Page 36 - Axiom Mining Limited 2012 Annual Report

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Corporate Governance
Axiom Mining Limited
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 which
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.
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, including
discharge of hazardous waste and materials. Although
the Company endeavours to comply in all material
respects with all applicable environmental laws and
regulations, there are risks inherent in its activities,
such as spills, leakages or other unforeseen circumstances,
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 which 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.