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.
*Mongolian Mining Corp HK Debut Tomorrow*
MMC Announces Allotment, Greenshoe forceable by Nov. 4, Debut Tomorrow
October 12 (MMC) --
OFFER PRICE AND USE OF NET PROCEEDS FROM THE GLOBAL OFFERING
The Offer Price has been determined at HK$7.02 per Hong Kong Offer Share (exclusive of 1% brokerage, 0.003% SFC transaction levy and 0.005% Hong Kong Stock Exchange trading fee).
Based on an Offer Price of HK$7.02 per Share, we estimate that we will receive net proceeds from the Global Offering of approximately HK4,017.9 million (Mogi: approximately 95.85% of total proceeds)from the 597,122,500 Offer Shares to be offered by the Company, after deducting underwriting fees and expenses payable by us and assuming the Over-allotment Option is not exercised.
We intend to use these net proceeds for the following purposes:
• approximately 50% (HK$2,008.9 million) for financing the Company's mine and transportation infrastructure development projects, which currently include approximately US$125 million (HK$970.5 million) to finance a portion of the Company's railway project and approximately US$80 million (HK$621.1 million) for the Company's coal handling and washing plant. See the section headed "Business – Mining Operations – General" in the Prospectus;
• approximately 40% (HK$1,607.2 million) for acquisitions of companies with existing exploration rights and additional mining assets. As of the Latest Practicable Date, the Company had not identified any acquisition targets; and
• the remaining net proceeds of approximately 10% (HK$401.8 million) to fund working capital and other general corporate purposes. To the extent that proceeds are not used immediately for the purposes stated, they will be invested in short term demand deposits and money market instruments.
The Selling Shareholders will be selling a portion of their Shares in the Global Offering. The Selling Shareholders will be responsible for their own shares of underwriting commissions.
The Company will not receive any of the proceeds from the sale of Shares by the Selling Shareholders in the Global Offering.s
…
International Placing
In connection with the Global Offering, the Company has granted the Over-allotment Option to the International Underwriters exercisable by Citi on behalf of the International Underwriters. Pursuant to the Over-allotment Option, Citi has the right, at any time from the Listing Date to November 4, 2010, being the 30th day after the last date of lodging applications under the Hong Kong Public Offering, to require the Selling Shareholders to sell up to an aggregate of 107,914,000 additional Shares, representing 15% of the initial Offer Shares, at the Offer Price to, among other things, cover over-allocations in the International Placing, if any. If the Over-allotment Option is exercised in full, the additional Shares for sale will represent approximately 3% of the Company's enlarged share capital immediately following the completion of the Global Offering. There has been an over-allocation of 107,914,000 Shares in the International Placing and such over-allocation is covered through the stock borrowing arrangement under the Stock Borrowing Agreement between MCS Mining Group Limited and the Stabilizing Manager. Such borrowed Shares will be covered by exercising the Over-allotment Option or by making purchases in the secondary market. In the event that the Over-allotment Option is exercised, an announcement will be made. As at the date of this announcement, the Over-allotment Option has not been exercised.
…
| NO. OF HONG KONG OFFER SHARES APPLIED FOR | NO. OF VALID APPLICATIONS | BASIS OF ALLOTMENT/BALLOT
| APPROXIMATE PERCENTAGE ALLOTTED OF THE TOTAL NO. OF HONG KONG OFFER SHARES APPLIED FOR |
| 500 | 6,439 | 3,220 out of 6,439 to receive 500 Shares | 50.01% |
| … | … | … | … |
| 35,971,000 | 2 | 2,903,500 Shares | 8.07% |
…
Petro Matad. Issue of Equity to EBRD, Exercise of Options and Relinquishment of Part of Block XX
October 12 (Petro Matad) Following the Company's announcement of 24 September 2010, Petro Matad announces that it has today issued 3,367,003 new ordinary shares of US$0.01 each in the Company (the "EBRD Shares") at a price of 135 pence per share to the European Bank for Reconstruction and Development (the "EBRD").
Petro Matad also announces that it has today issued 490,500 new ordinary shares of US$0.01 each in the Company as a result of the exercise of options by certain directors and employees pursuant to the Company's Long Term Equity Incentive Plan (the "Option Shares").
Details of the options exercised by the Directors are as follows:
| Director | Amount | Exercise Price |
| Oyungerel Janchiv | 62,500 | US$0.75 |
| Oyungerel Janchiv | 62,500 | £0.11 |
| Douglas McGay | 87,500 | US$0.75 |
| Douglas McGay | 87,500 | £0.11 |
| Sarangua Davaadorj | 37,500 | US$0.75 |
| Sarangua Davaadorj | 37,500 | £0.11 |
Application has been made for the EBRD Shares and the Option Shares to be admitted to AIM. It is expected that trading will commence in the EBRD Shares and the Option Shares at 8.00 a.m. on or around 15 October 2010.
