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Corporate Governance

Environmental regulations

The Company’s operations and projects are subject to the

law and regulations of the jurisdictions in which it operates

relating to environmental matters.

Although the Company endeavours to comply in all

material respects with all applicable environmental laws

and regulations, there are risks inherent in its activities,

which could expose the Company to liability.

The Company may require, and has obtained or

will obtain, approvals from all relevant authorities to

undertake prescribed exploration or mining activities.

Failure to maintain such approvals may prevent the

Company from undertaking such activities. The

Company is unable to predict the effect of additional

environmental laws and regulations that may be adopted

in the future, including whether such laws or regulations

would materially increase the Company’s cost of doing

business or affect its operations in any area.

There can be no assurance that the implementation

of new environmental laws and regulations or stricter

enforcement policies would not oblige the Company

to incur expenses and investments which could have

a material adverse effect on the Company’s business,

financial condition or operational results. The cost and

complexity of complying with applicable environmental

laws and regulations in any relevant jurisdiction may

prevent the Company from being able to develop

mineral deposits.


The Company intends to maintain adequate insurance

over its operations within ranges of coverage that the

Company understands to be consistent with industry

practice and having regard to the nature of activities being

conducted. However, insurance of all risks with mineral

exploration, project development and production is not

always possible. Accordingly, the Company may not

be insured against all possible losses, either because

of unavailability of cover or because the premiums may

be excessive relative to benefits that would accrue.

Sovereign risk and foreign operations

There are risks associated with operating internationally.

There can be no guarantee that the government

regulations in Australia, Hong Kong, Vietnam or Solomon

Islands, in particular in relation to foreign investment,

repatriation of foreign currency, taxation and the regulation

of the mineral exploration and mining industry, will not be

amended in the future to the detriment of the Company’s

business. Costs of compliance with laws and regulations

in Australia, Hong Kong, Vietnam and Solomon Islands

may vary from current estimates.

The Company undertakes its activities in Vietnam and in

Solomon Islands in conjunction with other local partners.

There can be no guarantee that the Company will be able

to enter into commercially satisfactory arrangements with

other local partners for any future operations in Vietnam

and/or Solomon Islands.

The Company is incorporated in Hong Kong; changes in

Hong Kong laws may have an adverse effect on non-Hong

Kong holders of shares. Reporting requirements of the

Company in Hong Kong may impose onerous obligations

on the Company.

The Company also currently operates in Vietnam in

maintenance mode. As the Company awaits clarity in

Vietnam mining legislation, exploration activities have been

wound down. The Company currently maintains a small

office with minimal staff.

The Solomon Islands economy and political environment

remains fragile. The Company is currently involved in

litigation in respect of the Prospecting Licence and

Registered Lease it was granted on Isabel Island and

whilst the Company is confident that its rights will be

upheld, this cannot be guaranteed.

Currency and exchange rate risk

Movements in currency exchange rates can be volatile.

The Company’s expenditure obligations in Vietnam

are incurred predominantly in US dollars (USD) and

Vietnamese dong (VND), in the Solomon Islands in

Solomon Bolona dollars (SBD) and in Australia in

Australian dollars (AUD). Currency risk may result in an

exchange rate loss or gain to the Company, depending

on the value movement between currencies.

The Company has prepared its accounts denominated in

AUD. For ASX reporting purposes, quarterly statements

and accounts are provided in AUD.

The return on equity and any dividends for Australian

Shareholders may be exposed to fluctuations and volatility

of the exchange rates among USD, AUD, SBD, and VND.