CPS International is a marketing arm of CPS Securities in Mongolia. CPS Securities is a Perth, Western Australia based AFSL License Holder. To trade ASX and international stocks, feel free to contact me at mogi@cpsinternational.mn or +976-99996779.
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Hunnu Coal halts trading, pending a significant capital raising
October 18 (Mogi) Hunnu Coal (ASX:HUN) shares were placed on pre-open after Friday trading, at the request of the company, until the earliest of announcement or Wednesday, October 20.
Hunnu Coal is conducting a significant capital raising, according to the release.
About Hunnu Coal:
Hunnu is an ASX listed coal exploration and development company with a market capitalisation of approximately $155 million. The Company's strategy has been to acquire and develop coking and thermal coal deposits in the South Gobi and Middle Gobi Coal Provinces in Mongolia. Since listing in February 2010 the Company has added to its portfolio of coal projects by aggressively pursuing its strategy of securing interests in a number of coal projects including:
· 90% interest in the Tsant Uul Coal Project located within 40km of the giant Tavan Tolgoi Coking Coal Field in Umnugobi Province. Consists of 1 Exploration licence covering 63,000 hectares.;
· 65% interest in the Unst Khudag Thermal Coal Mine consisting of two Exploration Licenses and one mining licence covering approximately 59,000 hectares;
· 60% interest in the Buyan Coal Project located within the Giant Tavan Tolgoi Coking Coal Field. Buyan is 5 km from operating coking coal mines that currently export raw coal to China;
· 60% interest in the Tsohio Coal Project, which is located between the Giant Tavan Tolgoi Coking Coal Field and South Gobi Energy Resources Coal Field.
· 80% interest in the Erdenes Thermal Coal Project which is located in the Dornogobi Province of south eastern Mongolia located 56 km from an operational multi party coal loading facility;
The Company recently announced that it had completed a total of 106 drill holes for 11,808 metres in its current drilling programmes aimed at generating initial JORC resources and further coal test work.
The Company has a total of eleven drilling rigs operating across the Company's projects in the Middle and South Gobi Coal Provinces including six drilling rigs operating at the Unst Khudag Thermal Coal Mine and its surrounding exploration licensed areas and eight drilling rigs are operating at the Tsant Uul Coking Coal Project.
We understand that the Company has engaged an independent geologist that has commenced the process of calculating JORC compliant resource statement for both the Tsant Uul Coal Project and the Unst Khudag Thermal Coal Mine with results available in the coming months.
Mogi: CPS Securities is a joint lead manager in this placement, as well as being the joint lead manager in Hunnu's February 2010 IPO on ASX.
Ban on mineral licenses ends on December 1
October 18 (news.mn) Following an initiative from President Ts.Elbegdorj issue of all mining licenses has been suspended until December 1.Officials of the Mineral Resources Authority have said they will have to issue licenses after that date if Parliament does not extend the term of suspension.
Mogi: IVN volume was quite high during opening hours on Monday. Shares dropped by as much as 4.1% in NY early trading but started picking slowly. Link to chart
Ivanhoe Targets $1 Billion in Rights Offering, Shuffles Executives
October 18 (WSJ) Ivanhoe Mines Ltd. is launching a rights offering to raise between $800 million and $1 billion as it works to develop its flagship Mongolian operation.
The mining company also said company founder and Executive Chairman Robert Friedland will re-assume the duties and title of chief executive as part of a series of management changes that include the establishment of an office of the chairman.
John Macken, who was chief executive, will remain president and continue to lead the construction of the Oyu Tolgoi mining complex in Mongolia.
"The goal of the offering is to ensure that Ivanhoe Mines remains in a strong financial position to bring the Oyu Tolgoi copper-gold mining complex into operation ahead of schedule in 2012 and to reinforce the company's independence to pursue strategic alternatives to protect and enhance shareholder value," Mr. Friedland said in a statement Monday.
Pursuant to the rights offering, existing shareholders can participate on an equal, proportional basis in purchasing additional common shares. Pricing hasn't been set.
Mr. Friedland, who is Ivanhoe's largest individual shareholder, will participate in the rights offering to the maximum permitted level to maintain his 18.3% stake.
Mr. Friedland said talks are progressing with a group of international financial institutions on a separate debt-financing package that is expected to close in the first half of 2011. The proposed multibillion-dollar package is being considered by a core lending group comprised of the European Bank for Reconstruction and Development, the International Finance Corp., Export Development Canada, BNP Paribas and Standard Chartered PLC.
Rio Tinto PLC, which owns 34.9% of Ivanhoe, will be fully entitled to exercise its rights in the rights offering.
Ivanhoe said it believes the rights offering is exempt from Rio Tinto's right of first offer to acquire shares issued by Ivanhoe under terms of Ivanhoe's 2006 five-year private-placement agreement with Rio Tinto.
