2.2 Business Nature

2.2.1 Background and Major Changes and Developments of Business
Operations

The Company, founded in 1906 and commenced operations in 1907, has been
listed on the Stock Exchange of Thailand (SET) since June 1979. Core
business activities include offshore tin mining, gold exploration and
mining, igneous rock quarrying, and property development and management.
Shareholders include the Ministry of Finance, and the public. Foreign
participation is limited to 30 percent.

Offshore tin mining began in 1907 by the Tongkah Harbour Tin Dredging
Co., NL., which was founded in 1906 by Australian, Captain Edward Miles.
The venture was the world’s first commercial offshore tin mining
operation by bucket dredging. Mining continued profitably on offshore
concessions for many decades until the tin market collapse in the
1980’s. However, in 1976, the Company registered with the Ministry of
Commerce, and in 1980 received offshore mining leases totaling 14,773.89

rai (23.64 sqkm) and good for 25 years. The leases are in Phuket Bay,
Bangtao Bay, and Ao-Chalong Bay. The Company’s dredge sank in 1991 in a
violent storm and since then, mining operations have been conducted
through contractors.

Due to the bleak future forecast for the tin market in general at that
time, the Company decided to diversify its operational base in mining
and, accordingly, became involved in gold exploration in northeast
Thailand in 1989 which led to its current holdings in Tungkum Limited.
In 2003 the Company was granted the first batch of six mining licenses
for the gold mining project. Project development and plant construction
were completed in May 2006 and the commercial operation commenced in
September 2006. In addition, to raise earnings and investment capital,
property development was undertaken in 1990 with the construction of the
36 story Tongkah Tower office building. On completion, the Tower was
sold to the Nilubon Company Limited, an affiliated company of Telecom
Asia PCL.

2.  Business Operations of the Company and Group

(Operations Summary and Group Holdings as at 31 December 2006)

  Business Type :Mining Operation

  Tin Mining : Six offshore tin mining leases 100% owned by THL located
  at Phuket Bay, Bangtao Bay and Pang-Nga areas. One lease expired in
  2006 and three in 2008. Resources: 15,702.52 rai (25.31 sq km) of
  mining lease area.

  Igneous Rock Mining : Igneous rock mining (Andesite) currently in
  operation at Kaeng Khoi, Saraburi Province, Thailand. Surveyed
  resources are about 12 M tons and open to dept and laterally
  indicating a further 15 M tons. Operating under a 10 year mining
  license granted on May 1999, and a second ten year mining application
  granted in 2003. 100% owned by THL.

  Land Holding : Phuket : two parcels total 33 Rai 1 Ngan 47.4 sq. wah
  (53,389 sq. m.) located in town and on sea front with potential for
  development. 100% owned by THL.

72.10% Business Type: Rock Crushing

  Crushing plant operator at the igneous rock quarry.

  72.10% owned by THL with remaining shares held by CPB Equity Co.,Ltd.
  (a subsidiary of the Crown Property Bureau), the Ministry of Finance,
  and others.

95.91% Business Type: Gold Exploration and Mining

  Gold Mining, Block 4 concession, Loei Province, Thailand. Six
  applications of the first batch were approved in January 2003. The
  mining licenses are valid for a 25-year term. Resources: 4.49 M tons
  at 4.14 g/t gold. Open pit operation with resource base open laterally
  and to depth.

75.00% Business Type: Property Development (Le Metro)

In Bangkok : a 75% holding in SCL, which owns a 3 rai 1 ngan 61.9 sq wah
(5,447.60 sq m) of land on Ratchadapisek Road. Sky Cliff plans to
develop a 28 storey office and service apartments. The site is
strategically located near the Pha Ram 9 subway station entrance, Rama
III expressway and motorway entrances leading to the Suvarnabhumi
airport.

83.70% Business Type: Offshore Tin Mining

  In Phuket: An 83.7% holding in SML, application of lease have been
  filed for lease area of 50,000 rai with minable resources of about
  64,320 tons, cutoff at 0.10 kg/cu m. Verification studies pending.

  Subsequently, the company increased its capital through shareholders’
  meeting in February 2007, to Baht 288 million from Baht72 million.

3.  Revenue Structure

The Group's revenue was generated from its core businesses, which are
tin mining, andesite aggregate production, gold mining and the interest
income from banks and financial institutions.

  ----------- --------------------- ----------- -------- --------- -------- --------- --------
  Nature of   Operated by           Revenue                                           
  Income                            Structure                                         

                                    2006                 2005               2004      

                                    Baht        %        Baht      %        Baht      %
                                    million              million            million   

  Gold Sales  Tungkum Limited (TKL) 269.47      91.49    -         -        -         -

  Andesite    Tongkah Harbour       21.08       7.16     21.46     77.72    17.39     29.13
  Sales       Public Company                                                          
              Limited (THL) and                                                       
              Cholsin Limited                                                         

  Tin Ore     THL                   -           -        2.35      8.52     39.77     66.64
  Sales                                                                               

  Other       THL                                                                     
  income                                                                              

              Amortisation of       -           -        -         -        0.02      0.03
              excess of net book                                                      
              value over cost of                                                      
              investments accounted                                                   
              (equity method)                                                         

              Interest Income and   4.00        1.36     3.80      13.76    2.51      4.20
              others                                                                  

  Total                             294.55      100.00   27.61     100.00   59.69     100.00
  Revenue                                                                             
  ----------- --------------------- ----------- -------- --------- -------- --------- --------