? UMACO Australia Pty Limited - Risk Analysis

UMACO has a clear view of variables to which they may be exposed, whether internal or external, retrospective or forward-looking. Their assessment is anchored in the defined risk appetite and tolerance of the Company to provide the basis for determining risk responses.

A robust risk assessment process is applied consistently throughout the Company empowering management to better identify, evaluate, and exploit the right risks for the business, while maintaining the appropriate controls to ensure effective and efficient operations and regulatory compliance. The linkage of risk assessment is a primary driver between shareholder values and key objectives as a robust risk assessment process forms the foundation of an effective risk management programme conducted by the Company.

Specific business objectives are anchored in key value drivers within the Company. These objectives provide the basis for measuring the impact and probability of risk ratings. Governance over the risk assessment process captures leading indicators and enhances the ability of the Company to anticipate possible risks before they materialise. This capability helps steer the Company toward measurable, lasting success in today’s ever-changing business environment, as by its nature, mining is a speculative endeavour which understandably brings risks that require mitigation.

Risk elements assessed are general for the exploration and mining industry, and specific to the existing and proposed venture of the Company, as estimation of risk is not exhaustive given the nature of the extremities that must often be faced in the mining business, and as exploration and mining of minerals carries a certain degree of inherent risk.

  • Strategic and priority risk assessment evaluates risks relating to the mission and strategic objectives of the Company in keeping with key priorities.
  • Project risk assessment evaluates the risk factors associated with the development and implementation of the Gold Project, considering the stakeholders, other dependencies, timelines, costs, and other key considerations. This is undertaken by the Gold Project management team.
  • Operational risk assessment evaluates exploration, mining, and operational processing that can be hampered by the unpredictable nature of mineral deposits, poor drilling techniques, incorrect grade or resource estimates, unforeseen and adverse ground conditions, flooding, inclement weather, lower mineral recoveries, force majeure circumstances, equipment failure, cost overruns from unforeseen events, industrial disruption and any risks that impact operating costs.
  • Market risk and competitive risk assessment evaluates competitor activity, market movements that could affect the performance or risk exposure to the Company, currency fluctuations, inflation, interest rates, and supply and demand, as profitability of the Company can be impacted by commodity and stock prices, movement on the stock market and the worldwide demand for Gold and minerals.
  • Compliance risk assessment evaluates risk factors relative to the compliance obligations of the Company, ASIC compliance policies and procedures, consideration of laws and regulations, including the Australian Resources ACT (1983) and the Mineral Resources Act 1989, ethics and business conduct standards, and contracts, as well as strategic voluntary standards and best practices to which the Company has committed.
  • Security risk assessment evaluates any potential breaches in the many physical assets of the Company including UGPL Process contracts, the overall security of the mining sites, the Gold production, information protection and Company policy restricting Directors or employees from insider trading in securities of the Company.
  • Native title risk assessment evaluates the impact of The Native Title Act 1993 (Commonwealth) that may affect the ability of the Company to gain access to some future prospective exploration or mining areas located on land that is not freehold land. A strategic plan has been implemented to allow for the determination or extended period of determination until granted. Currently there are no Native Title conflicts. This assessment disallows projects that do not fall into categories that are not extinguishable or alternatively have been previously granted under the Mineral Resources Act.
  • Title risk assessment evaluates interests in tenements in Australia that are governed by the respective State Government legislation and evidenced by the granting of tenements through the issuing of a lease or licence. Each lease or licence is for a specific term and carries with it annual expenditure and reporting commitments, as well as other conditions requiring compliance. Consequently, a Company could lose title to, or its interests in, tenements if licence conditions are not met or if sufficient funds are not available to meet expenditure commitments.
  • Environmental risk assessment evaluates projects for the Company that are subject to Queensland, New South Wales and Australian environmental laws. Exploration and mining projects are expected to see a variety of environmental impacts. The company has engaged its own environmental expert. The Company intends to responsibly carry out its operations in compliance with all applicable environmental laws. In the event that the Company does not operate in compliance with all applicable laws there is a risk that the tenements could be forfeited. UMACO has both in-house, and a broad network of qualified Environmental Professionals to provide guidelines for operational compliance.
  • Mineral estimation risk evaluates UMACO operations subject to joint agreements with existing miners who are resource owners in partnership with the Company, understanding that Resource estimates are an expression of judgment on behalf of the person who originally made the estimate. Some can change with the addition of new information. Others can be imprecise or depend on the interpretation of the person making the estimate. Sometimes there is a risk that they can prove to be incorrect. A number of other projects of the Company may have or eventuate in Gold resources estimated on them. There is no guarantee that these estimates are correct. None have been calculated by the Company, and although they will have been calculated by persons with knowledge and experience, the Company cannot guarantee their accuracy. The Company has not yet been able to review these resource estimates. In addition, while Company projects comply with regulatory JORC requirements, there are risks for some projects estimates of target mineralisation potential still undergoing compliance agreement to meet JORC Code criteria.
  • Key personnel risk assessment evaluates both key personnel and contractors to the Company; particularly personnel working with equipment that is IP sensitive to ensure specialised technology used by the Company is kept confidential under Non-Disclosure Agreements (“NDA”), and as such personnel have intimate knowledge, experience and expertise of the operation of the Company, and the loss of such personnel is always a potential risk to the Company. Key personnel insurance covers at risk executive personnel.