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Risk managementAn investment in the Ordinary Shares involves a high degree of risk. Accordingly prospective investors should carefully consider all of the information in this document and the risks attaching to an investment in the Company, including, but not limited to the risks set out below. The information set out below does not purport to be an exhaustive list or summary of the risks which the group may encounter and is not set out in any particular order of priority. The Group's business, financial or operations could be materially and adversely affected by the occurrence of any of the risks described below. In such case, the market price of the Ordinary Shares could decline and investors could lose all or part of their investment. Additional risks and uncertainties not presently known to the Directors, or that the Directors currently deem immaterial, may also have an adverse effect on the group. The Directors consider the following risk factors to be significant for potential investors, but the list of risks is not intended to be exhaustive nor does it comprise all those risks allocated with an investment in the Company. Investors in companies holding their assets in emerging markets such as West Africa should be aware that these markets are subject to greater risks than more developed markets, including significant legal, economic and political risks. Accordingly, investors should exercise particular Early stage of commercialisation The Company is an exploration vehicle which has not yet begun to generate revenues and is not yet trading profitably. The Directors do not expect the Company to achieve profitability in the short term. Nature of the Industry The ultimate production of diamonds from the probable and possible reserves may be lower than Economic, political, judicial, administrative, taxation or other regulatory factors The Group may be adversely affected by changes in economic, political, judicial, administrative, Working capital Having made due and careful enquiry, the Directors consider that the net proceeds of the Placing, will be sufficient to fund the Group's present requirements, that is, for at least the next twelve months following Admission. If the working capital requirements exceed current expectations, the Company may need to raise additional finance. There can be no assurance that, if required, further funds will be available. Management of growth The Group's ability to support the anticipated growth of its business will be substantially dependent upon, among other things, it successfully increasing and implementing additional resource to support sales, marketing, personnel, operational and financial functions. There can be no assurance that the Group will be able to manage any future expansion successfully, and any inability to do so would have a material adverse effect on the Group. Dependence on key personnel The Group's future success, particularly in the short term, depends in large part on the continued Regulatory changes The Group's strategy has been formulated in the light of the current regulatory environment and with regard to future changes and likely future changes. The regulatory environment may change in the future and such changes may have a material adverse effect on the Group. Market for the Company's shares, volatility of share price and liquidity Prospective investors should be aware that the value of an investment in the Company may go down as well as up. In addition, the Company can give no assurance that an active trading market for its shares will develop, or if developed, be sustained in the future. If an active trading market is not developed or maintained, the liquidity and trading price of the Company's shares could be adversely affected. Furthermore, the trading price of the Company's shares may be subject to wide fluctuations in response to a number of events and factors, such as variations in operating results, the timing of licence awards, changes in the regulatory environment and stock market sentiment towards mineral exploration companies. The share price of publicly traded smaller companies can be highly volatile. Admission to AIM should not be taken as implying that there will be a liquid market for the Ordinary Shares. It may be more difficult for an investor to realise his investment on AIM than to realise an investment in a company whose shares are quoted on the Official List. Exchange Rate Fluctuations The Group's future income will be subject to exchange rate fluctuations and may become subject to exchange control or similar restrictions. Fluctuations in exchange rates between currencies in which the Group operates may cause fluctuations in its financial results, which are not necessarily related to the Group's underlying operations. Licences and contractual commitments The interests of the Group are in some circumstances subject to licence and contractual requirements, which include, inter alia, certain financial commitments which, if not fulfilled, could result in the suspension or ultimate forfeiture of the relevant licence or of the Company's interests in prospects. Governmentaction, which could include non-renewal of licences, may result in any income receivable by the Group as licences held by the Group being adversely affected. Exploration and mining risks All exploration is inherently speculative. The techniques at present available to geophysicists, geologists, and other technical specialists to identify the existence and location of minerals are indirect, and therefore, a considerable amount of personal judgement is involved in the selection of any prospect for drilling or identifying potentially profitable producing sites. The demand for and availability of a ready market for diamonds and gold depends upon numerous factors beyond the Group's control, the exact effects of which cannot be accurately predicted. These factors (the list of which is not exhaustive) include: general economic activity, world diamond and gold prices, the availability of transportation capacity, the availability and pricing of other precious stones and metals, geological, geotechnical and seismic factors, industrial and mechanical accidents, unscheduled plant shutdowns or other processing problems, technical failures, labour disputes, power supply failure, environmental