Additional Funding Requirements
Under the terms of the Mine Operating Contract, the Company is required, among other
things, to make all necessary investments and complete all works necessary to
reactivate the Las Cristinas deposits, to design, construct and operate a processing

plant to process gold for its subsequent commercialization and sale and to return the
mine, its installations and equipment to the CVG upon termination of the Mine Operating
Contract. In order to carry out the Las Cristinas project and its other mining projects,
the Company will need to raise substantial additional financing.
The Company may decide to meet its additional funding requirements through one or
more of non-recourse project debt and other forms of public markets debt and equity. If
the Company elects to raise commercial bank limited recourse project debt, the
Company will need to demonstrate to potential lenders compliance with the Equator
Principles, which are a set of guidelines adopted by a number of international financing
institutions to address the environmental and social issues associated with project
financing transactions. The Equator Principles are largely based on policies and
guidelines established by the International Finance Company. In this context the
Company notes that it has completed an Environmental Impact Study to international
standards, which was approved by the Venezuelan Ministry of the Environment and
includes plans to comply with the Equator Principles.
The fundamentals for gold are expected to remain positive in the current year and
despite the financial market turmoil and volatility, equity issues of gold companies have
been favourable under the right conditions. Some producers have met resistance in the
financing markets as credit is more restrictive and expensive and some equity
financings were completed at levels which have resulted in significant dilution.
Despite the financings that have been completed by the Company, the Company has
limited access to financial resources as a direct result of the Permit denial and there is a
risk that sufficient additional financing may not be available to the Company on
acceptable terms or at all as a consequence of the Government’s conduct. Failure to
obtain such additional financing could result in a delay or the indefinite postponement of
the Las Cristinas project and other mining projects of the Company and could also
result in the Company defaulting in the performance of its obligations under the Mine
Operating Contract.