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Corporate Governance

Resource estimates

In this report and in future reporting by the Company,

references to reserves and resources and their

classifications, are in accordance with the Australasian

Code for Reporting of Mineral Resources and Ore

Reserves ('JORC Code'). Estimates are expressions

of judgement based on knowledge, experience and

industry practice. Estimates, which were valid when made,

may change significantly when new information becomes

available. In addition, resource estimates are necessarily

imprecise and depend to some extent on interpretations,

which may ultimately prove to be inaccurate.

Should the Company encounter mineralisation different

from that predicted by past drilling, sampling and similar

examination, resource estimates may have to be adjusted.

This adjustment could affect development and mining

plans, which could adversely impact the Company.

Title rights

There is no guarantee that any tenement applications

or conversions in which the Company has a current or

potential interest will be granted. Tenement applications

may require the Company to commence negotiations

with relevant government body, minister or official,

landholder, and, in Australia, Vietnam and Solomon

Islands, indigenous representative bodies to gain access

to the underlying land. There is no guarantee that such

negotiations will be successful or that having been

successful the Company will not be challenged by third

parties as it is currently in the Solomon Islands.

Also, due to its exploration activities in Queensland, the

Company must observe its “duty of care” under Aboriginal

Cultural Heritage Act 2003 (Qld) to ensure that its activities

do not harm Aboriginal cultural heritage.

Price volatility

Most of the Company’s revenues from any successful

exploration and mine development will ultimately be

derived from sale of metals. Consequently, the Company’s

expected earnings will be closely related to metal prices.

Metal prices fluctuate and are affected by numerous

factors beyond the control of the Company.

These factors include world demand, forward selling by

producers, and production cost levels in major metal

producing regions. Metal prices may also be affected by

macro-economic factors such as expectations regarding

inflation, interest rates, and global and regional demand

for and supply of metals as well as global economic

conditions. These factors may have an adverse effect on

the Company’s exploration, development and production

activity as well as its ability to fund these activities. The

Company will consider developing a suitable hedging

strategy as and when appropriate.

Funding requirements

The Company’s exploration and mining activities will

require significant expenditure. The Company’s ability

to effectively implement its business strategy over time

may depend in part on its ability to raise additional funds,

either in the form of debt or equity. Any additional equity

funding may dilute holdings of shareholders and any debt

financing, if available, may involve restrictive covenants,

which may limit the Company’s operations and business

strategy. Whilst the Board constantly reviews its capital

requirements and expenditure there can be no assurance

that the Company will be able to raise additional funding or

that such funding will be on favourable terms. If adequate

funds are not available on acceptable terms, the Company

may not be able to take advantage of opportunities

or otherwise respond to competitive pressures. This

may have a material adverse effect on the Company’s

activities and the price of its shares.

Dependence on key personnel

The Company’s success depends to a significant

extent on key management personnel, as well as other

management and technical personnel including those

employed on a contractual basis. The loss of the services

of certain personnel could have an adverse effect on the

Company and its operations. The Board has implemented

a long-term incentive plan for senior management and

Directors through a Performance Rights Plan that aligns

the employee with the success of the Company and

shareholder returns. Otherwise the Board is satisfied

that the Company remunerates fairly and responsibly

and where necessary independent remuneration

advice is obtained.

Dependence on third party contractors

The Company will be contracting third parties to provide

surface exploration services and equipment in relation to

its exploration activities. Failure or termination of a contract

with those third parties at any time may result in significant

delays in the Company’s exploration program that may

have a material effect on the Company. The Company will

mitigate these risks through the use of multiple suppliers

where feasible and by actively managing its supplier

relationships and procurement policies.