The EBRD Shares and the Option Shares will, following allotment, rank pari passu in all respects with the existing issued ordinary shares.
Shares in issue
Following the issue of the EBRD Shares and the Option Shares, the Company will have 183,042,827 ordinary shares in issue.
Changes to notifiable holdings following the issue of the EBRD Shares and the Option Shares
The following changes have occurred to notifiable holdings as a result of the issue of the EBRD Shares and the Option Shares:
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Relinquishment of part of Block XX
The Company has relinquished 20.7% of the original area of Block XX, as required by Mongolian law. Block XX is now 10,343.15 km² in area. Surface geology, 2D seismic, gravity, and magnetic surveys confirm that the relinquished areas are un-prospective for hydrocarbons, and are underlain by "basement" rocks and areas of shallow sedimentary fill above basement rocks.
Polo Resources receives $20m Mongolian JV payment
October 12 (StockMarketWire.com) - Polo Resources says it has received a $20m deferred cash consideration from Winsway relating to the disposal of Polo's 50% stake in the Peabody-Polo Resources JV formed to hold coal and uranium assets in Mongolia.
The total consideration received from Winsway for Polo's interest in the joint venture is $35m.
Co-chairman and MD Neil Herbert said, 'Polo Resources has now disposed of its Mongolian assets apart from a 0.5% royalty of the future producing asset.
'Polo is currently focused on investments in coal assets in Bangladesh and Australia and will update the market on new opportunities as and when they materialise.'
Mogi: Polo (LON:POL) up by as much as 5% on the back of the news.
XacBank signs international agreement
October 12 (news.mn) XacBank, M-ICP, and M-CAM of the USA have signed an agreement to cooperate in increasing business possibilities in Mongolia, to get a larger share of the emerging capital market. M. Bold, Executive Director of XacBank, said that the access promised in the agreement to financial resources and technology would now enable his bank try out several plans and concepts that are in need of a facilitating mechanism.
SPECIAL REPORT-Mongolia's fabled mine stirs Asian frontier
* Oyu Tolgoi copper/gold mine worth $350 bln - Ivanhoe
* Canada's Ivanhoe clashes with shareholder Rio Tinto
* Ivanhoe's shares up 68 pct since July
* Mine latest venture of colourful American billionaire
* Mongolia may be fastest-growing economy - analysts
By Joseph Chaney and David Stanway
ULAN BATOR, Oct 12 (Reuters) - A feeling of expectation hung in the air early one September morning as a group of bankers emerged from the aging, Soviet-era chic of Ulan Bator's Chinggis Khaan Hotel en route to a two-hour flight deep into the Gobi Desert, which blankets Mongolia's southern frontier.
…
"Obviously, people wanted to know what would drive Mongolia's economy going forward and (Oyu Tolgoi) is a testament to where it is heading," Alisher Ali Djumanov, chairman of Hong Kong-based investment bank Eurasia Capital, which organised the trip told Reuters. "We felt it important for foreign investors to see for themselves the transformations taking place so they feel more confident about the entire Mongolian story."
The visit came at a challenging time for Ivanhoe. The Canada-based miner is trying to fend off a possible takeover by its biggest shareholder, global mining giant Rio Tinto -- a deal that could be as compelling for Rio as its Australian rival BHP Billiton's $39 billion pursuit of Canada's Potash Corp.
SEEKING WHITE KNIGHT?
Analysts say Friedland is maneuvering to prevent Ivanhoe from being acquired too cheaply by the much bigger Rio, which posted a profit of $5.8 billion for the first half of 2010 on earnings of $25 billion.
"Ideally, Robert (Friedland) wants to be bought out and he wants a fair price," said UBS analyst Glyn Lawcock.
…
Friedland, meanwhile, has been flogging the mine's fabulous potential to potential investors. He told the Diggers and Dealers mining conference in Kalgoorlie, Australia in August that the estimated present value of the copper and gold at the project was about $US350 billion, and could, if the project expanded, be worth up to US$1 trillion.
Terminating the agreement with Rio "has opened us up to some very interesting discussions with third parties", he told the conference without elaborating.
Rio ultimately wants to swap its Ivanhoe stake for a direct holding in Oyu Tolgoi and bring in one of its largest shareholders, China's Chinalco, as a partner.
