Risk Management Policy

Phoenix Copper Limited Risk Management Policy

1. PURPOSE OF POLICY

This Policy is designed to provide a framework for minimising and managing risk. The Australian and New Zealand Standard on Risk Management Systems AS/NZS 4360 has been used as a benchmark in developing this Policy. According to this Standard, risk is the chance of something happening that will have an impact on objectives. Risk is measured in terms of a combination of the consequences of an event and their likelihood.

2. RISK MANAGEMENT PROCESS

The main elements of Phoenix Copper’s risk management process are as follows:

• Establish Phoenix Copper’s strategic, organizational and risk management context;
• Identify risks;
• Analyse risks;
• Evaluate risks;
• Treat risks; and
• Monitor and review the effectiveness of our risk management process.

Subject to the Board deciding otherwise, the Company is to have a Risk Management Committee, headed by the Managing Director.

Whilst the Board is ultimately responsible for identifying and managing areas of significant business risk and ensuring that arrangements are in place to adequately manage these risks, the Company’s Audit Committee and Risk Management Committee are to be heavily involved in this process.

3. RISK IDENTIFICATION AND ANALYSIS

This Risk Management Committee is to identify and analyse Phoenix Copper’s risks and create a Corporate Risk Register which lists and rates these risks. A risk matrix which takes into consideration the likelihood and consequence of the risk is to be used to determine risk ratings.

4. RISK EVALUATION AND TREATMENT

The Risk Management Committee is to evaluate the Company’s risks and develop specific cost-effective strategies and action plans for minimising and treating the risks. The current control measures and improvement actions for minimising and treating each risk are to be noted in detail on the Corporate Risk Register. The Managing Director must ensure that the person responsible for implementing the control measure or improvement action is aware of their responsibility.
The Managing Director is ultimately responsible for ensuring that the Company’s control measures for minimising and treating the Company’s risks operate effectively but monitoring and review will occur as described in section 5.

5. MONITOR AND REVIEW

The Managing Director is responsible for overseeing the establishment, implementation and review of Phoenix Copper’s risk management process. The Managing Director is to report annually to the Audit Committee, at its meeting held to recommend approval of the annual accounts, on the effectiveness of the Company’s risk management of material business risks and is to attend that meeting of the Audit Committee to answer questions regarding risk management from the members of the Audit Committee.

The Risk Management Committee must ensure that the Corporate Risk Register is kept up-to-date on an ‘as needs’ basis so as to reflect changes in Phoenix Copper’s business activities and risks, the law and current best practice within the mining industry.

A thorough review of the Corporate Risk Register is to be undertaken by the Risk Management Committee and the Audit Committee each year to identify any further risks, evaluate existing controls and, if necessary, develop and implement further strategies and action plans for minimising and treating the risks.