sorting facility or facilities at Perth are complete. The Company shall, within twenty-eight (28) days of commencement of this Agreement, and within twenty-eight (28) days of any change, notify the Territory in writing of the address of the facility or facilities used by the Company for the purposes of the Merlin Project in Perth, Western Australia. (4) The Company shall effect and keep in force a policy of insurance in respect of any theft, destruction or any other losses of mineral commodity for the period from the date that the mineral commodity leaves the mineral lease until the saleable mineral commodity is sold, or valued for the purposes of subclause 5(i). The Company shall: (i) when reasonably required by the Territory to do so, provide evidence of the currency of the insurance required under this sub-clause; (ii) not do or omit to do or permit to be done or omitted any act whereby any insurance required under this sub- clause may be rendered void or voidable; (iii) indemnify the Territory against all losses and damages suffered by the Territory as a result of a breach by the Company of this sub-clause. (5) Where there has been a removal without sale of a saleable mineral commodity from the production unit for the Merlin Project, then the value of that saleable mineral commodity for the purposes of section 4A(3) of the Mineral Royalty Act 1982 shall be as follows: (i) where the Company has nominated in writing to the Territory that saleable mineral commodity is to be withheld from sale by the Company, the value shall be the value attributed to such saleable mineral commodity by an independent Valuer appointed by the Territory. The Territory shall appoint a Valuer for the purposes of conducting a valuation in accordance with this subclause within 30 days of receipt of notification by the Company that saleable mineral commodity is to be withheld from sale. In the event that the Territory fails to appoint a Valuer within 30 days, the Company may appoint the Valuer. For the purpose of allowing the valuation to be conducted, the Company shall ensure that no cutting or polishing or further treatment of the saleable mineral

Schedule Merlin Project Agreement Ratification Act 1998 18 commodity is undertaken until such time as the Territory has notified the Company in writing that the valuation has been completed. The costs of any valuations conducted under this sub-clause shall be shared equally by the Territory and the Company ; (ii) in every other case, the value of the saleable mineral commodity shall be calculated in accordance with the following formula: GR = SP + EV – EV(previous year) + AOP where: GR is the value of the saleable mineral commodity for royalty purposes; SP is the sum of: (A) the sales proceeds, received or receivable by the Company for all arms length sales of saleable mineral commodity made during the royalty year, calculated in Australian Dollars, and, where any sales take place in another currency, calculated by reference to the Reserve Bank of Australia representative rate for the date of the sale; and (B) the value (calculated in the same manner as a valuation for the purpose of sub-clause (5)(i)) of the saleable mineral commodity sold during the royalty year in any non arms-length transactions; EV is the value, in Australian Dollars, attributed by the Company to the saleable mineral commodity removed from the production unit without sale and on hand at the end of the royalty year, being the value which the Company estimates is equal to the amount for which the Company could sell the saleable mineral commodity on the open market on the last day of the royalty year; EV (previous year) is the EV amount used in the GR calculation for the previous year; and AOP is: (A) the value of any saleable mineral commodity removed from the production unit without sale and not sold during the royalty year, nor on hand at the end of the royalty year, which value shall be the amount equivalent to the price which would have

Schedule Merlin Project Agreement Ratification Act 1998 19 been received for the saleable mineral commodity on the open market; less (B) the amount included in AOP in any previous royalty year in respect of any saleable mineral commodity where the sales proceeds for that saleable mineral commodity are included in the SP calculation in the current royalty year and the result may be a negative amount. For the purpose of this subclause, on hand includes in the possession of a sales agent and a transport carrier. (6) Words used in this clause and defined in the Mineral Royalty Act 1982 have the same meaning as in that Act for the purposes of this clause, and this clause is to be interpreted as though it were part of that Act. (7) The Mineral Royalty Act 1982 shall apply to this clause as though this clause were part of that Act. 6. Infrastructure (1) The Territory shall use its best endeavours to comply with any request by the Company for the issue of any necessary consents, permits, licences, easements, rights of way, approvals or mining tenements to allow construction, maintenance and operation of all infrastructure and facilities which the Company determines are required for the Merlin Project. (2) Nothing in this clause shall require the Territory to take any action which might be required as a pre-requisite to the issue of such consent, permits, licences, easements, rights of way, approvals or mining tenements pursuant to the Native Title Act 1993 of the Commonwealth or any Territory legislation relating to native title. (3) Nothing in this Agreement shall require the Territory to provide any infrastructure or facilities for the Merlin Project including construction and maintenance of roads, tracks and highways, provision of electricity, water or gas supply and electronic communication facilities. (4) Nothing in this Agreement shall entitle the Territory to require the provision by the Company of any infrastructure or facilities including construction and maintenance of roads, tracks and highways, provision of electricity, water or gas supply and electronic communication facilities.

Schedule Merlin Project Agreement Ratification Act 1998 20 7. Use of Professional Services, Labour and Materials (1) The Company shall, for the purposes of the Merlin Project, use its best endeavours to: (a) use for labour those persons available within the Northern Territory with suitable qualifications, skills and experience; (b) use Services providers located and available within the Northern Territory who are competent and capable to provide those Services, or if such Services are not available within the Northern Territory then as far as practical use Services otherwise available within Australia; (c) when preparing specifications, calling for tenders and letting contracts for works, materials, plant, equipment and supplies, ensure that the Services providers within the Northern Territory are given a reasonable opportunity to tender or quote; (d) give, and require the Contractors of the Company to give, preference to workers and Services providers within the Northern Territory when letting contracts or placing orders for works, materials, plant, equipment and supplies where price, quality, delivery, service and compliance with safety and environmental requirements are equal to or better than that obtainable elsewhere and where the workers have suitable qualifications, skills and experience; and (e) consult with, and have regard to any advice provided by, the Northern Territory Industry Search and Opportunities Office on the manner in which local participation in the Merlin Project can be maximised. (2) The Company shall, when requested in writing by the Territory Minister with responsibility for the Mining Act to do so (such request not to be made more frequently than annually) submit a written report detailing: (a) the Company’s actual expenditure on Services providers and labour in the Northern Territory compared with the Company’s Australian and overseas expenditure on Services providers for the purpose of the Merlin Project; (b) the Services providers who are located in the Northern Territory and who have supplied goods and Services for the purposes of the Merlin Project;

Schedule Merlin Project Agreement Ratification Act 1998 21 (c) the consultations with, and advice provided by, the Northern Territory Industry Search and Opportunities Office, and the extent to which such advice has been followed by the Company; and (d) an explanation of why labour and Services have been sourced from outside the Northern Territory, and details of the opportunities that have been provided to Services providers within the Northern Territory to bid for such Services, and shall use its best endeavours to provide similar information concerning the compliance of any Contractors with paragraph (1)(d) of this clause. 8. Non-Discrimination (1) Except as provided by this Agreement and section 64 of the Mining Act, the Territory must not impose or allow its instrumentalities or authorities, or any local government authority to impose discriminatory taxes, rates or charges on or in respect of the activities of the Company, its agents or Contractors in respect of the Merlin Project, including but without limitation charges or levies related to the maintenance of the Carpentaria Highway and provisions of signs thereon in the vicinity of the Merlin Project. (2) The Territory must not take, or permit to be taken, any other discriminatory action which would deprive the Company of full enjoyment of the rights granted or to be granted under this Agreement, provided that nothing in this subclause shall prevent the Territory, its servants and agents, from taking any lawful action under a law in force in the Territory relating to the protection, conservation or rehabilitation of the environment as provided for by the Mining Act and the mineral lease. 9. Finance (1) The Company shall notify the Territory of the name, address, telephone and facsimile numbers of any party which has the benefit of a Mortgage: (a) upon execution of this Agreement; (b) within fourteen (14) days of the date of any additional Mortgage: and (c) within fourteen (14) days of any change in such details.