The company said the office of the chairman will also include Peter Meredith, its deputy chairman for the past four years, and Sam Riggall, who is executive vice president of Ivanhoe Australia and will take on the added duties of executive vice president for business development and strategic planning.
Link to related articles:
Robert Friedland re-assumes CEO role at Ivanhoe – Reuters
Ivanhoe unveils rights offering, re-appoints Friedland as CEO – Financial Post
Link to original releases:
Mongolia's El Dorado stirs shareholder battle
October 17 (Reuters) In Mongolia's South Gobi desert lies Oyu Tolgoi, touted as having the world's largest untapped copper and gold deposits. Little wonder then that this "El Dorado" has become a boardroom battleground between the relatively unknown Ivanhoe Mines and its biggest shareholder, the giant Australian mining company, Rio Tinto.
Our attempts to get near this mine or elicit any comment from Ivanhoe were about as fruitless as the Spanish conquistadors attempts to find the legendary "El Dorado", or "Lost City of Gold" in the 16th century. Twice Ivanhoe stopped our reporters from visiting the mine with delegations from the investment community, saying reporters were not allowed to mingle with bankers on visits to the mine. We don't know why that would be. We mingle with them pretty often in other contexts and usually find each other's company amusing and mutually informative.
Perhaps that's the point of Ivanhoe's policy. The company and its executive chairman, Robert Friedland, do not seem to trust the media much. They maintain a robust website, http://www.ivanhoemines.co m/s/The_Facts.asp, that pretty much takes issue with every story written about them. Friedman is legendary in the business for spinning a story and trying to control the narrative.
Friedland has lived a colourful and adventurous life. Perhaps he admired in his youth the swashbuckling medieval hero of Sir Walter Scott's novel, Ivanhoe, a noble in the disguise of the "black knight" who fights alongside Robin Hood, and so named his company after him.
Friedland has had a Midas touch when it comes to monetising mining assets over the years in a business where exploration is fraught with risk. In that sense. he calls to mind the original El Dorado, or "Golden One". This was the name given to the kings of the Muisica tribe in what is now Colombia, when they were undergoing an initiation rite for taking the throne: they covered themselves in gold dust before diving into lake Guatavita.
In time, the Muisica towns and their treasures fell to the conquistadores, who never did find the "lost city". Friedman can only hope that his efforts to foil Rio Tinto's efforts to take over Ivanhoe on the cheap will fare better than the Muisica's attempts to fend off the Spanish. He may need a Robin Hood or a "white knight", however, to come to his rescue.
Mongolia to pay Russia USD3 million as final settlement of dues
October 18 (news.mn) Talking of Mongolia's monetary debt to the Soviet Union and its successor state, Russia, Minister of Finance S.Bayartsogt said on Friday that it was computed in 2003, based on exchange parity between the MNT and the rouble, that between 1949 and 1991 Mongolia had borrowed MNT9.6 billion and the interest on it was MNT2.2 billion. The total to be repaid thus stood at MNT11.8 billion.
The then Prime Ministers of the two countries, N.Enkhbayar and S.Kasiyanov, negotiated the issue and it was decided to deduct from the total the MNT260.3 million Russia had given to the Erdenet factory and the interest on this. The total amount to be repaid was then agreed to be MNT11.4 billion. Russia then agreed to write off 97.8% of the "great debt", as it was named. Mongolia was left with 2.2% to pay, but it was understood that the amount would be adjusted against the accounts of the two countries' joint venture Mongolrostsvetmet.
However, just before the visit of President Medvedev to Mongolia in September, 2009, Moscow announced that Mongolia was still to pay back the 2.2%. It was decided during the visit that the debt issue would be resolved within two months. Russia repeated its claim at a meeting of the World Bank in Istanbul in October, 2009.
Since then, three rounds of bilateral talks on the issue have been held and after further adjustments, it has now been agreed between the two finance ministries that Mongolia will pay Russia USD3 million, pending approval by both Governments. The Mongolian Government has recently done so.
Mogi: Winsway's initial share offer was priced at HK$3.70. Link to Winsway chart
Goldman Sachs owns 6.55% of Winsway
October 18 (Mogi) Two "Corporate Substantial Shareholder Notice"-s released by Winsway Coking Coal Holdings Ltd. today discloses Goldman Sachs' substantial stake in the company.
On October 11, Goldman bought 60,350,000 shares on the market at an average price of HK$3.553 to bring its stake to 5.69% from 4.09%
On October 12, Goldman bought a further 32,611,000 shares on the market at an average price of HK$3.5 to bring its total stake in the company to 6.55% from 5.69%
Goldman was a joint bookrunner of Winsway's IPO that raised US$472M with Deutsche Bank and BofA Merrill Lynch.
Links to releases: October 11 event, October 12 event
Mogi: Link to MATD Chart
Petro Matad Spuds DT-3, DT-1 Results
October 18 (Petro Matad) Petro Matad (AIM:MATD) is pleased to provide an update on its exploration and drilling activities on the Davsan Tolgoi Prospect on Block XX in Eastern Mongolia.
