Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Environmental Compliance Certificate (ECC) issued for the King-King Project in February 2015.

Social Achievements

• Memorandum of Agreement (MOA) executed in July 2015 between NADECOR, Mansaka Indigenous Cultural Communities/Indigenous Peoples (IPs), and the National Commission on Indigenous Peoples (NCIP), ensuring a royalty fee, employment priority for IPs, and their Free and Prior Informed Consent.

Governance Achievements

• Two new directors, Marcelino C. Mendoza and Patrick V. Caoile, were elected at the June 2015 Annual General Meeting (AGM).

Climate Goals & Targets

Environmental Challenges

• Adverse fluctuations in currency exchange rates.
• Competition in the mining industry.
• Conflicts of interest among directors and officers.
• Current global economic conditions and potential governmental nationalization of assets.
• Dependence on key directors and officers.
• Environmental risks, health and safety regulations, permits and licenses.
• Mine development risks.
• Fluctuating mineral prices.
• Foreign operations and joint venture risks.
• Social and community impacts.
• Security of energy supplies.
• Emissions and climate change regulations.
• Future acquisitions.
• Future financing.
• No history of earnings.
• Operating hazards and risks.
• Partner risk (internal dispute within NADECOR).
• Philippine tax incentives (potential withdrawal or reduction).
• Reliability of historical information.
• Title risks.
• Uninsured or uninsurable risks.
• Volatility of share price.

Mitigation Strategies

• Careful cash outlay management to optimize permitting and project advancement.
• Cost minimization strategies (reduced staffing, decreased share-based payments, etc.).
• Procedures to address conflicts of interest.
• Monitoring of governmental actions and adapting strategies as needed.
• Maintaining sufficient cash or credit terms with suppliers.
• Compliance with environmental regulations and obtaining necessary permits.
• Addressing social and community concerns through MOA and Resettlement Action Plan (RAP).
• Entering into long-term supply contracts for energy when beneficial.
• Due diligence in acquisitions and joint ventures.
• Securing additional financing through equity issuances and other means.
• Risk mitigation strategies for operating hazards and risks (insurance where possible).
• Legal recourse through arbitration in Singapore and Philippine courts.
• Ongoing efforts to address the NADECOR shareholder dispute.
• Monitoring of Philippine government's tax incentive regulations.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Flooding
• Earthquakes

Transition Risks

• Emissions regulations

Reporting Standards

Frameworks Used: IFRS

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Obtained ISO 14001:2015 certification in February 2018, allowing compliance with DENR Administrative Order 2015-07. Passed Stage 2 ISO external audit in February 2020, certification valid until March 12, 2023. Completed ISO Internal Audit in September 2020.
• Submitted and received approval for Care and Maintenance Program (CMP) for 2020 from MGB Regional Office XI. Reallocated unutilized funds from SDMP-CMP to provide relief goods and face masks to over 350 households in Pantukan, Davao de Oro.

Social Achievements

• Implemented a corporate social responsibility management policy to guide community development activities. Conducted numerous environmental and social surveys to determine impacts and needs of local communities. Executed a MOA in July 2015 with NADECOR, Mansaka Indigenous Cultural Communities/Indigenous Peoples, and the National Commission on Indigenous Peoples, committing to royalty payments and employment priority for IPs.

Governance Achievements

• Established an Audit Committee compliant with NI 52-110. Adopted an Audit Committee Charter (Schedule A). No non-audit services were approved pursuant to a de minimis exemption to the pre-approval requirement. The Audit Committee has adopted specific policies and procedures for the engagement of non-audit services.

Climate Goals & Targets

Environmental Challenges

• Highly competitive industry with challenges in accessing qualified personnel, drilling contractors, mineral properties, and capital. Sensitivity to worldwide economic cycles and metal prices. Risks associated with operating in the Philippines, including potential for local unrest, corruption, and physical security concerns. Dependence on management and the success of the Kingking Project.
• Environmental risks, regulations, permits, and licenses. Potential for liabilities exceeding insurance coverage. Governmental scrutiny of the mining industry.
• Imprecise resource estimates dependent on metal prices and recovery costs. Volatility of share price. Dependence on future financing and the ability to generate positive cash flow.

Mitigation Strategies

• Engaging with the Chamber of Mines of the Philippines and others in the mining industry regarding DAO No. 2017-10 (ban on open-pit mining). Monitoring and engaging with the DENR on show-cause orders. Carrying commercial general liability insurance and ensuring contractors have adequate coverage. Actively engaging with local communities and pursuing the FPIC process to obtain CP from indigenous people.
• Evaluating an integrated project approach for developing Kingking. Managing permitting and engineering activities with qualified professionals. Complying with environmental legislation and obtaining necessary permits.
• Conducting a bankable feasibility study to confirm project feasibility. Assessing the impact of sustained lower metal prices on economically available mineral resources. Seeking additional financing, but acknowledging potential for share dilution.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: NI 43-101

Certifications: ISO 14001:2015

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Passed ISO Surveillance Audit in March 2021 with no non-conformities; remains ISO-certified.
• Submitted and received approval for Care and Maintenance Program (CMP) for 2021 from MGB XI.

Social Achievements

• Full compliance with health and safety protocols mandated by national and local governments in response to COVID-19.
• Memorandum of Agreement (MOA) executed with Mansaka Indigenous Cultural Communities/Indigenous Peoples (IPs) and National Commission on Indigenous Peoples (NCIP) in May 2015, providing royalty fees and employment priority to IPs.

Governance Achievements

• Maintains compliance with all regulatory requirements to date.
• Board considers gender as one factor in selecting candidates for board and executive positions.

Climate Goals & Targets

Environmental Challenges

• Working capital deficit of approximately $5.4 million at March 31, 2021.
• Material uncertainty about the Company’s ability to continue as a going concern due to lack of revenue, accumulated deficit, and limited free working capital.
• Ban on open-pit mining (DAO No. 2017-10) impacting project development.
• Potential for changes in tax and royalty structure in the Philippines.
• Show cause order from DENR regarding possible cancellation of MPSA.
• Dependence on directors and officers.
• Fluctuating mineral prices.
• Risks associated with foreign operations and joint ventures.
• Social and community impacts requiring resettlement and potential local opposition.
• Security of energy supplies.
• Emissions and climate change regulations.
• Title risks to mineral property interests.

Mitigation Strategies

• Seeking additional financing through equity issuances, debt, or partner financing.
• Careful management of cash outlay to optimize project milestones.
• Engaging with DENR and MGB for lifting of the open-pit mining ban.
• Collaboration with mining associations to advocate for policy changes.
• Continued compliance with permits and licenses.
• Monitoring effects of new tax law (Republic Act No. 10963).
• Addressing social and community impacts through MOA with IPs and Resettlement Action Plan (RAP).

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: IFRS

Certifications: ISO