The ordinary shares of Patagonia Gold PLC (the “Company”) have been traded on the London Stock Exchange’s Alternative Investment Market (AIM) since March 2003. Despite the Company not previously being required to make an annual statement to shareholders regarding its approach to corporate governance, the Company’s Board has fully supported good corporate governance and has voluntarily disclosed to shareholders information about its governance practices.


During the 2018 financial year, AIM Rule 26 changed requiring companies listed on AIM to disclose on their websites which recognised corporate governance code they apply and details of how that code is complied with.

The Board formally adopted the QCA Corporate Governance Code (the “QCA Code”) on 27 September 2018. An explanation of how the QCA Code is applied and how compliance with its principles will promote the success of the Company is set out below, together with any areas of non-compliance.

Further corporate governance disclosures will be included in the Company’s Annual Report for the year ending 31 December 2018 (the “2018 Annual Report”).

Role of the Chairman

The Board as a whole is responsible for effective corporate governance. As Chairman of the Board, I have overall responsibility for the corporate governance arrangements of the Company in addition to ensuring that corporate governance arrangements are fully adopted within the Company.

In addition, my role as Chairman is to lead and supervise the Board, ensuring its smooth running and the effective contribution of all Board members, and to ensure that the Board has control of the business.

Strategy and business model

In our Annual Report for the year ended 31 December 2017 (the “2017 Annual Report”), the Chief Executive Officer’s Review and Strategic Report set out the Company’s business model, strategy, key markets and principal risks. A copy of the 2017 Annual Report is available here.

The 2018 Annual Report will include additional information relating to the Company’s purpose, business model and strategy, as well as key challenges in the execution of the Company’s strategy.

Relations with shareholders

The Chief Executive Officer is responsible for shareholder liaison and has regular dialogue with institutional investors/shareholders in order to develop an understanding of their views.

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

The Board believes that its current approach to shareholder engagement is successful. During the 2017 financial year, meetings to present the FY17 interim and annual results were held with all major investors.

Stakeholder and social responsibilities

The Board considers its key stakeholders to include:

  • workforce – our people are our most important resource. They know and share the same values, care of the environment and responsibility for work, guaranteeing performance of tasks in a sustainable fashion and ensuring compliance with the company´s goals. In return the Company seeks to provide an environment for workers and their families where they feel safe, supported, motivated and properly rewarded;
  • suppliers – we aim to use local suppliers and to build strong relationships with them based on trust, understanding and respect;
  • customers – good relationships with our customers are important for the success of our business;
  • local communities – we aim to hire local personnel and local contractors where possible.

The Company provides an email address for feedback from the workforce, contractors and other stakeholders. In addition, the Company:

  • holds regular meetings with main suppliers and formal assessment made at least once a year;
  • surveys main customers at least once a year; and
  • maintains a social media presence in order to understand the sentiment of and obtain feedback from our stakeholders.

The Company is fully aware of its responsibilities towards the environment, its employees and existing social structures and is strongly committed to best industry practice, the safety of its workers and the communities where it operates. The Company guarantees that all exploration and production works are performed in compliance with the labour, mining and environmental laws in force, ensuring a safe and healthy working environment for its employees.

Mindful of its duty to respect institutions, local culture, communities and their history, the Company works to improve the educational services and the infrastructure of the regions impacted by its activities. It interacts with all stakeholders, working together to achieve a sustainable future and to secure better prospects for the communities when it finally concludes its production activities.

The Company is also committed to managing the environmental and social impact of the mining operations in which it is invested in a responsible and sensitive manner. All businesses are part of wider society and have a duty, responsibility and capability to make a positive contribution towards the communities in which they operate.

The Company recognises that the efficient operation of its business depends on the support of local authorities and the welfare of the communities as a whole and seeks to provide significant and sustainable benefits through its presence.

Risk Management

The Directors are responsible for establishing and maintaining the Company’s system of internal control and reviewing its effectiveness. Pages 15 and 16 of the 2017 Annual Report set out the Company’s approach to risk management and lists those risks which are considered to have a serious adverse impact on the Company’s performance.

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.