Davsan Tolgoi-3 ("DT-3") spudding
The DT-3 exploration well was spudded at 18:00 Mongolian time on 15 October 2010. The well is intended to be drilled vertically to an estimated target depth of approximately 1,200m.
During the afternoon of 17 October, the well reached the first casing point at 345m depth, where the first string casing will be set and cemented. Following that, the well will continue drilling the second and final string to target depth.
DT-3 is the third exploration well to be spudded as part of Petro Matad's three well drilling programme for 2010 on its Production Sharing Contract on Block XX. It is located approximately 8.6 km southwest of DT-1 and 7.7km southwest of DT-2.
The two previous wells tested a subsidiary closure along the crest of the Davsan Tolgoi anticline and showed a shared hydrocarbon column slightly over 100m in height. DT-3 has been sited at the apex of the Davsan Tolgoi anticline, where the top of the Tsagaantsav formation is approximately 150m higher than at DT-1, and thus will test the full height of the hydrocarbon column. DT-3 will also be well positioned to test for any hydrocarbon accumulations in an anticlinal closure in the Upper Zuunbayan formation as well as in fractured basement.
Analytical Results for Davsan Tolgoi-1 (" DT-1")
The Company has received the laboratory reports for thermal maturity and fluid inclusion studies of well samples from DT-1. No further test results are pending.
Fluid inclusion analysis identified two zones of anomalous hydrocarbons. Firstly, a zone in Upper Zuunbayan sandstones from 810m to 850m that was not identified during the drilling operations. Secondly, a zone from 1 080m to 1,180m within Tsagaantsav sandstones and basement metamorphic rocks.
The Zuunbayan oil inclusions have dry gas, acetic acid and other volatile constituents indicating that they lie down-dip from an oil/water contact.
The fluid inclusion pattern in the Tsagaantsav and underlying basement is indicative of a stratified hydrocarbon column with dry gas characteristics from 1,080m to 1,105m and wet gas to oil constituents from 1,110m to 1,180m. The fluid inclusion study concluded that DT-1 penetrated oil in the Tsagaantsav, a conclusion that is consistent with observed oil shows, mud gas signature, and calculated hydrocarbon saturations.
The geochemical data from DT-1 further proves that the Davsan Tolgoi anticline is a regional focus for oil and gas migration, with the observed hydrocarbons coming from deeper and more thermally mature parts of the Tamsag Basin. Vitrinite reflectance values of 0.44 at 580m and 0.53 at 1,070m and a Tmax value of 428oC from 1,070m demonstrate that local source rocks along the crest of Davsan Tolgoi are thermally immature. The presence of hydrocarbons in DT-1, and particularly the dry through wet natural gas inclusion phases, requires migration from the deepest parts of the basin where mature source rocks lie within the gas generative window.
Commenting on the spudding of DT-3, CEO Douglas McGay noted "The contractor and our technical team are to be congratulated on the speedy mobilisation and the commencement of drilling of DT-3. They are now experiencing early winter conditions on site, with nighttime temperatures falling below zero. The speed of completion of the first string is an encouraging sign, but we are monitoring the conditions on site for engineering and health and safety issues that the rapidly approaching winter conditions may cause.
"The Company has been diligently pursuing both an extra drilling rig and also a workover rig to try to achieve as much as possible prior to the end of the calendar year. At the moment we are hopeful of further work being commissioned to suitable contractors, but are mindful of the difficulties that can occur in a yet-to-be developed oil services sector."
Further commenting on the DT-1 analytical results, McGay said "These laboratory results provide quantitative proof of the previously observed well data. That is, that the hydrocarbons in Davsan Tolgoi have migrated over long distances from the source kitchens and have charged the Tsagaantsav Formation of Davsan Tolgoi. They have provided more surety in de-risking this aspect of the prospective resources. The previously undetected indication of hydrocarbons in the Zuunbayan Formation is also a welcome result."
Mogi: Link to MNAP chart
Manas Petroleum Corp. Begins Seismic Program in Mongolia
BAAR, SWITZERLAND--(Marketwire - October 18, 2010) - Manas Petroleum Corporation (OTCBB:MNAP) ("Manas") is pleased to announce the start up of seismic operations on Blocks XIII and XIV in Mongolia as planned for the year 2010, and is anticipated to be completed by November 2010. All operating licenses and permits have been received and the contractor's personnel and equipment are on site. This program includes 300 km of 2D seismic survey which represents the required work program for the year 2011 in accordance with the terms of the Production Sharing Contract.
