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Risk Management

An 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 care in evaluating the risks involved and must decide for themselves after proper consultation whether, in light of those risks, their investment is appropriate.
 

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 expected or even non-existent. The Group's operations are subject to the normal risks inherent in diamond exploration, refinement and production.

Economic, political, judicial, administrative, taxation or other regulatory factors
The Group may be adversely affected by changes in economic, political, judicial, administrative, taxation or other regulatory factors, in the United Kingdom (the jurisdiction in which the Group is registered), the Republic of Ireland, Botswana, South Africa and  the DRC, the jurisdictions in which the Group operates and holds its major assets, as well as other unforeseen matters. The Group operates in countries which have a history of political instability.

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 service of its key management and its ability to attract, motivate and retain skilled employees. The loss of the services of any of the Directors or other employees, particularly technical personnel, could have an adverse affect on the Group's business.

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. Government action, 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 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 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 operational hazards and environmental, technical and logistical difficulties. These include, inter alia, the possibility of: fires, earthquake activity, extreme weather conditions, coastal erosion, explosions, unusual or unexpected geological conditions, unpredictable drilling-related problems, unstable mining conditions, unacceptable low metallurgical recoveries of minerals and metal from the ore, equipment failure and the absence of economically viable reserves. These hazards may result in uneconomic mining and ore processing costs, capital cost overruns, substantial losses and/or exposure to substantial environmental and other liabilities.

Legal Systems
The Botswana, South African and DRC 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
others and the effectiveness of and enforcement of such arrangements in these jurisdictions cannot be assured.

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 Botswana, South Africa and the DRC, they are subject to greater risks than more developed markets, including significant legal, economic and political risks. Investors in emerging markets such as Botswana, South Africa and the DRC, 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 Botswana, South Africa and the DRC, 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. Generally, investment in emerging markets is only suitable for sophisticated investors who fully
appreciate the significance of the risks involved and investors are urged to consult with their own legal and financial advisors before making an investment in the Ordinary Shares.

Limited operating history
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
liability for hazards that cannot be insured against or against which it may elect not to be so insured because of high premium costs or other reasons. The Group may incur a liability to third parties (in excess of any insurance cover) arising from pollution or other damage or injury.

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 investment. In addition, delays in the construction and communing of any of the Company's mining projects or dwelling projects or other technical difficulties may result in projected target dates for related production being delayed and/or future capital expenditure being required.
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 required by the Company will be made available to it and, if such funding is available, that it will be offered on reasonable terms.
If the Company is unable to obtain additional financing as needed, it may not be able to fulfil its strategy which could have a material adverse effect on the Company's business, financial conditions
and prospects.
The investment opportunity offered in this document may not be suitable for all recipients of this document. Investors are therefore strongly recommended to consult an investment adviser authorised under the Financial Services and Markets Act 2000, who specialises in advising on the acquisition of shares and other securities before making their decision to invest.