Page 23 of the 2017 Annual Report includes additional information about the Company’s internal control system.

The Board

The Board is responsible for managing the Company which 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.

The Board is comprised of the Chairman, the Chief Executive Officer and two Non-executive Directors. The Board considers the Non-executive Directors to be independent.

The Company has established an Audit Committee, a Remuneration Committee and a Nomination Committee. Details of these committees are disclosed on page 23 of the 2017 Annual Report.

The 2018 Annual Report will include the time commitment of, and the number of Board and Committee meetings attended by, the Directors.


The Board has an appropriate balance of skills and experience, as well as an appropriate balance of personal qualities and capabilities. Page 3 of the 2017 Annual Report identifies each Director and explains their experience and employment history.

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 2018 Annual Report will include information about how the skillsets of the Directors remain up to date as well as information relating to external advisers.

Board performance

The Board continually reflects on its performance and aims to identify areas for improvement where such areas exist.

The Board has not yet undertaken a formal review of its performance but has undertaken to complete an informal review during the 2019 financial year. Details of the review, its findings and the resulting actions agreed by the Board will be published in the 2019 Annual Report.

Ethical values and behaviours

The Board is committed to ensuring the highest legal and ethical standards and acknowledges its responsibilities in relation to corporate governance.

The Board will review the culture within the Company during the 2019 financial year and provide an update to shareholders in the 2019 Annual Report.

Governance structure and processes

Delivering growth and long-term shareholder value with effective and efficient decision-making is of high importance to the Board.

There is a clear division of responsibilities between the Chairman, who is responsible for supervising the Board, and the Chief Executive Officer, who is responsible for managing the Company on the Board’s behalf.

The Company has established an Audit Committee, a Remuneration Committee and a Nomination Committee. These committees meet at least three times a year. Details of the committees are disclosed on page 23 of the 2017 Annual Report.

Other than the adoption of the QCA Code in 27 September 2018 and the changes in governance arrangements arising from its adoption, there have been no other significant changes in governance arrangements both during and after the year ended 31 December 2017. There are no current plans to make any further amendments to the Company’s governance framework.

Carlos J. Miguens
28 September 2018


Patagonia Gold Corp and its subsidiaries (“Patagonia”) is committed to ensuring that its business operations are not used by others to bring funds generated by illegal activities into legitimate commerce (money laundering).

Although Patagonia is not a financial institution, anti-money laundering (“AML”) requirements are applicable to our business. Money laundering also represents several risks for non-financial companies such as Patagonia, including: reputational damage; operational losses resulting from inadequate or failed internal processes, people and systems, or from external events; legal liabilities due to any of these risks resulting in the failure to comply with applicable laws which could have a negative legal impact on Patagonia; and financial losses due to any of these risks  resulting in a negative financial impact for Patagonia.

It is therefore important to understand and comply with all AML regulations including: screening and monitoring requirements, “Know Your Customer” (KYC) procedures, sanction lists, record keeping requirements, reporting of suspicious circumstances and/or certain transactions in accordance with relevant laws, as well as AML training, if required.


This Policy provides guidance for compliance with AML and counter terrorist financing laws. It intends to educate all Patagonia employees to detect red flags for being misused for money laundering, terrorist financing or other financial crimes purposes.

Patagonia will take the necessary measures not to be used in the channeling of resources from acts of corruption, money laundering or the financing of terrorism.


This Policy applies to Patagonia’s directors, officers, and employees, including any individual working for, on behalf of Patagonia worldwide regardless of the place where Patagonia operates or conducts business. Ignorance or misunderstanding of the rules is no excuse for violations.


Money Laundering” means the process of transforming the profits of serious crime, such as corruption, drug trafficking and terrorism activities into ostensibly ‘legitimate’ assets.

Terrorist Financing” means the provision or collection of funds or resources of any kind, by any means, directly or indirectly, with the intention to use them or in the knowledge that they may be used, in full or in part, for terrorist purposes.

Politically Exposed Person” (PEP) means an individual who is or has been entrusted with a prominent public function. Due to their position and influence, it is recognized that many PEPs can be potentially abused for the purpose of committing Money Laundering offences and related predicate offences, including corruption and bribery as well as conducting activities related to Terrorist Financing. This definition includes PEP´s family members and close associates.

