Risk Report - Ingles

MATHEUS LATORRE - 201510943

WINTON CARTER MINING: RISK REPORT

Executive Summary

WCM will be going public early next year and wants to persuade the public to buy shares in the company. However, WCM is considering to sign a contract with ATZ and start mining in Africa. A meeting was held to analyze the risks of the contract and decide to mention the project in the prospectus.

Introduction

This report will look at:

• Risks of mining in Africa
• Evaluate risks (scale)
• Decision to include the project in the prospectus

Findings

5 considerable risks were found about mining in Africa:

1. The exploitation risk, potential sites were found in Kango on the other hand is no guarantee the deposit will be profitable
2. The security risk, civil disturbance has been happening in the area as a result mining companies have been attacked by gangs of robber and some workers have lost their lives
3. The health risk, by mining the area could result in workers and inhabitant sufferings because of industrial emissions. The water has been contaminated, so is not drinkable
4. The economic risk, the economy of Africa is tremendous volatile. An election will be held in six months
5. The financial risk, the exchange of the local currency is flaunting. New machines will be expensive

Conclusion

Important aspects were commented in the meeting and possible recommendation were elaborated.

Recommendation

1. Buy new machines to exploitation the sites (low risk)
2. Create walls and invest in guards (high risk)
3. Protect the workers with IEPs (risk-free)
4. Persuade the government of both parties (very high risk)
5. Save money, as a result the company will be possible to be prepared for future financial risk
6. The project Africa shouldn’t be in the prospects of the company

 

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