"Chinalco has indicated an interest in acquiring a minority equity stake in the company (Ivanhoe) or acquiring, from the company, a direct minority ownership interest in the OT project," Rio said in a July 7 filing to the U.S. Securities and Exchange Commission.
"At the end of the day, you're dealing with one of the shrewdest investors in the mining space," said James Bruce, portfolio manager at Perpetual Investments, which owns a stake in Rio Tinto. "It's a very difficult negotiation, but one that, presumably, Rio Tinto are keen to have."
Both Ivanhoe and Rio, meanwhile, have profited from a 68 percent rise in Ivanhoe's shares between mid-July, when Ivanhoe announced it had scrapped the shareholding agreement, and Sept. 28, when the company disclosed it had discovered the new vein in Oyu Tolgoi containing an estimated 10.2 billion pounds of copper and 15 million ounces of gold. The surge has also coincided with a 25 percent increase in copper prices during the period.
Hidden riches in Mongolia pose big challenges
ONE hundred and ten per cent is the gain this year in the Mongolia Stock Exchange Top 20.
October 12 (The Times, Australia) It is a stellar index of companies that you've almost certainly never heard of and which mostly have something to do with coal.
The story behind this breathless advance is one of depth and proximity, of mammoth metal and energy reserves sitting on the doorstep of mineral-hungry China.
If you believe that China's appetite will only swell from here, runs the argument, Mongolia should be a sure thing.
…
Outside Ulan Bator, investment views on Mongolia's prospects are mixed.
Low price and proximity to China is no advantage so long as transport links remain feebly financed and rife with bottlenecks. The mines need huge capital expenditure before they start producing the goods.
The big 20 Mongolian companies may be enjoying their domestic rally now, but know that they need to raise billions to set the right projects in motion, and they will not find those billions at home.
The bid for investment has recently taken several Mongolian companies - or companies with exposure to its fortunes - to Hong Kong and into a more severe market environment.
Yesterday, the reception was cool. Shares in Winsway Coking Coal Holdings - a logistics company responsible for moving about 65 per cent of Mongolia's coal into China, suffered a 9 per cent fall in the value of its shares as they made their debut in Hong Kong.
A bigger challenge is to come tomorrow when shares in Mongolian Mining Corporation begin trading, also in Hong Kong.
So far, the listing has fared well: the coke producer raised its price range and raised $US650m ($661m). The performance of the MMC shares, senior investors say, will be the critical test of whether the world outside Ulan Bator really believes the Mongolian story.
Mongolia's difficulty is not resource scarcity, but a lack of finance and expertise, says Mining Report
October 12 (news.mn) The mining sector is the key driver for the Mongolian economy, says the Mongolia Mining Report Q4 2010. In 2001, mining earned just USD110 million and made up 9.5% of GDP. But in 2010, mining revenue is expected to total a comparatively massive USD2.4 billion and to dwarf all other economic sectors, making up over half the total economy. The growth of Mongolian mining however has only just begun; the country has vast and untapped mineral resources which are yet to be fully explored.
Leading the way will be two giant projects that should both come on stream in 2013. The biggest is the gold/copper mine at Oyu Tolgoi which is considered to have the potential to be one of the world's richest producing mine with reserves that will last 60 years. The other is the 6.4 billion tons of coking coal deposits at Tavan Tolgoi, which while smaller in financial potential is still attracting the attention of the biggest corporate players in the mining world.
Mongolia's riches are, however, not confined to these two projects and there is much more to be discovered and developed in the future. The difficulty is not resource scarcity, but a lack of finance and expertise as well as the logistical problem of extracting the resources and getting them to buyers. That the nearest road to Oyu Tolgoi is 500 miles away gives an idea of the scale of infrastructural investment required. Indeed, the investment required in Oyu Tolgoi before production can start is estimated at USD4.6 billion and already there are reportedly cracks appearing in the financing agreements between Ivanhoe, Rio Tinto and the Mongolian government. While Rio and Ivanhoe are rowing over who will own what, the government, through a Treasury Bill issue and the use of 'tax prepayments', is planning to raise USD250 million before production has even begun.
This was not the only incident where the spotlight has shone on government interference in the sector. Canadian company Khan Resources suspects that the revocation of its uranium prospecting licenses in April came after pressure from the Russian state-owned uranium miner ARMZ and has successfully argued its case in the Mongolian courts winning two recent judgments. However with the Nuclear Energy Agency (NEA) giving notice that it will appeal, one of the rulings the issue is still unresolved.
The Mongolian government is in a potentially difficult spot. Located between Russia and China, there are fears that these geopolitical giants will pressure Mongolia in an attempt to gain access to its valuable resources. Fear of this occurring, as well as the government's recent actions, could damage investor perceptions of Mongolia as a business friendly environment. Given the huge capital investment required to get Mongolian mining projects up and running, many global players will be watching developments closely.