Ultimate Beneficial Owner” (UBO) generally means the person or group of persons that:

  1. By means of another person or any act, obtains the benefit derived therefrom and who, ultimately, exercises the rights of use, enjoy, benefit or dispose of a good or service, or
  2. Exercises the control of the legal entity that carries out acts or transactions with Patagonia, as well as the persons on behalf of which Patagonia enters into any of such acts or transactions.


I. Know Your Customer (KYC)

  1. Patagonia will perform due diligence on counterparties as required by local laws in order to make a formal identification of the Ultimate Beneficial Owners. Patagonia might conduct enhanced due diligence on high risk counterparties.
  2. Patagonia will undertake on-going monitoring of its business relationships with counterparties.
  3. Patagonia will retain relevant due diligence records for the period of time as required by applicable local laws.
  4. Patagonia will annually carry out a cross-check of its counterparties against international sanction lists (for example, OFAC List, UN Terrorists, FBI Most Wanted, etc.). In case of a positive match, further investigation will be conducted and appropriate action, including up to termination will be undertaken.

II. Suspicious Operations

  1. The following should be considered red flags which may be related to Money Laundering or Terrorism Financing activities:
    • Use of shell-companies;
    • Payments through accounts in shell banks;
    • Use of nominees, trusts, family member or third party accounts;
    • Difficulty to verify the identity of UBOs or reluctance to provide relevant details;
    • Disconnected customer/suppliers/third parties sharing common address;
    • The level of activity is not consistent with Patagonia´s understanding of the customer/supplier/
      third party’s business or level of legitimate income;
    • Customers/suppliers/third parties based in countries where production of drugs or drug trafficking is prevalent;
    • Business transactions involving countries where there is a high risk of Money Laundering and/or the Financing of Terrorism;
    • Funds are sent or received via international transfers from or to higher-risk locations or offshore accounts;
    • Cash intense businesses; and
    • Requests to inflate invoices.
  2. Patagonia will refrain from executing any operation when there is a suspicion of Money Laundering until further investigation has been completed. Patagonia will not execute any transaction on which there is evidence or certainty that is related to Money Laundering, even before making the communication to the competent authorities.

III. Politically Exposed Persons (PEPs)

  1. When applicable, Patagonia will obtain the required authorization from relevant governmental authorities before entering into a transaction with any PEP.
  2. Patagonia will undertake enhanced due diligence for all PEPs. Such enhanced due diligence shall include approval at a higher level than the one required for non-PEP counterparties.

IV. Reporting Suspicious, Relevant or Unusual Operations

  1. Any employee who becomes aware of any suspicious operation or reasonably suspects that Money Laundering or Terrorism Financing may occur, shall immediately report it to Patagonia’s Legal Affairs Manager and refrain from continuing with the transaction until approval is granted.
  2. Whenever a suspicious transaction or activity is to be communicated to Patagonia’s Legal Affairs Manager or the competent authorities for appropriate investigation, it is forbidden to disclose information about the issue to the person to whom the suspicion refers to, another person or organization.
  3. Patagonia will cooperate with the national and international AML competent authorities or its supporting bodies, facilitating at all times, in accordance with current applicable legal provisions in each jurisdiction, the documentation and information required by such authorities.


Because we all have a stake in Patagonia´s success, it is in all of our interest to help ensure that our business is conducted to the highest ethical standards, and that our reputation remains untarnished. For this reason, we strongly encourage you to report any situation you know or suspect about that may involve illegal, unethical or otherwise improper business activity, as well as all instances of employee violations of this or any other of the Patagonia policies. Doing so will allow the company to address the issue and take appropriate corrective action.

If you have a good-faith belief or concern related to improper or illegal conduct, you should immediately contact Patagonia’s Legal Affairs Manager at the contact details below:

Phone: +54 11 52786950.

Patagonia will not tolerate retaliation against you due to your report or participation in any internal investigations, as long as you have acted in good faith and believe what you reported to be true.

