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Close: Mongolia Related ASX Listed Companies, July 6, 2011 | ||||||||
Code | Last | $ +/- | Bid | Offer |
| High | Low | Volume |
0.051 | -0.001 | 0.051 | 0.052 | 0.053 | 0.053 | 0.051 | 9,812,505 | |
1.350 | 0.000 | 1.345 | 1.370 | 1.360 | 1.390 | 1.340 | 1,261,168 | |
0.215 | -0.010 | 0.210 | 0.225 | 0.230 | 0.230 | 0.210 | 449,065 | |
0.595 | 0.005 | 0.595 | 0.600 | 0.595 | 0.610 | 0.580 | 881,166 | |
0.009 | -0.001 | 0.009 | 0.010 | 0.009 | 0.009 | 0.009 | 2,591,995 | |
0.004 | 0.000 | 0.005 | 0.006 | 0.000 | 0.000 | 0.000 | 0 | |
0.150 | 0.035 | 0.145 | 0.150 | 0.115 | 0.155 | 0.115 | 39,626,922 | |
0.185 | 0.010 | 0.175 | 0.185 | 0.170 | 0.185 | 0.165 | 193,175 | |
1.165 | 0.025 | 1.150 | 1.170 | 1.145 | 1.165 | 1.130 | 208,775 | |
0.270 | 0.000 | 0.260 | 0.270 | 0.265 | 0.270 | 0.260 | 268,707 | |
0.480 | 0.000 | 0.460 | 0.470 | 0.000 | 0.000 | 0.000 | 0 | |
0.030 | 0.000 | 0.035 | 0.026 | 0.000 | 0.000 | 0.000 | 0 | |
0.530 | 0.010 | 0.510 | 0.530 | 0.520 | 0.530 | 0.510 | 270,466 | |
20.850 | 0.150 | 20.810 | 20.860 | 20.830 | 20.930 | 20.550 | 937,405 | |
83.600 | 0.280 | 83.580 | 83.600 | 83.100 | 83.780 | 82.970 | 2,781,171 | |
44.450 | 0.220 | 44.450 | 44.460 | 44.420 | 44.650 | 44.280 | 9,135,332 | |
Source: asx.com.au
SouthGobi Receives Mining License for Soumber Deposit
HONG KONG, CHINA--(Marketwire - July 6, 2011) - SouthGobi Resources Ltd. (TSX:SGQ)(SEHK:1878) announced today that the Mineral Resource Authority of Mongolia (MRAM) has issued mining license MV-016869 to its wholly-owned Mongolian operating subsidiary SouthGobi Sands LLC. The new license pertains to the resource previously disclosed by the Company under NI 43-101 standards as the Soumber Deposit.
The Soumber Deposit is approximately 20 kilometres east of SouthGobi's flagship Ovoot Tolgoi Mine. An independent NI 43-101 resource estimate for Soumber was prepared in January, 2011 by Minarco-MineConsult ("MMC"). MMC estimated 61.4 million tonnes of measured and indicated resources and 65.8 million tonnes of inferred resources. The coal resources are classified as bituminous coal and the rank ranges from low-volatile bituminous coal to medium-volatile bituminous coal, based on ASTM standard D388. Calorific values range between 5,000 kilocalories per kilogram to 7,800 kilocalories per kilogram. Coal quality data suggest that there is good potential to produce a blend or washed coking coal product from shallow (low stripping ratio) sources. Details of the assumptions and parameters used to calculate these coal resources and coal quality estimates are set out in the Technical Report entitled "Coal Geology and Resources – Soumber Deposit, Mongolia" dated March 28, 2011 and available at www.sedar.com and on the company's website (www.southgobi.com).
The new 10,992.92 hectare mining license is granted for an initial term of 30 years with an option for two 20-year extensions.
"With the granting of the Soumber mining license, we can immediately finalize plans for mine development at Soumber," said Alexander Molyneux, President and CEO. "Soumber will likely have an integrated coal processing facility and will require around two years of development for first clean coal production."
SouthGobi plans to complete a Pre-Feasibility Study on Soumber and include the inaugural reserve report when it updates resources and reserves during 2012.
[I-bank focus] Citi cuts SouthGobi (01878) target to HK$103
July 6 (ETNet) Citigroup lowered its target price for SouthGobi Resources (01878) to HK$103 from HK$130, and maintained its "buy" call.
The house believes SouthGobi offers substantial growth potential from a tripling of its output to 12Mt in 2015 from 4Mt in 2011, and strong upside potential to improve pricing power through diversifying its customer base and processed products.
Citi estimated Sunrise to start operation in 3Q. Coal produced from Sunrise has lower ash and sulphur than the high-ash coal produced from Sunset.
SouthGobi expects to obtain Soumber mining rights by 4Q. Citi forecast the 5Mtpa HCC project to start box-cut in 2013 and reach full capacity in 2016, bringing further volume growth opportunities, higher margin product, and blending options. (KL)
Initial Drill Results Confirm Copper-Gold Sulfide Zone at Erdene's Nomin Project
HALIFAX, NOVA SCOTIA--(Marketwire - July 6, 2011) - Erdene Resource Development Corp. ("Erdene") (TSX:ERD), is pleased to announce initial drilling results from its wholly owned Nomin copper-gold project in southwestern Mongolia. The second hole of the program (TND-02) intersected a zone of massive sulphide mineralization at a vertical depth of approximately 60 metres. An 8 metre interval from 82 to 90 metres returned 1.8% Cu and 0.71g/t Au, including 2 metres of 6.04% Cu and 2.4 g/t Au.
As part of Erdene's 2010 regional exploration program, several small-scale relic mineral workings were discovered within the Nomin exploration license, located approximately 35 km west of Erdene's Zuun Mod license. These workings are characterized by shallow hand dug pits with associated waste rock debris. Samples collected during the 2010 field season by Erdene geologists returned highly anomalous copper and gold values. Drilling commenced on June 13, 2011 targeting geochemical and geophysical (magnetic and IP chargeability) anomalies related to this zone of mineralization.
Initial drill results for the first two holes in the vicinity of the relic pits has confirmed copper and gold mineralization at shallow depths. The first hole of the program (TND-01) intersected 10 metres of 0.1% copper from 76 to 86 metres within propylitically altered granodiorite. The second hole of the program (TND-02) intersected a zone of massive sulphide mineralization at a vertical depth of approximately 60 metres. An 8 metre interval from 82 to 90 metres returned 1.8% Cu and 0.71g/t Au,including 2 metres of 6.04% Cu and 2.4 g/t Au.TND-01 was drilled vertically while TND-02 was drilled from the same collar location using a 50 degree angle, successfully transecting the interpreted subsurface continuation of the mineralized pits. Initial interpretation suggests two or more steeply dippingmineralized zones. Threeadditional shallow holes have been drilled along trend of the pits which extend over a strike length of 250 metres.Assay results for these additional holes are pending. Future drilling will test the new zones along strike and at depth.
Think Environmental up on Mongolian gold output
July 5 (Reuters) SINGAPORE - Shares of Singapore gold miner Think Environmental (TENV:SP) rose as much as 6.5 per cent on Tuesday after the firm said it had produced 454.99 grammes of gold from its first trial in Mongolia.
At 0741 GMT, Think shares were up 3.6 per cent at S$0.87 on a volume of 15.6 million shares, around 2.5 times the average daily traded volume in the last 30 days.
The firm had taken over an existing gold recovery plant in its Tsagaan Jalga project in Mongolia, which has a historical production rate of 300-400 grammes per day, it said in a statement.
'This marks the company's growth from exploration to production,' said Liu Jinshu, an analyst at Sias Research. 'We expect their output to grow as the company intends to bring in more equipment to this site, as well as to start production at other concessions.'
Singapore's Think Environmental recently told Reuters it aims to produce a few hundred ounces of gold per month when its first plant begins operations in the West African nation of Mali later this year, and then ramp up to 3,000 ounces per month by March 2012. -- REUTERS
Related company releases:
THINK ENVIRONMENTAL ACHIEVES FIRST GOLD POUR IN MONGOLIA – July 4
THINK ENVIRONMENTAL TO ACQUIRE 51% OF A PRODUCING GOLD MINE IN THE MONGOLIAN REPUBLIC – June 23
Mongolia says Tavan Tolgoi not final yet; S.Korea complains
July 6 (Reuters) - Mongolia said on Wednesday its decision on three shortlisted bidders for massive Tavan Tolgoi project was not final yet as South Korea complained the bidding process was "unclear and unfair."