Schedule Merlin Project Agreement Ratification Act 1998 22 (2) The Territory shall, if it gives a notice, request or demand to the Company under this Agreement, concerning other than routine matters, provide to a party which has the benefit of a Mortgage a copy of that notice, request or demand. (3) It is agreed between the parties that such notice or written statement provided by the Territory to the Company shall in no way affect the Territory’s remedies at law against the Company. (4) A party which has the benefit of a Mortgage shall not be liable for the Company’s operation of the Merlin Project or for the performance of any of the Company’s obligations under this Agreement provided that where pursuant to any Mortgage such a party conveys to itself an interest in a mineral lease and the Merlin Project or otherwise assumes liabilities of the Company in respect of the Merlin Project, such party may then become so liable to the extent of the interest so conveyed or the liability so assumed. 10. Application of Agreement to further Mineral Leases (1) The terms of this Agreement shall apply, to the extent that it is possible, to any further mineral lease granted to the Company for the mining of diamond bearing ore where the whole or part of the processing of that ore takes place at the mill established or to be established within Mineral Lease N1154, provided that at least part of each such mineral lease is not further than 100 kilometres from a point on the boundary of Mineral Lease N1154. (2) In the event that this Agreement has application to another mineral lease or mineral leases by operation of subclause (1), the definition of "mineral lease" in clause 1 of this Agreement shall be read so as to include the further mineral lease or further mineral leases. (3) In the event that this Agreement has application to another mineral lease or mineral leases by operation of subclause (1), the Territory shall amend the legislation enacted in accordance with clause 4 hereof so that it has application to the further mineral lease or further mineral leases. 11. Variation (1) The parties may vary this Agreement by further agreement in writing signed by the Territory and the Company. (2) The Territory must cause any further agreement made pursuant to this clause to be laid before the Legislative Assembly at the next sitting of the Legislative Assembly.

Schedule Merlin Project Agreement Ratification Act 1998 23 (3) The Legislative Assembly may, within ten (10) full sitting days including the day upon which the further agreement was laid before it, pass a resolution disallowing the further agreement, but if after the last day in which the further agreement might have been disallowed, the Legislative Assembly has not passed such a resolution, the further agreement shall have effect from and after that last day. 12. No Assignment (1) The Company must not assign its rights or obligations under this Agreement or any of them without the prior written consent of the Territory, which consent shall not be unreasonably withheld. (2) The Company may mortgage, charge or encumber the mineral lease and the Minister must consent to that mortgage, charge or encumbrance for the purposes of the Mining Act, provided that the consent of the Territory shall be required under subclause (1) for any subsequent sale or transfer by the mortgagee, charge, or encumbrancee exercising its power under the mortgage, charge or encumbrance. (3) Nothing in this Agreement shall operate to restrict the ability of the Company to mortgage, charge, encumber or sell or assign the mineral lease. 13. Power to Vary Periods Notwithstanding any provision in this Agreement, the Territory may in writing at the request of the Company vary any period in this Agreement whether or not the period to be varied has expired. 14. Force Majeure (1) Subject to this clause, the time for the performance of any obligation of this Agreement or the mineral lease, except an obligation to pay money, which performance is delayed by circumstances beyond the reasonable control of the party responsible for the performance of such obligation, shall be extended by the period of the delay but no longer and, subject to subclauses (2) and (3), the party shall not be liable in damages to the other nor shall any action, claim or demand be taken or made against a party by reason solely of such delay in the performance of such obligation in circumstances beyond the reasonable control of that party. (2) The party responsible for the performance of any such obligation shall use all reasonable diligence to remove the said circumstances and minimise the effects of the said circumstances as soon as is reasonably practicable after notice of the same shall have come to

Schedule Merlin Project Agreement Ratification Act 1998 24 its attention save and except that the settlement of any strike, lock out or any other industrial dispute shall be entirely in the discretion of any party directly concerned therewith and nothing herein shall require the settlement thereof by acceding to the demands of the opposing party or parties where such settlement is considered inadvisable in the absolute discretion of the party so concerned. (3) A party shall as soon as reasonably practicable give notice to the other party of: (i) each event alleged to constitute circumstances beyond its reasonable control; (ii) any delay in the performance of any obligation of this Agreement and the mineral lease; (iii) the likely duration of the delay; and (iv) the cessation of the circumstances. (4) In this clause, the expression circumstances beyond the reasonable control shall include, without limitation, earthquakes, floods, storms, tempests, cyclones, wash-aways, fires not caused by the wilful default or gross negligence of the party responsible for such performance, acts of God, acts of war, acts of public enemies, riots and civil commotions, strikes, lock-outs, bans, go slow activity, stoppages, restraints of labour or other similar acts (whether partial or entire), acts or omissions of the Commonwealth or any instrumentality of the Commonwealth (whether legislative, executive, or administrative) or any other government or governmental authority or instrumentality or any local government authority (whether legislative, executive or administrative) shortages of labour or of essential materials, reasonable inability to obtain contractors or retain contractors, delays of contractors, actual or reasonably forecast inability to profitably sell the diamonds, delays or restrictions on the remittance or provision of funds to a party, inability or delay in obtaining any government or local government authority approval, permit or licence or any other cause whether of a kind specifically enumerated above or otherwise which is not reasonably within the control of the party delayed. 15. Termination (1) In the event that the Company: (a) is in default in the due and punctual performance or observance of any of the provisions in this Agreement, which default the Territory reasonably considers material;

Schedule Merlin Project Agreement Ratification Act 1998 25 (b) subject to clause 14 abandons the Merlin Project and does not resume operations on the Merlin Project and for the purposes of this provision, abandons shall include placing the Merlin Project on a care and maintenance basis for a period of more than three (3) years or a number of periods which total more than three (3) years, provided that the Territory may in writing at its discretion extend that period of three (3) years; or (c) repudiates any obligation the Territory reasonably considers material under this Agreement, the Territory may give notice in writing to the Company requiring the Company to remedy that default or to pay to the Territory such sum as is specified in the notice, being a sum which, in the opinion of the Territory, is adequate to compensate the Territory, its servants, agents, contractors, instrumentalities, authorities and any relevant local government authorities for that default. (2) If within 150 days of the said notice the Company has neither rectified the default nor paid compensation in accordance with the notice, the Territory may terminate this Agreement by giving not less than 30 days written notice to the Company. Provided that if the Company, upon receipt of the notice referred to in subclause (1) promptly commences to use and continues to use its best endeavours to remedy the default, the Minister shall extend the notice period for such further period as is reasonably necessary to remedy the default. Provided further that if the Company has given the Territory a notice in accordance with clause 17 of this Agreement, and such notice has been given not less than 90 days after the notice referred to in subclause (1), the Territory shall not give the Company a notice of termination under sub-clause (2) until the dispute resolution process in clause 17 has terminated. (3) The Territory may terminate this Agreement by giving not less than ninety (90) days notice in writing to the Company if the Company goes into liquidation (other than voluntary liquidation for the purposes of reconstruction) and the Agreement shall terminate at the expiration of that ninety (90) day period unless within that period the interest of the Company in this Agreement is assigned to an assignee approved in writing by the Territory.