Retaliation may be grounds for discipline up to and including dismissal, subject applicable local laws. Patagonia will treat any good-faith reports or discussions in confidence consistent with legal requirements and subject to the need to conduct a thorough investigation where appropriate. In certain cases, and consistent with applicable laws, information may be shared with local law enforcement or other authorities.


This Policy and any standards and procedures adopted thereunder shall be communicated to all our directors, officers and employees and contractors, and other parties as appropriate.


The Audit Committee will review this Policy on a periodic basis, evaluate its effectiveness, and update or amend this Policy as necessary.

As at 24 August, 2019

Code of Ethics for Personnel



The Code of Ethics for Personnel (hereinafter, the “Code”) sets outs the principles that govern the behavior of personnel acting in the name and on behalf of the Organization or any conduct in their private life that may have a bearing on the Organization’s activity.


These principles apply to in-house employees of the Organization’s Controlled Companies and contracted third parties (hereinafter, the “Personnel”).


The Organization will continue to uphold the highest ethical principles to which it has strictly adhered at all times in the various spheres of action. For such purpose, it requires that personnel discharging duties in the name and on behalf of the Organization observe and comply with the laws and the highest basic principles governing ethical behavior.

All the activities of the Organization must be ultimately focused on satisfying the needs of the individuals, in their role as customers, consumers, vendors, employees, executives, shareholders and citizens. It is therefore essential to live by entrepreneurial ethical principles based on a behavior that does not give up a far-seeing mission in pursuit of opportunism, striving to establish fair and transparent relations in accordance with the rules of public and private law.

It is the Organization’s policy to:

  • deter the performance of illegal or unethical acts
  • stop any illegal or unethical act as soon as it may be possibly detected, and
  • enforce the relevant disciplinary sanctions.


All personnel must behave in an honest, fair and respectful manner in their relationships with other members of the Organizations and likewise with all third parties who may interact with it, including customers, vendors, contractors, governmental officials concerned, mass media or any other individuals and/or organizations, as applicable.


All personnel must be faithful to the Organization and avoid giving any assistance to competitors or third parties in matters that are contrary to the interests of the Organization.


All personnel must comply with the laws and regulations in all areas and countries where the Organization carries out its activities.


All personnel must avoid offensive behavior and conducts contrary to the law, including discrimination on grounds of racial or ethnic origin, skin color, religion or belief, nationality, gender, age, ancestry, national origin, civil status, physical disability, etc.

All decisions proper to the labor relationship between personnel and the Organization must be exclusively based on evaluations related to the activity and performance.


All personnel must avoid any action that may lead to provocation or incitement of violence of any kind, either physical or otherwise, in their workplace. In this sense, it is of the essence that the conduct of all individuals be respectful to all members of the company.

It is the responsibility of all those concerned to preserve a safe and respectful working environment, free from abusive or unprofessional behavior, abiding by ethically correct and sound practices and avoiding unbecoming situations both at the workplace and resting areas.

It is worth pointing out that personnel should discharge duties in each working place in a rightful manner. Particular care should be given to their behavior while performing their tasks and after the completion thereof, during their time off from work.


All personnel must avoid spreading of information, acceptance, marketing and/or use of addictive substances that may influence their normal and habitual behavior.


Measures should be taken to avoid engaging and/or promoting the engagement of immediate family members in the same Company.

In the event family members discharge duties in the same company, care must be taken to avoid that one family member be assigned to a position where he could possibly control, review and/or approve the work done by another family members or exert influence in obtaining or promoting a salary increase in their favor.

If the foregoing grounds for disqualification arise in connection with those already in the employment of the Company (for example: marriage), one of them should be reassigned to another Manager’s Office or Company of the Organization.


All personnel must avoid the use or disclosure, either directly or indirectly, of the Organization’s proprietary information for their own benefit and/or that of third parties, save for information already in the public domain or in respect of which the express authorization from the relevant managerial level had been previously obtained.

All personnel must report any attempt by third parties to obtain restricted and/or secret information to their immediate superiors. Likewise, any unauthorized use or disclosure of information by other employees should be notified, as soon as this circumstance is verified.

