Sustainability – Key risk factors

INTRODUCTION

Exploration and mining companies are subject to the regulatory environments in which they operate.

Companies operating in Australia ( where Peninsula Mines has its tenements ) are subject to the relevant laws in those juristictions.

These include, in the case of the Western Australian tenements;

the Western Australian Mining Act 1978,
the Commonwealth Government Native Title Act; and
the relevant State and Federal environmental and occupational health and safety legislation legislation;

WESTERN AUSTRALIA

Tenement Titles

In WA, ownership of all minerals is vested in the Government. Exploration and mining companies and individuals may access rights to minerals, subject to payment of rents and royalties, by obtaining exclusive mining title, commonly called mining “tenements”.

The Company’s mining tenements (“Mining Tenements”) comprise exploration licences, mining leases and prospecting licences, granted or applied for under the Western Australian Mining Act 1978.

The WA Mining Act applies generally in relation to mining, prospecting and related activities conducted on the land subject to the Mining Tenements in addition to any standard and special conditions that apply to each tenements.

An exploration licence remains in force for a period of 5 years. Those applied for before 6 February, 2006 may, in certain circumstances, be extended by a further period or periods of one or two years on application, while at the end of the third and fourth years of the term, the holder must relinquish not less than half of the area of the licence. Exploration licences applied for after 6/2/06 still remain in force for 5 years but at the end of this term the licence can be extended for a further period of 5 years, subject to a 40% relinquishment of the original area. Further extensions of 2 years each are then possible under prescribed circumstances.

No legal or equitable interest in or affecting a granted exploration licence application can be transfered or dealt with.

No legal or equitable interest in or affecting an exploration licence can be transferred or otherwise dealt with during the first year of its term without the prior written consent of the relevant Western Australian Government minister (“Minister”)

Exploration licences are applied for in graticular blocks comprising one minute of latitude and longitude. The area comprising one graticular block will range from approximately 2.8 km2 to 3.3 km2 depending on latitude.

The WA Mining Act confers on the holder of an exploration licence which is in force, the right to apply for and, subject to the WA Mining Act, have granted one or more mining leases over any part of the land the subject of that licence, for the purpose of a bonafide mining operation.

A mining lease remains in force for a period of 21 years and may be renewed for successive periods of 21 years. In the case of mining leases the period of 21 years commences from the date of notification by the Minister.

No legal or equitable interest in or affecting a mining lease can be transferred or otherwise dealt with, or sub-lease entered, without the prior written consent of the Minister. Mining tenements in Western Australia are granted subject to various conditions prescribed by the WA Mining Act including payment of rent, expenditure and reporting requirements and standard environmental conditions.

Information on rent and expenditure conditions can be found at the website of the WA Department of Industry and Resources at

http://www.doir.wa.gov.au/aboutus/D69EC29123C14078A7F3F51D8C4864B3.asp

If there are no objections to an application, then grants can occur in approximately seven months from application. However delays of more than 12 months can occur if objections are lodged, under either the Mining Act or Native Title Act.

Native title objections are usually avoided if an applicant and an affected native title claimant/holder sign a standard heritage agreement, which facilitates the future survey and protection of heritage sites in areas of ground disturbing activities. Many claimants do not currently support this process and in the areas affected by their claims, it is expected that delays, in the granting of applications and in conducting heritage surveys, may be experienced.

The Company closely monitors the progress of the applications and has employed a specialist tenement consultant to assist with the process.

Mining tenements in Western Australia are also subject to statutory requirements of certain other Acts including the Aboriginal Heritage Act 1972, Environmental Protection Act 1971, Rights in Water and Irrigation Act 1914 and Conservation and Land Management Act 1984.

Aboriginal Heritage

Generally, this would not appear to apply to low impact activities such as soil sampling or airborne geophysical surveys. In order to achieve outcomes in accordance with heritage agreements in areas it wishes to conduct exploration the Company is reliant on the timely, efficient and reasonable co-operation of the relevant claimants and those who represent them.