Schedule Merlin Project Agreement Ratification Act 1998 26 (4) The Company may terminate this Agreement by giving not less than one hundred and eighty (180) days notice in writing to the Territory in the event that the Territory:– (a) is in default in the due and punctual performance or observance of the provisions in this Agreement, which default the Company reasonably considers material and which has not been remedied within that notice period; (b) enacts legislation which significantly increases the obligations of the Company in relation to the Merlin Project; or (c) enacts legislation which significantly diminishes:– (i) the rights of the Company; or (ii) the profitability of the Merlin Project; and this Agreement shall terminate upon the expiration of that notice period unless such default has been sooner remedied, or unless such legislation has been sooner repealed. (5) Notice given pursuant to this clause shall specify the nature of the default or the ground entitling the party to exercise such right of termination. (6) A party who has the benefit of a Mortgage shall be entitled but not obliged to rectify the default within the relevant notice period. (7) This Agreement may be terminated at any time by agreement in writing signed by the Territory and the Company. 16. Effects of Termination (1) On termination of this Agreement, the Company shall immediately pay all amounts due under this Agreement but unpaid to the Territory. (2) Termination of this Agreement shall not terminate the mineral lease or any lease, licence, easement or right of way. (3) Notwithstanding any notice of termination by the Territory, nothing in this Agreement shall prevent the Territory from administering and enforcing any law in force in the Territory in its application to the Company, the Merlin Project and the mineral lease. (4) Any obligations of confidentiality between the parties shall continue after termination of this Agreement unless otherwise agreed.

Schedule Merlin Project Agreement Ratification Act 1998 27 (5) Termination of this Agreement shall not otherwise affect any accrued rights or remedies a party may have against the other party. 17. Resolution of Disputes (1) A party shall not commence court proceedings (except proceedings seeking interlocutory relief) in respect of a dispute concerning any clause of this Agreement (a Dispute) unless it has complied with this clause. (2) A party claiming that a Dispute has arisen shall notify the other party to the Dispute by notice in writing. (3) Within ten (10) days after a notice is given under subclause (2) each party to the Dispute shall nominate in writing a representative authorised to settle the Dispute on its behalf. (4) The parties shall ensure that during the 45 day period after a notice is given under subclause (2) (or such longer period as is agreed between the parties), their representatives shall use their best endeavours: (a) to resolve the Dispute; or (b) to agree on: (i) a process to resolve all or any part of the Dispute without court proceedings (for example, arbitration, mediation, conciliation, executive appraisal or independent expert determination); and (ii) the selection and payment of any third party to be engaged by the parties and the involvement of any dispute resolution organisation. (5) The role of any third party will be to assist in negotiating a resolution of the Dispute. A third party may not make a decision that is binding on a party unless that party's representative has so agreed in writing. (6) Any information or documents disclosed by a representative under this clause: (a) must be kept confidential; and (b) may not be used except to attempt to settle the Dispute.

Schedule Merlin Project Agreement Ratification Act 1998 28 (7) Each party must bear its own costs of resolving a Dispute under this clause and the parties must bear equally the costs of any third party engaged. (8) After the forty-five (45) day period referred to in subclause (4) (or longer period agreed between the representatives), a party that has complied with subclauses (2) to (4) may terminate the dispute resolution process by giving notice to the other parties to the Dispute. (9) If a party to a Dispute does not comply with any provision of subclauses (1) to (4) the other party to the Dispute will not be bound by subclause (1) to (4). (10) In the event that a Dispute arises in relation to termination the dispute resolution process shall be commenced within the notice period referred to in clause 15. 18. Territory Assistance (1) The Company may from time to time make such application to the Commonwealth or to a Commonwealth agency, authority or instrumentality for the grant to it of any permit, consent, approval, authorisation, licence under the laws of the Commonwealth required for the purposes of the Merlin Project. (2) On the request by the Company and where the Territory considers it appropriate, the Territory shall make representations to the Commonwealth or to the Commonwealth agency, authority or instrumentality concerned in support of the grant to the Company of any permit, consent, approval, authorisation, licence or permission referred to in subclause (1). 19. No Requirement to Register this Agreement For the avoidance of doubt, it is hereby agreed that this Agreement does not require approval and registration in accordance with the provisions of Section 173 of the Mining Act. 20. Notices (1) A notice given under this Agreement shall be:– (a) in writing; and (b) addressed to the address of the recipient specified in accordance with this Agreement or as altered by notice given in accordance with this clause; or

Schedule Merlin Project Agreement Ratification Act 1998 29 (c) hand delivered or sent by pre-paid post to that address or sent by telex or facsimile transmission and immediately confirmed by hand delivery or pre-paid post. (2) A notice given in accordance with subclause (1) shall be deemed received:– (a) if hand delivered, on the date of delivery; (b) if sent by pre-paid post three (3) days after the date of posting; or (c) if sent by facsimile, on receipt by the sender of a transmission report confirming transmission of the facsimile. Provided that any notice hand delivered or sent by facsimile and received after 5.00 pm on a day shall be deemed to have been delivered at 9.00 am on the next business day. (3) Notice shall be sent to the parties at the following addresses:– The Territory The Secretary Department of Mines and Energy Paspalis Centrepoint Towers Building Smith Street DARWIN NT 0800 Telephone: (08) 8999 5461 Facsimile: (08) 8941 4284 The Company The Company Secretary Ashton Mining Limited Level 4 441 St Kilda Road MELBOURNE VIC 3001 Telephone: (03) 9828 4200 Facsimile (03) 9828 4211 or such other address which is advised in writing by one party to the other parties from time to time. 21 Applicable Law This Agreement is governed by the laws in force in the Northern Territory of Australia and, the Company shall comply with all applicable laws of the Commonwealth and, subject to this Agreement, all laws of the Territory applicable to the Merlin Project.

Schedule Merlin Project Agreement Ratification Act 1998 30 IN WITNESS WHEREOF the parties hereto have hereunto set their hands and seals the day and year herein before written. SIGNED by Eric Houguet Poole, ) Minister for Resource Development ) for and on behalf of the NORTHERN ) TERRITORY OF AUSTRALIA ) (Sgd.) Eric Poole (Sgd.) R L Adams .............................. Witness ASHTON MINING LIMITED ) (A.C.N. 005 466 964) by its ) Attorney MICHAEL BOHM ) under Power of Attorney ) dated 5 October 1998 ) in the presence of: ) (Sgd.) Michael Bohm (Sgd.) Markus Ziemer .............................…… Witness