The term Organization’s proprietary information shall be deemed to include any data, idea, concept, improvement, discovery, development, invention or the like, conceived, performed, developed or acquired by an employee, individually or collectively, while performing tasks for the Organization, during or after working hours and both in or outside the working environment, that may be related to the Organization’s business.


Personnel must avoid any kind of investment, participation or association that interferes or may interfere with the discharge of their duties in furtherance of the Organization’s interests, as concerns, in particular, the following matters:

  • All personnel must treat vendors, customers and any other persons doing business with the Organization in a fair and objective manner, without showing favoritism or preference based on personal considerations.
  • All personnel and their immediate family members must avoid accepting from vendors, customers, competitors or any other third parties and/or delivering to them gifts and/or entertainment, except as authorized under the title “Acceptance of gifts and/or entertainment” and/or”Delivery of gifts and/or entertainment”.
  • All personnel must avoid
    • Engaging in business deals with immediate family members (parents, children, spouses, siblings), unless the transaction is carried out on an arms´ length basis and is disclosed in writing to the relevant managerial level for the purpose of determining whether it is inconsistent with the principles of this Code
    • Having any direct or indirect interest in any company that competes against or intends to engage in business with the Organization, provided that such interest may influence the performance of their tasks, in which case this circumstance should be promptly disclosed to their immediate supervisor.


All personnel must avoid using, directly or indirectly, property and/or services of the Organization for their own benefit and/or that of third parties, unless the express authorization from the relevant managerial level had been previously obtained.


All personnel must avoid making deals, for their own benefit and/or that of third parties, using property, services or securities of the Companies controlled by or related to the Organization or companies in which it is contemplated to make deals, for as long as they have information in their possession that has not become publicly known.

Information is deemed to be known by the general public when same has been disclosed as public information to third parties; for example, when it has been revealed to controlling authorities such as the Argentine Securities and Exchange Commission [Comisión Nacional de Valores (CNV)], the Buenos Aires Stock Exchange [Bolsa de Comercio de Buenos Aires (BCBA)], the Securities and Exchange Commission (SEC) or any similar institution.

Personnel must be particularly cautious and prudent at the time of trading in securities of controlled or related Companies or of other companies that may be materially affected by the actions of the Organization. Therefore, securities may be purchased or sold after at least two business days have elapsed since the date the information became public domain.


Personnel must ensure that all books, records and accounts of the Organization completely, accurately and timely reflect the nature of the transactions:

  • All assets, liabilities and income/losses from the Organization’s transactions must be recorded in the books of account.
  • The existence of funds and/or assets unrecorded or hidden for any purpose whatsoever must be avoided.
  • Artificial or false accounting entries must be avoided.
  • Payments and/or payment agreements intended for any party thereto to use same for purposes other than those described in the supporting documentation must be avoided.


All personnel must avoid the cult of personality, unnecessary showing-off or arrogating to themselves the representativeness vested in the Organization. The position held must be used as a service and they should set an example of behavior for peers, superiors and co-workers within the Organization and for all members of the community in general.


Neither personnel nor their immediate family members are allowed to accept items, services, fees, loans or the like from any individual, entity or company as a condition for or as a result of making business deals with the Organization, at that time or in the future.

No gifts and/or entertainment entailing sums of money or any equivalent thereof (for example: securities and shares of stock) shall be accepted, irrespective of the amount involved.

In the event such gifts and/or entertainment do not entail sums of money or any equivalent thereof, the individual receiving the gifts and/or entertainment, considering the significance thereof, must report this circumstance to his immediate superior, who must evaluate whether same should be accepted or not.


Personnel may offer gifts and/or entertainment, at the Organization’s expense, to any individual, institution or company with which it has business relations, always provided that the following requirements be met:

  • Gifts and/or entertainment should not entail any sums of money or the equivalent thereof, regardless of the amount involved.
  • Gifts and/or entertainment should not be offered as a condition or as a result of making business deals with the Organization, at that time or in the future.
  • Gifts and/or entertainment should be reasonable and commensurate with business practices.
  • Gifts and/or entertainment should be duly authorized and correctly recorded in the relevant books of account.


