Principle 7: Recognise and Manage Risk
"Establish a sound system of risk oversight and management and internal control"
Recommendation 7.1: The board or appropriate committee should establish policies on risk oversight and management.
The Company has in place a risk oversight and management policy, which sets out the Company's systems for risk oversight, management and internal control. The key aspects of the policy are that:
- the Board oversees the establishment and implementation of risk management systems and control frameworks, and in the absence of a separate audit committee as set out in relation to best practice recommendation 4.2, has the responsibility to establish, implement and maintain these systems and frameworks; and
- the Company's senior management are delegated the tasks of management of operational risk and the implementation of risk management strategies with the chief executive officer (unfilled at present) and Chief Operating Officer/Chief Financial Officer having ultimate responsibility to the Board for the risk management and control framework.
The Board and reviews the Company's risk management systems and control frameworks, and the effectiveness of their implementation, annually. The Board also considers the management of risk at its regular meetings. The Company's risk profile, which is assessed and determined on the basis of the Company's business in commercial mining and mineral exploration, is reviewed annually upon advice from management including, where appropriate, as a result of regular interaction with management and relevant staff from across the Company's business.
The Board or the Company's senior management may consult with the Company's external accountants on external risk matters as required.
The Company's risk management systems and control frameworks for identifying, assessing, monitoring and managing its material risks, as established by the Board in conjunction with management, include:
- the Board's ongoing monitoring of management and operational performance;
- a comprehensive system of budgeting, forecasting and reporting to the Board;
- approval procedures for significant capital expenditure above threshold levels;
- regular Board review of all areas of significant financial risk and all significant transactions not part of the Company's normal business activities;
- regular presentations to the Board by management on the management of risk;
- comprehensive written policies in relation to specific business activities;
- comprehensive written policies in relation to corporate governance issues;
- regular communication between directors on compliance and risk matters; and
- consultation and review processes between the Board and external accountants.
The Company's risk oversight and management policy was adopted in June 2005.
Recommendation 7.2: The chief executive officer (or equivalent) and the chief financial officer (or equivalent) to state to the board in writing that:
7.2.1 – the statement given in accordance with best practice recommendation 4.1 (the integrity of financial statements) is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the board
7.2.2 – the company's risk management and internal compliance and control system is operating efficiently and effectively in all material respects
The Company's chief executive officer (unfilled at present) and chief operating officer/chief financial officer together report in writing to the Board that the statement given in accordance with best practice recommendation 4.1 is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the board and that the company's risk management and internal compliance and control system is operating efficiently and effectively in all material respects.
Recommendation 7.3: Provide the information indicated in the ASX Corporate Governance Council's Guide to Reporting on Principle 7.
The Company has provided relevant information in this Statement upon recognising and managing risk.
The recently completed optimisation study has indicated that an open pit mine would make a significant profit with various treatment options producing 50,000 - 60,000 ozs of Au at a gold price of A$1,300/oz
Encouraging results have been received from recent drilling of East Shear North
exploration target which lies to the east of the main Mt Martin pit.
Australian Mines Limited (ASX:AUZ) is pleased to announce an increase of approximately 50% in gold resources at the Mt Martin mine.
Australian Mines Limited (ASX:AUZ) is pleased to announce that surface drilling will recommence at Mt Martin on Monday 14th June 2010 to further define new resources at Mt Martin.
Australian Mines Limited (ASX:AUZ) is pleased to announce very encouraging results from its latest RC drilling under the East Lode pit at the Mt Martin Project
AUZ Mines which announced encouraging results on 6th April from drilling its 100% owned Mt Martin gold project will be recommencing drilling this week.