Gobi Energy Partners LLC, a Mongolian subsidiary owned by Manas through its Swiss subsidiary DWM Petroleum AG, is the operator of the project. As previously announced, Gobi signed an agreement for seismic services with the Chinese company DQE International Tamsag (Mongol) LLC, on August 31, 2010. DQE International, a subsidiary of CNPC Daqing Petroleum, has extensive experience in the hydrocarbon exploration industry performing seismic survey, well drilling, completion and services in northern China, in South-East Mongolia and many other countries.
The purpose of the vibro-seismic survey is to improve its existing geological data and to increase the chances of success of the exploratory wells intended to be drilled upon completion and interpretation of the new seismic data. The first well is anticipated to be drilled in 2011.
About Manas Petroleum Corp.
Manas Petroleum is an international oil and gas company with primary focus on exploration and development in South-Eastern Europe, Central Asia and Mongolia. In Albania, Manas participates in a 1.7 million acre exploration project through its equity interest in Petromanas Energy Inc., a Canadian public company. In Kyrgyzstan, Manas has signed a US $54 million farm-out agreement with Santos International Holdings Pty Ltd., a subsidiary of Australia's third largest oil and gas company. In addition to the development of its Kyrgyzstan project, Santos is developing the company's neighboring Tajikistan license under an option farm out agreement. In Mongolia, Manas owns record title to the two Production Sharing Contracts covering Blocks XIII and XIV through its wholly-owned subsidiary DWM Petroleum AG, but 26% of the beneficial ownership interest in these blocks is held in trust for others.
Link to real-time quotes and charts of MMC (sites licensed by HKEx): ETNET, AAStocks
MMC up 2.9%, 20.2% overall
October 18 (Mogi) Mongolian Mining Corporation (HK:975) continued its rise today, pushing up its historical high to HK$8.94 in the morning. Afternoon trading didn't fare well for MMC though, dropping down to as low as HK$8.32 before rallying slightly at the end to close the day at HK$8.44.
HK:0975 Snap quote, October 18 (all in HKD except where noted):
· Close: $8.44
· Open: $8.49
· High: $8.94
· Low: $8.32
· Listing price: $7.02
· Volume: 47.266 million shares
· Total turnover: $405.949 Million
· Market cap (on close): $29.496 Billion (around US$3.8 billion (Bloomberg: HK$7.7584))
Mogi: Prophecy's Monday early morning intraday high was C$0.72, up 9%. Link to chart
Prophecy Resource Rises 24% As It Reaches Milestone And Transitions To Producer
October 14 (Proactive Investors, USA & Canada) Prophecy Resource (TSX-V:PCY) said Thursday that the mine commission inspection at its Ulaan Ovoo project in Mongolia is complete and its first coal shipment from the site is now on its way for delivery.
The final permit inspection was conducted by a commission from the Mongolian Ministry of Mineral Resources and Energy in early October, and represents the final step required for Prophecy to begin production operations at the site.
…
Currently, the company has deployed more than 50 staff at Ulaan Ovoo, with a full line of mining equipment to start production at a rate of 120,000 tonnes per month. Over two million tonnes of waste have already been removed to expose the project's massive coal seam at surface.
Based on the instructions of the commission to begin mining, Prophecy has decided to complete a trial run coal shipment. The company has provided 10,000 tonnes of coal to power stations in Darkhan and Erdenet, Mongolia's largest cities after the capital of Ulaanbaatar.
Prophecy said it has trucked the first coal shipment to Sukhbaatar rail station, ready to be transported to Darkhan power plant by rail. The company's share price has soared more than 23% on Thursday, reaching highs of $0.68 as of 1:12pm on the TSX-Venture Exchange.
Prophecy holds a 100% interest in the 208.8 million tonne Ulaan Ovoo project, which features Bituminous, low ash, low sulphur thermal coal suitable for export markets. The deposit features single massive coal seam 45-80 m thick with an average strip ratio of 2:1.
The Mongolian government gave the project a fully transferable 30 year mining license that can be extended by an additional 40 years. The project also received environmental approvals.
…
Chile mining echoes on Mongolian steppes
October 15, Hong Kong, China (CNN) -- As the last of 33 trapped miners were pulled to the surface in Chile, a group of bankers, government officials and mining company executives gathered to talk about the coming minerals explosion in Mongolia.
"We are following the economic model of Chile," said Dashdorj Zorigt, Mongolia's minister of mineral resources and energy. "There are a lot of lessons we can learn from the mine accident."
The celebrations on the Atacama Desert in Chile, the toxic sludge coursing through the streets Devecser, Hungary, and the economic hopes of the people on the steppes of Mongolia share a common link -- the world's growing hunger for dwindling resources plumbed from the ground.
…
As mining commodities enjoy boom times, pressure is growing to build the world's supply of coal, bauxite and rare earth metals in increasingly difficult locales. As safety and environmental risks rise, so does the allure for developing economies like Mongolia to harness the world's growing minerals appetite.
"We expect to be one of the top-performing economies in the next few years, and this is mainly due to mining," Zorigt said.
