Risk of mine reclamation and rehabilitation requirements
continue to be performed until the entire mining activities are
completed in
related concession
areas. Since
the commencement of mining operations, the Company through its
related subsidiaries has to record the estimated reclamation and rehabilitation costs as a component of mining costs. These
costs will increase in line with the expanded mining area. Based on PKP2B and IUP, associated subsidiaries are
responsible to
the Government
for the
reclamation and
rehabilitation of all mining area within their concession territory. There is no certainty that the reclamation and
rehabilitation works undertaken by associated subsidiaries, will be in accordance with standards established by the
Government. When the result of reclamation and rehabilitation does not meet predetermined standard, it may result in
requirement for continued
reclamation and rehabilitation
works. This may increase the Company’s operational costs which will cause significant negative impacts on the financial
condition, results of operations and Companys business prospects.
B RISKS ASSOCIATED WITH THE MANAGEMENT AND SHAREHOLDERS OF
THE COMPANY 1. Risk of the Companys dependence on its subsidiaries
Currently, the majority of the Company’s is gained from the subsidiaries’ business activities. Therefore, the Companys
financial condition
is highly
dependent on
financial performance
and dividend
policy of
its subsidiaries.
Disruption in business activities or changes in dividend policy by the subsidiaries or restriction of the subsidiaries’
ability to distribute dividends as a result of certain agreements, particularly the loan agreement, can affect the
Companys financial condition.