Corporate Governance Statement

Board of Directors

The Board’s primary role is the protection and enhancement of long-term shareholder value.

To fulfil this role, the Board is responsible for the overall corporate governance of the consolidated entity including formulating its strategic direction, approving and monitoring capital, exploration and operating expenditure, setting remuneration, appointing and removing directors and senior employees, establishing and monitoring the achievement of management’s goals and ensuring the integrity of internal control and management information systems. It is also responsible for approving and monitoring financial and other reporting.

The Board has delegated responsibility for operation and administration of the Company to the Executive Directors and senior employees.

Identification of Independent Director

The independent director of the Company is Mr Mark Rodda.

Board Processes

Due to the small size of the Board all matters that would be addressed by committees (eg. nomination committee, audit committee) are dealt with by the full Board of directors.

The Board has established a framework for the consolidated entity including a system of internal control, a business risk management process and the establishment of appropriate ethical standards.

The full Board holds regular meetings to discuss operational matters, plus strategy meetings and any extraordinary meetings at such other times as may be necessary to address any specific significant matters that may arise.

Independent professional advice and access to Company information

If a director considers it necessary to obtain independent professional advice to properly discharge the responsibility of his/her office as a director then, provided the director first obtains approval for incurring such expense from the chairperson, the Company will pay the reasonable expenses associated with obtaining such advice.

Composition of the Board

The names and profile of each director of the Company are set out in the Corporate section of the website.

The composition of the Board is determined using the following principles:

  • The Board should comprise at least three directors. This number may be increased where it is felt that additional expertise is required in specific areas, or when an outstanding candidate is identified
  • Due to the small size of the Board it is not considered necessary that the majority of the Board should be independent directors
  • The Board should comprise directors with a broad range of expertise, with a majority of directors having extensive knowledge of the Company’s industry
  • Directors appointed by the Board are subject to election by shareholders at the
    following Annual General Meeting and thereafter directors are subject to re-election at least every three years.

The composition of the Board is reviewed on an annual basis to ensure that the Board has the appropriate mix of expertise and experience. When a vacancy exists, through whatever cause, or where it is considered that the Board would benefit from the services of a new director with particular skills, a panel of candidates is selected with the appropriate expertise and experience. External advisers may be used to assist in such a process. The Board then appoints the most suitable candidate who must stand for election at the next general meeting of shareholders.

Director Evaluation

Evaluation of the Board and its members is facilitated by the Chairman and carried out by the full Board in the absence of the relevant Board member.

Risk Management

Oversight of the Risk Management System

The Board oversees the establishment, implementation, and annual review of the Company’s Risk Management System. Management has established and implemented the Risk Management System for assessing, monitoring and managing operational, financial reporting and compliance risks for the consolidated entity. Financial reporting risk management and associated compliance and controls have been assessed and found to be operating adequately.

Risk Profile

The Executive Directors report to the Board regularly on the status of risks, ensuring that they are identified, assessed and appropriately managed.

Major risks arise from such matters as political risk, exploration risk, security of tenure, environment, government policy changes, commodity prices, occupational health and safety and financial reporting.

Comprehensive practices have been established to ensure:

  • The political situation in Peru is closely monitored
  • Exploration expenditure is incurred in accordance with an approved budget
    • Occupational health and safety standards are monitored and reviewed to achieve high standards of performance
    • Joint ventures and project acquisitions are properly authorised and executed
    • The quality and integrity of personnel
      • Financial reporting accuracy and compliance with the financial reporting regulatory framework
      • Environmental regulation compliance.

Quality and Integrity of Personnel

Formal appraisals are conducted at least annually for all employees. Training and development and appropriate remuneration and incentives with regular performance reviews create an environment of co-operation and constructive dialogue with employees.

Financial Reporting

The Executive Directors have declared in writing to the Board that the Company’s financial reports are founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the Board.

Environmental Regulation

The consolidated entity holds exploration interests in Peru and Australia. The consolidated entity’s operations are subject to environmental regulations in Peru and Australia in relation to its exploration activities.

The consolidated entity is committed to achieving a high standard of environmental performance. The Executive Directors are responsible for the regular monitoring of environmental exposures and compliance with environmental regulations. As part of this process they are responsible for:

  • Implementing environmental management plans in operating areas which may have a significant environmental impact
  • Identifying where remedial actions are required and implementing action plans.

The Board is advised of any significant environmental issues as they occur. Based upon the work completed, the Board is not aware of any significant breaches of environmental requirements.

Ethical Standards

The Board acknowledges the need for continued maintenance of the highest standards of corporate governance practice and ethical conduct by all directors and employees of the consolidated entity. A fundamental theme of the consolidated entity’s code of ethics is that all business affairs are conducted legally, ethically and with the strict of the highest standards of integrity and propriety. The Directors and management have the responsibility to carry out their functions with a view to maximising financial performance of the consolidated entity.

All directors and employees are expected to act with the utmost integrity and objectivity, striving at all times to enhance the reputation and performance of the consolidated entity.

Conflict of Interest

Directors must keep the Board advised, on an ongoing basis, of any interest that could potentially conflict with those of the Company. Where the Board believes that a significant conflict exists for a director on a Board matter, the director concerned does not receive the relevant Board papers and is not present at the meeting whist the item is considered.

Trading in General Company Securities by Directors and Employees

The Policy on trading in Company securities by directors and employees is that directors and employees are prohibited from dealing in Company shares or exercising options whilst in possession of price sensitive information not yet released to the market. The Company released its detailed Security Trading Policy to the market on 31 December 2010.

Communication with Shareholders

The Board provides shareholders with information using a comprehensive continuous disclosure policy which includes identifying matters that may have a material effect on the price of the Company’s securities, notifying them to the Australian Stock Exchange (ASX), posting them on the Company’s website and issuing media releases.

In summary, the continuous disclosure policy operates as follows:

  • The Executive Directors and the Company Secretary are responsible for interpreting the Company’s policy and where necessary informing the Board. The Company Secretary is responsible for all communications with the ASX
  • The full annual financial report is distributed to all shareholders
  • The half-yearly report contains summarised financial information and a review of the operations of the consolidated entity during the period.  The half-year reviewed financial report is lodged with the Australian Securities and Investments Commission and the ASX, and sent to any shareholder who requests it
  • Quarterly reports contain summarised financial information and a review of the operations of the consolidated entity during the period.  The quarterly reports are lodged with the ASX, and sent to any shareholder who requests it
  • Proposed major changes in the consolidated entity which may impact on share ownership rights are submitted to a vote of shareholders
  • All announcements made to the market are placed on the Company’s website after they are released to the ASX
  • The full texts of notices of meetings and associated explanatory material are placed on the Company’s website
  • The external auditor is requested to attend the Annual General Meeting to answer any questions concerning the audit and the content of the Auditor’s Report.

All the above information is made available on the Company’s website within three days of public release and is emailed to all shareholders who lodge their email contact details with the Company.  Information on lodging email addresses with the Company are available elsewhere on this website.

The Board encourages full participation of shareholders at the Annual General Meeting to ensure a high level of accountability and identification with the consolidated entity’s strategy and goals.  Important issues are presented to the shareholders as single resolutions.