The latest development adds more confusion to the hotly contested deal, which has been undermined by political considerations.
Earlier this week, Mongolia said it picked miner Peabody Energy (BTU.N), China's Shenhua (1088.HK) and a Russian-Mongolia consortium out of six preferred bidders and the proposal needs parliamentary approval.
But it did not mention names of major partners of the shortlisted bidding groups. The Mongolian ambassador to China said last week that the government would consider the interests of its two neighbors, China and Russia.
"We are still in talks with the companies. It's not final yet," B. Enebish, executive director of state-owned Erdenes MGL, which owns the deposit, told Reuters on Wednesday.
Mongolia relies heavily on China for its commodities for exports, but is in talks to access Russia's railways and ports as it looks to build new trade ties with other countries in the Far East.
South Korea said the Mongolian government had asked the preferred bidders in April to form one grand consortium for the project and bidders had since been in talks to meet the request.
"While we were still in talks, Mongolian government unilaterally announced three shortlisted bidders without negotiations with the participants," Seoul's energy ministry said in a statement.
Mongolia picked a newly formed Russian-Mongolia consortium and excluded Korean and Japanese firms, it said.
"We are trying to nail down the exact composition of the Russia-Mongolian consortium...will tap the possibility of additional talks with the Mongolian government as this international bidding process has been unclear and unfair," the statement said.
UNCERTAINTY
Members of the South Korean firms which participated in the Russian-Korean-Japanese consortium include state-run Korea Resources, POSCO (005490.KS), utility firm KEPCO (015760.KS), trading firm LG International (001120.KS) and Daewoo International (047050.KS).
Japanese firms in the group include Itochu Corp (8001.T), Sumitomo Corp (8053.T), Marubeni Corp (8002.T) and Sojitz Corp (2768.T).
"We are still under negotiation. Our understanding is that this is not the final decision," said an executive of one Japanese firm, which is part of the consortium.
China's Shenhua teamed up with Japan's Mitsui & Co (8031.T) but the Japanese firm's name was dropped without explanation.
Mitsui said they haven't received notice from the Mongolian government and have no information whether they are still in.
The head of state-owned Erdenes MGL, which owns the Tavan Tolgoi deposit, said talks were still continuing.
The capricious nature of Mongolia's democratic government have complicated foreign investment projects in the country.
A five-year negotiation on a $6 billion Oyu Tolgoi copper project in the past was conducted against a backdrop of damaging political and legal uncertainties, including local ownership requirements and a windfall tax on mining profits that was only rescinded in 2008.
Now the democratic government, in power since the early 1990s, is trying to pull its 3 million citizens out of poverty by exploiting its largely untapped mineral wealth.
The Tavan Tolgoi coal deposit in Mongolia's south Gobi region has estimated reserves of 6 billion tons of coal, including the world's largest untapped deposit of steelmaking coking coal.
The project, which may require an initial investment of more than $7 billion, will also generate billions of dollars in revenue for the companies involved and add tens of millions of tons of increasingly rare coking coal used by steel makers.
China, Japan and South Korea are snapping up iron ore and coking coal mines globally to diversify from heavyweight suppliers such as BHP Billiton (BHP.AX) (BLT.L) and Rio Tinto (RIO.L) (RIO.AX).
For South Korea, the project is one of the key assets it has been eyeing to boost natural resources self-sufficiency to feed its manufacturing-focused economy.
Related:
Peabody Energy shares up on Mongolian coal project – AP, July 5
Mongolia’s Picks Shenhua, Peabody, Russia to Develop Tavan Tolgoi Project – Bloomberg, July 5
MONGOLIAN BUM’S RUSH – DERIPASKA REJECTED IN TAVAN TOLGOI BIDDING – Business Insider, July 5
US firm Peabody, China, Russia in Mongolia mine deal – AFP, July 5
Chinese win bulk of Mongolia coal project – FT, July 5
Mongolian Airlines under fire
July 5 (Korea Times) Mongolian Airlines has come under criticism for launching charter flights without approval from the Korean government, duping air travelers who purchased unauthorized tickets.
To fly chartered flights between Korea and other countries, airlines are obliged to receive prior approval from aviation authorities here.
According to the Ministry of Land, Transport and Maritime Affairs Tuesday, Mongolia’s flagship carrier has been selling tickets on three weekly chartered flights since June without a green light from the authorities.
It operates six regular flights per week between Incheon and Ulan Bator, with Korean Air providing another six weekly flights.
Passengers with bogus tickets have been able to board a plane only when seats on regular flights become vacant.
Some travelers are even forced to fly to Japan and other countries to take a flight operated by other airlines affiliated with Mongolian Airlines.
The airline operates a Boeing 737-800 aircraft on the Incheon-Ulan Bator route, which carries up to 170 passengers.
Given this, more than 500 passengers a week, or 2,000 for the month of June, were estimated to have bought unauthorized plane tickets.
“Well before June, we notified Mongolian Airlines and travel agencies of our decision that the airline would not be given approval for launching chartered flights this year. But the company ignored our notice by selling seats on unapproved flights in order to make more money,” a ministry official said.
He said the ministry is considering imposing a range of legal and administrative penalties on Mongolian Airlines, including the suspension of its business license.
“We will do everything we can to minimize damage to those who purchased the problematic tickets. We will also try to revise the aviation treaty with Mongolia to increase the number of regular flights,” the official said.
Checks on number of flights
In response, the airline’s Seoul office said the company received approval for the operation of three weekly charter flights on July 4, admitting that it sold unauthorized tickets until Sunday.
“We got the go-ahead from the ministry Monday for our chartered flights,” said a sales manager, who declined to be named. But he refused to collaborate further on the issue.
After launching the Incheon-Ulan Bator route in 1999, Mongolian Airlines operated charter flights during the summer peak season every year to meet growing travel demand until last year.
But Mongolian Airlines, along with Korean Air, has tried to keep weekly regular flights at the current six for years because if the number of weekly flights rose, other airlines would be allowed to operate on the lucrative route, according to the ministry.
The two airlines have been criticized for charging travelers higher airfare, compared to those of other similar-distance international routes.
An economy-class round ticket on the Incheon-Ulan Bator route, which takes about three and an half hours, is priced at about 600,000 won.
But the price goes up to 900,000 won during peak seasons.
On the other hand, low-season fares for Incheon-Taipei routes are about 360,000 won rising to 430,000 won on blackout flight dates.
Aviation authorities here have been trying to boost the number of flights between Korea and Mongolia to make it possible for other airlines to operate the route.
The move is aimed to provide air travelers with more choices and bring down ticket prices.
Related: Mongolian Airlines sells tickets for ‘ghost’ flights – Korea Herald, July 5
Solartech (01166) buys 10% stake in Mongolia mine at HK$100m
July 6 (ETNet) Solartech International (01166) said it entered into an agreement with Hero Wisdom Limited to acquire 10% equity interest in Venture Max Limited at HK$100 million.
The unaudited total asset value and unaudited net liabilities of Venture Max as at 15 June 2011 amounted to about US$65,000 and US$35,000.
Venture Max indirectly owns Mongolian Copper Mining LLC (MCM), which holds the Minerals Exploration Special Licence covering an aggregate area of 610.55 hectares.
MCM will seek to obtain the licence permitting the conducting of mining activities in relation to the mining area located in the place named Bor Khag of Nogoonnuur soum in Bayan-Ulgii Aimag, Mongolia, with a term of not less than 30 years covering an area of not less than 600 hectares of the mining area.
The total estimated resources at the mine based on the The Russian Reserves & Resources Reporting System is about 41.81 million tonnes of ore and the current combined estimated resources is equivalent to total copper metal resources of 464,625 tonnes. (HL)
Mongolia Energy (00276) says concessions unaffected by MPL
July 5 (ETNet) Mongolia Energy Corporation (00276) issued an announcement to clarify the report made by independent auditors in its annual results announcement regarding certain licences which may be affected by the Mining Prohibition Law (MPL).