A landlocked nation sandwiched between China and Russia, Mongolia is better known as the birthplace of Genghis Khan than as an economic powerhouse. But two mines under development -- expected to become the world's largest operating mines of coking coal and copper -- will change that.
Mongolia's economic output is projected to nearly quadruple to $23 billion by 2013, according to a Renaissance Capital report. Zorigt projects the nation's per capita income -- which now stands about $3,200 a year -- will grow to $5,000 by 2015 and $12,000 by 2021.
…
The Chilean economy was built on copper mining, but avoided becoming a victim of Dutch disease. "Copper transformed the Chilean economy and Chile has had enormous social benefit from mining ... there's enormous wealth that's being created there and that's fed back into the economy," Finch said.
The rescue in Chile illustrates the safety issues in mining and the market pressures driving operators to get minerals out of the ground while prices are high. The small-time operation at the heart of the Chile accident was mining copper -- which hit a 27-month high in prices this week -- and gold, which hit record prices this year as it nears $1,400 an ounce.
…
Mongolians exchange ideas with London
October 18 (by Oli Belfitt-Nash in UlaanBaatar for bne) Snuggled at the feet of the Great Khural government office, an old soviet cinema is home to Mongolia's Stock Exchange and opens its doors for an hour a day to host the slow trickle of brokers making their way to work. The candy-pink paint job is a deceptively lively mask for the dearth of activity inside, where a huge hall echoes any time a trade is made.
The Mongolian bourse needs help. Out of 367 companies listed since the 1990s (as part of a voucher privatisation programme), over half have been suspended and of those left, less than 20 are liquid enough to be traded on a daily basis.
With the vast majority of shares in the pockets of very few investors, manipulation and insider trading have become commonplace. Mongolia's stock market had the distinction of being the best performer in the world over the last decade, up 1,600%, and is on course to be the same again this year, with the leading index rising over 100% in just two months this summer. But with an average daily turnover of just $100,000 for the whole exchange, these gains could just as easily be one of the local oligarchs playing games.
A big fix
The bourse badly needs reform, as Mongolia is expecting a wave of cash to hit the economy in the coming years after Canada's Ivanhoe Mines brings the massive Oyu Tolgoi copper/gold mine on stream in 2013, which should increase the size of the economy by half on its own. The government is well aware of the problems and has finally turned its mind to fixing them. Earlier this year, it announced the exchange would be privatised and put the job out for tender. From an original 12 applications, four candidates were short listed and a proud Prime Minister Sükhbaataryn Batbold recently said the London Stock Exchange (LSE) was the "front-runner."
The LSE has no doubt helped its bid by hosting a conference in UlaanBaatar at the end of September to discuss the future of the local bourse. With a reputation as strong as London's and expected growth as overwhelming as Mongolia's, it wasn't difficult to impress.
Emerging markets represent 12% of the LSE, $635bn worth of stocks, and the exchange is keen to expand into the fast growing economies of the east. With the largest pool of liquidity in the world and over 200 years of expertise, the LSE has a lot to offer. "Mongolia has huge opportunities with regards to development of the natural resources, and that growth will support the economy," says Tracey Pierce, director of equity primary markets, in an interview with bne. "If they're to monetize those opportunities, they're going to need efficient capital markets, and London truly is the centre for global finance for natural resources companies."
However, the opportunities for both parties won't come without bumps in the road. In October, a representative of Mongolia's State Property Committee suddenly announced that the tender had been cancelled. With that decision almost instantly overturned, it would appear infighting has broken out over a strategic decision that will set the course for the development of the country's capital markets for decades to come.
Fears of foreign ownership and flip-flopping on tenders have become something of a norm in Mongolia. Both the deals to develop Oyu Tolgoi mine and the giant Tavan Tolgoi coal deposit by foreign investors have followed a similar winding path – the Oyu Tolgoi deal took six years to sign and Tavan Tolgoi is back on the table after a first attempt to auction it was cancelled earlier this year, frustrating international investors. The executive director of the Mongolian Stock Exchange (MSE), Rentsen Sodkhuu, had to fend off accusations that he was selling out in a recent interview with the local media. "Mongolians can do the work," he said. "We will not permanently hand over the MSE to any foreign bidder."
As head of the Agricultural Association and four years as an MP before helping to draft the new securities law, Sodkhuu is a fiery public speaker and has inflamed the media with Mongol patriotism before. "If we took back our Oyu Tolgoi," he said in 2008, "we could have raised several billion dollars like Ivanhoe [Mines]." Amidst recent arguments over accusations of corruption, he is now fighting to restore his reputation with one hand while beckoning London with the other.
Mongolia recognizes the real need for diversification and a developed domestic capital market to channel the wall of cash that Oyu Tolgoi will bring. Dwarfed by their two neighbours of Russia and China, however, they are being very cautious to balance foreign influence during this pivotal period. They would rather be in charge of their own development process themselves if they could manage it.
