The postulant who is not the owner of the land or who being the owner has not acted in time shall pay for the exploration permit 0.75 centimos for every hectare which the tract contains if the exploration covers all the mineral substances with which this Law deals, and likewise Bs. 0.50 per hectare if the permission is only asked for hydrocarbons and likewise Bs. 0.25 per hectare if the exploration has only for its object coal, (soft coal, anthracite coal, lignite) and other similar mineral combustibles.

Art. 15. He who claims to have a right to oppose the granting of exploration permits shall make his opposition in writing before the Ministry of Fomento within a period of six months which can not be extended and which shall be counted after the publications foreseen in Article 12, and any opposition presented after said period or which has been made as follows, shall not be considered:

1. By him who also pretends to be owner of the land which the postulant claims to be his, and maintains to have filled all the formalities necessary to obtain an exploration permit.

2. By those who oppose the petition made by parties who pretend to be the owners of the majority of the rights to a community property in accordance with Article 11, the opponents claiming that they form said majority and asking that the exploration permit be given to them in due legal course.

3. By him who without pretending to be the owner of the land or acting as such only makes opposition claiming his better right because he first fulfilled the legal formalities foreseen in the second part of Article 8 or by the joint owner whom prior registry favors in the case foreseen in the last part of Article 11.

4. By him who pretends that the tract over which an exploration permit is requested is a reserved zone because it embraces in total or in part a concession in force belonging to the opposer in accordance with No. 1 of Article 4, or denouncement of his own pending in accordance with No. 7 of this same article. Art. 16. The oppositions, which in accordance with the previous Article, have been presented to the Ministry of Fomento shall be dealt with as follows:

In the cases to which Nos. 1 and 2 refer, the proceedings shall be ordered discontinued until the competent courts shall decide the controversy regarding the property.

In the cases to which Nos. 3 and 4 refer, the Ministry shall decide the matter within a view of the cited documents and shall then accord or refuse the exploration permit. Before rendering a decision and in order to be able to more intelligently decide the case, the Ministry may order that a new plan be made. Art. 17. The Minister of Fomento may also ex officio order the proceedings to be discontinued:

1. If there are reasons to believe, which reasons must be expressed in the resolution, that the land which the postulant claims to be his is wild land during the time that this point is cleared up through the suit which shall be ordered brought by the competent superintendent of wild lands.

2. In case he has a like reason to consider that the denounced tract is within the reserved zones to which Nos. 2, 3, 4, 5 and 6 of Article 4 refer, and during the time that this point is cleared up through proceedings he may order taken. In the cases to which the two preceding numbers refer, the permit shall be denied if the reasons for discontinuing have been substantiated. The permit may also be denied if there are irregularities in the proceedings or if the case foreseen in the sole paragraph of Article 13 has been verified.

3. In case the Federal Executive considers it expedient to declare the tract petitioned is a reserved zone or to incorporate it in a zone already reserved for the effects of No. 6 of Article refusing as a consequence the exploration permit.

Art. 18. The injured party may appeal inside of 10 days following the publication in the Official Gazette before the Federal Court of Cassation to whom in such case the original expedient shall be sent, against the decision of the Minister of Fomento refusing the exploration permit ordering the suspension of the proceedings, or when granting said permission he declares an opposition as invalid.

There shall be no appeal against a denial of the exploration permit which has been made in accordance with No. 3 of the previous article but the tract asked for can not be given in contract to third parties nor in total, or in part within 10 years following the said denial.

Art. 19. In case no legally drawn up opposition has been presented or if this has been rejected or if the cases foreseen in Article 17, have not presented themselves, or if the Federal Court of Cassation revokes the denial of the permit 'or the suspension of the proceedings which the Minister of Fomento have declared, the latter while approving said proceedings shall order in representation of the Federal Executive that the exploration permit asked for shall be granted to the interested party provided he deposits in the National Treasury the sum to which Article 14 refers in its latter part.

Just as soon as the interested party proves that he has made said deposit the resolution of the Minister of Fomento by which the permit is granted shall be dictated and published.

Sole Paragraph. If the petition originates from the owner of the land, exempt to pay for exploration permit in accordance in the same resolution in which the proceedings have been approved.

Art. 20. The section of Mines shall extend to the interested party a certified copy of the resolution in which the permit has been granted. This document shall serve the interested party as proof of his right and he shall have it recorded in the corresponding Registry Office.

Art. 21. The exploration permit gives to him who holds it an exclusive right to make explorations in the corresponding tract, during the time of its duration and for such substances as covered by the permit and for his work in territory which is not his own property and which is occupied by other or belongs to others he must fulfill the requisites prescribed by the Articles 136 to 144 inclusive of the Mining Law. Said permission will last for two years which shall be granted from the time that the resolution mentioned in Article 19 is published in the Official Gazette and always within the legal periods.

