Important info from meeting with director KC, page-36

Obviously sovereign risk gives people the jitters and it certainly has in our case. However I am not overly concerned, consider the facts.

Firstly CR is a member of the EU and its biggest trading partner is Germany - by a long way: (Imports/Exports valued at USD82B with Slovakia second with USD19B). CR's biggest export is motor vehicles and parts, at around 24%. Nationalisation or forced acquisition of foreign companies and their assets would be suicidal. There is also the legal matter associated with the granting of permits, exploration rights etc etc. And although a MOU is not a contract it does signify intent, with duly elected government officials in attendance for the signing ceremony.

Secondly it is quite possible and preferable that a way forward that appeases all at Cinovec is a type of Production Sharing Contract (PSC) or similar, common in the oil industry where the National Oil Companies (NOC) want some 'skin in the game', but require expertise and/or finance from the independent corporate sector. Numerous permutations are possible for EMH, maybe bringing a manufacturer and/or an experienced mining company into the consortium with a local CR government company.

Thirdly Babis is under criminal investigation for fraud. What will happen if he is found guilty? there are EU grants in question, how will the commission respond? Also in the complex world of CR politics there are many possibilities for different coalitions to be either broken up or formed.

Politicians are the same the world over , say anything to win the populist vote.