1.  RISK FACTORS

Mining and the Investor

 High risk investment, on the chance of high financial rewards, goes hand in hand with commodity investments. Mining products, such as gold, copper, and tin, are commodities and as such their value, together with businesses concerned, are subject to the affects of natural, economic, and socio-political developments, influencing the market. The investor, therefore, becomes exposed to these same influences and should be informed accordingly when investing in mining ventures, and include the following points in due diligence. 

 

 1) Property rights The long term stability of a mining operation will depend markedly on sound legal position and ownership of the mining property concerned. The investor should be satisfied that property and mining rights will be protected according to legal agreement. 

2) Supply and Demand Be satisfied that product will be in consistent
demand over the proposed life of the venture, and that resource
evaluations are reliable., having been verified in detail by certified,
duly accredited, third party expertise in mineral deposit evaluations of
the type in question.

3) Project Management Be satisfied that management group consists of
people capable of efficiently managing all aspects of the operation:
exploration, mine planing, production, marketing, and finance.

1. Tin Mining

Tin prices are controlled mainly by world demand and supply where upon
the price is set by the international metal markets.

1) The Company’s income from the mining in based on the price and volume
mined rather than on a fixed rate.

2) Advaces in inclustrial technology and new alloys result in either and
increase on decrease in the demand for tin.

3) Operating costs, such as fuel prices and maintenance costs have a
direct bearing on tin mining profits. Currently, fuel costs are high.

2. Andesite Quarrying

1) Igneous rock (andesite) mining, the Company’s licenses are for ten
years.

2) Possible difficulties in the operations center on marketing,
maintenance, and production management. The marketing section has to be
constantly updating on new prospects and market opportunities while
maintaining contact with existing customers and addressing any problems
arising. Production must be coordinated with current delivery schedules
to avoid excessive stockpiling, and with maintenance requirements as
parts inventory has to be planed in advance to meet expected hours of
operation.

3) Ballast Deliveries to Main Customers Sometimes delivery schedules are
changed and/or postponed by the customer in accordance with their
construction progress. Such delays can result in temporary ones stocking
at the quarry site and a corresponding slow down in payments by the
client.

3. Gold Mining

Pursuant to its mining operations plans, about one year will be required
for infrastructure and ore processing plant development once project
financing is in place, Currently, the Company is negotiating with both
foreign and domestic financial organizations. Accordingly, the Company
expects to be realizing earnings from mining operations curing the
second year once full scale development commences.

4. Liquidity

Since gold mining preparations are still in progress, the Company’s
earnings have been confined to only two sources of income (tin and
quarrying), rather than the expected three, which has had a impact on
liquidty. However, the Company completed our restrucure with financial
institutes in July 2001 within a two-year grace period. After debt
restructure, the Company kept up repayments and will start to pay
principal in March 2003 and there after. In 2003, the Company will repay
Baht 12 million in total principal and interest.