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.
Mogi: Dear subscribers, due to my mail server spam-blocking my newswires, I'm sending them from an internet account. In replying back, please direct them to mogi@cpsinternational.mn. Thank you.
*Notice: All HK Orders are day only. Unfilled orders must be reinstated the next day*
| Close: Mongolia Related ASX Listed Companies, October 18, 2010 | ||||||||
| HUN * | 0.970 | 0.000 | 0.980 | 0.970 | 0.000 | 0.000 | 0.000 | 0 |
| VOR | 0.035 | -0.001 | 0.033 | 0.035 | 0.035 | 0.037 | 0.032 | 5,178,682 |
| 0.255 | 0.005 | 0.250 | 0.255 | 0.250 | 0.265 | 0.250 | 978,292 | |
| AKM * | 0.170 | -0.020 | 0.165 | 0.170 | 0.195 | 0.195 | 0.165 | 4,328,173 |
| GMM | 0.150 | 0.000 | 0.150 | 0.160 | 0.150 | 0.150 | 0.150 | 82,500 |
| LEI | 37.770 | 0.450 | 37.750 | 37.880 | 37.400 | 37.970 | 37.400 | 949,310 |
| RIO | 82.600 | -0.380 | 82.550 | 82.680 | 82.400 | 83.100 | 82.310 | 3,741,066 |
| BHP | 41.160 | -0.020 | 41.150 | 41.250 | 41.380 | 41.470 | 41.060 | 15,271,145 |
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
Hunnu Coal Completes A$40M Placement
October 19 (Mogi) Hunnu Coal Limited (ASX:HUN) announced today its firm commitment from subscribers to participate in the placement through an issue of 50 million shares at 80c to raise A$40 million before costs.
CPS Securities and Azure Capital Limited were joint lead managers in this placement.
Hunnu Coal states in its announcement that the funds raised will be used for:
- Continue aggressive drilling at Tsant Uul Coking Coal Project
- Continue aggressive drilling at Unst Khudag Thermal Coal Project
- Calculation of JORC resources on both Tsant Uul and Unst Khudag
- Fast track development at Tsant Uul and Unst Khudag
- Acquisition of additional coking coal projects
The placement is in two tranches. First tranche of 24 million shares will be issued on October 27, 2010. Second tranche of 26 million shares is subject to shareholder approval at a general meeting of Hunnu Coal, to be scheduled as soon as it is practical, the announcement states.
Hunnu Coal shares were halted after Friday trading and it is believed resume normal trading tomorrow Wednesday, October 20.
Other Mongolia Related ASX releases dating October 19:
- Aspire Mining (ASX:AKM) : Investor Presentation – Ovoot Coking Coal Project, following its Maiden JORC resources announcement
- Leyshon Resources (See below for article): Quarterly Activities Report and Quarterly Cash Flow
Rio claims Ivanhoe breaches agreed obligation by rights issue
RIO Tinto has threatened to block a proposed $1 billion rights issue by its Canadian partner in Mongolian copper, Ivanhoe Mines.
October 19 (The Australian) Rio claims the capital raising breaches a range of obligations written into a 2006 investment agreement between the two international mining houses.
Rio's threat to either seek further arbitration or injunct the "strategic rights offering" is detailed in a prospectus Ivanhoe has lodged with the US Securities and Exchange Commission.
Any move by Rio to make good on warnings issued to Ivanhoe in private talks ahead of Monday's announcement could delay progress of their $US4.6bn Oyu Tolgoi project in Mongolia and will doubtless dramatically increase tensions in a rapidly fracturing investment relationship.
Monday's SEC filing revealed that Ivanhoe had, as required under its investment agreements, discussed with Rio plans to raise $US800 million to $US1bn through rights issues to shareholders.
"In response, a representative of Rio has communicated to us a number of assertions, including that he believes there are superior financing opportunities available to us, that the rights offering and the Friedland agreements offend a number of Rio Tinto's contractual rights, including Rio's right of first offer, and that we are obliged to make certain additional disclosures regarding the Oyu Tolgoi project, among other things," Ivanhoe said.
"Further, the representative has advised that Rio Tinto is reserving its rights to make an arbitration claim or seek injunctive relief to protect its interests."
Ivanhoe rejects each of Rio's claimed rights and bit back in its SEC filing, saying it intended to hold Rio "fully liable for any and all losses Ivanhoe may suffer as a result of Rio Tinto's actions".
The Ivanhoe prospectus makes the point that if the rights offer is not successful it "may not be able to raise the proceeds necessary to fund its anticipated cash obligations and capital expenditures". It says: "If this happens, the company may be forced to raise funds from alternative sources on less favourable terms, which may have a material adverse impact on the company and its share price."
