Ann: Ngualla SML being considered by Mining Commission, page-82

Mining in Africa and South America is always highly volatile and very risky. What we have to do, is to view an investment in PEK through the prism of an "African" or "South American" investor, who is used to the high levels of corruption, government instability, and high chance of theft all along the supply chain, (from the contractors, private citizens, workers, to the government officials, port officials, and consulting companies, add to that the chance of civil, tribal or conflicts or territorial disputes.).

We cannot view this investment as a "sure thing" like in Australia. Over the years of working internationally, I have discovered that we take for granted in Australia that the transactional part of the government in our country generally works very well (compared to others), and follows the stated regulations and procedures:  we have appropriate systems, laws and oversight in place to approve and manage all forms of mining exploration and projects on our soils. Our laws and regulations with respect to mining have been developed over HUNDREDS of years, as even the very first laws in this country stemmed from British laws, including common law. If you read books such as, Twists in the Sand: 50 years in the turbulent life of Beach Energy, you will see over the course of the last 50 years, how Australian mining companies attempted to do projects overseas, only to be beset by similar problems to what PEK is having now.

Compare Australia to areas of Africa such as TZ: these are tribal people who have only been Westernised for a few decades (100-180 years). They don't know how to manage money, as they never needed it as a medium to trade and live, they had no "government" until colonisation, and only then when Germany decided to take over, before that they were used as slaves, with the remainder left to their own devices living in remote regions as tribes. This region had no laws, didn't know what money was, and the key to survival was power. Now Western ideals and laws have been introduced, but the respect for them is limited; power is still the key for survival. The mentality is still to take as much for yourself, at the expense of others (i.e. the state). Hence the laws are a means to an end, becoming powerful and wealthy, at the expense of the laws themselves sometimes. That is why corruption is high, minister turnover is high, theft is high, mining is unstable, and so on.

So my point is (1) don't expect them to follow schedules (2) don't assume they value laws and stability as much as we do (the more unstable the system for them, the more money they can make as individuals, (not as a country), hence assume there is corruption and high risk to mine there, particularly regarding due diligence and not being involved in bribery (3) don't treat this mine as though it is situated in remote WA, it is located in an unstable country across the Indian Ocean, (4) next time you want to invest $15,000 of your savings into a company wanting to work in an unstable country with little history of stable political and legal branches, perhaps use $5000 of that to fund a personal trip to the country and get an idea of what the situation on the ground is, which would be better than losing $12,000 of that $15,000 on a worthless investment, once its value crashes or once the impatient investors sell out.