Risk of increasing fuel price andor raw materials andor
increase in fuel price. The increase in fuel price will indirectly trigger the increase in coal sales price, which in
turn will also impact the volume of demand for coal supply. The increase in fuel prices in the future can cause an adverse
impact on the financial condition, operations results and business prospects of the Company, when it leads to a decline
volume of coal demand.
3. Risk of adjustment to the estimation of proven and probable coal reserves and limited coal reserves
Estimation of proved and probable reserves of coal set forth in this Prospectus is the statement of assessment based
on knowledge,
experience and
common industry
practice. Although the estimations are considered reasonable at the time
they were made, but they may change significantly when new information is available, where there is a risk that the coal
has quality, volume or stripping ratio different from or not as good as what has been estimated previously and the cost of
production is higher than that of the estimation. Adjustment of proven and probable coal reserves can influence the
development and mining operations plan of the Company and its subsidiaries, and may cause negative impacts on the financial
condition, results
of operations
and prospects
of the
Companys business. The amount of coal reserves in the territory of PKP2B and IUP of subsidiaries will decrease in
line with the Companys mining activities. The Companys
growth and success in the future depend on the success of the Company and subsidiaries to acquire additional coal reserves
within the current territory of PKP2B and IUP and will depend on the ability of the Company and its subsidiaries in
converting the existing coal resources into coal reserves which can be mined economically before the validity of
concerned PKP2B and IUP is expired.