There may be sites of significance to Aboriginal people located on the land on which the Mining Tenements are situated.

The Aboriginal Heritage Act 1972 (WA) (WA Heritage Act) applies to the Mining Tenements and makes it an offence to, among other things, knowingly alter or damage an Aboriginal site or object on or under an Aboriginal site. A site is defined to include any sacred, ritual or ceremonial site which is of importance and special significance to persons of Aboriginal descent. There is no requirement or need for a site to be registered in any public manner or, indeed, be in any way acknowledged as an Aboriginal site for it to qualify as an Aboriginal site for the purposes of the WA Heritage Act.

The Aboriginal and Torres Strait Islander Heritage Act 1984 (Cth.) (Commonwealth Heritage Act) also applies to the Mining Tenements and is aimed at the preservation and protection from desecration of significant Aboriginal areas and significant Aboriginal objects. An area or object is found to be desecrated if it is used or treated in a manner inconsistent with Aboriginal tradition.

The Company has not undertaken database searches to ascertain if any Aboriginal sites have been registered in the vicinity of its exploration licences and applications, under any of these Acts, as there is no obligation in any of those Acts to register sites, objects or relics. In any event, their exact location is often not ascertainable from such searches. Further, these enquiries are generally done by the mining company after the mining tenure applied for is granted and once a particular work programme has been determined. In those cases it may be generally necessary to enter into separate arrangements with the traditional owners of the sites to obtain that information. This may add to the time taken for the Company to gain access to the ground for exploration.

To ensure that that it does not contravene any of these Acts while carrying out operations on the Mining Tenements, the Company would need to conduct heritage surveys to determine if any Aboriginal sites exist within the area of the Mining Tenements. If so, the Company would also need to ensure that any interference with such Aboriginal sites is in strict conformity with the provisions of the above WA Heritage Act and the Commonwealth Heritage Act.

Native Title – Generally

On 3 June 1992 the High Court of Australia held in Mabo -v- Queensland that the common law of Australia recognises a form of native title. In order to maintain a claim to native title the persons making such claim must show that they enjoyed certain customary rights and privileges in respect of a particular area of land and that they have maintained their traditional connection with that land. Such a claim will not be recognised if the native title has been extinguished, either by voluntary surrender to the Crown, death of the last survivor of a community entitled to native title, abandonment of the land in question by that community or the granting of an “inconsistent interest” in the land by the Crown. An example of inconsistent interest would be the granting of a freehold or some types of leasehold interest in the land. The granting of a lesser form of interest will not extinguish native title unless it is wholly inconsistent with native title.

The Commonwealth Parliament responded to the Mabo decision by passing the Native Title Act 1993 (Commonwealth Act). Among other things, the Commonwealth Act:

(a) regulates the recognition and protection of native title;

(b) confirms the validity of titles granted by the Federal Government prior to the commencement of that Act on 1 January 1994;

(d) specifies the procedures by which Aboriginal peoples can claim native title and by which people determined to hold native title holders can claim compensation.

The Commonwealth Act was extensively amended in 1998 by the Native Title Amendment Act 1998. These amendments include the validation of any titles that may have been invalidly granted over pastoral leases and certain other leasehold interests during the period 1 January 1994 to 23 December 1996. Other significant amendments include a revised threshold test for the acceptance of native title claims, confirmation of extinguishment of native title by the grant of “exclusive possession” pastoral leases and certain other leasehold interests and provisions intended to deal with overlapping claims.

The Western Australian Parliament has enacted the Titles (Validation) and Native Title (Effect of Past Acts) Act 1995 which adopts the Commonwealth Act in Western Australia. The majority of the High Court concluded in the recent Ward decision (8 August 2002) that, among other things:

(a) native title has been wholly extinguished in respect of land the subject of freehold, public works or other previous “exclusive possession” acts, and in respect of minerals and petroleum which are vested in the Crown, as well as various other grants and vestings; and

(b) native title has been partially extinguished as a result of the grant of “non-exclusive possession” pastoral leases and mining leases, and also as a result of the creation of certain reserves.