In appropriate and duly authorized circumstances, personnel may offer entertainment, at the Organization’s expense, to any individual, institution or company with which it has business relations, always provided that such practices are not in violation of the ethical principles of the Organization.

In the case of governmental officials, hospitality should be avoided if same could jeopardize the integrity of such officials or the Organization.


The action of giving, offering or promising, directly or indirectly, any type of bribes, gratuities or payoffs to officials, employees or representatives of the national, provincial or municipal governments, political parties or individuals or companies, as a means to obtain any kind of business benefit is prohibited.


All personnel must avoid activities that may give rise to a violation of the anti-trust laws in force in those countries where the Organization carries out commercial activities.


All personnel must comply with the laws, labor regulations and rules of the Organization in connection with safety and occupational health matters enforceable in each working environment.


All personnel must ensure that the applicable environmental laws, rules and regulations be observed in the facilities and in the development of the operations and actions of the Organization, in compliance with the Environment, Quality, Occupational Safety and Health Policy and Principles.


In addition to the express requirements in the foregoing paragraphs, the Organization intends that all personnel should abide by and comply with the laws and the highest basic principles governing ethical behavior. 



The responsibility to ensure effective enforcement of this Code and compliance with its provisions lies with the Chief Executive Officers (CEOs), Managers and Functional Managers of the Companies. The Human Resources areas in controlled Companies have general responsibility for the implementation, control and enforcement of this Code.


In case of questions by personnel regarding the enforcement or interpretation of any provisions of this Code in connection with a particular situation, or if any violation or threatened violation of the Code comes to their knowledge, they must promptly report such circumstance to their immediate superior, as applicable, and/or as follows:

Labor HR Department
Legal Legal Department
Administrative or financial in the case of attempted willful misconduct or fraud Chief Executive Officer and CFO

Each area listed above shall forthwith start investigation proceedings with respect to all reported violations of the Code and shall periodically inform progress made in such investigations and any findings to the Organization’s CEO.


The Organization shall have an Ethics Committee for Personnel made up of the individuals responsible for the Human Resources, Legal and Operations areas and the Chief Executive Officer of the Controlled Companies.

When necessary, the Committee shall meet to:

  • resolve issues inherent in the implementation of the Code
  • recommend improvements and/or changes in the Code.


All personnel must be informed about the provisions of the Code and must sign a statement to be appended to their personal files:

  • On the date of receiving the Code
  • Upon joining the Organization to discharge duties therein
  • At the time any changes or amendments are made to the Code
  • Whenever it is expressly established by the Organization

Mention should be made in such statement that they:

  • have read and understood the Code in its entirety
  • have been given the opportunity to make questions about its contents
  • shall observe and comply with the provisions of the Code, and commit to:
    • preserve the confidential nature of all information of the Organization used in the discharge of their duties or of which they may be aware
    • comply with the applicable regulations regulating Information Safety, and
    • take custody of all user accounts to access the systems provided to them for the performance of their tasks


The Organization demands that its personnel comply in all respects with the provisions of this Code.

It is personnel´s great responsibility to the shareholders and public in general to ensure that transactions and dealings in which they are involved be made in compliance with ethical standards and business practices.

The most effective manner to discharge such responsibility is by complying with and enforcing strict compliance with this Code.

Any violation of the principles set forth in the Code may result in the imposition of disciplinary sanctions by the Organization, including termination of employment and, in some circumstances, the infringer may be subject to the penalties set forth in the laws and codes enforced by courts of law with different competent jurisdictions such as labor, criminal, civil, tax, commercial administrative and/or international courts, as applicable.

The Organization may take disciplinary measures in cases of involvement in activities in violation of the Code:

  • Violation of the duty to maintain the confidentiality of information.
  • Actual non-compliance with the duty to report any violation of the Code.
  • Lack of cooperation in the investigation of a violation of the Code.
  • Failure by any individual directly responsible for an area or sector to detect and/or report a violation of the Code by personnel under his direction, provided such omission entails inappropriate supervision or lack of control.
  • Retaliation against any individual for having reported violations of the Code.
As at 22 February, 2019

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