Ivanhoe's documents make it clear the capital raising is a necessary first step to finalising negotiations with bankers over project financing for Oyu Tolgoi.
The company wants those discussions completed by the middle of next year ahead of the October 6 deadline proscribed in the investment agreement with the Mongolian government.
The Friedland agreement referred to by Rio is a separate funding arrangement between lead manager of Ivanhoe's rights issue, Citi, and the miner's founder, executive chairman Robert Friedland. Friedland owns 18 per cent of Ivanhoe and he will finance his slice of the rights issue using funds secured by Citi.
Incidentally, ahead of the rights issue being announced, Friedland reclaimed the role of chief executive in a move that might signal the stress between Ivanhoe and its senior shareholder, Rio.
Rio owns 34 per cent of Ivanhoe and, under the terms of its original investment agreement, can move to almost 44 per cent by exercising two tranches of warrants in the company.
That same agreement contains a standstill clause that prevents the Anglo-Australian miner from moving beyond a 46.4 per cent stake in Ivanhoe until October 18 next year.
Rio has invested $US1.7bn in more than three years building its stake in Ivanhoe and has appointed three directors to the 14-strong board. But with the recent increase of its stake to 34 per cent, it can appoint five.
Most importantly, Rio holds the balance of authority on the technical committee that is shaping the Oyu Tolgoi project.
Ivanhoe has invested the bulk of Rio's cash on Oyu Tolgoi, a world-class copper-gold find but one that is on the real frontier of mining both because of the lack of infrastructure and physical resources such as water, and because of the political risk implicit in large-scale investment in the emerging nation.
Needless to say, Rio's target is not Ivanhoe but Oyu Tolgoi, which is 66 per cent-owned by Friedland's company and 34 per cent-owned by Mongolia.
When Ivanhoe reports that its major shareholder reckons there are "superior financing" options to the proposed rights issue, it means Friedland & Co should sell it a chunk of Oyu Tolgoi.
Rio has been trying, without success, for the best part of a year to convince Ivanhoe to introduce it as a direct owner of Oyu Tolgoi.
Relations between Rio and Ivanhoe have been severely strained since the Canadian moved in July to extend its protection from a Rio takeover offer by the standstill through the introduction of a poison pill in the form of a shareholder rights plan.
Rio maintains, as it does with the proposed capital raising, that the shareholder rights plan is a breach of its original investment agreement and has sought resolution of its complaint through the formal legal arbitration system available under Canadian corporations law.
After more than three months of haggling, Rio and Ivanhoe have settled on who will run the process. Arbitration is now to be held between January 18 and February 5.
Given this path to arbitration is indicative, it underscores the threat Rio's objection poses to Ivanhoe's proposed 2010 time frame to complete its rights issue.
Monday's prospectus highlights that the confrontation between Rio and Ivanhoe goes much deeper than what has previously been revealed. In its SEC filing, Ivanhoe reports disagreements with Rio's three representatives on the five-strong Oyu Tolgoi technical committee.
Differences between Rio and Ivanhoe people go to the heart of the progress of the project.
"The extent to which these differences of opinion will be resolved or will become matters of disagreement depends upon the result of ongoing and future evaluations and consultations . . . but failure to reach a timely consensus by all Oyu Tolgoi Project stakeholders could delay the completion of the IDP (Integrated Development Plan) and could potentially affect the project's current development schedule," the prospectus said.
Related article:
Ivanhoe, Rio tension increases – Sydney Morning Herald, October 20
Rio-Ivanhoe Tensions Could Disrupt Oyu Tolgoi's Development -Ivanhoe – Dow Jones, October 19
Ivanhoe to raise $1bn through rights issue – Financial Times, October 18.
Ivanhoe Downgraded – Financial Post, October 19
Draft Prospectus lodged by Ivanhoe at SEC
Link to Ivanhoe chart – IVN down on opening
Leyshon Resources Continues To Review Investment Opportunities
LONDON, Oct 19, 2010 (Dow Jones Commodities News via Comtex) --
Leyshon Resources Ltd. (LRL.AU), an Australian gold mining company, said Tuesday that during the September quarter it continued to review, and is continuing to undertake due diligence, on a number of project investment opportunities, some of which have the potential to meet the Company's investment criteria.
MAIN FACTS:
-Company remains alive to possibilities both internationally and within China; It is currently focusing on thermal and coking coal and gold opportunities in North Western China and Southern Mongolia.
-Company is in active discussions with a potential vendor of an interest in a large thermal coal project located in eastern Xinjiang; Due diligence is well advanced and the results suggest that the project has the potential to meet the Company's investment criteria.
-Further discussions are expected during the current quarter.
-Company is also actively reviewing epithermal gold and copper targets in the major metallogenic Tien Shan belt in northern Xinjiang.