Mongolia Energy Corporation currently has in total 21 mining and exploration licences under its concessions in Mongolia and has 4 mining licences and 1 exploration licence which may be affected by the MPL. Upon its enquiry with the Mineral Resources Authority of Mongolia, the authority replied that the boundary lines of restricted areas as defined by MPL have not been determined nor announced to the public and Mongolia Energy Corporation was also informed that it could continue to operate normally under the Minerals Law of Mongolia.
Mongolia Energy Corporation said its mining and exploration activities under concessions are conducted as usual and have not been affected by the MPL since the passing of the MPL on 16 July 2009. (HL)
Haranga: Appointment of Technical Manager
July 6, Haranga Resources Limited (ASX:HAR) is pleased to announce the appointment of Mr. Kerry Griffin as the Company’s Technical Manager. The role will be based in Ulaanbaatar, Mongolia.
Kerry has 18 years professional experience in exploration, resource development and mining geology in Australia, Southern Africa, South America and Mongolia including senior roles with such companies as Ivanhoe Mines Mongolia, Newcrest Mining and Consolidated Minerals.
As well as extensive hands on experience in designing and managing exploration and resource drilling programs, Kerry is a Competent/Qualified Person for JORC/43-101 standard reporting and sign-off, management of geological teams and has previously consulted in the use of new geological databasing, modelling and geophysical interpretation software.
Kerry has significant experience in Mongolia having spent four years with Ivanhoe Mines as the Senior Development Geologist for the world class Oyu Tolgoi development. In this role he not only managed major diamond drilling programs, but also looked after geological interpretation, 3D modelling and resource estimation, and the training of the incoming Mongolian geologists.
Prior to joining Haranga Resources, Kerry was employed as the Country Manager for Aspire Mining Limited in Mongolia and was instrumental in their recent successful acquisition and development of the Ovoot coking coal project.
Haranga Resources is preparing for a major drilling program at its flagship Selenge project and is currently performing due diligence on a number of other potential project acquisitions in Mongolia. The Company is fortunate to have someone with Kerry’s extensive professional expertise and incountry experience to oversee these critical activities.
Guildford: EGM Presentation
July 6, Guildford Coal Limited (ASX:GUF) --
MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Co-financing $10m in Loans from Mongolian Microfinance Institution XacBank
July 6 (MicroCapital.org) The European Bank for Reconstruction and Development (EBRD), an international financial institution headquartered in the UK, recently announced it has committed USD 5 million to co-finance up to 50 percent of loans issued by XacBank, a Mongolian community development microfinance institution (MFI). This “Medium-Sized Co-Financing Facility” (MCFF) is expected to allow XacBank to expand its lending capacity and to provide larger and longer-term loans to its small and medium-sized enterprise (SME) customer base.
Philip ter Woort, Head of EBRD’s office in Mongolia, said, “This facility is an important step in the further enhancement of our cooperation with XacBank, which will enable more businesses to access bank financing and facilitate growth of a medium-sized private sector in Mongolia.”
EBRD holds a 10.5 percent stake in XacBank, which is a subsidiary of TenGer Financial Group, a conglomerate in Mongolia owned by a group of local and international investors. As of 2010, XacBank reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 380 million, a gross loan portfolio of USD 264 million, approximately 75,700 borrowers, return on assets (ROA) of 0.43 percent and return on equity (ROE) of 5.29 percent.
Regular Cabinet Meeting on July 6
July 6 (summarized from Government press release) –
- Excise tax on diesel, petrol to be zero. Tax on A80 and A92 is 0 from 80,000MNT and 100,000MNT respectfully per each tonne.
Rosnefti will only supply 10,000 tonnes of A92 out of the 20,000 tonnes average consumption in Mongolia this month. This is being negotiated with Rosnefti and other sources have started being used.
July Rosnefti prices increased by $119, $201, $4 for A80, A92 and diesel respectfully.
- “Dornod Oil” Company to be formed in Choibalsan, Dornod for oil processing as a state involved company. Selection of companies to take equity participation and drafting of company constitution is handed to Minister Zorigt and SPC Chairman Sugar.
Projects to build 2 million tonne oil refinery in Darkhan, 300,000 tonnes in Rashaant, 120,000 tonne in Dornod Aimag, 330,000 tonne and 50,000 tonne in Dornod’s Zuunbayan are internationally approved. $28M-$600M and 1.5-4 years is needed to finance and build these projects.
- Government Bonds of up to MNT300B to be issued. 100B for loans to cashmere producers, 50B for loans to support sheep, camel wool producers, and 150B to support small-mid manufacturers.
- 20 day coal reserve to be prepared for stable supply to power stations.
…
Link to Government press release (Mongolian)
DP does not favor referendum any longer, wants 38:38 election system
July 5 (news.mn) The DP has changed its mind about the referendum on the election law and does not support the idea any longer.
Explaining the change of stand, Ch.Saikhanbileg, head of the DP group in Parliament, told journalists that holding a referendum would cost between MNT6 billion and MNT8 billion but the outcome may not justify the prohibitive expense. A referendum held in a hurry and under politically charged conditions may not represent the true national mood. If people now vote against change, another referendum cannot be held before at least 8 years. Saikhanbileg said a vote on amendments to the Constitution could be held together with the parliamentary election next year.
Saikhanbileg said the DP has agreed to modify its stand on the election law and if the MPP does the same, an agreement can be reached. The MPP is sticking to direct election for 52 MPs while allowing the remaining 24 to be elected on the basis of proportional representation. The DP has suggested a 38:38 ratio and has informed the MPP of the decision.
At a later press conference, the MPP group leader U.Enkhtuvshin said the DP is making it difficult for Parliament to work properly. Election law is an issue of state policy and thus, under the law passed in 1995, can be decided in a referendum. He also asked the DP group to return to Parliament. “If we cannot finish pending work, including this issue, before July 10 we shall have to wait until the Autumn session,” he said, adding, “If the two groups cannot agree, the decision should be passed on to voters.”
Enkhtuvshin said according to MPP calculations, only MNT3 billion was needed for a referendum.
China will export petroleum only under long-term agreement
July 6 (news.mn) Chinese Ambassador Wang Xiaolong yesterday called on Deputy Prime Minister M.Enkhbold to say China was ready to sell AI-92 to Mongolia, but only under a long-term agreement, and not as a temporary measure. Enkhbold had some days ago requested China for 22,000 tons of AI-92 immediately and then 10,000 tons every month.
The Chinese reply came in the form of a letter from the State Council of China. It says China was ready to help Mongolia, but it had its own problems with meeting domestic demands and could sell AI-92 to Mongolia only as a long-term arrangement. Enkhbold told the Ambassador Mongolia would send specific suggestions on such an agreement soon, and said Mongolia was interested in expanding its cooperation with Sinopec Corporation.
D.Enkhbat: Parliament should break up if could not pass a draft law on election
The Civil Will-Green Party yesterday said Parliament should be dissolved if it cannot resolve the political deadlock over the draft law on election. Party head D.Enkhbat said that the dispute has lingered for a month and a half and if the two groups cannot break the impasse of their own creation, Parliament should be dissolved.
He also expressed the disappointment of his party at the retreat of the DP group from its original stand to accept a 38:38 ratio in electing MPs from the two systems. Enkhbat said his party did not consider a referendum the proper way of deciding the issue.
Russian gasoline shipment to ease Mongolia's fuel shortage
ULAN BATOR, July 5 (Xinhua) -- A shipment of 10,000 tons of Russian petroleum was on its way to Mongolia to ease the country's fuel crunch, local media said Tuesday.
Mongolia has experienced a severe fuel crisis in recent months, which has severely affected all areas of Mongolian society.
Mongolia imports about 90 percent of its petroleum from Russia but a domestic supply shortage has forced Russia to significantly reduce fuel exports, including to Mongolia.
In the Mongolian capital, all gas stations have imposed a limit of 30 liters of gasoline per customer and several kinds of petroleum products have run out completely.
Minister of Mineral Resources and Energy Dashdorj Zorigt said Monday Mongolia had sent officials and business people to Moscow to negotiate a long-term guarantee of petroleum supplies.
