In business terms, especially in the gold mining business, there is an objective need to create an own research facility within the Company in order to foresee possible risks, evaluate the chance of their occurrence and calculate the damage caused to the company by these risk events.
This project includes some potential business risks assessed based on the scale of probability (the impossible event is ”0”, the low probability is ”1”, the average probability is ”2”, the probable event is ”3”, the high incidence – ”4”).
- Production risk occurs due to decrease in the volume of production or its sell (due to a decrease in the productivity of personnel or equipment – unplanned down time, accidental breakdowns, etc.); reduction in the unit price (due to decrease in competitors’ prices of, a decrease in product quality, i.e., failure to meet standard brands and grades); due to an unforeseen increase in costs; due to overspending the wage fund; due to payment of increased taxes, fees and other payments; due to losses caused by other circumstances, such as payment of penalties, fines, damages, expenses in case of natural disasters.
- Commercial risk occurs in the process of selling goods and services purchased by the company, i.e. at their resale.
Operational risk is a set of the following risks – transport, organizational and informational. Transport risk arises when the goods are transported; Organizational risk is losses due to ineffective business management, recruiting mistakes;
- Information risk is losses due to leakage of business information.
- Financial risk occurs during financial or business activities as well as financial transactions.
To minimize risks, the following methods are used:
- project structuring and operational project management;
- distribution of responsibilities between project participants;
- reservation of funds;
- conclusion of fixed-term contracts that take into account changes in the market conditions in the future.
SStar Gold Resources AB (publ)
World Trade Center, Klarabergsviadukten 70, Stockholm
Telefon 08- 506 36 388
Fax 08- 506 362 01
Karl-Axel Waplan, direkt 070-510 42 39
Emissionsinstitut och Aktieboksansvarig
S-400 10 Göteborg
Henrik Kristensen, Telefon: +46 733 31 11 03
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