The underlying land tenure has not been researched in respect of the Mining Tenements in order to determine the extent of extinguishment.

Native Title – Claims

Persons claiming to hold native title may lodge an application for determination of native title (being a native title claim) with the Federal Court. Applications which are lodged with the Federal Court will be referred to the National Native Title Tribunal (NNTT) for the purposes of registration of the claim.

If the Native Title Registrar is satisfied that a claim meets the registration requirements set out in the Commonwealth Act (Registration Test) it will be entered on the Register of Native Title Claims maintained by the NNTT (Register). Claimants of registered claims are afforded certain procedural rights under the Commonwealth Act including the “right to negotiate” discussed further below.

Claims which fail to meet the Registration Test are recorded on the Schedule of Applications Received maintained by the NNTT. Such claims may be entered on the Register at a later date if additional information is provided by the claimant that satisfies the Registration Test. Claims which are deregistered will lose the right to negotiate from the date of deregistration but will still remain on foot in the Federal Court until such time as they are determined by the Court.

All of the Mining Tenements relate to land which is currently the subject of at least one registered native title claim.The fact that a claim has been lodged does not necessarily mean that native title exists over the area claimed, nor does the absence of a claim necessarily indicate that no native title exists over that area. The existence of native title will be established in due course as the claims are determined by the Federal Court. The Company has not undertaken the considerable historical, anthropological and ethnographic work that would be required to determine the possibility of any further claims in respect of the area of the Mining Tenements being made in the future.

Native Title – Validity of Titles

Granted Tenements – Western Australia

(a) Tenements granted prior to 1 January 1994 Under the Titles (Validation) and Native Title (Effect of Past Acts) Act 1995 the grant of mining tenements granted in Western Australia prior to 1 January 1994 has been validated to the extent that the grant may have been invalid as a result of the existence of native title. Exploration Licence 20/168 was granted prior to 1 January 1994 and accordingly has been validated pursuant to this Act.

(b) Tenements granted after 1 January 1994 The grant of a mining tenement is an act that is capable of affecting, and which may affect, native title. The future act processes of the Commonwealth Act provide a mechanism for achieving the valid grant of a mining tenement in terms of native title.

The Western Australian Parliament passed the Titles Validation Amendment Act 1999 which confirmed the validity of certain acts made by the State of Western Australia between 1 January 1994 and 23 December 1996, provided such acts had met various conditions set out in the Commonwealth Act.

Mining Tenements granted since 23 December 1996 which are affected by native title rights and interests will be valid provided the applicable processes prescribed by the Commonwealth Act were complied with. The balance of the granted WA Mining Tenements were granted after 23 December 1996. We understand that it has been the practice of the Western Australian Government to comply with these processes but we have not undertaken any independent enquiries to confirm that this is the case.

Future Tenement Grants

As stated above, the valid grant of any of the Mining Tenements which may affect native title requires full compliance with the provisions of the Commonwealth Act in addition to compliance with the usual procedures under the relevant State’s mining legislation. The primary procedure prescribed under the Commonwealth Act is the “right to negotiate” process. Other procedures generally apply to low-impact titles (such as prospecting and exploration licences) or infrastructure titles.

The right to negotiate process involves the publishing of a notice of the proposed grant of a tenement followed by a minimum 6 month period of negotiation between the relevant State Government, the tenement applicant and the relevant registered native title claimant. If agreement is not reached to enable the grant to occur, the matter may be referred to arbitration before the NNTT, which has a further 6 months to reach a decision. The decision of the NNTT may be reviewed by the relevant Federal Minister.

The Commonwealth Act provides that, in relation to the grant of mining tenements in certain areas, a State law can operate in lieu of the right to negotiate process of the Commonwealth Act. These areas are principally areas covered by pastoral leases. The Western Australian State Government has not yet introduced such a law. The right to negotiate process does not have to be pursued in cases where an indigenous land use agreement (ILUA) is negotiated with the relevant Aboriginal people and registered with the NNTT. In such cases, the procedures prescribed by the ILUA must be followed to obtain the valid grant of the tenement. These procedures will vary depending on the terms of the relevant ILUA.