Currently, Mongolia has no oil refining industry, but plans to build one in the near future.
Anti-monopoly actions in Mongolian petroleum industry
July 5 (UB Post) Four petroleum distributing and importing companies in Mongolia have been fined MNT 10 million each. Using the shortage from Russia as an excuse, they started supplying fuel exceptionally by cards and coupons; refusing service to other costumers.
Mongolia’s anti-monopoly agency sent an official letter to the Petroleum Authority of Mongolia and petroleum importers demanding them to stop selling by coupons and cards from 28th June, as there was no legitimate explanation for their actions.
However, companies “Petrovis”, “Shunghlai”, “Just oil” and “Magnai trade” continued to supply fuel by cards and coupons only.
“We imposed a fine of MNT10 million on these companies as their actions violated the law of fare competition and conflicted with interests of citizens” the Mongolian anti-monopoly commission announced on Friday.
“It is illegal to sell petroleum by card and coupons or to limit the purchase of A 92 and diesel fuels up to the value of MNT2000.” said A.Ariunbold, Head of the Department of Law and Control, Mongolian Anti-Monopoly Commission.
This violation was detected after investigation following the warning given to petroleum companies. As, at the moment petrol stock is normal and the government is taking measures to increase fuel supply, the government will impose harsh punishments on those intentionally increasing inflation and operating in a way that damages the interests of citizens.
“Furthermore, there should be no repetition of companies giving out petrol by cards and coupons. Ministry of Resources and Energy and Petroleum Authority of Mongolia has announced officially that the reserve of fuel is enough. Therefore, we will not come into shortage“ he said.
“Following reports from some provinces complaining that petroleum distributors there are still supplying by cards and coupons, further investigations are taking place right now. Required measures will be taken and this will not be repeated again.” said A.Ariunbold.
Some sources report that the MNT10 million the companies were fined is equal to revenue the petrol companies make in just two days. Previously, the anti-monopoly agency in Mongolia imposed MNT250 thousand fines on six petroleum importers for intentionally increasing fuel prices. The fine imposed by the anti-monopoly companies has increased from MNT250 thousand to MNT10 million
Water used in mining, agriculture likely to cost more
July 5 (news.mn) The Deputy Chief of the Water Board has told our reporter that the work of identifying and counting water sources in the country, including rivers, lakes, underground reservoirs, and artisanal wells was progressing on schedule. The exercise is carried out every four years. The results of the work will determine the quality of the water at various places and the extent of pollution following mineral resources exploitation. This will help determine new standards for water use and the rates to be charged.
The official felt water costs are too low in Mongolia. Mining companies buy a ton of water for MNT180 but citizens buy 40 liters for MNT40. The ecological and economic value of water has to be considered.
A working group of the Ministry of Nature, Environment and Tourism is studying the issue and is likely to recommend an increase in the price of water used in mining and agriculture. The rates for water used in households are not to be increased much.
German loan to upgrade power station in Darkhan
July 5 (news.mn) The State Secretary of the Ministry of Mineral Resources and Energy, D.Khurelbaatar, and the President of Asen Corp of Russia, V. I. Kostyakov, today signed an agreement to upgrade a power station in Darkhan. The German Government has given a soft loan of 12 million euro for the work.
The plant was built in 1965 and needs new turbines and generators. A 35-mw turbine and other equipment would be installed and the transformers’ load bearing capacity will be raised. Asen Corp hopes to finish the work in two years.
"Stock Markets 101" for Mongolians ahead of coal mine IPO
July 6 (Reuters) - Forced to sell his animals and flee his dried-up lands, former herder Sainbuyangiin Tsagaan-Ovgon is now hoping mining profits will let him return to his native Gobi.
The 72-year old, who admits he knows nothing about stocks, will soon receive 536 shares in the Mongolian company that owns the world's largest coking coal deposit.
The potential windfall is part of an experiment to allow Mongolians to share directly in wealth generated by mining at Tavan Tolgoi, the hotly contested coal project.
"These shares will be a big help to herders like myself," said Tsagaan-Ovgon, who sported a traditional silk robe and white fedora as he mingled with the crowd on Ulan Bator's Sukhbaatar Square.
"We can plant fruit, vegetables and trees. In the city people can use their shares to start small businesses, they can package jam or make sweaters and then build their own brand names."
Erdenes Tavan Tolgoi's international IPO could raise up to $5 billion, a vast sum for one of the poorest countries in Asia. Ten percent of shares are reserved for Mongolian citizens, and another 10 percent is to be split among Mongolian companies. Some lawmakers support giving those shares to citizens as well.
The value of each Mongolian's shares could be around $300, Mongolian officials have estimated, a substantial amount in a country where the average GDP per capita stands at $1,573.
The rights to develop the site are expected to go to a consortium led by Chinese coal giant Shenhua Energy Co Ltd (1088.HK), U.S. coal miner Peabody Energy Corp (BTU.N) and a Russian consortium. (Mogi: slight mistake here)
WINDFALL
To cope with the coming wave of citizens-turned-traders, Mongolia's tiny stock exchange is gearing up for a massive investor education effort, so that the opportunity represented by the shares is not frittered away by an impoverished population unfamiliar with capital markets.
"When I daydream about the possibilities here I think, 'wouldn't it be wonderful if I can make Mongolia the most investment literate country in the world'," said Bill Gorman, president of the Mongolian Stock Exchange.
It's a tall order for the exchange, which trades for only two hours each day. It signed a $14.2 million restructuring agreement with the London Stock Exchange (LSE.L), to help it upgrade ahead of the listing of Erdenes Tavan Tolgoi, the license holder for the coal deposit.
Gorman envisions cartoon-style pulp books to introduce capital market concepts, starting from the basics of "what is a stock, what is a company and how it is set up." A markets-themed soap opera could follow.
"I am hoping to train everyone from school children to Supreme Court justices," he said at the exchange, a Russian-style building painted a cheerful shade of peach.
"People can do whatever they want with their shares. They can buy them, sell them, trade them or frame them and hang them on their wall," says Peter Morrow, a banker and stock exchange board member.
"But the shares represent real value and when people realize that, they won't give them up easily."
That's the hope, at least.
During the messy privatization following the collapse of the Soviet Union in the 1990s, Russians received vouchers that entitled them to shares of state-owned companies. But many sold them for pennies, or even vodka or flour, to savvy free-marketeers who went on to become tremendously wealthy oligarchs.
The challenge will be to avoid a similar scenario in Mongolia, a former Soviet satellite where local industry collapsed along with the Soviet Union.
Mining in Mongolia has boomed thanks to Chinese demand for minerals and coal, but corruption and environmental degradation plagues the sector. The Mongolian state has failed to capture its share of the wealth, or pass it on its people.
All Mongolians born before March 31, 2011 are eligible for the shares, but they will only become valuable after the IPO in 2012. It will be years, if not decades, before Tavan Tolgoi yields dividends once the coal gets to market.
Gorman acknowledged that some would sell their stake but said others would hang on for potential dividends. Laws to encourage companies to issue dividends would help raise interest in holding shares.
"If we can get the Mongolians to keep their shares and enjoy the benefits we have been successful," Gorman said.
Former herder Tsagaan-Ovgon said he hoped to use his shares to return to the land and plant trees, helping to reverse the desertification that drove him to the capital city.
"I really don't know what it means to be a shareholder but I am hoping the government will give me some information about it," he said.
"They say it's a way to share the land and I just hope that is the case, because Tavan Tolgoi belongs to all Mongolians."
Mineral-rich Mongolia sells fields
July 5 (Al Jazeera English) --
“This will be the Richest Place in the World Per Capita in 10 Years”
Jun 27 (Capitalist Exploits) These words from a friend I was recently discussing Mongolia with. He’s easily one of the most astute investors we know, and later this week we’ll introduce you to him, but first I want to explain why Mark and I agree with that statement.
Mark spoke about Mongolia some time back, and since then growth and returns have been spectacular and breathtaking all at once. That said, we believe that this party is far from over. In fact it’s only getting started.
