WINTON CARTER MINING

THE RISKS OF ENGAGING A MINING IN AFRICA

Business Report

April 9, 2015

Chi Minh Bui

Word count: 1,121

Table of contents

Executive Summary 3

Introduction 3

Main findings 4

1. The exploitation risk is medium 4

2. The security risk is high 5

3. The health risk is low 5

4. The economic risk is low 5

5. The financial risk is medium 6

Conclusion 6

Recommendations 7

References 8

Executive Summary

The purpose of this report is to explore and explain the opportunities and challenges Winton Carter Mining (WCM) may face when entering into a joint venture with ATZ in a mining operation in Kango, Gabon, Central Africa.

WCM has an opportunity to apply its experience in the mining industry in terms of management and production for short-term and long-term gain. By engaging in the project, WCM will improve its reputation, increase its goodwill because of a likely increase in its share price, and potentially establish a new considerable source of income.

The risks, however, are substantial. Firstly, security risk that is considered high due to social instability of African countries may reduce the site’s revenue considerably and cost about $1 million annually to mitigate. Secondly, there is a medium exploitation risk because of quality of geologists’ reports. Moreover, economic risk and financial risk that are considered low and medium may result in an increased annual cost of $2 million to. Lastly, WCM will need to spend about $5 million on setting up a new water source and enhancing current technology to reduce health risk.

WCM should go ahead with the joint venture because if it applies all recommended solutions, all increasing expenditures will be still