Beefing up the bourse
The government's Financial Regulatory Committee (FRC) has drafted a new securities law, which is due to go to a vote in November. With over 100 new articles, the law aims to introduce international standards by drawing on the experience of other leading exchanges around the world. Strict investor and company rules as well as harsher penalties for crimes wield the stick, and new much-anticipated depositary receipt rules and fund structures offer the carrot.
Despite this step forward, there were still complaints from the panel at the LSE's conference. "What's the point of over regulating a market that barely has a heartbeat?" asked Lee Cashell, founder of Asia Pacific Investment Partners. Finding "complete paralysis" from the FRC, he insists that more IPOs and tradable floats are required to drive this market forward.
Happily, this is about to change. Tavan Tolgoi will be listed on the MSE and shares distributed to citizens, according to the government's latest announcements. In fact, all "strategically significant" companies must sell at least 10% to the public via the MSE, it says, despite the deep-seated problems with the exchange - though critics argue that demands for local listing can't be met until the MSE has had its makeover, and this could take years.
The LSE is plugging London dual listings to Mongolian companies before relying on the MSE and offering up London's Alternative Investment Market (AIM) is no doubt where the interest in Mongolia stems. "We're definitely here to win [the management tender]," says Pierce with confidence. "We are here for the long term and would like to use London's expertise to support the future development of the Mongolian capital markets."
Mongolian debt, copper mining a play on Chinese construction, consumption
October 17 (Benzinga) Back in June Batbayar Balgan, director general of the financial and economic policy department of Mongolia, spoke of the country's plans to raise $500 million selling bonds in 2010, while the remainder of a planned $1.2 billion program would be sold according to market conditions. Bloomberg notes that the government scaled back its plans for global bond sales after Europe's debt crisis drove up borrowing costs, and that investment banks have been advising Mongolia to issue debt with maturities of 5 years to 10 years. Per the country's Finance Minister, Sangajav Bayartsogt, said securities may yield between 8 to 11 percent.
Mongolia is still a fringe play on commodities, and specifically copper, coking coal and uranium, though if the copper industry's fundamentals in particular indeed shift, and the country's stock market develops further (currently only 300 listed companies with a total market capitalization of only $1 billion, per the Mad Hedge Fund Trader) it will likely garner increased attention as a steadier play on risk amidst stabilizing cash flows and increased liquidity. This should bode well for its debt. Moreover, the "spillover" effect on GDP is likely to draw further capital stock investment and create a postive feedback loop for future, near-term growth levels. Per the secular demand for copper (driven chiefly by China; see graph inset), analysts with Goldman Sachs recently wrote that "the combination of lower copper-exchange inventories, robust demand largely driven by emerging-market urbanization and a constrained copper-supply outlook will sustain copper deficits large enough to mostly deplete exchange inventories by the end of 2011." To that end, Barclays Capital agreed, writing to investors this month that it was "reiterating [a] long-held bullish call on copper as supply constraints in the copper industry have intensified due to a variety of issues including declining grades, increasingly difficult geology, and rising geopolitical risk in copper-rich regions of the world."
Copper dropped for the first time in four days on Friday from a 27-month high, its rise during that time further fueled by the falling dollar. Furthermore, The Macro Man, a London-based money manager, noted that Ivanhoe Mines' (NYSE: IVN) Deputy Chairman and Director (one of two firms along with Rio Tinto slated to develop the world's largest undeveloped copper resource, the Oyu Tolgoi mine in Mongolia ) Bob Friedland described Chiquicamata and other mature Chilean mines as "a little old lady in bed, waiting to die" during a recent conference, hinting at the very impending, structural changes in the supply chain explicitly highlighted by the major investment banks. Even the IMF agrees, stating last week that "deteriorating mine productivity (copper and tin) and the impact of policies targeted at reducing the impact of metal smelting on the environment (lead) are among the most important constraints on supply."
Garrison International Announces Proposed Share Consolidation
TORONTO, ONTARIO--(Marketwire - Oct. 15, 2010) - Garrison International Ltd. (TSX VENTURE:GAU) ("Garrison") announces that a consolidation of its common shares will be proposed to its shareholders at the upcoming annual and special meeting of shareholders scheduled to be held on November 9, 2010. Garrison currently has 100,437,769 common shares outstanding. Garrison believes that the completion of a share consolidation would facilitate future financings by Garrison, as these would be accomplished through the issuance of additional common shares of Garrison.
Garrison proposes to consolidate its common shares such that one (1) new common share would be issued for every ten (10) common shares outstanding on the effective date of the consolidation, or such lower number of common shares as may be determined by the directors of Garrison and as may be required to obtain approval of the share consolidation from the TSX Venture Exchange. If the share consolidation is completed on a ten (10) to one (1) basis, Garrison would have approximately 10,043,776 common shares outstanding, post-consolidation.