Due to my unashamed and admittedly bullish stance, I’m cognizant that when discussing Mongolian investment opportunities I may come across sounding like one of those cheesy salesman advertising “the next best, most unbelievable, swish whizzy, never to be repeated again, must buy now before the sky falls in” sort of opportunities, where not only will you assuredly make millions, but you’ll have a better sex life too! Instead I’ll attempt to temper my enthusiasm and simply provide you with a brief breakdown of some important points for you to consider. After all, we have nothing to sell, and though we believe we are correct in our assessment we’re willing to accept that maybe, just maybe, we are actually wrong, and if that is indeed the case we’d love to hear from you as to why.
On with the show then… To the land of Genghis Khan:
§ Population: 2.8 M
§ 97.8% literacy rate
§ Multi-party democracy
§ Median age: 26
§ Sits conveniently between Russia and China, and close to the world’s fastest growing economies. India, Philippines, Indonesia – you get the picture.
§ 19th largest country in the world with a total of 1.56M sq.km (giving it 1stprize in terms of lowest population density in the world).
§ No restrictions on foreign ownership of businesses, and the government doesn’t pre-screen. However, foreigners cannot own land directly. Incidentally, there is no discrimination between foreigners and Mongolians when buying shares.
§ The currency is freely exchangeable.
§ A GDP of $5.1B and a GDP per capita of $1,900.
§ Strategic minerals and natural resources are subject to a 34% government stake.
§ The London Stock Exchange (LSE) is helping develop the Mongolian Stock exchange and opening it up to capital flows previously not available.
With the above as a very brief overview let’s put our investor hat on and take a look at some important facts. The entire market cap of the Mongolian stock market is roughly $1B. To give you an idea of growth, in 2008 the market cap was $406M. It finished 2010 with the title of the world’s best performing equity market, up a stunning 64% YTD. This is some stupendous growth, but lets put this into perspective with what’s taking place.
Consider the two largest projects in the country: The Oyu Tolgoi Mine (OT); and, the Tavan Tolgoi Mine (TT). Together these two projects completely dwarf the current entire Mongolian economy. OT alone will produce roughly $7B of metal per year at current prices. TT is considered the largest coking coal deposit on this ball of dirt we call home, with a total coal resource of 6.4 billion tonnes of high quality coking coal. Initial estimates have it that TT will produce 30 M tonnes of coal annually for the next 30 years.
Although these are currently the two largest mining projects in Mongolia, there are literally dozens more in varying stages of implementation.
What happens when the capital required to fulfill the dreams of just these two projects alone hits such a tiny market?
The answer of course is open to debate, but we believe that the Mongolian economy and market will go from “Lada to Bentley” in short order. In fact it’s already happening. If you’ve ever wanted to upgrade from economy to first class we suggest you sit up and take notice.
Why might this happen?
Mongolia is still the smallest market in Asia, yet it has resources its counterparts in Asia only dream of. Remember it has the lowest population density in the world, let alone Asia. Billions upon billions of dollars are required to extract the resources known to be present. How do you push this sort of capital into such a tiny economy without an eruption?
Per capita income for Mongolians is expected to rise to US$5,000 within the next two years and to a staggering US$12,000 by as early as 2015. Back of the napkin math tells me this is about what the average Shanghainese and Beijingese earns now. What happens when Joe Sixpack, or in this instance Odtsetseg or any of his relatives, experiences a doubling, tripling or more in his disposable income?
We don’t know for sure but we’re willing to make some educated guesses.
Mongolia is about to experience the biggest boom it’s seen probably since the Khanate era. Last year the economy grew 6.1%, with international reserves hitting an all time high of $1.6B. On the back of this the banking sector is weak, and bond markets underdeveloped, liquidity is poor, and financial statements are at times non-existent or hard to come by in many instances. Problems to be sure, but these problems create severe miss-pricing in valuations. These are opportunities for an astute investor, and we don’t believe they will last.
Stay tuned to one of the ways we are personally playing this growth. We’ve made the case previously for picking the best management possible in any company. It is easily THE MOST IMPORTANT aspect for us and of all the companies we’ve ever looked at. The management of the entity we’re going to introduce you to later this week is absolutely superb, with what has to be the most shareholder-friendly corporate structure we’ve ever seen.
Lastly, since we’re possibly being monitored by any number of three letter agencies in any number of countries, please read our disclosure statement here.
A Mongolian Capitalist – Part I
June 29 (Capitalist Exploits) June In the last post Chris talked about Mongolia. It’s truly a land of opportunity, and it’s experiencing a boom that will be one for the history books to be sure.
In the spirit of continuing our Frontier Capitalists theme, we wanted to introduce you to another good friend whose taken the proverbial “bull by the horns” and actually relocated to Mongolia! A bold move, but likely one that will make him an 8 or 9 figure fortune over the next decade.
Chris recently interviewed Harris Kupperman, a successful hedge fund manager and now the CEO of a Mongolia-based diversified investment company that is investing heavily into real estate and financial services (we’ll speak more about that in our next post). We also let our friend Carlos Andres throw a few questions out there, and between the two of them our readers should come away with a pretty clear picture of what’s happening on the ground in Mongolia.
So let’s get started!
Chris: In our last post I gave a little overview of why Mark and I like Mongolia so that readers have a basic background to the story. Can you tell us why you like it so much (so much so in fact that you moved there!), and not just from the standpoint of a capitalist and investor, but also as a global citizen. What’s so great?
Harris: To start with, the weather… Just kidding. But where else do you have a 150 degree swing from summer to winter? Everything in Mongolia is so unique, it’s like no other place and that’s why I enjoy it so much. No other country has gone from half nomad to wealthiest per capita in a decade. I want to be here and see it happen. I enjoy the intellectual factors at play in building a business in a country like this. Every day is just fascinating. Besides, I really do enjoy living here. It is one of the most open and free countries in the world, the people are friendly and I’m having a great time.
Carlos: When did Mongolia first come to your attention and under what circumstances? What were you up to at the time?
Harris: I’ve managed a hedge fund since 2003 and through that I have always been looking for interesting opportunities. I first learned the Mongolia story in 2005, but I was too busy with other things to really figure it out other than sending some Emails. I kept it on my radar though. A very good friend of mine in Hong Kong had been telling me for ages that we needed to go take a look and then finally in August of 2010, I arrived in Mongolia. Once you are here, you realize that the Western investment media has it all wrong, the growth is much stronger than what you hear about and it is the reason that I have pretty much dedicated my time to Mongolia ever since. There is no other story like it in the investment world.
Chris: I know we’ve discussed this before, but can you tell our readers how what’s taking place in Mongolia compares on a historical basis to previous booms… if at all?
Harris: There is no historical precedent. You are looking at an economy that might literally double each year for the next decade. I cannot think of anything like this in history. Basically, mineral exports are going to go from 2 billion in 2010 to some number around 20-80 billion by 2017 and continue growing from there. It’s just never happened before.
Carlos: What type of government do you have in Mongolia and what’s the basic structure?
Harris: Mongolia has a fully democratic government with regular elections that see the ruling party change. It is a very Western-style government that is very much free.
Carlos: What type of economic regime is in operation? Is it liberalized trade and free market, socialist, Chinese style communism or something else? What is the economic and political leaning of government officials? Is the idea of a free market present?
Harris: It is the best free market country that I know of. There’s a bit of bureaucracy left over from Soviet days, but the government understands growth and they want the country to be successful. Remember that the guys in politics tend to be the richest citizens and they want to make sure that they become wealthier. They are doing everything possible to promote growth. Taxes are minimal, regulation barely exists and bureaucracy is slowly being tamed. It’s paradise for investors.
Chris: What do you see as the biggest risk to investing in Mongolia? Is it the government, who might do something stupid along the way, or is there anything else?
Harris: Like most countries, as an investor, the government is usually the biggest risk. I think the current government is smarter than most. They know they need foreign investors in order to develop the mineral resources as Mongolia doesn’t have billions to spend on the necessary infrastructure. More importantly, they already stubbed their toe badly a few years back with an excess profits tax which has now been repealed. I do not think they will try something like this again. The other risk is a global slowdown as you have a country that is a major commodity exporter. I’m less worried about this risk however.
Carlos: How about the security and crime situation in the country in terms of both personal safety and business security?