- Company is currently undertaking a detailed due diligence exploration program on a gold project located in a historic mining district in north west Xinjiang; Program has comprised extensive trenching and sampling over several kilometers, testing the surface expression of a potentially deep seated orogenic gold resources.
-Further detailed testwork and commercial negotiations are expected during the current quarter.
-Company continues to generate investment proposals from many locations around the world and it actively considers each one in light of its competitive advantage of being located in Beijing and able to access the Chinese end user market.
-Company remains diligent in its assessment of assets at all times and is therefore prepared to commit significant expenditure on due diligence and other studies before committing to a transaction.
-At quarter end, the Company had A$46.6 million in cash, and is due A$1.4 million in term deposit interest for a total of A$48.0 million; This is an increase on the funds held immediately following settlement on the sale of the Zheng Gung gold project in December 2009 and is equivalent to 22.2 cents per share and 13.7 pence per share.
-Shares in London at 0820 GMT unchanged at 15.25 pence valuing the company at GBP32.95 million.
Leyshon announcements today: Quarterly Activities Report and Quarterly Cash Flow
MMC up 14.1%, 37.2% overall
October 19 (Mogi) Mongolian Mining Corporation (HK:975) has consecutively updated its historical high for
HK:0975 Snap quote, October 18 (all in HKD except where noted):
· Close: $9.63
· Open: $8.60
· High: $9.72
· Low: $8.60
· Listing price: $7.02
· Volume: 47.274 million shares
· Total turnover: $426.41 Million
· Market cap (on close): $30.36 Billion (around US$3.9 billion (Bloomberg: HK$ 7.7588))
Link to real-time quotes and charts of MMC (sites licensed by HKEx): ETNET, AAStocks
Sharyn Gol JSC Appoints New Chief Financial Officer
ULAANBAATAR, MONGOLIA--(Marketwire - October 18, 2010) - Sharyn Gol JSC is pleased to announce that Mr. David Dring has been appointed as Chief Financial Officer of the Company.
Mr. Dring's tenure will commence on November 1, 2010.
Mr. Dring, a British citizen, is currently a director of Singapore registered, Triton Coal Pte Ltd, and has over 10 years of experience in accounting, stock broking and compliance. He has extensive knowledge of natural resource companies and their operations.
This appointment will prove to be a valuable addition to Sharyn Gol's management, and underlines the Company's commitment to strengthening its corporate governance.
As at October 18, 2010, Mr. Dring held 4,284 ordinary shares in Sharyn Gol JSC.
About Sharyn Gol JSC
Sharyn Gol JSC (MSE: SHG MO) has a coal mining operation located in Northern Mongolia. It currently owns and operates 100% of the established Sharyn Gol Coal Mine. The Company was privatized and listed on the Mongolian Stock Exchange in 2003.
The Company has been mining coal at Sharyn Gol for over 45 years, supplying domestic and export customers with coal for thermal and semi-coking (smokeless fuel) uses.
A dedicated rail spur links the mine to the Trans-Mongolian railroad, currently Mongolia's main railway connecting Mongolia to the major markets of Russia and China. This exclusive access to the rail spur provides the Company with a significant competitive advantage over the majority of coal mining operations in Mongolia.
Top 10 Shareholders (7,231,389 total outstanding shares)
| 1 | FIREBIRD GLOBAL MASTER FUND | 2,400,773 |
| 2 | BATMUNKH BATKHUU | 1,600,000 |
| 3 | SHARYN GOL ENERGO | 982,172 |
| 4 | FIREBIRD GLOBAL MASTER FUND | 948,455 |
| 5 | FIREBIRD MONGOLIA FUND | 586,089 |
| 6 | BATBOLD | 226,130 |
| 7 | MDR | 182,542 |
| 8 | BALIHUU DAMBACHULTEM | 40,952 |
| 9 | ANOD BANK | 36,238 |
| 10 | KHISHIGJARGAL ENKHTUVSHIN | 20,744 |
Source: sharyngol.com
Interview with the Petroleum Authority Chairman D.Amarsaikhan
October 19 (UB Post) --
- As we know, there is a project to build oil refinery under discussion. Who is the investor of the project?
The Government of Mongolia believes the building of oil refinery is a priority and ten companies have expressed their interest to build oil refinery in Mongolia so far. The Minerals and Energy Ministry issued special license to build the refinery to four companies.
- For example ...
The biggest one will be built in Darkhan City by Mongol Seku Company. Others include Khet Company and others.
- What amount of money is required to build an oil refinery?
US$500-600 million is required in order to build a refinery with the capacity of 2 million tons. Besides, $35-40 million is needed to build a small capacity oil refinery in regional centers.
- How long it will take?