Renewals

As with the grant of mining tenements, renewals of mining tenements granted prior to 1 January 1994, to the extent the renewals were invalid due to native title, have been validated by legislation. Renewals granted between 1 January 1994 and 23 December 1996 have been similarly validated provided certain statutory criteria have been met. Renewals made after 23 December 1996 of tenements validly granted before that date will not be subject to the right to negotiate process provided:

(i) the area to which the earlier right is made is not extended;

(ii) the term of the new right is not longer than the term of the earlier right; and

(iii) the rights to be created are not greater than the rights conferred by the earlier grant.

There is doubt as to whether the right to negotiate process applies to second and subsequent renewals but this matter is yet to be determined by the courts. Other than as stated above, renewals of mining tenements are subject to the same right to negotiate (or, pending legislation, alternative State) process as is described above.

Sustainability – Key Risk Factors

Introduction

Exploration and mining companies are subject to the regulatory environments in which they operate.

Companies operating in Australia are subject to the relevant laws in those jurisdictions. These include, in the case of the Western Australian tenements:

the Western Australian Mining Act 1978;
the Commonwealth Government Native Title Act;
the Western Australian Aboriginal Heritage Act; and
the relevant State and Federal environmental and occupational health and safety legislation.

This Section identifies the areas the Directors regard as the major risks associated with an investment in the Company. Investors should be aware that an investment in the Company (and its subsidiaries) involves a number of risks, which may be higher than the risks associated with an investment in other companies. Intending investors should read the whole of this section; the Companies ASX Announcements; and this website in order to fully appreciate such matters and the manner in which the Company intends to operate, before any decision is made to trade in the Company’s securities.

There are general risks associated with investing in any form of business and with investing in the share market generally. There is also a range of specific risks associated with the Company’s business and its involvement in the exploration and mining industry. These risk factors are largely beyond the control of the Company and its directors because of the nature of the activities of the Company. The following summary, which is not exhaustive, lists some of the major risk factors, of which potential investors need to be aware.

Summary

Exploration and mining companies throughout the world are subject to the inherent risks of the minerals industry.

The future viability and profitability of the Company as an exploration and mining company will depend on a number of factors, including:

commodity prices and exchange rates, which are constantly changing;
risks inherent in exploration and mining including, among other things, successful exploration and identification of ore reserves, satisfactory performance of mining operations if a mineable deposit is discovered and competent management;
risks associated with obtaining the grant of any or all of the Company’s mining tenements or permits which are applications, or renewal of tenements upon expiry of their current term, including the grant of subsequent titles where applied for over the same ground.

Generally the grant or refusal of tenements is subject to ministerial discretion and there is no certainty that the tenements applied for will be granted.

Applications are also subject to additional processes and requirements under the Native Title Act.

No legal or equitable interest in or affecting an exploration licence application can be transferred or dealt with while it is at the application stage.

Following grant, no legal or equitable interest in or affecting a granted exploration licence can be transferred or otherwise dealt with during the first year of its term without the prior written consent of the relevant Western Australian Government minister (“Minister”).