Harris: There is essentially no crime. I feel perfectly safe walking by myself at 2 am. Business security is the same. I feel safer here than in Manhattan doing business, and we all know that Manhattan has been sterilized to the point that it’s like Disneyland.
Mark again… We’ll continue our discussion with Harris on Monday next week, and let you know the name of the company he co-founded to invest in Mongolia.
To our readers from the U.S., have a safe and happy 4th of July weekend. I can just smell the hamburgers and corn grilling on the BBQ. I do miss this time of year in the States.
A Mongolian Capitalist – Part II
June 30 (Capitalist Exploits) We left off before the 4th of July holiday last Thursday with Chris and Carlos speaking to Harris Kupperman, a successful hedge fund manager and now CEO of a Mongolia-focused venture. Today we’ll talk more about his company and his plans for investing in Mongolia.
Chris: Harris, you’ve said that you wanted to invest in Mongolia but couldn’t find a suitable vehicle to do so. Like a true capitalist, you created your own! For our readers benefit, please tell us more about Mongolia Growth Group (Editors note: Mongolia Growth Group is traded on the Canadian exchange under the ticker symbol “YAK“. Investors in the US can find it listed over the counter as “MNGGF“).
Harris: We’re a company focused on real estate and financial services. Those are the two sectors that should be most leveraged to the growth of the economy and GDP. From a historical perspective, real estate in the downtown of the capital city of a country seeing a boom has always gone parabolic. We think a similar thing will happen here. We were recently granted an insurance license and are now the best capitalized insurance company in Mongolia. Finally, we are actively investigating other sectors of the financial services market to enter.
Chris: Investing privately is one thing, but you went the public vehicle route, which is a bit more complex at best. How did you go about creating the company?
Harris: When I first visited Mongolia, I saw the opportunity, but like you say, I couldn’t find a way to get appropriate exposure. I also couldn’t get comfortable with corporate governance and the accounting at the various public companies. I figured that my only viable alternative was to build it myself.
I built MGG because I wanted to invest my own money in Mongolia, as did some friends. Management and the board have now invested over $7 million in the company and I’m about half of that amount. No matter what happens in our business we can be confident that our accounting is done right. I couldn’t invest the sort of money that I’ve invested without that knowledge.
Chris: Mongolia Growth Group is a bit different from most other public companies in terms of compensation. Can you explain?
Harris: The company started with me asking friends to invest alongside me in Mongolia. I wanted a diversified company that would have adequate exposure to the Mongolian economy. I simply didn’t have the resources to do that myself. I felt funny asking my friends to invest in my company and then tell them that I was going to take a salary and dilute them through stock options or any other scheme like that. Instead, I have decided to take no salary, stock options, performance allocation, bonus or anything else. I’m here in Mongolia because I’ve invested my own money in the company. My Co-Pilot in this venture, Jordan Calonego feels the same way. Besides, we’ve been investors for over a decade now and have been disgusted to learn that the CEO always seems to do better than the shareholders. Now that our roles are reversed and we are management, it would be wrong of us to do what we have always criticized. Investors need to think of this company as a business created by a bunch of very successful hedge fund guys who want to invest their own money in Mongolia. Minority shareholders can come along for the ride if they want without any of the onerous fees normally associated with hedge funds. It is the only company that I know of like this. I hope we can use this as a template for the next time that I complain that some Management team is overpaid, but that’s a different story!
Chris: Investing in foreign emerging markets entails a certain amount of risk for us “foreign devils.” Tell me about your local partners in Mongolia and how you’re mitigating risk by partnering locally.
Harris: I think you have an inaccurate impression about Mongolia. People are very happy to have us investing in the country and helping the economy to grow. A stronger country means they can stand up to the Chinese better. Of course, our foreign partners help us navigate business relationships and that is critical. Think of it this way, I’m from New York. If I moved to Boston, I could do business just fine. Of course it helps if you have friends in Boston, but you’d do just fine without any relationships. That’s how Mongolia appears to me. That said, we have amazing partners and they have made everything significantly more successful for us at MGG. We couldn’t have gotten this far this fast without them.
Carlos: Even though you are focusing on the FIRE sectors (Finance, Insurance, & Real Estate), was this driven by a natural resource thesis? [i.e. in the context of economic growth derived from the natural resource sectors?]
Harris: Yes. We want leverage to the growth of Mongolia. These three sectors are very closely tied to economic growth which we think is about to significantly accelerate as new mines come online.
Carlos: For our readers benefit can you tell us what minerals and resources are found in Mongolia?
Harris: We are learning that Mongolia has everything. Just a few months ago, we learned that Mongolia may also be a significant oil exporter. They’ve already found coal, copper, iron ore, gold, uranium, rare earth elements and pretty much everything else.
Carlos: We all remember the Levi Strauss story back from the California Gold Rush. Along those lines have you thought of jumping into the mining camp support business?
Harris: We are looking at everything. However, for now at least, we see the biggest opportunities in real estate. There are hundreds of millions being raised for Mongolia focused real estate funds. Prices will go simply nutty as they try to put that capital to work, and we want to get positioned before that happens.
Chris: Regulations, taxes and other such government ‘ahem… initiatives can, and often do, make enormous differences to investments. Currently agriculture is favored and doesn’t pay VAT or import taxes on farming equipment and supplies. This is because the Mongolian government wants food costs low. Normally this would allow fatter margins for farmers. Is this something of interest, and do you see any other opportunities arising due to government mandates and tax incentives/breaks?
Harris: We have looked at agriculture and have a joint venture with a Mongolian to finance the expansion of his potato patch; however this is quite small in terms of our company. In general, we want to focus on businesses tied to the growth of the broader economy and agriculture doesn’t fit that bill, at least for now.
Chris: You and I have previously discussed infrastructure in Asia, and agreed as to why neither of us would invest in early stage infrastructure. At the same time we both know that infrastructure is absolutely critical to growth. Where do you think Mongolia is at with the critical infrastructure that is being built now, and needs building to enable the sustainable growth we expect?
Harris: Infrastructure is the main thing holding back the economy. As soon as you build a railroad, all these stranded mineral assets suddenly become economic. The same goes for road infrastructure, power, and water transport. Really everything needs investment, that’s the reason that I feel so confident that the government won’t do anything to hurt foreign investors, it would simply derail growth.
Chris: Here’s a problem I’ve been thinking of lately. It’s fair to say that since listing its shares publicly, MGG has experienced periods where the market clearly overvalued the company. This should be obvious to any investor performing some back of the napkin math. When insiders of a company see the market value of their company trading below their best estimates of fair market value they buy back stock. When the opposite happens it’s natural to offload stock. This is easy for me as a pure capital provider, and one not involved in strategic decisions or management. But, I wonder how I’d deal with this situation where it’s my own company I’m running. How do you deal with this conundrum, given that I think we’re likely to see some extreme over-valuations at some point as the Mongolia story begins to unfold and the world wakes up to the opportunities?
Harris: I’m a long term investor. I have absolutely no intention of selling any of my shares. NONE. If our shares are undervalued, it would be great to be able to buy back shares. If we are overvalued, we just ignore it. Remember, that when an economy grows as fast as Mongolia’s, it’s very easy for our company to simply grow into the valuation. For instance, in the past four months, real estate prices are up between 20 and 50%. It doesn’t take many more months like that for a business to grow into and then exceed a current valuation.
Mark again… Harris is as sharp as they come in our opinion. We believe in him so much in fact that we participated in all three rounds of the MGG private placements. So for purposes of full disclosure, Chris and I own shares. You can figure out what we paid by looking at the SEDAR filings. We also encourage anyone that is interested to review the Company’s website at: http://www.MongoliaGrowthGroup.com.
We’ll have more from Mongolia over the coming weeks. Chris knows a few more intrepid capitalists that have made Mongolia an important part of their investment activities. Stay tuned, and let us know if you have any comments or questions. Just post ‘em below and we’ll respond asap.
“With Heaven’s aid I have conquered for you a huge empire. But my life was too short to achieve the conquest of the world. That task is left for you.”
- Genghis Khan, to his sons at the end of his life.