The proposed share consolidation is subject to the approval, by special resolution, of the shareholders of Garrison and to the approval of the TSX Venture Exchange.
About Garrison
Garrison is a junior mineral exploration company focused on acquiring and developing advanced stage gold properties in Mongolia. For complete details on Garrison International Ltd. and its partners, management encourages investors and interested parties to view its public documents filed on SEDAR at www.sedar.com.
Mongolian credit unions get help from Manitoban
October 18 (Winnipeg Free Press) Ken Doleman is hoping to initiate about 50 years worth of time travel in Mongolia.
The CEO of the Swan Valley Credit Union is heading up a team of credit union employees from across Canada to provide consulting and mentoring services to the fledgling financial co-operative sector in Mongolia, where he estimates the banking system is more than a half-century behind the North American model.
Doleman will spend two weeks working with the management and boards of individual credit unions, with the goal of helping alleviate poverty through the gathering of savings and micro-lending. The more money deposited in savings accounts, the more that can be lent to budding entrepreneurs looking to start cellphone businesses, small restaurants, grocery stores and taxi cab companies.
Mongolia is a landlocked country in Asia between China and Russia and has a largely nomadic population. Doleman said Manitobans wouldn't recognize what passes for a banking system there -- no ATMs or electronic banking services -- and they don't have traditional phone lines, either.
"(Credit unions) there are small. They'd have four or five employees, little use, if any, of technology, very basic ways of operating and very limited services and products. (Canadians) would see it as a small micro-finance kind of outlet, (a place) without any sophistication at all," he said.
"If they're 50 years behind us, they can leapfrog over many of the barriers we had along our co-operative journey in Canada. They've leapt over land lines and bypassed that infrastructure completely and gone to cellphone service," Doleman said.
Because the credit union system is in its relative infancy in Mongolia, Doleman said, the upside is almost unlimited. There are fewer than 200 savings and credit co-operatives in the country of 2.7 million people, with about 25,000 members.
The Mongolia project is the first of four coaching missions organized by Ottawa-based Canadian Co-operative Association over the next few months. Jo-Anne Ferguson, its senior director of international development, said delegations will also head off to Malawi, Uganda and Ghana in January. Its staff members will return every six months to monitor project developments in the four countries, she said.
…
Swan Valley Credit Union serves a region of about 12,000 people two hours north of Dauphin. It has $200 million in assets and 9,300 members.
Australia
| Close: Mongolia Related ASX Listed Companies, October 18, 2010 | ||||||||
| HUN * | 0.970 | 0.000 | 0.990 | 0.970 | 0.000 | 0.000 | 0.000 | 0 |
| VOR | 0.036 | -0.001 | 0.035 | 0.036 | 0.037 | 0.037 | 0.032 | 5,669,646 |
| LRL | 0.250 | -0.010 | 0.250 | 0.260 | 0.250 | 0.255 | 0.245 | 1,376,370 |
| 0.190 | 0.005 | 0.180 | 0.190 | 0.195 | 0.215 | 0.180 | 4,643,112 | |
| GMM | 0.150 | -0.020 | 0.150 | 0.160 | 0.165 | 0.165 | 0.150 | 122,300 |
| LEI * | 37.320 | -0.120 | 37.280 | 37.320 | 37.450 | 38.090 | 37.030 | 1,006,868 |
| RIO * | 82.980 | -0.220 | 82.950 | 82.990 | 83.200 | 83.350 | 82.410 | 2,199,788 |
| 41.180 | -0.470 | 41.170 | 41.180 | 41.590 | 41.590 | 41.010 | 7,913,340 | |
An * next to the security code indicates there has been an announcement today relating to that security. Click on the * to view the announcement.
Source: asx.com.au
Shares sag as investors sell off risk assets
October 18 (AAP) Close The Australian sharemarket fell today, led down by the big miners, as investors took profits.
At the close, the benchmark S&P/ASX200 Index was down 37.1 points, or 0.8 per cent, at 4651.9,fell while the broader All Ordinaries Index fell 34.8 points, or 0.7 per cent, to 4723.4.
Among the sectors, gold shares slumped 2.8 per cent, materials fell 1.4 per cent, energy shed 0.9 per cent and financials lost 0.6 per cent.
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The Australian dollar was trading at 98.48 US cents after having touched parity with the greenback late Friday night.
need2know:
- The dollar drops to 98.48 US cents
- Asian shares slip on profit-taking
- Gold falls to $US1360 as greenback rises
- Oil slides to 1-week low of $US80
- Dow futures are 55 points lower at 10,969
"We saw a sell-off of risk assets – including the Aussie dollar, gold and resources stocks – which means investors are getting out of positions that have had a good run during the previous weeks," said CityIndex head of dealing Michael McCarthy. "However, trading volumes are quite thin and low today."
The miners fell despite a higher copper prices as lower price of gold and some selling pressure on the Australian dollar appear to have infected the local bourse with negative sentiment.
