Bidder's Statement from Sovereign Gold - About Precious Metal ...

9 – INVESTMENT RISKS
9. INVESTMENT RISKS
9.1 Introduction
An overview of the key risks that may have a material adverse impact upon the implementation of the
Offer, the future performance of the Merged Group and the value of Sovereign Gold Shares are described
in this Bidder's Statement and include those risks set out in this section 9. The risks identified in this
section 9 are not exhaustive. Sovereign Gold gives no assurances or guarantees of future performance or
profitability, or payment of dividends by, the Merged Group.
Additionally Sovereign Gold gives no assurances or guarantees that the risks set out in this document will
not change. There may be other material risks which are not disclosed in this document because they were
not known by Sovereign Gold or were not considered to be material at the date of this Bidder's Statement.
Many of the risks below arising from Sovereign Gold's Offer is also inherent within each of PMR and
Sovereign Gold as separate entities.
The value of the Offer to PMR Shareholders will depend upon the future performance of the Merged Group
and the value of Sovereign Gold Shares. As a result, PMR Shareholders should carefully consider both the
risks affecting the Offer and those risks affecting the future performance of the Merged Group and the
value of the Sovereign Gold Shares.
PMR Shareholders should be aware that an investment in the Merged Group has risks which are
associated with investing in listed securities. Any future dividends, the value of the Merged Group's assets
and the market value or price of the Sovereign Gold Shares quoted on ASX may be influenced by these and
other risk factors.
Many of these factors are common to those affecting the current performance of Sovereign Gold and PMR.
Some of the risks may be mitigated by the use of safeguards and appropriate systems and controls.
However, many risks that may affect the Merged Group are outside the control of Sovereign Gold, PMR and
the Merged Group.
This section 9 does not take into account the investment objectives, financial circumstances or particular
needs of individual PMR Shareholders. It is important that PMR Shareholders carefully read this Bidder's
Statement in its entirety (particularly the risks set out in this section 9), consider their personal
circumstances (including financial and taxation issues) and seek independent professional advice before
deciding whether to accept the Offer.
9.2 Specific risk factors that affect the Merged Group
Set out below are some of the key risks that have been identified as potentially affecting the performance
of the Merged Group, the ability of the Merged Group to pay dividends and the value of the Sovereign Gold
Shares.
The past performance of Sovereign Gold and PMR is not necessarily representative of the future
performance of the Merged Group or the value of Sovereign Gold Shares.
(a)
Exploration and Operational Risks
i. By its nature, the business of exploration is a speculative endeavour and involves
significant risks. The prosperity of the Merged Group’s mining exploration business
depends on the successful exploration and/or acquisition of resources or reserves,
competent operational management and efficient financial management. Further, the
nature of the business of exploration can sometimes result in industrial accidents and
other incidents beyond the control of the Merged Group.
ii. There can be no assurances that the proposed project exploration programs, or any
other projects or tenements that the Merged Group may acquire in the future, will
result in the discovery of a significant ore deposit. Even if a significant ore deposit is
identified, there can be no guarantee that it can be economically exploited.
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