Khan Investment Management to Launch Mongolia Equity Fund
SINGAPORE, July 5, 2011 /PRNewswire/ -- Khan Investment Management (http://www.khan-management.com) announces the launch of the Khan Mongolia Equity Fund in August to capitalize on the growth opportunities in Mongolia and provide investors with both diversified and liquid exposure to one of the world's most resource rich and fastest growing economies.
"Mongolia is forecast to have the fastest growing economy in the world over the next decade. Growth will be primarily driven by the development of the nation's mining sector, which includes some of the world's largest coal, copper, gold and uranium deposits," said Travis Hamilton, Managing Director of Khan. Prior to founding Khan, Mr. Hamilton was a Director at the Helvetica Group, a boutique asset management and fund management firm with USD3.5 billion under management, which in 2006 launched the first collective investment vehicle, now listed on the London Stock Exchange, to access the Qatar Stock Market.
The Khan Mongolia Equity Fund will invest in companies with significant assets and operations in Mongolia listed internationally and on the Mongolian Stock Exchange, while opportunistically participating in Mongolian initial public offerings. The Fund has partnered with industry leading service providers to achieve its capital growth objectives.
Gordian Capital Singapore Private Ltd, a specialist fund management group offering full service fund management infrastructure and operational support, has been appointed as the Investment Manager of the Fund. Gordian operates a number of funds with total assets under management in excess of USD 300 million.
Monet Capital, a leading investment banking firm based in Ulaanbaatar with a seat on the Mongolian Stock Exchange, has been appointed as chief Investment Advisor. As more Mongolian companies offer their shares to the public Monet is well placed to participate in this segment of the market that is expected to grow rapidly over the next few years.
Mr. Hamilton noted, "Mongolia's location between China and Russia, coupled with its vast natural resources allows Mongolia to efficiently supply raw materials to key consumer nations. Given our unique capabilities and strategic partnerships we can provide key opportunities in the Mongolian market which few investors have the ability to access."
Khan Investment Management is a Cayman based asset manager specializing in providing global investors with access to a wide range of investment opportunities in fast growing Mongolia.
Voyager Resources starts drilling at Khul Morit Copper Porphyry Project, Mongolia
July 5 (Fortbridge) Voyager Resources (ASX: VOR) has commenced Reverse Circulation (RC) drilling at the Khul Morit Copper Porphyry Project located in the South Gobi region of Mongolia.
Highlights:
· Reverse Circulation drilling has commenced at Khul Morit. To date three drill holes (of an estimated 40 hole programme) have been completed targeting high order Induced Polarisation geophysical anomalies and to follow up previously intersected high grade copper in drilling that has returned:
o 27 metres at 2.09% copper from 28.8 metres (KH04), including:
§ 12.5 metres at 3.63 % copper from 43.3 metres
· Copper mineralisation has been intersected in each of the three holes drilled to date. The extent of the mineralised widths and grade will not be known until assay analysis of the samples is completed at an independent laboratory in Ulaanbaatar.
· Geological reconnaissance has identified further outcropping and sub cropping quartz-tourmaline breccias that contain varying amounts of malachite and azurite (copper oxide), these breccias occur over a strike length exceeding 4 kilometres within an identified alteration corridor.
· Ongoing pole-dipole and dipole-dipole Induced Polarisation geophysical surveys, continue to identify broad intense high order chargeability anomalies that require drill testing
· Voyager has now fast tracked two diamond core drilling rigs to site and plans to commence drill testing of the deeper Induced Polarisation targets that have been identified within the alteration corridor
TVN Corporation focusing on Mongolian coal, in pre-open pending 'material corporate transaction'
July 5 (Proactive Investors Australia) Mongolian focused coal explorer TVN Corporation (ASX: TVN) has been granted a trading halt by the ASX pending a 'material corporate transaction', with the company's shares placed in pre-open.
TVN Corporation has not yet provided the market with any further details on the transaction, but investors recently have been re-rating the stock - evidenced by the 67% share spike on Monday 4 July 2011.
Although there was no announcement on the day, it appears investors began positioning themselves in the stock after last Friday's announcement that the company received the requisite governmental approvals required to begin drilling at its Nuurst Thermal Coal Project, located in a new coal hot spot of Mongolia.
Nuurst has an exploration target of 50 to 100 million tonnes thermal coal, Calorific value range Qdaf 6200 to 6800 kcal/kg.
What is so fascinating about exploration and geological understanding in Mongolia is the lack of it, with an estimation that only three quarters of the country has been mapped to a scale of 1:200,000.
The underdeveloped and general lack of infrastructure in the country won't present much of a problem for TVN Corporation at this exploration stage.
The best part for the junior coal explorers in Mongolia is the country's location next to China, offering potential funds for infrastructure and development support should a sizeable coal resource be discovered.
Boosting the coal possibilities even higher for Mongolian focused company's, the country has coal reserves estimated at over 150 billion tonnes.
Link to TVN Presentation on Nuurst Acquisition.
FURTHER SIGNIFICANT COAL INTERSECTIONS IN MONGOLIA
July 4, Guildford Coal Limited (ASX:GUF) --
FURTHER SIGNIFICANT INTERSECTIONS ON SOUTH GOBI COAL PROJECT
Ø Following on from the previously reported coal outcrop mapping and coal intersections at potentially open cut minable depths in EL13780X on the South Gobi Project, Stage 2 drilling has commenced to quantify coal tonnages and qualities according to the JORC Code and to prepare a Mining License application.
Ø Drilling on the adjacent tenement EL5264X have intersected approximately 21 metres apparent thickness of net coal at potentially open cut mineable depths. This included a seam of 13.7 metres (apparent thickness) in the Permian Deliin Shand Formation which is known to have potential for coking properties. The intersection thicknesses are to be confirmed by geophysical logging at the completion of drilling.
EXPLORATION TARGET DEVELOPED ON MIDDLE GOBI COAL PROJECT
Ø An Exploration Target* range of 29Mt to 149 Mt has been estimated for the Middle Gobi Project; the coal is likely to suit thermal markets and is potentially amenable to open cut mining methods. Geologists believe that there is additional upside potential for further drilling to increase this exploration target tonnage range.
Ø This Exploration Target* range is based on 4km of mapped coal outcrop combined with multiple coal seams encountered in both historic and recent exploration boreholes drilled. The intersections are to be confirmed by geophysics and include net coal thicknesses of up to 9.2 metres in boreholes.
TOTAL EXPLORATION TARGET FOR MONGOLIAN COAL TENEMENTS
Ø The Exploration Target* for the Middle Gobi Project brings the total Exploration Target Range* for Guildford’s Mongolian subsidiary to 29 Mt to 609 Mt which is made up of 0 to 460 Mt for the South Gobi Project and 29 Mt to 149 Mt for the Middle Gobi Project.
HUGHENDEN COAL PROJECT DRILLING PROGRESS
Ø Following on from the recently reported drilling that intersected significant coal seams in borehole H005C with an interpreted 11.9 metres of net coal from the Betts Creek Beds with multiple individual seams up to 5.5 metres in thickness.
Ø Drilling has progressed slower than expected on subsequent holes due to difficult drilling conditions in the overlying Triassic sandstones, however it is anticipated that Permian Betts Creek coal seams will soon be cored on the current hole. A second hole has been pre-collared to just above the interpreted position of the Permian Betts Creek coal seams also in preparation for coring.
Ø The Exploration Target* range for this region will be released once the results of the current drilling are incorporated into the geological model. The planned pattern of holes is also expected to deliver a significant JORC inferred resource once completed.
Ø An Exploration Target* for the Hughenden White Mountain Project of 40 to 815 Mt of Galilee Basin thermal coal for the combined EPC1250 and EPC1260 has already been developed.
…
Xanadu: Appointment of Chief Financial Officer and Company Secretary
July 4, The Board of Xanadu Mines Ltd (“Xanadu”, ASX:XAM) is pleased to advise that Mr Brendan Evans has been appointed as Chief Financial Officer and Company Secretary of Xanadu, effective 4 July 2011.
Mr Evans is a Chartered Accountant with over 12 years experience in taxation, business services and commerce. He has worked in the United Kingdom and Australia for a number of large organisations and has considerable resource industry experience. Mr Evans has a Bachelor of Commerce from the University of Newcastle and is a member of the Institute of Chartered Accountants of Australia and the Institute of Chartered Secretaries of Australia.