MonBiz Mongolia Index updated to include more names
October 12 (news.mn) Eurasia Capital, a Hong Kong-based investment bank, and MonBiz Media Ltd. updated the MonBiz Mongolia Index on October 1 and increased the number of benchmark members to 24 from 20. Actually five companies were added -- Mongolia Investment Group, Central Asia Metals Plc, Shariin Gol, Aspire Mining Ltd, and Asia Gold Ltd -- but Kiu Hung Energy Holdings was excluded from the Index because company"s acquisitions of coal assets in Mongolia had been canceled.
The MonBiz Mongolia Index covers publicly listed companies with the total market capitalization of US$21 billion (as of October 1), including seven companies from the Mongolia Stock Exchange, seven from the Hong Kong Stock Exchange and ten companies listed on the New York, Toronto, London and Australia Stock Exchanges.
The New York Stock Exchange (NYSE) leads in terms of its share in the index"s total market capitalization. Ivanhoe Mines, the NYSE-listed bellwether member of the index, contributes 47.4% of the Index"s total market capitalization. The Hong Kong and Toronto-listed companies are the 2nd and 3rd largest members with 23% and 21.8%, respectively. In terms of industry breakdown of the Index, the metals & mining companies dominate with 96.1% of the benchmark"s total market capitalization.
Mining companies stay away from labor fair
October 12 (news.mn) Almost all mining companies, except Energy Resources LLC, decided to stay away from the two-day labor fair at the Central Culture Palace last week. More than 60 companies advertised 1,080 vacancies. The organizer of the fair, The Central Labor Exchange, said they had sent several invitations to Oyutolgoi LLC but had received no response. Many job seekers were disappointed as, according to the Millennium Challenge Account research, the most lucrative jobs now are in mining and as drivers of heavy weight vehicles.
Surveys had predicted that permanent jobs in agriculture will increase 22.5%, 6.5% in construction, and 9.4% in trade this year. The demand for temporary jobs in these sectors was expected to rise 34.7%, 5.8%, and 10.5% respectively. But this has not happened as the salaries offered have not attracted most of the unemployed.
Most of those enquiring about jobs at the fair were middle aged or older people but there was not much demand for them.
BANK OF MONGOLIA REPORTS
October 12, Ulaanbaatar, Mongolia, /MONTSAME/ According to the report of the Bank of Mongolia, money supply (broad money or M2) at the end of September of 2010 reached 3,851.7 bln.tog increasing 194.3 bln.tog or 5.3 percent against the end of August 2010, and an increase 1,198.3 bln.tog or 45.2 percent compared to the same period of the previous year.
At the end of September of 2010, currency issued in circulation reached 452.6 bln.tog, demonstrating a decrease of 14.9 bln.tog or 3.2 percent compared to the end of August 2010, and an increase of 89.1 bln.tog or 24.5 percent compared to the same period of the previous year.
Loans outstanding at the end of September, 2010, amounted to 3,085.3 bln.tog, up by 63.3 bln.tog or 2.1 percent compared to the end of August 2010, and by 454.4 bln.tog or 17.3 percent compared to the same period of the previous year.
Principals in arrears at the end of September, 2010, reached 75.8 bln.tog reflecting a decrease of 9.6 bln.tog or 11.3 percent compared to the end of August 2010, and of 122.4 bln.tog or 61.8 percent against the same period of 2009.
At the end of September, 2010, the non-performing loans over the bank system reached 411.2 bln.tog, showing a increase of 0.7 bln.tog or 0.2 percent compared to the end of August, 2010, and an increase of 13.5 bln.tog or 3.4 percent compared to the same period of the previous year.
In September, 2010, there were 22 trading days when 5.1 mln.shares valued at 3,3372.7 mln.tog were traded.
GENERAL GOVERNMENT BUDGET
Ulaanbaatar, Mongolia, /MONTSAME/ In the first 9 months of 2010, total revenue and grants of the General Government Budget amounted to 2,058.6 bln.tog, and total expenditure and net lending--to 2,078.2 bln.tog, representing a deficit of 19.7 bln.tog in the General Government Budget overall balance, down by 312.8 bln.tog or 16.9 times compared to the same period of the previous year.