ENDNOTES Merlin Project Agreement Ratification Act 1998 31 ENDNOTES 1 KEY Key to abbreviations amd = amended od = order app = appendix om = omitted bl = by-law pt = Part ch = Chapter r = regulation/rule cl = clause rem = remainder div = Division renum = renumbered exp = expires/expired rep = repealed f = forms s = section Gaz = Gazette sch = Schedule hdg = heading sdiv = Subdivision ins = inserted SL = Subordinate Legislation lt = long title sub = substituted nc = not commenced 2 LIST OF LEGISLATION Merlin Project Agreement Ratification Act 1998 (Act No. 84, 1998) Assent date 7 December 1998 Commenced 22 December 1998 (Gaz S47, 22 December 1998) Financial Relations Agreement (Consequential Provisions) Act 2000 (Act No. 32, 2000) Assent date 27 June 2000 Commenced 1 July 2000 (s 2) Penalties Amendment (Children and Families, Health and Primary Industry, Fisheries and Resources) Act 2011 (Act No. 28, 2011) Assent date 31 August 2011 Commenced 21 September 2011 (Gaz G38, 21 September 2011, p 4) Local Court (Related Amendments) Act 2016 (Act No. 8, 2016) Assent date 6 April 2016 Commenced 1 May 2016 (s 2, s 2 Local Court (Repeals and Related Amendments) Act 2016 (Act No. 9, 2016) and Gaz S34, 29 April 2016) 3 GENERAL AMENDMENTS General amendments of a formal nature (which are not referred to in the table of amendments to this reprint) are made by the Interpretation Legislation Amendment Act 2018 (Act No. 22 of 2018) to: ss 1 and 3 and sch. 4 LIST OF AMENDMENTS s 5A ins No. 32, 2000, s 46 ss 7 – 9 amd No. 28, 2011, s 5 s 11 amd No. 28, 2011, s 5; No. 8, 2016, s 45 s 15 amd No. 28, 2011, s 5

1 Merlin Project Agreement Ratification Act 1998

Merlin Project Agreement Ratification Act 1998 ii

NORTHERN TERRITORY OF AUSTRALIA

As in force at 1 May 2016

The statute rests on a small set of recurring concepts. Designated area and controlled access point: the Minister may declare any land or premises where diamonds are mined, treated, processed, sorted, stored or cut for the Merlin Project to be a "designated area", with boundaries specified by Gazette notice (s 6(1)-(3)). The Minister may also declare particular access points to a designated area to be "controlled access points" (s 6(4)). Declarations take effect on publication or a later date specified (s 6(5)).

Security officer: the Act defines a "security officer" as a person licensed under the Private Security Act 1995 who is employed by the Company or a Contractor (s 3). Security officers are given statutory capacities within designated areas and on the mineral lease including stopping persons and vehicles, directing entry through specified access points, imposing conditions of entry (including written consent to searches), examining property brought into or out of the area, directing persons not to enter or to leave parts of the area, requiring identity/authority/purpose information, requiring compliance for security, and using reasonable force as specified (ss 8(2)-(9), 9(1)-(5)). Private security is thus integrated into a statutory schema that otherwise sits alongside police powers.

Uncut diamonds: the Act uses a broad definition of "uncut diamond" (s 3) to include crushed diamonds, dust, fragments or partly cut or processed stones. Offences are framed around possession, control or concealment of uncut diamonds within designated areas or the mineral lease without lawful authority (s 7).

Search, detention and police interface: security officers may search vehicles and property (s 10), and may detain persons for a reasonable period if they suspect unlawful possession or concealment of uncut diamonds or lack of permission to be in the area (s 11(1)). Detention must be notified to police "as soon as practicable" (s 11(2)), detainees are to be kept in a set-aside place and delivered into police custody as soon as practicable (s 11(3)). Security officers can use reasonable force for stopping, removal, and in relation to vehicles (ss 9(5), 11(15)). Member of Police Force (not security officers) must conduct searches of persons (s 11(5)) with same-sex search requirements (s 11(6)-(7)); body cavity examinations require written consent or Local Court Judge approval and medical practitioner involvement (ss 11(9)-(14)).

Ratification and statutory priority: the Act makes the Agreement operate despite contrary Territory Acts (s 4(3)), authorises Ministers and agencies to do all necessary acts to give effect to the Agreement (s 4(6)), and provides that subsequent Territory Acts cannot amend the Agreement unless they expressly do so (s 4(5)). At the same time, the Act requires the Company to observe all Territory Acts or laws applying to the Merlin Project "subject to this Act and the Agreement" (s 4(7)).

Royalty/GST interaction: s 5A, inserted by later Commonwealth-related legislation, directs that amounts relevant to royalty calculation under clause 5 of the Agreement are to be taken exclusive of GST except where amounts are directly attributable to an acquisition related to an input taxed supply, in which case the amounts are taken inclusive of GST; the section defines GST terms by reference to the Commonwealth GST Act (s 5A(1)-(4)) and instructs that the Agreement be treated as amended to give effect to those rules (s 5A(3)).

Regulations and operational detail: the Administrator may make regulations to carry out the Act, and the Regulations may require the Company to erect and maintain fences and barriers, provide and designate entry/exit/vehicle/property points, erect signage, provide places for detention and storage, regulate how searches and examinations are conducted, create offences and penalties (up to 85 penalty units) and confer discretionary authorities (s 15(1)-(5)).

Commercial content in the Schedule: the Agreement in the Schedule contains operational and commercial rules that the Act ratifies: royalty calculation adjustments and valuation rules (Schedule cl 5), insurance obligations (Schedule cl 5(4)), the Territory’s commitment to facilitate consents and approvals as far as practicable without displacing native title processes (Schedule cl 6), local content and reporting obligations (Schedule cl 7), non-discrimination commitments (Schedule cl 8), mortgagee notification and protections (Schedule cl 9), dispute resolution steps prior to litigation (Schedule cl 17), and termination mechanics (Schedule cl 15).

These concepts combine to reallocate certain regulatory and security decision-making power from general public authorities to a hybrid model where licensed private security (employed by the Company) exercises frontline control over access, subject to police back-up and statutory constraints.

Primary parties named in the Act and Agreement are the Northern Territory (the Territory) and the Company, Ashton Mining Limited (Schedule, opening recital and cl 1 definitions). The Act also expressly captures the Company’s Contractors and Sub-Contractors as persons subject to the security regime and to obligations under the Agreement (s 3; Schedule cl 1). The security regime directly affects three operational cohorts: employees and contractors working on the Merlin Project, third-party service providers and suppliers bringing property or vehicles to or from designated areas, and visitors or other members of the public seeking physical access to the project site.

Security officers are central: they must hold a licence under the Private Security Act 1995 and be employed by the Company or a Contractor (s 3). The Act gives these private, licensed security officers statutory powers to stop persons or vehicles at controlled access points (s 8(2)), direct entry and exit through specified points (s 8(3)), refuse entry (s 8(5)), impose conditions of entry including written consents to searches (s 8(8)), examine property (s 8(2)(c)), issue directions within designated areas (s 9(1)), search property and vehicles including by dismantling (s 10), and detain persons pending police attendance (s 11).

Members of the Police Force are affected operationally: the Act contemplates immediate notification to police when a person is detained (s 11(2)), requires police to perform searches of persons detained (s 11(5)), and requires same-sex searches and involvement in medical examinations (ss 11(6), (9)-(14)). The Schedule (cl 4) contemplates that the Territory may provide Northern Territory Police Force Gold Squad personnel for the security provisions, but expressly says the Territory is not required to meet costs for personnel or medical practitioners beyond providing police personnel (Schedule cl 4(2)); the Company must enter arrangements to contribute to costs via the Northern Territory Minerals Council (Schedule cl 4(3)).