Last year, the country has consumed 850 thousand tons of oil products. By the year of 2015, it is forecasted to consume 1.5 million tons of oil products. Thus, the country needs a big oil refinery capable to process 2 million tons of oil.
- What requirements do investors must met to build oil refinery?
To produce quality products meeting quality standards of Mongolia. To be environment friendly. We aim at building factories using latest technology.
- What about investment to oil industry?
Oil exploration and exploitation has intensified in Mongolia since 1993. Since that time, total investment to Mongolia's oil industry reached US$1.5 billion. It has increased sharply last two years and more foreign and domestic investors are seeking investment opportunities in Mongolia.
- Will oil reserve increase further?
Mongolia's established reserve of oil is 119 million tons. Further this number will surely increase because it is the preliminary results only. It means we have a reserve sufficient to consume for 30 years.
Figures show economy is improving
October 19 (news.mn) The data on social and economic indicators announced by the National Statistics Office give encouraging hope that Mongolia is coming out of the recession and the economic crisis. Some selected indicators are given below.
The State budget deficit in the first 9 months was 16.9 times less than in the same period last year. The current account showed a surplus. Tax receipts rose 68.6 percent. Receipts from the windfall profits tax rose 3.0 times, from corporate income tax 2.1 times and from value added tax 65.0 percent.
The national consumer price index in September fell 0.7 percent from the previous month, but was 8.3 percent higher than at the end of last year, and 10.6 percent higher than in the same period of 2009.
The number of unemployed people registered at labor exchanges all over the nation was 3.6 percent less at the end of September than in the same period last year.
Total turnover of trade with 122 countries in the first 9 months of 2010 reached USD4,273.9 million, recording a 53.8 percent rise. Exports stood at USD 2,025.6 million, an increase of 56.6 percent, while imports accounted for USD2,248.3 million, up 51.5 percent. The balance showed a deficit of USD222.6 million, rising 16.9 percent against the same period of 2009.
Gross domestic product (at 2005 constant prices) in the first 3 quarters of 2010 increased 6.3 percent.
Total industrial output in the first nine months increased by 15 percent (at 2005 constant prices).
Domestic entities carried out 91.1 percent of the total construction and installation work worth MNT143.7 billion in the first 9 months.
The volume of freight rose 15.5 percent and the number of passengers 12.8 percent in the first 9 months. The figures include traffic by all types of transport.
Of the 516,600 people registered under social insurance, 60.7 percent worked at Government establishments, and the remaining 39.3 percent in the private sector. Retirement pension accounted for 73.4 percent of the total amount of pensions paid in the first 3 quarters, pension for the disabled for 12.7 percent, breadwinner loss pension for 7.2 percent, and military pension for 6.7 percent.
Mongol Bank FX, Commodity Rates
October 19 (Mongol Bank) --
| USD | 1,305.22 |
| EUR | 1,809.43 |
| JPY | 16.06 |
| CHF | 1,354.95 |
| GBP | 2,070.80 |
| HKD | 168.22 |
| RUB | 42.75 |
| CNY | 196.46 |
| KRW | 1.17 |
| CAD | 1,280.57 |
| AUD | 1,283.55 |
| XAU (Gold, oz) | 1,773,369.78 |
| XAG (Silver, oz) | 31,175.18 |
Australia
Shares surrender gains to profit-taking
October 19 (AAP) Close Australian shares have ended minimally higher, as early gains in banks and miners on the back of positive leads from Wall Street led to profit taking.
The benchmark S&P/ASX200 index rose was up 3.8 points, or 0.1 per cent, at 4655.7, while the broader All Ordinaries index gained 3.9 points, or 0.1 per cent, to 4727.1.
Among the sectors, financials added 0.1 per cent, buoyed by a strong quarterly profit by Citigroup overnight. Materials ended flat, while energy shares gained 0.5 per cent.
need2know:
- Asian stocks buoyed by Citigroup results
- The dollar falls to 98.45 US cents
- Gold hovers below $US1370
- Oil slips below $US83
- Dow futures lose 43 points to 11,002
…
Wall Street closed higher on upbeat news for banks and home builders, with the broad-based Standard & Poor's 500 index finishing up 0.7 per cent.
…
The major miners were mixed. BHP Billiton closed down 2 cents at $41.12, while Rio was down 38 cents, or 0.5 per cent, at $82.60. Fortescue Metals was up 5 cents at $6.36.
China is scheduled to release important economic data on Thursday including gross domestic product for the September quarter.
…
Preliminary market turnover was 3.064 billion securities worth $5.99 billion, with 591 stocks up, 540 down and 382 unchanged.
<Mogi & Friends Fund A/C>
Flat
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: Flat is the story. Opening was slightly higher, middle down, close was flat.
Patience is a virtue. Don't remember who say that actually or maybe it's just one of those philosophical quotes to use in moments like this.
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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