The Ordinary Shares of Patagonia Gold PLC have been traded on the London Stock Exchange AIM market since March 2003. Companies on AIM are not required to make an annual statement to shareholders regarding compliance with The Combined Code on Corporate Governance. However, the following statements are made in respect of corporate governance.


The Company is managed by the Board of Directors. The function of the Chairman is to supervise the Board and to ensure that the Board has control of the business, and that of the Chief Executive Officer is to manage the Company on the Board’s behalf. Three of the four Board members are non-executive and hence are independent of management.

All Board members have access at all times to sufficient information about the business to enable them to fully discharge their duties. Also, procedures exist covering the circumstances under which the Directors may need to obtain independent professional advice at the Company’s expense.

The Board has several established Committees to fulfil specific functions.

The Executive Committee, chaired by Christopher van Tienhoven, consists of the Executive Director and the Secretary. It has responsibility for the day-to-day management of the Company.

The Audit Committee is chaired by Gonzalo Tanoira and includes Carlos Miguens and Manuel de Prado. The Committee is appointed by the Board to assist in fulfilling its obligations relating to the integrity of the internal controls and financial reporting of the Company. Meetings are held as required. A separate internal audit function cannot be justified, at present, in view of the size and scope of the Company’s activities. The external auditors, currently Grant Thornton, are invited to attend at least one meeting of the Audit Committee each year.

The Remuneration Committee is chaired by Carlos Miguens and includes Gonzalo Tanoira and Manuel de Prado. The Committee is appointed by the Board to assist in setting director and senior officer remuneration and to develop and submit to the Board recommendations with respect to other employee benefits considered advisable. Meetings are convened to monitor, assess and report to the full Board on all aspects and policy relating to the remuneration of Directors. All Directors are required, in turn, to stand for re-election every three years.

The Nomination Committee is chaired by Manuel de Prado and includes Carlos Miguens and Gonzalo Tanoira. The Committee is appointed by the Board to assist the Company and the Board in fulfilling their respective corporate governance responsibilities under applicable securities laws, instruments, rules and policies and regulatory requirements, to promote a culture of integrity throughout the Company and to assist in identifying and recommending new nominees for election to the Board.

The Board has overall responsibility for the Group’s system of internal controls. However, such a system is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can only provide reasonable and not absolute assurance against material misstatement.

There is an appropriate level of involvement by the Directors in the Company’s activities. This includes the comprehensive review of both management and technical reports, the monitoring of foreign exchange and interest rate fluctuations, environmental considerations, government and fiscal policy issues, employment and information technology requirements and cash control procedures.

Site visits are made as required both by certain Directors and senior management. In this way the key risk areas can be monitored effectively and specialist expertise applied in a timely and productive manner.

Gonzalo Tanoira has a service arrangement that provides for six months’ notice of termination, while the other Directors have three months’ notice of termination.

Patagonia Gold maintains effective contact with its principal shareholders and welcomes communications from private investors. News releases and other information are available to shareholders on the Company’s website. Shareholders are encouraged to attend the Annual General Meeting, at which time there is an opportunity for discussion with members of the Board.

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