the Company’s ability to mine, in the event that exploration on an exploration tenement owned by the Company, or in which the Company has an interest, results in an economic deposit being discovered.
The grant or refusal of production tenements is generally subject to ministerial discretion and there is no certainty that a production tenement will be granted.
Additionally, any application for a production tenement may be subject to the right to negotiate process under the Native Title Act in which case the grant of a valid tenement may require either the successful negotiation of an agreement with the native title claimants or holders or alternatively a successful application to the National Native Title Tribunal that the production tenement be granted.
The right to negotiate process under Native Title matters can result in significant delays to the implementation of any project or stall it.
Negotiated native title agreements may adversely impact on the economics of projects depending on the nature of any commercial terms agreed.
Any mining lease granted in Western Australia would be currently subject to a prohibition on uranium mining.
risks arising because of the rights of indigenous groups in jurisdictions in which the Company operates which may affect the Company’s ability to gain access to prospective exploration areas and to obtain exploration titles and access, and to obtain production titles for mining if exploration is successful.
If negotiations for such access are successful, compensation may be necessary in settling indigenous title claims lodged over any of the tenements held or acquired by the Company. The level of impact of these matters will depend, in part, on the location and status of the tenements acquired by the Company;
the risk of material adverse changes in the government policies or legislation of Australia and affecting the level and practicality of mining and exploration activities;
environmental management issues with which the Company may be required to comply from time to time. There are very substantive legislative and regulatory regimes with which the Company needs to comply for land access, exploration and mining which can lead to significant delays.
Poor access to exploration areas as a result of remoteness or difficult terrain;
poor weather conditions over a prolonged period which might adversely affect mining and exploration activities and the timing of earning revenues;
unforeseen major failures, breakdowns or repairs required to key items of exploration equipment and vehicles, mining plant and equipment or mine structure resulting in significant delays, notwithstanding regular programs of repair, maintenance and upkeep;
the availability and high cost of of quality management, contractors and equipment for exploration, mining, and the corporate and administration functions in the current minerals boom and the cost of identifying, negotiating with and engaging the same; and
the risks associated with being able to negotiate access to land, including by conducting heritage and environmental surveys, to allow for prospecting, exploration and mining, is time and capital consuming and and may be over budget and is not guaranteed of success.
the Company has projects in Western Australia where exploration and mining on its tenements are subject to the regulatory regimes and stakeholders’ interests. These include the Western Australian Mining Act 1978 and Western Australian Aboriginal Heritage Act 1972, and the Commonwealth Government Native Title Act 1993.

Investment Risks

Investors should regard the securities of the Company as speculative because of the nature of the Company’s business. The Directors have identified factors that are most likely to affect the Company and the value of its securities, as presented below. However, this is not an exhaustive list and investors should seek professional advice for further clarification of the risks involved before deciding whether to trade in the Company’s securities.

Valuation of Tenements

The Company makes no representation with regards to a valuation of the tenements or permits or applications.

Exploration and Mining

Mining and exploration are high risk endeavours although there may be the potential for high returns.

Exploration is costly and involves exacting techniques which must be applied over extended periods of time. All of the Company’s projects are at an exploration stage and the Company cannot foresee whether the planned exploration programmes will generate positive results. Furthermore, there is no guarantee that the Company’s exploration activities will succeed in the discovery of a commercially viable ore deposit.

Mining risks include the uncertainties associated with projected continuity of an ore deposit, fluctuations in grades and values of the product being mined, and unforeseen operational and technical problems.

Exploration and mining may be adversely affected or hampered by a variety of non-technical issues such as limitations on activities due to seasonal changes, industrial disputes, land claims, legal challenges associated with Native Title claimants, heritage and environmental matters and legislation, mining legislation and many other factors beyond the control of the Company, including many that are partly or wholly unforeseeable.

The cost of maintaining exploration and mining properties, which depends on the Company having access to sufficient development capital, poses another form of risk.

If exploration or mining programmes prove to be unsuccessful, this could result in a diminution of the value of the tenements which could have a negative impact on the Company’s share price.

In respect to any of the Company’s tenements, in the event that

exploration or production programmes yield negative results,
insufficient funding is available,
such a tenement is considered by the Company to not meet the risk: reward or other criteria of the Company
its relative perceived prospectivity is less that that of other tenements in the Company’ portfolio which take a higher priority,
or a variety of other reasons

such a tenement may be relinquished either in total or in part thereof and/or the Company may withdraw from a joint venture or not exercise its option to acquire equity, even though a viable mineral deposit may be present.

The Company may also be exposed to risks associated with the financial or performance failure, default or litigation (actual or potential) by a participant in any of the joint ventures or other contractual relationships to which the Company is, or may become, a party.

