SECTION 1

EXECUTIVE SUMMARY

Core Business Activities and Corporate Focus

Gold and base metal exploration and mining, offshore tin mining, igneous
rock (andesite) mining, and property development, continue to be the
core capabilities of the Company and its subsidiaries. In commitment to
our shareholders, customers, and the communities in which we operate, we
continually focus on achieving operational excellence and improvement
while striving for maximum value creation in each of these core business
areas.

Investment Activities

In FY06, the Company maintained its equity position in Sea Minerals
Limited (SML) at 83.70% SML has also applied for offshore mining leases
which are viewed as having long term potential for the benefit of the
Company. SML is related to the Company’s original core business of tin
mining, a sector that has been performing very well on the international
market and is expected to continue to do so. The latter part of the year
has seen the Company come into production with its gold mining
operations at Loei, with ongoing improvements in production, and in
laying solid ground work for developing its recently acquired offshore
tin resources. Also, during the last quarter, further progress was made
in enlisting joint venture prospects to develop the Sky Cliff property
on Ratchadapisek Road.

MINING ACTIVITIES

Pursuant to securing project financing through a USD 13.3 M loan, and
completion of the development and commissioning phases, Tungkum
Limited’s gold mining operation at Loei was brought officially into
production in September. Upon some technical problems being corrected,
throughput was brought up to the desired rate of about 1500 tons per day
and recovery levels of around 90%. During the year agreement was reach
with Deutsche Bank on a USD 25 M refinancing package which will enable
the Company to retire the loan with the EXIM Bank and proceed with phase
2 installations, improve efficiency in existing operations, and prepare
to further evaluate nearby mineralized areas with the objective of
proving up additional gold ore resources for future production.

The revenue generated from this operation in FY06 is about the same as
previous year due to no progress on the SRT double track project. The
Company’s quarrying operations at Saraburi is still relied on the
implementation of the State Railway of Thailand (SRT) and the Highways
Department Projects. However, prospects remain encouraging that the SRT
will commence new double-track projects in the Central Region in the
near future as bidding on projects in 2007 for which about 850,000 tons
of ballast will be required and which we believe will create a much
higher demand for our ballast product. Otherwise, marketing efforts are
ongoing focusing on the Company’s non-ballast aggregate products

In offshore tin mining, the Company’s operations remain on hold pending
results of negotiations with the Government to have rates reduced to
more competitive levels. Tin prices are expected to remain buoyant, and
we expect to see positive results in this sector in the near future.
Meanwhile, the Company will push ahead with laying plans to eventual
development of the Sea Minerals Limited (SML), holdings in which THL has
controlling interest. Sourcing in appropriate mining equipment and
expertise has been ongoing during the year, including application for a
mining license and mining plans covering the maximum 50,000 rai (8,000
hectares) allowable under the law.

PROPERTY DEVELOPMENT

The Le Metro Condominium Development at Bangkok, Thailand

The Le Metro Project after a long waiting on development will be
implemented later in 2007 pursuant to negotiations with a joint venture
partner in the last quarter of 2006 and signing of agreement early in
2007. The agreement will be a 25/75 sharing basis with THL retaining
majority interest. The development will be altered from the original
condominium complex to 28 storey office-service apartment complex
reflecting changes in the areas business environment over the last
several years.

Phuket Land Holdings

Land holdings at Phuket remained unchanged during the year. The Company
had previously acquired full ownership of a Phuket Bay land plot which
adjoins two already existing land parcels owned by the Company. The
Company now owns one large contiguous piece of waterfront land at Phuket
Bay which dramatically increases the land value and prospects for future
development.

Registered increase in Paid-Up Capital

During FY06 the Company undertook no further capital increased
exercises. After the completion of right issued exercises in 2005, the
Company’s paid up capital has increased from 605,551,170 last year to
756,939,463 shares. Currently, the amount of shareholders’ equity is
Baht 1.2 billion.

In Summary

FY06, as in FY05, saw ongoing turbulence in the Thai market. Given the
adverse impacts of the bird flu scare, unrest in the south, the recent
tsunami, and the disruptive political events, the year was one of
considerable accomplishment. In particular, two important operational
objectives materialized with opening of the gold operation at Loei and
the ongoing procedures for the mining license for SML which promises to
be a major contributor to the Company’s revenues in the future.