Third parties with interests in the mineral lease and finance arrangements are also covered. The Agreement requires the Company to notify the Territory of parties with the benefit of a mortgage (Schedule cl 9(1)) and provides mortgagee protections (Schedule cl 9(4)). Sales agents and transport carriers are included in the "on hand" definition for royalty valuation calculations (Schedule cl 5(5) final paragraph).

Regulators and administrators: the Minister and Administrator have decision-making roles. The Minister decides whether to declare a designated area and controlled access points (s 6). The Administrator may make Regulations to prescribe operational detail (s 15). Courts and the Local Court have defined roles in authorising body cavity examinations (s 11(10)-(13)) and in granting specific performance against the Territory (s 5).

Who pays. The Scheme assigns specific costs to the Company: insurance for mineral commodity during transit and commencement of sale (Schedule cl 5(4)), contribution to police assistance costs via the Minerals Council (Schedule cl 4(3)), costs associated with valuations when withholding saleable commodity (Schedule cl 5(5)(i) to be shared equally with the Territory), and obligations under Regulations (s 15(2) includes physical barriers, signage, detention areas). The Territory’s ongoing obligations are limited in the Schedule: it will use best endeavours to facilitate consents and to supply police personnel, but will not be obliged to provide infrastructure (Schedule cls 6(1), 6(3)) or meet certain costs.

Finally, ordinary members of the public and contractors are directly affected by criminal and regulatory offences created by the Act: penalties attach to unauthorised possession of uncut diamonds (s 7), unauthorised entry/exit or moving property other than through controlled access points (s 8(1)), and obstruction or non-compliance with security officer directions (ss 8(10), 9(3), 11(16)). The burden of proving lawful authority or excuse for possession or failure to comply lies on the accused in several provisions (ss 7(2), 9(4), 11(19)), shifting evidentiary burdens onto those charged.

The Act and the Agreement allocate a mix of duties and rights across the Territory, the Company, security officers, police and third parties. Duties imposed on the Company and its Contractors include compliance with Territory Acts and the Agreement (s 4(7), Schedule cl 21), maintaining insurance against theft and loss of mineral commodity between leaving the mineral lease and sale or valuation (Schedule cl 5(4)), notifying the Territory of the Perth treatment facility address and changes to it (Schedule cl 5(3)), and co-operating with local content and reporting obligations to maximise Northern Territory participation (Schedule cl 7(1)-(2)). The Company must also arrange to contribute to costs of police assistance via the Northern Territory Minerals Council (Schedule cl 4(3)).

The Minister and Administrator have statutory duties and powers. The Minister may declare designated areas and controlled access points by Gazette notice after being satisfied diamonds will be mined, processed or stored on the land (s 6(1)-(4)). The Administrator may make Regulations to give effect to the Act and to prescribe operational matters, including requiring the Company to erect fences and detention places, to regulate searches and storage and to impose regulatory offences with penalties up to 85 penalty units (s 15(1)-(2), (3)-(5)).

Security officers have powers and concomitant duties. They can exercise powers to stop, search property and vehicles, direct people to particular controlled access points, refuse or grant entry, direct persons to leave parts of a designated area, and detain persons on reasonable grounds for suspected unlawful possession or stealing of uncut diamonds (ss 8(2)-(9), 9(1)-(5), 11(1)). They must notify police "as soon as practicable" after detaining a person and deliver the person into police custody as soon as practicable (s 11(2)-(3)). Security officers are required to act within the limitations and conditions in the Act (for example searches of persons are to be conducted by police and not by security officers, s 11(5)).

Police have the statutory right and duty to conduct searches of detained persons and to take custody of detained individuals. Police may cause searches to be conducted by a same-sex security officer under direction if an immediate same-sex member of Police Force is not available (s 11(7)(a)). Police can organise medical practitioner body cavity examinations, subject to written consent or Local Court Judge approval (ss 11(9)-(13)).

Individuals entering designated areas have duties: they must enter and leave only through a controlled access point, must comply with directions and requirements of security officers, and must agree in writing to conditions of entry where required (ss 8(1), 8(8)-(9), 8(10)). The Act creates criminal offences for non-compliance (s 8(1), s 8(10)), and typically places the evidentiary burden of proving lawful authority or excuse on the accused (ss 7(2), 9(4), 11(19)).

Courts are given two important statutory roles. First, courts can grant specific performance in respect of the Territory’s obligations under the Agreement on the same basis as against a private subject (s 5). Second, a criminal conviction for an offence involving stealing, receiving or possession of uncut diamonds within a designated area triggers a mandatory order that the uncut diamonds be delivered to the Company (s 13(1)).

Rights of protection and limitation of liability: the Act protects security officers and police from being charged with obstructing or hindering a person in exercising a power under Territory law for acts done in exercising powers under this Act (s 14). For medical practitioners, the Act bars civil action for reasonable acts done for examination purposes under s 11(18).

Regulatory discrimination and constraint: the Agreement contains a non-discrimination obligation on the Territory to avoid imposing discriminatory taxes or charges on the Company’s activities (Schedule cl 8(1)), while permitting Territory action for environmental protection and rehabilitation under the Mining Act (Schedule cl 8(2)). The Agreement also places limits on the Territory’s ability to amend the Agreement via subsequent legislation (s 4(5) and Schedule cl 2).

Finally, the Act and Agreement provide express delegation and flexibility via Regulations and by allowing the parties to vary the Agreement by further written agreement, subject to laying it before the Legislative Assembly (Schedule cl 11). The Regulations may contain standards, approvals and conferral of discretionary authorities (s 15(4)-(5)), creating further compliance requirements to which the Company must adapt.

The Act creates a mixture of criminal penalties, regulatory offences to be set by Regulation and statutory enforcement mechanisms.

Criminal penalties in the Act: unauthorised possession or control of an uncut diamond in a designated area or mineral lease is an offence carrying a maximum penalty of 170 penalty units or two years imprisonment (s 7(1)). Entering, driving or consigning property into or out of a designated area other than through a controlled access point is an offence with maximum penalty 85 penalty units or 12 months imprisonment (s 8(1)). Failure to comply with permission requirements at a controlled access point (for example entering without permission from a security officer on duty) carries a maximum penalty of 8 penalty units (s 8(4)). Contravening a direction or requirement imposed by a security officer (in the context of entry/exit/property movements) may carry up to 85 penalty units or 12 months imprisonment (s 8(10)). Failing to comply with a direction to leave a designated area when required under s 9, or failing to comply with a security officer’s requirements under s 9(2), is an offence with a maximum penalty of 8 penalty units (s 9(3)). Obstruction, escaping custody, resisting detention or hindering searches and examinations in the designated area or mineral lease is penalised by up to 170 penalty units or two years imprisonment (s 11(16)). Regulations may create offences with penalties of up to 85 penalty units (s 15(2)(j)).

Enforcement agents and process: enforcement is carried out through a combination of private security and the Police Force. Security officers have statutory powers to stop, direct, search property and vehicles, detain persons on reasonable suspicion and to use reasonable force in prescribed circumstances (ss 8(2)-(9), 9(5), 10, 11(1)). However, searches of detained persons are to be performed by police (s 11(5)), subject to same-sex search principles (s 11(6)-(7)). After detention, the security officer must notify police as soon as practicable and deliver the person into police custody (s 11(2)-(3)). If police cannot immediately conduct a same-sex search, a police member may cause a same-sex security officer to carry out the search under police direction (s 11(7)(a)).