The exploration permit is irrevocable during the time of its duration but is subject to the causes of nullity indicated in Articles 23, 24 and 25. Nor can he who has commenced to fulfill the formalities required by this Law be deprived of the right to pursue the proceedings until he has obtained the permit in accordance with this Law.

Art. 22. Once the duration of the exploration permit has expired it ceases in all its consequences without necessitating a special declaration, and for no reason can it be extended.

Art. 23. The exploration permit is null insofar as it invades mining concessions belonging to third parties with which it is incompatible as regards No. 1 of Article 4, in which case the interested party can ask nullity although they have not presented oppostion.

The judicial proceedings in this case shall be between the parties before the competent courts and without intervention of the Nation; and in no case can the Nation in any respect be held responsible.

Art. 24. The exploration permit is also void if notwithstanding the legal prohibition, it has been granted over reserved zones in accordance with Nos. 2, 3, 4, 5, and 6 of Article 4, or in contravention with Article 7 or without

previous legal procedure or notwithstanding prohibition mentioned in the sole paragraph of Article 13.

In this case the action to have declared the nullity belongs to the Nation represented by the Attorney General, in accordance with instructions from the Federal Executive, and the case shall be brought before the Federal Court of Cassation.

Art. 25. The permit granted in violation of Articles 28 and 29 is absolutely null.

If the permit should be given in the name of intervening persons but in reality in favor of those who can not obtain same it shall be necessary to prove this simulation by means of judicial proceedings.

Art. 26. The nullity of the exploration permit carried with it the nullity of the exploitation contracts which may have been consequently closed in the corresponding suit for nullity of the permit said contracts shall be specified, the nullity of which may be demanded at the same time.

Art. 27. The exploration permit can be transferred and it is only necessary to notify the Minister of Fomento. The land owner may also specially transfer the right which is given to him by the first part of Article 8 for which only a public deed duly registered is necessary.

Art. 28. Save for lands which they own persons indicated in Article 29 of the Mining Law can not obtain exploration permits.

Art. 29. Nor can exploration permits be given to foreign Governments.

CHAPTER III.

EXPLOITATION CONTRACTS.

SECTION I.

CONTRACTS WITH EXPLORERS.

Art. 30. He who exercising his right of exploration has discovered substances which constitute the object of his permit and wants to make an exploitation contract shall ask this of the Minister of Fomento before the time his permit lapses and in accordance with the following Articles.

Art. 31. Every exploration tract shall be divided in plots of 200 hectares in case the substances which form the object of exploration be hydrocarbons, and of 500 hectares if they be of coal or similar combustible minerals. In case the exploitation embraces the one as well as the other substances the plots shall be of 200 hectares.

The division shall be made in quadrangles even if the original tract be irregular which would result in having irregular plots on the borders and of a smaller area than that indicated.

The explorer may ask for the closing of separate contract of plots the number of which is not in excess of one half of those contained in the original tract. The others will remain National Reserve and the latter can not have other contact with the first than the corners of the quadrangle.

Art. 32. The basis of the exploitation contract for each plot shall be:

1. The duration of the contract or permit shall be 30 years following the publication in the Official Gazette of the Law approving it.

2. The obligation on the part of the contracting party to pay to National Treasury once only and inside of one month after publication in the Official Gazette of the Law by which the contract is approved Bs. 2,000.00 if the contract is made not only for the exploitation of hydrocarbons but also coal and

other similar combustible substances; and Bs. 1,000.00 if the contract is only for one of these classes.

3. The obligation of the contracting party to pay yearly in the National Treasury Bs. 1,400.00 as a surface tax or exploitation if the contract is for the two classes of mineral substances; Bs. 1,000.00 of it is only for hydrocarbons, and Bs. 400.00 if it is for coal and other similar combustible substances only.

4. Obligation on the part of the contracting party to pay in the National Treasury a sum equivalent to 15% of the commercial value of the mineral as exploitation tax, optional to the Federal Executive, to deliver in kind 50% of the extracted minerals.

Sole Paragraph: The Federal Executive is authorized to reduce the exploitation tax in cash or in kind, taking into account the distance of the place where the exploitation is to be established from the closest shipping point in the event that no other mines of the same substance is yet in exploitation at least within 10 kilometers of said place; and the special difficulties of transport which the business has to face, but in no case shall the exploitation tax be less than 10% of the commercial value of the mineral in cash or than 10% in kind of the gross extracted mineral and in case the Federal Executive adopts the first form of payment the tax shall never be less than Bs. 2.00 for each ton of petroleum, if this is the substance which is exploited.

