Lack of Experience in Managing a P ublic Entity Management has historically operated the business of the Company as a privatelyowned series of companies The individuals who will constitute the Companys senior management team have never had responsibility for managing a publiclytraded entity If these individuals are unable to satisfactorily manage a public entity and ensure the Companys compliance with all continuous disclosure and other requirements applicable to public entities the Company may be adversely affected Environment Health and Safety R equirements and R elated Considerations The operations of the Company are subject to a broad range of federal provincial state and local laws and regulations as well as permits and other approvals including those relating to the protection of the environment and workers health and safety governing among other things air emissions water discharges nonhazardous and hazardous waste including waste water storage handling disposal and cleanup of dangerous goods and hazardous materials such as chemicals remediation of releases and workers health and safety in Canada and elsewhere the Environment Health and Safety R equirements As a result of the Companys operations it may be involved from time to time in administrative and judicial proceedings and inquiries relating to Environment Health and Safety R equirements F uture proceedings or inquiries could have a material adverse effect on the Companys business financial condition and results of operations The Companys employees are required to attend at worksites of its clients many of whom insist on compliance with internal health and safety and environmental policies The activities at these worksites may involve operating hazards that can result in personal injury and loss of life There can be no assurance that the Companys insurance will be sufficient or effective under all circumstances or against all claims or hazards to which it may be subject or that it will be able to continue to obtain adequate insurance protection A successful claim or damage resulting from a hazard for which it is not fully insured could adversely affect the Companys results of operations In addition if the Company is seen not to adequately implement health and safety and environmental policies its relationships with its customers may deteriorate which may result in the loss of contracts and restrict its ability to obtain new contracts Insurance Limits The Company maintains property general liability and business interruption insurance However there can be no assurance that such insurance will continue to be offered on an economically feasible basis that all events that could give rise to a loss or liability are insurable or that the amounts of insurance will at all times be sufficient to cover each and every loss or claim that may occur involving the assets or operations of the Company Legislative and R egulatory Changes Changes to any of the laws rules regulations or policies affecting the business of the Company would have an impact on the Companys business and may significantly and adversely affect the operations and financial performance of the Company Legal and R egulatory Risk The mining and drilling industries are highly regulated by legal environmental and health and safety regulations F ailure to comply with such regulations could lead to penalties including fines or suspension of operations which could have a significant impact on the financial strength and future earnings potential of the Company F urthermore the Companys mineral exploration customers are also subject to similar legal regulatory health and safety regulations which could materially effect their decision to go ahead with mineral exploration or mine development and thereby indirectly negatively impact the Company 75