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Risk Perception

The exploration  of natural resources implies risks, which require a proper risk management approach. For investors it is crucial to identify and appraise the risk profile of an exploration company. The risk mapping chart below illustrates the different elements to consider.

We have chosen to group all these risks into four main categories of potential impacts:

  • Project:  comprising the following sub-domains:
    • Location
    • Skills
    • Geology
    • Mineralogy
  • Corporate Governance comprising the following sub-domains:
    • Management
    • Funding capacity and ability
    • Risk Management
    • Marketing ability
  • External sphere comprising the following sub-domains:
    • Permitting
    • Community
    • SHE (security,health,environment)
    • Sustainable Development
  • Value  comprising the following sub-domains:
    • Valuation
    • Maturity
    • Uncertainties level
    • Growth potential



The risk perception is rated as followed:     Rating : Low =1     Very High = 5
Formula :
  Probability * Impact * Difficulty to detect (1:easy to 3:difficult) = Risk Value



Risk Impact                  1= Insignificant    2=Minor    3=Moderate   4=Major    5= Critical


Risk Probability        1=Rare    2=Unlikely     3= Possible     4=Likely     5=Almost Certain


Difficulty to detect    1=Easy    2=Attention required     3=Difficult without specific investigation


Risk levels

EXTREME RISK               x>=20      
Immediate action required 
HIGH RISK                    12< x < 20   
Detailed research and management planning required at senior level; risk plan required
SIGNIFICANT RISK       8< x <=12     
Senior management attention needed; risk plan required
MODERATE RISK         3< x <= 8
Management responsibility must be specified; monitoring plan required
LOW RISK   <= 3 (4)*
Manage by routine procedures; risk plan or monitoring plan not required.   
       * zone to appreciate: minor risk impact and unlikely probability