Judicial and civil enforcement: the Act allows a court to grant a decree of specific performance against the Territory in respect of its Agreement obligations "in the same circumstances and on the same conditions as a decree of specific performance could be granted and enforced against a subject of the Crown" (s 5(1)). Subsection (2) confirms that this applies despite any Territory law to the contrary. The Agreement itself contains dispute resolution procedures to be exhausted before ordinary court proceedings in respect of a dispute, except for interlocutory relief (Schedule cl 17(1)-(8)).

Evidentiary facilitation and transfer of property: s 12 provides that in prosecutions, certain averments are to be taken as proved in the absence of proof to the contrary , that a place was a designated area, that a place was a controlled access point, or that a person was a security officer. Convictions for stealing, receiving or possession of uncut diamonds within a designated area or mineral lease must be followed by a court order delivering the uncut diamonds to the Company (s 13(1)-(2)), and s 13(2) declares this applies to offences under any Act and "notwithstanding any other law or Act", thereby effecting a statutory transfer order post-conviction.

Protections and immunities: s 14 prevents a security officer or member of the Police Force being charged with or found guilty of an offence of obstructing or hindering a person in exercising a power under Territory legislation for actions done in exercising powers under this Act. For medical practitioners conducting body cavity examinations approved under s 11, s 11(18) bars action against them for anything reasonably done for examination purposes.

Regulatory design: the Act contemplates that the Regulations will flesh out operational detail, detention standards, search procedures, storage of detained vehicles and property, and create regulatory offences, including penalties of up to 85 penalty units (s 15(2)(e)-(j)). The Regulations may be targeted to specific designated areas and times and can confer discretionary authorities (s 15(3)-(5)), which will shape on-the-ground enforcement and sanctions.

In short, the enforcement architecture blends private security with public police responsibility and provides both criminal sanctions and compulsory civil remedies (specific performance and post-conviction delivery orders) to secure the company’s economic interest in diamond security and royalty collection.

The Act expressly governs the relationship between the ratified Agreement and Territory law. It directs that the Agreement "operate and take effect according to their terms despite anything to the contrary in any Act or law in force in the Territory" (s 4(3)), and where the Agreement provides for modification of a Territory Act or law, the relevant Act "operates and takes effect for the purposes of the Agreement as if the Act or law had been modified as provided for in the Agreement" (s 4(4)). Critically, s 4(5) states that an Act passed after commencement cannot amend, modify or repeal a provision of the Agreement or affect the operation of the Agreement unless the later Act "expressly provides accordingly". These provisions create a statutory priority for the Agreement’s terms within the Territory legal order, subject to the express words in later Acts.

At the same time, s 4(7) qualifies the Company’s position: "Subject to this Act and the Agreement, the Company, its servants, agents and Contractors must observe and comply with all Acts or laws in force in the Territory applying in any way to the Merlin Project." Thus the statutory priority given to the Agreement is not absolute for the Company; the Company must still comply with Territory law as applied and modified by the Agreement and the Act.

The Act also imports Commonwealth law via s 5A, which defines GST-related terms by reference to the Commonwealth A New Tax System (Goods and Services Tax) Act 1999 and requires royalty calculations be handled with GST-exclusive amounts unless directly attributable to an input taxed acquisition (s 5A(1)-(4)). Schedule cl 6(2) expressly preserves compliance with native title processes by noting the Territory is not required to take actions that might be necessary under the Commonwealth Native Title Act 1993. The Agreement also directs the Company to comply with all applicable Commonwealth laws (Schedule cl 21).

Private security licensing is linked through cross-reference to the Private Security Act 1995 for the definition and qualification of security officers (s 3). The Traffic Act 1987 supplies the definition of "vehicle" used in the Act (s 3). Local Court and police processes are incorporated in enforcement provisions: the Local Court Judge has the power to authorise body cavity examinations where consent is not provided (s 11(10)-(13)). The Regulation-making power (s 15) allows the Administrator to make rules "not inconsistent with this Act", thereby creating subordinate law that further interacts with Territory administrative and criminal frameworks.

The Agreement amends the operation of the Mineral Royalty Act 1982 for the purposes of the Merlin Project (Schedule cl 5(2), (6)-(7)), including defining the production unit to include treatment and sorting facilities in Perth and setting a valuation methodology for saleable mineral commodity removed without sale (Schedule cl 5(3), (5)). Clause 19 of the Schedule clarifies that the Agreement does not require registration under s 173 of the Mining Act.

The Act also contemplates interface between public resources and private payment obligations: the Territory is to use its "best endeavours" to facilitate consents and approvals (Schedule cl 6(1)), and may make Northern Territory Police Force personnel available (Schedule cl 4(2)) but is not obliged to meet policing costs beyond providing personnel. The Agreement therefore modifies conventional public-private obligations by requiring the Company to organise and pay for certain elements (insurance, contributions to Gold Squad costs) while the Territory provides statutory backing and facilitation.

Finally, the Act contemplates regulatory discretions and delegations that may intersect with administrative law: the Regulations may confer discretionary authority on specified persons or bodies (s 15(5)), and the Minister’s declarations under s 6 are made by notice in the Gazette "only if the Minister is satisfied" of the presence of relevant diamond operations (s 6(2)). The Act itself does not provide internal merits review procedures for those decisions, leaving ordinary administrative law remedies outside the Act to address disputes about the exercise of those discretionary powers.

The Endnotes and the Act text record the legislative timeline and subsequent amendments that have altered the Act since assent.

Commencement and assent:

The Act received assent on 7 December 1998 and commenced on 22 December 1998 (Endnotes, List of Legislation).

Subsequent amending Acts and key insertions:

Financial Relations Agreement (Consequential Provisions) Act 2000 (Act No. 32, 2000): inserted s 5A, the GST/royalty calculation provision (Endnotes, List of Amendments: "s 5A ins No. 32, 2000, s 46"). Section 5A sets GST treatment for royalty-related amounts and defines GST terms by reference to the Commonwealth GST Act (s 5A(4)).
Penalties Amendment (Children and Families, Health and Primary Industry, Fisheries and Resources) Act 2011 (Act No. 28, 2011): amended ss 7-9 and s 11 and s 15 (Endnotes list "ss 7 - 9 amd No. 28, 2011, s 5", "s 11 amd No. 28, 2011, s 5", "s 15 amd No. 28, 2011, s 5"). The Endnotes do not specify the textual changes effected; they indicate these penalty and operational provisions were amended in 2011.
Local Court (Related Amendments) Act 2016 (Act No. 8, 2016): amended s 11 (Endnotes list "s 11 amd No. 28, 2011, s 5; No. 8, 2016, s 45"). This 2016 amendment likely updated Local Court references or procedures linked to custody and medical examination authorisation; the reprint is "as in force at 1 May 2016" reflecting these changes.
Interpretation Legislation Amendment Act 2018 (Act No. 22 of 2018): made general formal amendments to ss 1 and 3 and the Schedule (Endnotes 3).