Xanadu also wishes to advise that Mr Richard Pillinger has tendered his resignation as joint Company Secretary and that Mr Roger Perry has tendered his resignation as Chief Financial Officer and joint Company Secretary of Xanadu.
The Board would like to extend its gratitude to Mr Pillinger for his contribution to the Company since his appointment in December 2010.
Mr Perry will move to a Non-Executive Director position within the Company allowing him opportunity to focus on other commitments. The Chairman thanked Mr Perry for his very significant contribution during Xanadu’s formative years, having been an Executive Director, Company Secretary and Chief Financial Officer of Xanadu since May 2005.
Mongolia gets EU aid for improving uranium mining safety
ULAN BATOR, July 4 (Xinhua) -- The EuropeAid development and cooperation department of the European Commission has provided Mongolia with 2.5 million euros in aid for a three-year project related to uranium exploitation in Central Asia, local media reported on Monday.
The project involves the monitoring of radioactive substances and chemical pollution of water, the training of specialists on radioactive protection, environmental recovery, and the improvement of technologies to determine emissions of alpha, beta and gamma rays.
The project will also establish a database on exploited uranium in Central Asia.
Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan are also among the countries that will implement the project together with Mongolia.
Mineral-rich Mongolia Emerges As Land Of Opportunity
ULAN BATOR, July 4 (Bernama) -- After spending the last eight years in Dubai, Filipino engineer Dennis Pimentel has turned to Mongolia to join the exodus of expatriate hands to magnetic Oyu Tolgoi mine.
"I like the place - the locals call it OT just like UB for Ulan Bator because it's cold and the people are warm...they are very hospitable." As we bumped into each other at the airport, Pimentel said he needed the job to support his wife and the couple's two sons, aged 12 and 16, in Manila.
"I design roads in OT (Oyu Tolgoi) but I don't know when the project will end, it's a contract," said the 37-year-old who has been in Mongolia over the past five months.
OT is the world's largest undeveloped copper-gold project and is located in the South Gobi region of Mongolia, approximately 550km south of the capital Ulaanbaatar, and 80km north of the Mongolia-China border.
Pimentel has grown fond of Mongolia which has only 2.9 million people, almost half of them living in the capital built for 500,000.
"Despite the mineral rich status, the Mongolians are environmental-conscious and want to preserve the Gobi desert," he said.
…
Mongolia herder on mission to tackle mining firms
July 6 (AFP) ULAN BATOR — The destruction of Mongolia's grasslands to access a wealth of mineral riches has sparked an anti-mining movement led by a nomadic herder who says force can be used to bring polluting firms to heel.
Tsetsegee Munkhbayar is the head of Fire Nation, a small group on a crusade to put an end to what they say are irresponsible mining operations in the resource-rich landlocked country that are threatening their livelihoods.
After failing to gain traction with the country's political leaders, Munkhbayar and his fellow activists reportedly took matters into their own hands and shot at equipment at a mine in the southern province of Ovorkhangai.
Now Munkhbayar -- who in 2007 gained national fame by winning the US-based Goldman Environmental Prize honouring grassroots activists for his work in cleaning up the Ongi river, one of the largest in the country -- is in jail.
"We will give the mining companies fair warning -- either they must cease their activities or incur our wrath," Munkhbayar, 44, told reporters shortly before he was detained late last month in connection with the mine incident.
"If they do not comply with our demands, then we will use our guns. We are not violent people but we will do what we need to do to stop these environmental polluters."
Munkhbayar's quest for justice began with his work on the Ongi river. It had run nearly dry due to unchecked mining activity as both local and foreign companies look to cash in on the country's mineral treasure trove.
He won the Goldman Prize after lobbying to shut down 35 of the 37 mines in the area, and has since used the $125,000 that came along with it to increase public awareness about environmental issues.
But he and his ragtag band of activist herders are finding it hard to keep up with the dizzying pace at which private mines are opening up -- and are finding their cause largely ignored in Mongolia's halls of officialdom.
In April, they charged onto the main Sukhbaatar Square in the capital Ulan Bator on horseback, calling for the government to clean up the mining sector and take more responsibility for environmental degradation.
"We wanted to speak to the president, to tell him that if he cannot do his job properly, then he should step down," Munkhbayar told AFP.
When top leaders spurned their requests for a meeting, the protesters responded Genghis Khan-style -- by shooting arrows at Government House. And then came the incident at the mine in Ovorkhangai province.
No one was injured and there was minimal damage to the equipment, but Munkhbayar is in police custody in Ulan Bator. Local media say he can be detained without charge for up to 30 days, until about July 24.
It was not the first time that Munkhbayar had resorted to violence.
In September last year, he and three other activists shot up a bulldozer at the Canadian-run Boroo gold mine in Selenge province, after the mining company refused to cease operations that he said were polluting local streams.
In China's Inner Mongolia region to the south, ethnic Mongol herders are similarly angry at what they say is rampant mining, and in May staged several days of protests over resource exploitation by powerful mining interests.
The confrontations highlight the rift between Mongolia?s traditional way of life and new economic realities in the impoverished country.
Mongolia is setting itself up to be a global name in the mining industry, thanks mostly to its vast reserves of gold, silver, coal, iron ore, uranium and oil -- and the voracious appetite for resources in neighboring China.
Plans are being laid for a vast network of paved highways, rail lines, power stations and other infrastructure that will forever change the landscape of this sparsely populated nation of 2.7 million inhabitants.
Herders are already feeling the effects of the economic boom.
Many have lost their pastures and moved to Ulan Bator, where they have joined an army of urban poor in the shantytowns circling the capital.
Others have turned to "ninja mining" -- panning for gold in the tailings left behind by bigger mining companies. Small numbers have joined Munkhbayar in his campaign to fight the mining companies.
"They are not afraid to protest," Kirk Olson, a US biologist and environmentalist working on a World Bank-sponsored project in Mongolia, told AFP.
"They are starting to realise that all this unchecked mining is impacting their livelihoods and they are standing up and saying 'enough is enough'."
Olson says that in many parts of Mongolia, mining companies have drained water resources, destroying grasslands and depriving herders of their livelihoods. He said more cooperation was needed to end the problem.
The government has attempted to slow the destruction.
Last year, it enacted a law banning mining operations near rivers and forests and suspended more than 1,700 mining licenses in these areas. But activists like Munkhbayar have said the law is not being enforced.
Some politicians have proposed setting up a fund financed in part by the mines themselves to help rehabilitate spoiled land.
"Someone has to take responsibility for all this damage and if the mining companies have not done it, then the state has to step up," lawmaker Sanjasurengiin Oyun, a geologist by education, told AFP.
Until then, activists like Munkhbayar are facing an uphill battle.
"We are a small group of simple herders fighting powerful people," said Munkhbayar.
"It’s not an easy fight but we cannot stand by idly and watch our land and way of life come to an end."
ORBIS International's Flying Eye Hospital Brings Sight Saving Skills and Technology to Ulaanbaatar, Mongolia
Three-Week Skills Exchange Program to Strengthen Blindness Prevention Initiatives
NEW YORK, July 5, 2011 /PRNewswire/ -- ORBIS and its global team of volunteer eye care specialists completed an intensive three-week program in Ulaanbaatar, Mongolia (June 19 - July 7) aboard ORBIS International's signature Flying Eye Hospital – a state-of-the-art hospital with wings. The mission was supported by Alcon Inc., the global leader in eye care, and included a three-week ophthalmic skills exchange and surgical program through the one-of-a-kind DC-10 aircraft.
This ORBIS Flying Eye Hospital (FEH) Program marks its sixth mission in Mongolia. Local eye care professionals of all disciplines attended an ORBIS skills transfer training course designed to address the country's eye health needs.
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<Mogi & Friends Fund A/C>
Total 4.5%
Mogi & Friends Fund is a tiny fund of A$23K I created in late September with a few friends to put my own (and a few friends’) money where my mouth (just mine) is.
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Mogi
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"Mogi" Munkhdul Badral
Executive Director
CPS International LLC
Telephone/Fax: +976-11-321326
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