Pilbara JV shelved
BHP Billiton and Rio Tinto announced they have formally scrapped plans for a $US116 billion ($117.4 billion) joint venture in the Pilbara.
BHP Billiton closed down 47 cents, or 1.13 per cent, to $41.18, while Rio was down 22 cents, or 0.26 per cent, at $82.98.
''That deal Rio and BHP were going to do with their iron ore has been pulled, so that might have slowed them down a little bit,'' said RBS Morgans director of equities Bill Chatterton.
…
Preliminary market turnover was 2.26 billion securities worth $4.03 billion, with 485 stocks up, 642 down and 361 unchanged.
Global
BHP and Rio scrap $116 billion iron ore joint venture
October 18 (Reuters) - BHP Billiton (BHP.AX) and Rio Tinto (RIO.AX) ditched plans to form the world's biggest iron-ore joint venture, in a victory for steelmakers that could prompt both miners to step up competing expansions.
The announcement marked the second failed attempt in three years by BHP chief executive Marius Kloppers to buy into Rio's superior iron ore assets, and strengthens the hand of steel mills which feared the pair would gain too much pricing control.
Monday's long-expected news also left BHP focusing squarely on a $39 billion hostile bid for fertilizer group Potash Corp (POT.TO), no longer distracted by the $116 billion marriage of the two miners' mammoth Australian iron ore operations.
"The failure of the joint venture will be slightly more positive for Rio than BHP, but it's important to remember it's actually a negative for both companies," said Ben Lyons, an analyst at ATI Asset Management.
A joint venture between Rio (RIO.L) and BHP (BLT.L), the world's second and third largest iron ore miners, would have eclipsed Brazil's Vale (VALE5.SA), the world's largest supplier, and would have reaped more than $10 billion in savings from combining rail and port operations.
…
Misc
New rotation of Mongolian Soldiers transfer authority in Kabul
October 15 (dvidshub.net) CAMP EGGERS, Afghanistan – A new rotation of about 200 soldiers from the Mongolian Expeditionary Task Force III transferred authority Oct. 15 from the previous contingent on Mongolian forces serving in Kabul, Afghanistan, during a change-of-command ceremony at Camp Eggers.
As a NATO and International Security Assistance Force coalition partner, Mongolia provides six-month rotations of soldiers in support of security operations for U.S. and coalition installations in the capital region for Task Force Rushmore: Kabul Base Cluster Installation Command.
"I want to thank the leadership and Soldiers of METF II who have worked so hard, and given so much to Camp Eggers and Afghanistan," said Brig. Gen. Ted Johnson, commander Task Force Rushmore, during the ceremony. "I have every confidence in a seamless transition of military operations from METF II to METF III, and we will build on the partnership between the international military and the Afghan National Security Forces, who are the future of the security in Afghanistan."
The METF also mentors and trains Afghan National Security Forces (ANSF) at the Kabul Military Training Center and Darulaman Infantry School, as a part of NATO Training Mission–Afghanistan and Combined Security Transition Command–Afghanistan.
"The opportunity for METF III to assume responsibility for providing security to Camp Eggers has made it possible for NTM-A/CSTC-A to operate at such a high level," said Johnson. "I know all present here today are committed to building on this legacy and taking it forward in the footsteps of your predecessors."
The METF specializes in the training of Soviet-style artillery, mortars and rocket weapon systems. The Mongolians also have a small team of aviation maintenance and repair technicians who mentor ANSF counterparts.
"We are ready to serve all of Camp Eggers and all of Afghanistan," said Lt. Col. Sodov, incoming-commander METF III, while addressing his troops.
"Building on the outstanding legacy put forth by prior rotations of the METF, I am convinced that with the efforts of the Mongolian government, ISAF and the brave and steadfast people of Afghanistan we will accomplish our goals," said Johnson.
<Mogi & Friends Fund A/C>
Up 36.5%: The power of a penny
Mogi & Friends Fund is a tiny fund of US$6,000 I created with a few friends to put my own (and a few friends') money where my mouth (just mine) is.
Mogi: Amazing what a single penny does to your investment. Well, a penny and a half I should say. Tempting I have to say to sell, but just hoping if this is possibly, just might be a sign of an announcement coming. Well, will have to see.
In any case, just ask any fund manager what their average return is. Hmmm, how about 36% in 20 days? An enviable return if this was a bigger fund and $6000 probably does not constitute being a real fund I suppose. But it is a fund nonetheless. Sorry, my $300 unrealized profit must be getting to me.
Mogi
"Mogi" Munkhdul Badral
Executive Director
CPS International
Email: mogi@cpsinternational.mn
Mobile: +976-99996779
CPS International is a marketing arm of CPS Securities in Mongolia. CPS Securities is a Perth, Western Australia based AFSL License Holder. To trade ASX and international stocks, feel free to contact me at mogi@cpsinternational.mn or +976-99996779.
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