hazards, governmental regulation and taxation. Political and Economic Risks All of the Group's properties and operations will be located in a foreign jurisdiction. As a result, the Group is subject to political, economic and other uncertainties, including but not limited to, changes in policies or the personnel administering them, terrorism, nationalisation, appropriation of property without fair compensation, cancellation or modification of contract rights, foreign exchange restrictions, currency fluctuations, export quotas, royalty and tax increases and other risks arising out of foreign governmental sovereignty over the area in which these operations are conducted, as well as risks of loss due to civil strife, acts of war, guerrilla activities and insurrection. Further issues of Shares Upon identification of suitable projects, the consideration payable may be satisfied or part satisfied by the issue of new Ordinary Shares at a price which may be less than the Placing Price. Operational and environmental risks Exploration, drilling, appraisal, construction, development and production activities may involve Legal Systems The Sierra Leonian, Guinean and other jurisdictions in which the Group might operate in the future may have less developed legal systems than more established economics which could result in risks such as (i) effective legal redress in the courts of such jurisdictions, whether in respect of a breach of law or regulation, or in an ownership dispute, being more difficult to obtain; (ii) a higher degree of discretion on the part of governmental authorities; (iii) the lack of judicial or administrative guidance on interpreting applicable rules and regulations; (iv) inconsistencies or conflicts between and within various laws, regulations, decrees, orders and resolutions; or (v) relative inexperience of the judiciary and courts in such matters. In certain jurisdictions the commitment of local business people, government officials and agencies and the judicial system to abide by legal requirements and negotiated agreements may be more uncertain, creating particular concerns with respect to the Group's licences and agreements for business. These may be susceptible to revision or cancellation and legal redress may be uncertain or delayed. There can be no assurance that joint ventures, licences, licence applications or other legal arrangements will not be adversely affected by the actions of government authorities or Title to properties Whilst the Company is satisfied that it has taken reasonable measures to ensure an unencumbered right to exploit its licence areas in Sierra Leone and Guinea, they are subject to greater risks than more developed markets, including significant legal, economic and political risks. Investors in emerging markets such as Sierra Leone and Guinea, should be aware that these markets are subject to greater risk than more developed markets, including in some cases significant legal, economic and political risks. Investors should also note that emerging economies such as the economics of Sierra Leone and Guinea, are subject to rapid change and that the information set out in this document may become outdated relatively quickly. Accordingly, investors should exercise particular care in evaluating the risks involved and must decide for themselves whether, in light of those risks, their investment is appropriate.
The Company does not have an established track record. The Group's operations are at an early stage of development and success will depend upon the Director's ability to manage the current projects and to identify and take advantage of further opportunities which may arise. The Group has no properties producing cash flow and its ultimate success will depend upon its ability to generate cash flow from properties in the future. The Group has not earned profits to date and there is no assurance that it will do so in future. A portion of the Group's activities will be directed to the search for and the development of new mineral deposits. Historical facts, information gained from historic experience, present facts, circumstances and information, and assumptions from all or any of these are not a guide to the future. Aims, targets, plans and intentions referred to herein are no more than that and do not imply forecasts. The Ordinary Shares should be regarded as a highly speculative investment and an investment in Ordinary Shares should only be made by those with the necessary expertise to fully evaluate the investment. Prospective investors are advised to consult an independent adviser authorised under the Financial Services and Markets Act 2000. Uninsured risks The Group, as a participant in exploration and development programmes, may become subject to Conflicts of interest Certain Directors and officers of the Group also serve as directors and/or officers of other companies involved in mineral exploration and development and consequently there exists the possibility for such Directors and officers to be in a position of conflict. The Company expects that any decision made by any of such Directors and officers involving the Group will be made in accordance with their duties and obligations to deal fairly and in good faith with a view to the best interests of the Company and its Shareholders, but there can be no assurances in this regard. Competition The Group has exclusive exploration and/or prospecting rights over the areas covered by its licences. Current and potential competitors may have substantially greater financial, technical and marketing resources, longer operating histories, larger customer bases, greater name recognition and more established relationships than the Group and so may be better able to compete in the Group's target markets. Financing The successful extraction of diamonds or other minerals may require very significant capital It may be necessary to raise additional equity or debt financing to cover working capital requirements. Any additional equity financing may be dilutive to Shareholders and debt financing, if available, may involve restrictions on financing and operating activities. There can be no assurance that such funding If the Company is unable to obtain additional financing as needed, it may not be able to fulfil its The investment opportunity offered in this document may not be suitable for all recipients of this BACK |
