Chugai Mining Co.,Ltd.

Precious metal bullion such as gold, silver, platinum, and palladium are internationally traded commodities and are significantly affected by international commodity markets (non-ferrous metal prices) and exchange rate fluctuations. Fluctuations in market prices may directly affect the business results and financial condition of the precious metals business. The securities report does not describe specific hedging measures or other countermeasures.

Products such as loose diamonds and jewelry are also internationally traded commodities and are affected by international commodity markets and exchange rate fluctuations. Price fluctuations may affect the business results and financial condition of the Group. The securities report does not describe specific countermeasures.

Sales prices in the real estate business are susceptible to trends in the economy, interest rates, housing taxation systems, and other factors. Changes in these external environments may adversely affect the business results and financial condition of the real estate business. The securities report does not describe specific countermeasures.

Demand trends among buyers in the real estate business are heavily influenced by fluctuations in market interest rates. In a rising interest rate environment, demand for housing purchases may decline, potentially adversely affecting the business results and financial condition of the Group. The securities report does not describe specific countermeasures.

The precious metals business works to prevent pollution of air, water discharge, soil, and groundwater in accordance with environmental laws and regulations, and implements measures to prevent mining-related harm, such as mine drainage treatment and safety management of tailings storage facilities, for closed and abandoned mines in accordance with the Mine Safety Act. Revisions to related laws and regulations may result in new capital expenditures or cost burdens.

The real estate business is subject to regulation under numerous laws including the National Land Use Planning Act, the Building Lots and Buildings Transaction Business Act, the Building Standards Act, the City Planning Act, and the Construction Business Act, and operates under a license granted pursuant to the Building Lots and Buildings Transaction Business Act. Revisions to these related laws and regulations may affect the business results and financial condition of the Group.

Certain borrowings of the Group are subject to financial covenants that stipulate a minimum level of net assets. If a deterioration in business performance results in a breach of these covenants, the Group could lose the benefit of the term on its loans, potentially causing material adverse effects on its financial condition and business results.