Risk Management

Risk management based on sound internal controls is a key consideration for the Board of Directors of Discover Exploration Ltd. The Chief Financial Officer is charged with the review of the key risks inherent in the business and the system of control necessary to manage such risks and to present his findings to the Board. Exploration risk, the main corporate risk to which the Company is exposed, is monitored and reviewed regularly by the Board. The Board considers the level of exploration risk to be acceptable for the Company taking into account the industry in which it operates.

The Directors consider that the frequency of Board meetings and the information provided to the Board in relation to Discover's operations assists the identification, evaluation and management of significant risks relevant to its operations on a continuous basis.

The Company’s system of internal control is designed to manage rather than eliminate the risk of failure to achieve the Company’s business objectives and provides reasonable but not absolute safeguards against loss or material misstatement.