Native Title and Land Access

Risks Associated with grant of Exploration Licences

Any application for a production tenement may be subject to the right to negotiate process under the Native Title Act in which case the grant of a valid tenement may require either the successful negotiation of an agreement with the native title claimants or holders or alternatively a successful application to the National Native Title Tribunal for a determination that the production tenement be granted. Compliance with the right to negotiate process can result in significant delays to the implementation of any project. Negotiated native title agreements may adversely impact on the economics of projects depending on the nature of any commercial terms agreed.

The Company has a large number of exploration licence applications. A significant number have been granted and the remainder are the subject of Native Title claimant objections

If there are no objections to an application, then grants can occur in approximately ten months from application. However delays of more than 12 months can occur if objections are lodged, under either the Mining Act or Native Title Act, and this applies to many of the Company’s tenements ( refer Solicitors Report and Risks Factors Sections in the Company prospectus located on the Aurora Minerals, ASX and Peninsula Mines websites).

Native title objections to the grant of a tenement are commonly avoided if an applicant and an affected native title claimant/holder sign a standard heritage agreement, which can help facilitate the future survey and protection of heritage sites in areas of ground disturbing activities.

Many claimants do not currently support this process and in the areas affected by their claims it is expected that delays in the granting of applications,and in conducting heritage surveys, may be experienced. A list of objections on some of the Company tenements is set out in the Solicitors Report (also refer Solicitors Report and Risk Factors in the Peninsula Mines Limited IPO prospectus located on the Aurora Minerals, ASX and Peninsula Mines websites).

Aboriginal Sites of Significance

Commonwealth and State Legislation in Australia allow for the protection of sites of significance to Aboriginal custom and tradition. The Company proposes to carry out “clearance surveys” where appropriate prior to conducting any exploration work that would involve ground disturbing activities.

The Company’s tenements are likely to contain some such sites of significance which would need to be avoided when carrying out field programmes. It is possible that such areas where sacred sites exist may contain mineralisation or an economic resource which would therefore remain unexploited.

Following grant of the Company’s tenements a ground based aboriginal heritage survey must be completed prior to drilling and other ground disturbing exploration work and delays may be experienced in completing the heritage surveys.

Transfers of Interests in Tenements and Tenement Applications

No legal or equitable interest in or affecting an exploration licence application can be transferred or dealt with.

Environmental Risk

The Company’s projects are subject to stringent laws and regulations regarding environmental matters, which means there are potential liability risks and potential delays in gaining access for exploration or mining. The Company proposes to operate in accordance with applicable laws and conduct its programmes in a responsible manner with proper regard to the environment.

The approval processes for uranium mining are more rigorous than for the mining of other metals, as both Commonwealth and State Government legislation needs to be satisfied. There is a risk that, should economic deposits be discovered, the necessary government approvals may not be granted, or may be significantly delayed.

Exploration and Development Capital

Exploration will reduce the cash reserves of the Company. The Company may be dependent on seeking development capital elsewhere, through equity raisings, debt, spin offs or joint venture financing, to support long term exploration and evaluation of its projects. In the event that an economic deposit is discovered, the ability to exploit such a deposit is likely to be subject to the Company’s ability to raise the necessary development finance through equity raisings, debt, spin offs or joint venture financings. The Company cannot provide any guarantees that such finance for exploration, or for mining will be available to the Company at such time in the future as it may require and this could lead to the loss of tenements.

Liquidity and Realisation Risks

There can be no guarantee that an active market in Securities will develop or that the price of Securities will increase. Moreover, there may be relatively few buyers or a relatively high number of sellers of the Securities on the ASX at any given time, which may increase not only the volatility of the market price of the Securities but also the prevailing price at which the Shareholders can sell their Securities. This may result in Shareholders receiving a market price for their Securities that is less than the price paid for their Securities.