The Endnotes table identifies formal editorial updates and lists the Acts that have amended this Act to date; the reprint includes those changes as of 1 May 2016 with further formal amendments indicated in Endnote 3. The insertion of s 5A in 2000 is an express substantive amendment aligning royalty calculations with the Commonwealth GST regime. Amendments in 2011 and 2016 addressed penalty and Local Court procedural elements, and the 2018 Interpretation Legislation Amendment Act made formal amendments of a drafting or presentation nature.

The Schedule itself contains contractual mechanisms for variation and for the Territory to lay any further agreements before the Legislative Assembly with a disallowance window of ten sitting days (Schedule cl 11), which permits the Agreement to be varied by written consent of the parties but subject to parliamentary oversight.

The Act’s provision restricting later Territory Acts from amending the Agreement unless they so state (s 4(5)) means any subsequent amendment in Territory law to the Agreement’s subject matter would now need express language to have effect. That statutory lock-in amplifies the practical importance of the amendment history and any future express legislative statements.

The text of the Act and its Endnotes do not record reported judicial decisions or litigation arising under the Merlin Project Agreement Ratification Act 1998 or the Agreement in the Schedule. The Schedule and the Act provide mechanisms that anticipate legal disputes and enforcement, most notably:

The statutory entitlement to specific performance against the Territory in respect of Agreement obligations (s 5), which permits the Company to seek and the courts to grant specific performance "in the same circumstances and on the same conditions as a decree of specific performance could be granted and enforced against a subject of the Crown." This provision signals that the Agreement’s commercial obligations are legally enforceable against the Territory and contemplates judicial enforcement remedies.
The Agreement’s dispute resolution procedure requires parties to follow specified negotiation and alternative dispute resolution steps and to nominate representatives before commencing court litigation in respect of a dispute (Schedule cl 17(1)-(8)). That clause creates a contractual pre‑litigation regime for parties to follow.
The Act establishes criminal offences and evidence presumptions relevant to prosecutions in or about designated areas (ss 7-12), and s 13 requires courts, on conviction of offences involving uncut diamonds, to order delivery of the diamonds to the Company.

Absent entries in the statutory reprint or Endnotes referencing judgments, no cases are cited in the Act or its Schedule. The presence of specific enforcement provisions, evidentiary presumptions (s 12) and mandatory post-conviction delivery orders (s 13) indicates likely areas where litigation might arise , for example, disputes about whether a place was properly declared a designated area, whether a person had lawful authority for possession of an uncut diamond, or whether the Territory has performed obligations under the Agreement requiring specific performance.

Where litigation does occur, Section 4(3)-(5) will be a central interpretive hinge, because it places the Agreement above inconsistent Territory Acts and bars implied amendment of the Agreement by later Territory statutes unless they expressly state otherwise. Judicial work will also be needed on how s 5’s specific performance entitlement is to be applied against the Territory in practice and on the operation of s 12’s evidentiary averments in criminal prosecutions.

Because the reprinted Act provides no reported judicial outcomes, practitioners should treat the statutory enforcement mechanisms as enabled but untested in reported case law in the source material. Any party facing or contemplating litigation will need to consider normally available common law and statutory remedies in conjunction with the bespoke provisions of this Act and Agreement.

The Act contains a number of provisions that can create practical compliance traps or surprising legal effects which are important to surface for operators, advisers and compliance officers.

Ministerial discretion and limited reasons: the security regime gives the Minister discretion to declare designated areas and controlled access points after being "satisfied" that diamonds will be mined or processed on the land (s 6(1)-(2)). Once a controlled access point is staffed, the security officer "may refuse a person permission to enter a designated area" and is "not required to give the person a reason" (s 8(5)). That combination means access can be restricted administratively without any statutory duty to provide reasons at the gate.

Private security empowered with statutory authority: the Act vests substantial on-the-ground control in private security officers licensed under the Private Security Act 1995 (s 3). These security officers may detain persons, require searches of property and vehicles (including dismantling vehicles, s 10), and use reasonable force for removal or to effect searches and detentions (ss 9(5), 10(2), 11(15)). Practitioners must note the unusual delegation of coercive capacities to private employees; although police must be involved for searches of persons (s 11(5)), security officers play a gatekeeping role.

Burden of proof shifts: in several key offences the burden of proving lawful authority or excuse lies on the person claiming it (ss 7(2), 9(4), 11(19)). That alters evidentiary dynamics in prosecutions for possession or failure to follow security directions.

Consent requirement as entry condition: security officers can require persons to agree in writing to entry conditions, including consenting to searches of the person, vehicle and property (s 8(8)-(9)). Entry may be denied if consent is not given (s 8(4)-(5)). In practice this may coerce signed consent as a condition of access; that has operational, evidential and privacy implications.

Post-conviction delivery to the Company: a court must order uncut diamonds to be delivered to the Company on conviction of an offence involving stealing, receiving or possession of uncut diamonds within the designated area or mineral lease (s 13(1)). This creates an outcome where criminal conviction transfers physical product to the Company, overriding other law (s 13(2)). Chain-of-custody and evidentiary procedures will therefore be important to safeguard property rights and to avoid wrongful delivery.

Regulations may create new offences and discretionary standards: the Administrator may make Regulations prescribing operational detail including detention places, search procedures, storage, and may create regulatory offences and penalties up to 85 penalty units (s 15(2)(e)-(j)). The Regulations can also confer discretionary power on named persons or bodies (s 15(5)). The combination of statutory power, subordinate law and delegated discretion can create compliance complexity and uncertainty until the Regulations are settled.

Police resource cost-shift: the Schedule anticipates that the Territory may make police Gold Squad personnel available but is not required to meet costs apart from providing personnel (Schedule cl 4(2)). The Company must contribute to costs via the Northern Territory Minerals Council (Schedule cl 4(3)). The practical implication is that the Company effectively pays for the policing assistance it needs even though police carry out certain forcible functions such as searches of persons and custody.

GST and royalty calculation nuance: s 5A prescribes that royalty calculations are to be made exclusive of GST unless amounts are directly attributable to an acquisition that relates to an input‑taxed supply; where that is so, amounts are taken inclusive of GST (s 5A(1)-(2)). The section treats the Agreement as amended to that extent (s 5A(3)). Accounting for this in complex royalty calculations requires careful matching of inputs, outputs and input-taxed supplies.

No requirement for Agreement registration under the Mining Act: Schedule cl 19 expressly states the Agreement does not require approval and registration under s 173 of the Mining Act. That may affect transparency and third-party notice.

Limited statutory safeguards for searches of body cavities: the Act permits body cavity examinations only with written consent or Local Court Judge approval and requires medical practitioner involvement and same-sex attendance where practicable (ss 11(9)-(14)). Nevertheless, medical examinations remain a sensitive intrusion with strict procedural gates; failure to follow those gates can expose practitioners and police to legal challenge despite s 11(18) which seeks to protect medical practitioners acting reasonably.

Potential for tight evidential presumptions: s 12 treats certain averments as proved unless contrary proof is given , that a place was a designated area, that a place was a controlled access point, or that a person was a security officer. Defendants should be aware that these presumptions narrow the prosecution’s initial evidentiary burden.

Operational detail delegated out: many critical operational specifics are left to Regulations or to Company practice (e.g. the construction and maintenance of fences, the location of controlled access points, detention place standards, and the content and form of written entry conditions) (s 15(2)(a)-(g)). Until those Regulations and administrative instruments are published and implemented, there is uncertainty about exact compliance requirements.