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Australia
| Close: Mongolia Related ASX Listed Companies, September 27, 2010 | ||||||||
| HUN | 0.900 | 0.030 | 0.895 | 0.900 | 0.895 | 0.900 | 0.875 | 540,758 |
| VOR | 0.037 | -0.007 | 0.037 | 0.039 | 0.043 | 0.043 | 0.037 | 23,307,948 |
| LRL | 0.235 | 0.005 | 0.230 | 0.235 | 0.220 | 0.235 | 0.220 | 2,961,149 |
| AKM | 0.150 | 0.010 | 0.145 | 0.150 | 0.150 | 0.150 | 0.140 | 704,976 |
| GMM | 0.185 | 0.000 | 0.165 | 0.185 | 0.165 | 0.185 | 0.165 | 61,714 |
| LEI | 35.850 | -0.490 | 35.820 | 35.860 | 36.000 | 36.000 | 35.740 | 555,259 |
| RIO | 77.870 | -2.220 | 77.870 | 77.900 | 79.000 | 79.500 | 77.870 | 3,419,460 |
| BHP | 40.740 | -0.710 | 40.740 | 40.750 | 41.120 | 41.180 | 40.650 | 12,348,880 |
An * next to the security code indicates there has been an announcement today relating to that security. Click on the * to view the list of today's announcements.
Source: asx.com.au
Stocks slide as miners take a hit
October 12 (AAP) CLOSE Australian stocks have posted big falls to end significantly lower, pulled down by the resources and banking sectors as investors took profits ahead of news on the US central bank's plans for further asset buying to lift the economy, and US profits season.
The benchmark S&P/ASX200 index had its worst day in two months to end 79.3 points lower, or 1.7 per cent, at 4618.2 and the All Ordinaries was down 75.8 points, or 1.6 per cent, at 4686.3.
Materials stocks were down 2.2 per cent, industrials were 1.8 per cent lower and the financials index had fallen 1.6 per cent.
What you need to know
· The Australian dollar was lower at 97.78 US cents
· Dow Futures are 66 points lower at 10,897
· In the US, the S&P500 rose 0.15 of a point to 1165.3
· In Europe, the FTSE 100 rose 15.7 points to 5672.40
· Gold eased to $US1353.05 an ounce
· Oil was down at $US81.59 a barrel
· The Reuters Jefferies CRB Index rose 0.43%
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Miners sink
BHP Billiton was down 71 cents at $40.74, while Rio Tinto dropped $2.22 to $78.87.
Fortescue Metals Group was the worst performing stock on the S&P/ASX 100 index, closing down 25 cents, or four per cent, at $6.00.
…
The most traded stock by volume was Avanco Resources, with 186.6 million shares worth $40.49 million changing hands.
Shares in Avanco were up two cents, or 11.11 per cent, at 20 cents, after the copper and nickel explorer announced "spectacular" copper assays from its Rio Verde project in Brazil.
Preliminary market turnover was 2.65 billion securities worth $5.17 billion, with 402 stocks up, 733 down and 354 unchanged.
Misc
Mongolia seeks co-operation with HCM City
The Mongolian capital city of Ulan Bator wishes to establish co-operation with Ho Chi Minh City to exchange experiences in construction and development as well as in the operation of the HCM City People's Council.
October 12 (VOV News) The Chairman of Ulan Bator's People's Council Bilegt Tudev made the statement at a meeting with Chairwoman of HCM City People's Council Pham Phuong Thao, in HCM City on October 11.
During the meeting, the two leaders agreed on the need to boost co-operation between localities of Vietnam and Mongolia, including the multifaceted co-operation between HCM City and Ulan Bator.
…
Mongolia-flagged ship sinks in Black Sea
October 12 (Monsters and Critics) Kiev - Ukrainian rescue teams were searching for four sailors in the Black Sea after a freighter sank in storms, officials from the Ministry of Emergency Situations said Monday.
The Mongolia-flagged vessel with Russian and Ukrainian crew had been passing through the Kerch Strait separating Russia's Krasnodar province from Ukraine's Crimea peninsula.
The cargo ship Vasily had been transporting scrap metal southwards when rough weather and high seas broke it up early Monday morning, the Interfax news agency reported.
Two Ukrainian and one Russian rescue boats operating in the area had pulled eight of the ship's 12-member crew from the water by midday.
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<Mogi & Friends Fund A/C>
At a loss. Do you see my hands shaking?
Mogi & Friends Fund is a tiny fund of $6,000 I created with a few friends to put my own (and a few friends') money where my mouth (just mine) is.
Well, as you must've found out by now, I'm making a loss on my investment now, but do remember saying before that you only stand to lose money if you sell them at a loss. And I'm not about to sell anything just yet. In fact I think this is the right time to buy it more, actually. So right now, for a limited period, I'm making my fund open ended for anyone who has a thousand bucks to waste. Let's see if my subscribers actually scroll down this much to read my little tiny fund blog.
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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