Sharemarket Conditions

The price of the Company’s shares quoted on the ASX is influenced by international and domestic factors or even on a day to day basis by individual investor’s decisions to buy or sell the Company’s securities.

Should these produce a negative effect on the share price, this may also affect the Company’s ability to raise development capital.

Commodity Price and Demand, and Exchange Rates

The Company’s projects were selected principally on the basis of their prospectivity for uranium and the potential for other minerals as perceived by the Company.

Therefore it would be reasonable to expect that the Company’s market appeal, and in the event it commences mining, its revenue will be affected by the price of such minerals.

Mineral and metal prices may fluctuate widely and are affected by numerous industry factors beyond the Company’s control.

These factors may include the demand for metals, forward selling by producers, central bank sales and purchases of gold and production cost levels in major gold and mineral producing regions.

Moreover, mineral prices are also affected by macro economic factors such as expectations regarding inflation, interest rates, currency exchange rates and global and regional demand and political and economic factors.

The Company’s project interests now extend to a variety of commodities and carry with them the risks associated with fluctuations in the price of such commodities.

General Economic Factors and Investment Risks

General economic conditions may affect inflation and interest rates, which in turn may impact upon the Company’s operating costs and financing. Other factors that may adversely affect the Company’s activities in Australia or overseas include changes in government policies, natural disasters, industrial disputes, and social unrest or war on a local or global scale. Some of these risks include:

Currency Exchange Rate Fluctuations

Fluctuations in currency exchange rates can also affect the value of investor’s security holdings and needs to be considered.

Taxation

Changes to tax legislation and regulation or their interpretation may adversely affect the value of an investment in securities and may affect Shareholders differently.

Accounting Standards

Changes in accounting standards or the interpretation of those accounting standards that occur after the date of this Prospectus may impact adversely on the Company’s reported financial performance.

Acts of Terrorism or an Outbreak of International Hostilities

Acts of terrorism or an outbreak of international hostilities may adversely affect the demand for the Company’s products. These, or an associated adverse change in sentiment with respect to the share market, could negatively impact on the value of an investment in the Company.

Speculative Nature of Investment

The above list of risk factors ought not to be taken as exhaustive of the risks faced by the Company or by investors in the Company. The above factors, and others not specifically referred to above, may in the future materially affect the financial performance of the Company and the value of the Company’s securities.

Therefore, the Company’s securities carry no guarantee with respect to the payment of dividends, returns of capital or the market value of those securities.

Potential investors should consider that investment in the Company is speculative and should consult their professional advisers before deciding whether to trade in the Company’s securities.

Unforeseeable Risks

There are likely to be risks that the Directors and the Company and its advisors are unaware of or do not fully appreciate at any point in time. Over time or with the benefit of hindsight these sometimes become apparent. Such risks may be related to legislation, regulation, business conditions, land access, conflicts and disputes at a local or international level, data issues and a variety of other unforeseen eventualities.

Forward Looking Statements

Forward-Looking Statements are statements included herein, including regarding future ability to finance projects and other statements that express management’s expectations or estimates regarding the timing of completion of various aspects of the projects’ development or of our future performance, constitute “forward-looking statements”.

The words “believe”, “expect”, “anticipate”, “contemplate”, “target”, “plan”, “intends”, “continue”, “budget”, “estimate”, “may”, “will”, “schedule”, and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies.

In particular, the Company’s announcements and presentations include many such forward-looking statements and such forward- looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual financial results, performance or achievements of Aurora Minerals to be materially different from its estimated future results, performance or achievements expressed or implied by those forward- looking statements and its forward-looking statements are not guarantees of future performance.

These risks, uncertainties and other factors are included in the Risks section of the Company’s website and 2006 Options Issue Prospectus available on the Aurora Minerals and ASX websites.

The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, events or otherwise, except where required by law.

Time and Capital

It is important to appreciate that the consent process is a time and capital consuming process. In addition, the current boom conditions prevailing throughout the Australasian mining industry have resulted in a shortage of experienced geological, land access and other industry personnel.