It is the opinion of the Board that the impending implementation of regulated government policy to phase out carbon rebar in favour of Stainless Rebar will propel exponential market growth in the very near future. This will surely be a "Game-Changer".

Stainless Steel not a traded commodity on the LME or FME. The utilization of Commodity Traders is envisaged, including possible offtake by the LME and/or FME, to market and sell the product from Lamergyre. Lamergyre does not exclude the option to establish its own trading platform to secure market penetration.

The major aspect of Sovereign risk in many developing economies relates directly to the outcomes of desperate measures taken by those States to prevent egregious profit transfers and the denuding of the State natural resources without provision for the sustainability of the local economy and without contributing to the fiscus of that State the funds required to create a viably sustainable local economy itself.

The result is often draconian legislation that incorporates racial, environmental, social and fiscal measures that are so onerous that in the international community of investors and miners, there are simply no takers. The outcome of such measures is generally industrial shrinkage, as many emerging economies rely on their natural resources for foreign direct investment and sustained economic growth.

This in turn leads to political unrest which leads, in several instances, to the violent overthrow of the government and its replacement with an institution that once again allows for the effective looting of the country’s resources in order to obtain a temporary economic re-growth. The cycle then tends to repeat itself [Zambia, the DRC, and Zimbabwe are good current examples of this cycle in the African context].

For Lamergyre, the response is multilateral –

Firstly, and most importantly, the corporation commits to working with unequivocal integrity in all its dealings with State, parastatal, regional and municipal institutions.

Secondly, the corporation will assert and maintain a clear and succinct mutual understanding of the meaning and application of “good corporate citizenship” of the sovereign States in which it carries out its operations. This includes addressing issues of sustainable development and being transparent in all aspects of its fiduciary responsibility.

Thirdly, the corporation's exposure to central bank restrictions on the movement of funds will at all times be proactively managed to ensure maximum limitation of risk to corporate trading sustainability.

Despite these measures, it is clear that the growth pains of developing countries, as they emerge from third world poverty and deprivation, manifest in the implementation of legislation that may be short-sighted or even totally destructive to any existing enterprise or to the investment in any developing enterprise.

To address this issue the mitigation of Sovereign Risk will be implemented by Sovereign Risk Insurance over the Debt-borrowing-term. Subsequent non-financial guarantees, such as land-security from the National Government will provide more relief on this aspect.

In respect of engagement with Government on these issues, the Lamergyre Alloys Limited business model is strategically aligned with entrenched South African Constitutional imperatives for social upliftment, providing a further bulwark against political or legislative threat to the project sustainability.

Sovereign Risk is not exclusive to the African market and it is the opinion of the Board that this will not slow the investment from Europe or East-Asia, as the abundance of resources and development opportunity in Africa will more than outweigh the risk.

The Moody’s Rating for the South African economy is currently just above Investment Grade, and there is a definite resource beneficiation investment-drive into Africa from India, China and the United States of America.