1.17 Risks A number of potential project risks have been identified during the course of this PFS that can materially affect project execution and project economics. These risks are categorized as originating from the FLN site development, from Railway infrastructure development between the FLN and Pointe-Noire sites, or from Pointe-Noire Port facility development. High-risk areas pertaining to the FLN site development are: Timely reception of environmental permits and EA approvals; Timely conclusion of MOU agreements with First Nations and other stakeholder agreements; Timely arrangement of Project financing. BBA 1-21 January 2013 Champion Iron Mines Limited CHAMPION NI 43-101 Technical Report High-risk areas pertaining to railway infrastructure development are: Completion of the geotechnical campaign for the railway (required to begin detailed engineering for the railway);engineering for the railway); Risk to construction schedule due to CN's suspension of their decision on whether or not to move forward with railway construction until Q4 2013. High-risk areas pertaining to Pointe-Noire port development are: Potential conflicts between the several port stakeholders; Space constraints in proximity to the port infrastructures. (The final location of the Champion stockyard has not been established and discussions are still underway amongst the various Stakeholders); Establishment of a concentrate transportation management plan to ensure an efficient utilization of infrastructures. All the identified risks will be carried through to the next phase of the Project and shall be updated based on the status of the Feasibility Study. The next step of the risk analysis process will be to hold a risk workshop to further identify potential issues and risks. The outcome of the workshop will be a risk register that will identify and quantify risk element and assess their severity as well as identify all possible opportunities. The risk register will help implement a risk management plan to monitor, reduce and avoid potential risks. Successful mitigation of the evaluated risk can result in a cost and schedule savings with a positive impact on the Project