5. Obligation on the part of the contracting party to pay for the refined products which it makes and which are consumed in the Republic 50% of the import duties which would have to be paid to the Treasury in case the products were imported.

Sole Paragraph: The Federal Executive may abolish the effects of this clause when he thinks this to be proper.

6. Enjoyment on the part of the contracting party of all the rights which this Law gives him, his submission to the obligations it imposes on him, his express submission to all the legal reasons for caducity or nullity of the contract, and his recognizing that under no circumstances shall the Nation be under obligation of curing title.

7. The stipulation of Article 121 of the National Constitution.

8. Obligation on the part of the contracting party to leave for the benefit of the Nation the piping machinery and installations fastened to the ground which had been erected for exploitation purposes on the plot contracted for and which exist there at the end of the contract, also the oleoducts with the exception of refinery apparatus which shall remain the property of the contracting party who may take away those that were inside the limits of the plot.

Art. 33. The explorer, when asking for the exploitation contract must accompany his petition by:

1. The exploration permit.

2. A composite plan of the tract covered by the permit, divided into quadrales in accordance with Article 31, to the scale of 1: 20,000 on which shall be marked the plots for which he wants to make a contract and those which will remain National Reserve.

3. Separate plans of the plots for which he wishes to make a contract, every one to the scale of 1: 5,000.

Sole Paragraph: The plan to which this number and the previous one refer must be real topographic plans made and signed by graduated engineers or surveyors oriented according to astronomic North and South, drawn on paper or cloth of a good quality, and indicating the following: the name or the exploration tract; the name of every plot for which a contract is asked; name of the municipality, District and State or territory in which it is located, area and

boundaries, length and direction of the sides of the square or rectangle of each plot on their special plans; location of one of its corners relative to a fixed proximent point on the ground, bearing and distances; and in the composite plan the location of the whole plot with respect to the closed mines if there are any within a radius of 4 kilometers, and the names of the land-owners. The composite p'an as well as the plans of the separate plots may be measured in accordance with Article 13 and by the same engineer or surveyor who makes the measurement foreseen therein during the time the permit is in force by him or by another graduated engineer or surveyor.

Art. 34. The plans presented shall be studied by the Technical Inspector of Mines who after having found them in order shall put on them his approval. In case he does not find them in order he shall report to the Ministry of Fomento for the corresponding action.

If the Minister finds that the observations of the Technical Inspector are justifiable he shall order the errors to be corrected within the time that he thinks sufficient.

Art. 35. If the observations of the Technical Inspector of Mines are based on data which exists in his Office and which shows that the area of the tract mentioned exceeds that given in the plans in proportions equal or more as indicated in the sole paragraph of Art. 13, and in any other case in which the Minister of Fomento sees fit in order to make sure of the proper distribution of the plots indicated to become National Reserve he may order the survey of a new plan by an engineer or surveyor nominated by him and at the expense of the interested party.

If the observations of the Technical Inspector of Mines prove to be correct or if the distribution of the plots prove to have been made by fraud to the detriment of the Nation, the Minister of Fomento shall deny the granting of the exploration contracts. The same way shall be proceeded if the exploration permit is declared null or if the petition to close contracts is untimely.

In all these cases the Ministerial resolutions shall be published as soon as possible in the Gaceta Oficial.

The intereted party who does not consider it lawfully adjudicated has recourse to appeal against the decision of the Minister of Fomento to the Court Federal and of Cassation within ten days following the aforesaid publication.

Art. 36. Once the proceedings and the plans have been approved the Minister of Fomento shall order in the same resolution in which this had been done, the despatch of the different exploitation contracts of the plots, which shall be executed and signed as soon as possible specifying the name, surname, and domicile of the contracting party; name, area, and boundaries of the plot; date of the corresponding exploration permit; the basis of the contract specified in Article 32; the stipulation of which shall be subject to the approval of the National Congress; and the number of the contract and the page of the registry book in which it is noted.

Art. 37. Once the contract is signed it shall be published in the Official Gazette and shall be submitted to the approval of the National Congress transmitting it to one of the chambers with the corresponding record.

Art. 38. In case Congress does not find any legal objections to the proceedings taken and consequently approves the contract, it shall return it to the Ministry of Fomento with the record.

Sole paragraph: Several exploitation contracts governing plots which corespond to one exploration contract may be approved by the same law.

Art. 39. Just as soon as the Ministry of Fomento receives the record from the Congress and the Law which approves it has been published in the Official Gazette, there shall be extended, upon petition by the interested party a cer