The project sponsor is Kasbah Resources Limited, a junior mining exploration company with a focus on Morocco. Kasbah is headquartered in Perth, and has been listed on the Australian Stock Exchange since 2007. Kasbah has a market capitalization of approximately A$10.6 million (as of March 10, 2010). The largest shareholders are African Lion 2 Ltd (10.17%) and Resource Capital Fund (10.17%).

The total project cost is estimated at A$16 million. The Project cost reflects the Company’s budget estimates for exploration, feasibility studies and environmental and social studies over the next 18-24 months. The proposed IFC investment is an equity investment of up to A$10.0 million including a warrants package and future capital participation.

9.16 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	9.16

* These investment figures are indicative

The Achmmach Project is located on the Western edge of the El Hajeb province in Morocco, 110 km southeast of Rabat and 40km southwest of Meknes. The Achmmach tenement is covered by two exploration permits covering an area of approximately 32 km2. The El Hajeb province is an underdeveloped frontier region which is mainly sustained by agricultural and herding activities and has limited formal employment opportunities. The project is located in a sparsely populated area.

Although Morocco has considerable mineral resources, the mining sector in Morocco has been dominated by the Government of Morocco with primary focus on phosphate rock. Current Government policies and incentives aims to diversify and grow its mineral industry and attract foreign direct investment. A few international junior mining companies have started exploration programs in the country. A successful exploration program by Kasbah would have notable demonstration effect and help establish mining as an attractive sector for private investors, supporting/promoting sustainable resource development and economic growth through infrastructure development and employment generation. The Project is in an early exploration phase so its developmental impacts are limited in scope at this stage. However, the project is located in an under-developed part (IFC Frontier region) of the country and outside of key centers of commercial activity and will likely contribute significantly to the area’s development should it transition into a full operating mine through generation of employment, improved infrastructure access, local economic development through purchased of local goods and services and payments to government in the form of royalties and taxes. During the early exploration phase the key impacts to monitor will include: (i) finalization of drilling program, completion of the feasibility study and acquisition of mining license; (ii) number of local employees; and (iii) completion of Social and Environmental Impact Assessment (SEIA).

IFC’s expected contribution during the pre-development phase includes: Provider of Capital: IFC’s investment will provide the much needed capital for further exploration and completion of studies which will take the project closer to development phase. Furthermore, an IFC investment provides comfort to its current investors that the project will be better prepared to attract equity and debt financiers as it will be developed in line with international best practices and sustainable resource development. Long-term Shareholder: IFC’s role as a long-term strategic investor provides comfort to the Company and other investors that adequate funding would be available notwithstanding a credit crunch. The Company seeks a partner who is willing to play a significant role in the future mobilization of funds. Environmental and Social expertise: IFC’s involvement in the development of Achmmach will help set benchmarks on environmental and social sustainability practices in the Moroccan mining sector. IFC will provide guidance to Kasbah and help build its internal environmental and social management systems and ensure implementation for sustainable development.

IFC''s review of the Environmental and Social issues for this tin exploration project which included visit to the Achmmach site in Morocco, has identified the following environmental, health and safety as well as social matters (EHSS): (i) management of health and safety risks in particular during drilling activities and transportation; (ii) management of water supply and quality; (iii) management of the exploration sites through establishment of land access procedure, control of erosion, rehabilitation of drill sites and drill roads; (iv) storage of fuel (for genset and vehicles); (v) domestic waste management; (vi) sponsor''s commitment to meet IFC E&S management system requirement through completion and implementation of a Health, Safety, Environment and Community Policy for the exploration stage; (vii) community safety from increased vehicular movements coupled with poor road conditions; (viii) management of community and community leaders'' expectations during consultation and disclosure in particular in the creation of jobs whilst in exploration stage. As such this investment has been categorized as B and will therefore require a 30 days disclosure period.

The IFC has considered the governance risks to project benefits and believes that the project should be supported. In evaluating this investment, IFC has reviewed a variety of governance metrics, including the World Bank Institute’s Governance Indicators, the World Bank’s Doing Business Report and the Transparency International’s Corruption Perception Index (CPI). While Morocco is lacking in its governance capacity, the Government has placed a priority on tackling corruption, and there have been several anti-corruption initiatives in recent years, including the ratification of the United Nations Convention against Corruption (UNCAC), the establishment of Central Authority for the Prevention of Corruption (Instance Centrale de Prévention de la Corruption (ICPC) but successful implementation of reforms has been slow. In the extractives industries, particularly the non-phosphate mining sector, the GoM has shown strong commitment to a good and transparent regulatory framework. Access to exploration and mining concession is transparent and well-regulated, model contracts are available on ONHYM’s website where partnerships are also made public. Morocco has not yet expressed interest in joining the Extractives Industries Transparency Initiative but the Company, outside of IFC’s disclosure requirement, has committed itself to making public all revenue payments to government. As an ASX-listed company the contract between ONHYM and the company is publicly available.