2.7 Litigation

  2.7.1 Offshore Tin Mining Operations

  The Phuket District’s Attorney filed a lawsuit against the Company
  concerning offshore tin mining operations operated by the Company’s
  contractor. The charges were filed on July 31, 2003 and consist of the
  following two cases.

  Criminal Case No. Black 2825/2546 consists of two charges as follows
  and which are now under appeal.

  1. The slime diffusion devices were not used for the dredge during the
  dredging operations over the ground.

  2. The engines installed on board the dredge were changed without
  notification submitted to the local Mineral Resources Office.

  On 5 November 2004 at 13.30 hours, the Phuket Province Court ruled in
  favor of the Plaintiff on charges that the Company was to pay a fine
  of Baht 5,000 on each of three charges. The Court recommended that, if
  the Company did not agree with the judgment, it should lodge an appeal
  to the Appellate Court, which the Company did on 29 December 2004. The
  Case is now under the Court’s consideration.

2.  Gold Mining Operations

  The Department of Primary Industries and Mines (DPIM) had notified the
  Company to acknowledge its complaints against Tungkum Limited (a
  subsidiary) for exporting gold dores weighting 105.5153 kgs. out of
  its mine/metallurgical area without filling the request for
  transportation permit. This action was considered, by the DPIM to be
  in violation of Section 108 of the Minerals Act B.E 2510 and for which
  the Director General of the DPIM, under Section 153 can impose a fined
  of 1-5 times the value of the gold shipment in question, a minimum of
  Baht 52.83 m. in this case. Also, the Minister of the Ministry of
  Industry, under Section 148, has the authority to cancel the mining
  right.

  Subsequently, on July 26, 2007, the subsidiary has met with the
  inquiry officers of the Wangsaphung District Police Office, Loei
  province denying all the allegations and stated that the subsidiary
  had complied with all official regulations.

  Inquire officers were preparing a case for the prosecution to consider
  to determine if sufficient grounds exist for indictment.

  Subsidiary’s legal counsel gave the opinion prescribed time frame had
  expired ending the case.

3.  Sky Cliff’s Case

  Construction Cost Consultants Limited Partnership (CCC) initiated
  legal action against Sky Cliff Limited, a subsidiary of the Company,
  in the Civil Court on 25 May 2005 for full payment of service fees
  amounting to Baht 491,531.24. Sky Cliff rejected the claim as not all
  services had been rendered pursuant to the agreement. The Civil Court
  ruled in favor of CCC charging that Sky Cliff was to pay the above sum
  plus 7.5% interest. Sky Cliff did not accept the judgment and lodged
  an appeal to the Appellate Court on 11 October 2006.

  On 19 September 2007 the Appeal Court and Civil Court summoned both
  parties to appear on 20 November 2007 at 13:30 pm to hear the Court’s
  decision. On said date, the Court informed that SCL was to prepare a
  bond to place with the Court worth the specified amount, plus interest
  calculated from the date of the Civil Court’s decision to a year in
  advance (Approximately Baht 600,000). The next court appearance was
  set at 15 February 2008, 13:30 pm. for consideration of the bond.