In summary, the Act centralises control over access and security at the mine site, shifts costs for policing and insurance towards the Company, and sets up evidentiary and property-transfer mechanisms that favour the Company’s secure custody and economic interest in diamonds, all while vesting frontline coercive powers in licensed private security allied with police. These are operational realities embedded in the statute that market participants and advisers must manage.

For a practical compliance programme built from the Act and Agreement, allocate responsibilities between legal, security operations, HR, procurement and finance functions. The following checklist-style steps map statutory duties into actionable obligations:

Ministerial and administrative steps

Monitor Gazette notices: the Minister’s declarations of designated areas and controlled access points are by Gazette (s 6(1), (4)). Ensure legal monitoring is in place to detect declarations and any Regulations made under s 15.

Company obligations under the Agreement and Act

Insurance: put in place and maintain a policy covering theft, destruction and other losses of mineral commodity from the date the product leaves the mineral lease until sale or valuation per Schedule cl 5(4). Keep documentary proof and be ready to provide evidence to the Territory.
Perth treatment facility notification: within 28 days of Agreement commencement and within 28 days of any change, notify the Territory in writing of the address of treatment and sorting facilities used in Perth as required by Schedule cl 5(3).
Valuation process: where saleable mineral commodity is withheld from sale, initiate the valuation process set out in Schedule cl 5(5)(i), including providing access for a Valuer appointed by the Territory (or by the Company if Territory fails to appoint within 30 days), and sharing valuation costs equally with the Territory.
Contribute to policing costs: establish the required arrangement with the Northern Territory Minerals Council to fund contributions to police assistance as contemplated in Schedule cl 4(3).
Local content reporting: prepare annual (or on-request) reports detailing expenditure on Northern Territory labour and services compared to Australian and overseas expenditure, and list local suppliers used (Schedule cl 7(2)).
Mortgagee notifications: if mortgages exist, notify the Territory as required (Schedule cl 9(1)). Keep a register of parties with mortgages and serve required notices.

Security infrastructure and regulatory compliance

Licence private security: employ only security officers who hold licences under the Private Security Act 1995, and maintain records of licences and renewals (s 3).
Physical infrastructure: erect and maintain fences, walls, barriers, controlled access points, signage and detention places as may be required by Regulations under s 15(2)(a)-(e). Ensure construction complies with any standards or approvals specified in Regulations (s 15(4)).
Access procedures and entry agreements: draft and implement written consent/entry-conditions forms for persons seeking to enter designated areas, including clear statements of conditions, consent to searches (scope and limits), and an acknowledgment of penalties for non-compliance. Ensure forms are compliant with s 8(8)-(9) regarding required contents and any Regulation-based rules about how searches are to be performed (s 15(2)(f)).
Controlled access point operations: establish protocols for security officers at controlled access points to exercise stopping powers, refusal of entry, vehicle inspections and property examinations (s 8). Provide a refusal policy consistent with s 8(5) and the absence of a statutory duty to provide reasons, while maintaining records of refused entries for audit and potential review.
Detention and handover: prepare secure, properly equipped places within designated areas for temporary detention pending police arrival as required by s 11(3) and the Regulations (s 15(2)(e)). Set out procedures for notification to police "as soon as practicable" and for prompt delivery into police custody.
Search protocols: implement procedures consistent with ss 10 and 11 for searching vehicles and property including safe dismantling protocols, chain of custody for property and detained vehicles, and storage and labelling requirements as may be prescribed by Regulations (s 10(2), s 15(2)(g)).
Use of reasonable force and training: prepare force-to-stop/removal protocols aligned with ss 9(5) and 11(15) and ensure security officers receive training in the legal thresholds for reasonable force and in the limits of their powers (security officers may not conduct searches of persons , that is a police function; see s 11(5)).

Police coordination and medical examination protocols

Liaise with NT Police: formalise contact and response protocols with the Northern Territory Police Force for notification and handover (s 11(2)-(3)). Document expected response times and escalation procedures.
Medical practitioner arrangements: for body cavity examinations, establish a protocol for obtaining written consent and for seeking Local Court Judge approval if consent is not given (s 11(9)-(13)). Keep a list of medical practitioners willing to assist and ensure the procedural safeguards (same‑sex presence where practicable) are understood.

Recordkeeping, audits and internal controls

Evidence and chain of custody: for any diamonds or suspected diamonds found, document discovery, take custody logs and photograph items. In prosecutions, s 12 allows certain averments to be treated as proved in absence of contrary proof; robust recordkeeping is the Company’s primary protection.
Royalty accounting and GST: ensure royalty calculation models implement s 5A’s GST exclusion/inclusion rules and Schedule cl 5 valuation rules. Where input-taxed acquisitions are material, document the linkage for GST-inclusive treatment per s 5A(2).
Regulatory watch: track Regulations made under s 15, Gazette notices of designated areas and controlled access points, and any further Agreement variations laid before the Legislative Assembly (Schedule cl 11). Update operational policies as Regulations or further Agreements require.

Legal and contract management

Entry agreements and contractor clauses: contractually require Contractors to comply with the Act’s entry and search regime and the Company’s security procedures, verify security officer licencing for Contractor-employed security, and include indemnities where appropriate (s 3; s 4(7)).
Dispute resolution compliance: when a dispute arises under the Agreement, follow Schedule cl 17’s negotiation and alternative dispute resolution steps and timeframes before commencing substantive court proceedings, except for interlocutory relief.
Specific performance preparedness: document the Territory’s obligations under the Agreement in a manner that supports specific performance relief under s 5, should enforcement action against the Territory be necessary.
Legal training and informed consent forms: ensure staff and security officers understand evidentiary burdens (e.g. s 7(2)), the circumstances in which detention is permitted (s 11(1)), and when to involve police. Keep legal review of consent and entry forms to minimise risk of procedural challenge.

Community and native title considerations

Native title and approvals: be aware Schedule cl 6(2) disclaims any obligation that would displace native title processes; ensure any infrastructure or approvals work adheres to Commonwealth Native Title Act processes and Territory requirements.

Incident response and remediation

Incident logs and reporting: for theft, loss or diversion of diamonds, activate insurance claim procedures under Schedule cl 5(4), notify the Territory as reasonably required and preserve evidence for prosecutions and valuations.
Return and valuations upon conviction: prepare to take constructive delivery of recovered uncut diamonds if courts order delivery to the Company under s 13 and maintain secure storage and appropriate valuation procedures.

Following these practical steps aligns operational practice with the statutory architecture. Legal and compliance teams should maintain contemporaneous documentation, ensure staff training and licence compliance for security officers, and prepare to adapt to Regulations the Administrator may enact under s 15. Regular audits of the royalty accounting model and insurance compliance are advisable given the financial exposures created by Schedule cl 5 and s 5A.

Merlin Project Agreement Ratification Act 1998

Plain English Summary

Deep Dive

What it does

Current sections

Merlin Project Agreement Ratification Act 1998

Source text: opening excerpt

1 Merlin Project Agreement Ratification Act 1998

Main concepts

Who it affects

Key duties and rights

Penalties and enforcement

How it interacts with other laws

Amendment history

Litigation history

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How to comply