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Wednesday, December 14, 2011

[CPSI NewsWire: FeOre Admitted to ASX, Trading Commencing Tomorrow]

CPSI NewsWire brings you market updates on Mongolia, compiled by CPS International, a Mongolian marketing arm of CPS Securities, a Perth, WA based stockbroking and corporate advisory firm, specialising in capital raising for mining and junior stocks.

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See Mongolia related quotes at bottom of newsletter

 

FEO will commence trading 8am (UB) December 15

FeOre aims for first rail haulage of Mongolian iron ore within two years, admitted to the ASX

December 14 (Proactive Investors) FeOre (ASX: FEO), a Mongolia-focused iron ore explorer, has been admitted to the ASX today following a successful initial public offer of up to 140 million shares at A$0.25 to raise up to $35 million.

The company will have just over 200 million shares on issue when it hits the ASX boards at 11am (AEDT) tomorrow, Thursday 15 December.

FeOre will use the funds raised from the IPO for exploration and development of the 108.7 million tonne Ereeny iron ore project, located 60 kilometres from the major trans Mongolian railway line between Russia and China.

The Ereeny Project covers approximately 3.26 square kilometres and extends to depths of over 400 metres. It has an Indicated JORC Resource of 57.3 million tonnes and an Inferred JORC Resource of 51.4 million tonnes. 

The company is targeting the first rail haulage of iron ore from the project for sale within 24 months of its listing on the ASX.

Importantly, FeOre is in an ideal position to meet its goal having entered into a 10 year offtake agreement and a 10 year logistics agreement with China Railway Group subsidiary CRMI

Through these two agreements CRMI has agreed to both transport and purchase FeOre's iron ore product.

Link to article

 

Ivanhoe plunges after Rio shows little interest in full takeover

December 13 (Financial Post) Rio Tinto Ltd. faces a bill that is likely in the billions of dollars if it wants to take control of Ivanhoe Mines Ltd. (TSX:IVN, NYSE:IVN), even after it won a key arbitration ruling.

Ivanhoe shares fell 22% Tuesday after the long-running arbitration case was settled in Rio's favour. The ruling prevents Rio's 49% stake in Ivanhoe from being diluted if Ivanhoe receives a takeover bid and its shareholder rights plan is triggered.

After the ruling, Rio hinted it may buy enough Ivanhoe shares to get more than 50% without bidding for the whole company, a scenario that spooked investors. Rio will have the opportunity to do so once a standstill agreement between the two firms expires Jan. 18.

However, it would not come cheap.

While the arbitration ruling protects Rio Tinto's anti-dilution rights for its 49% stake, it does not strike down Ivanhoe's shareholder rights plan. If Rio Tinto buys more Ivanhoe shares, the plan would be triggered and new shares would be issued. Ivanhoe shareholders would have the right to buy 10 shares for every one they own at half price. Rio Tinto would then have to buy enough of the issue to get a majority stake in Ivanhoe.

Depending on how many investors bought stock under the rights plan, the bill for Rio Tinto could be extremely high. Sources close to both companies said it would likely amount to billions of dollars. "It would be an expensive exercise," one source said.

Rio still seems to prefer that option to an outright takeover. On Tuesday, the company said it "currently has no intention" of bidding for all of Ivanhoe, though it left the option open for the future. In the meantime, Rio's advisors will be working hard to determine how much it would cost the company to boost its Ivanhoe stake over 50%.

With no guarantee that the price will be worth the investment, it is possible that the dysfunctional relationship between Ivanhoe and Rio could continue for some time. The Ivanhoe shareholder rights plan is not set to expire until April 2013, and it could be renewed.

Despite the ongoing tension around Rio's 49% stake in Ivanhoe, the two companies continue to work together to develop the massive Oyu Tolgoi copper-gold mine in Mongolia. After many setbacks and delays, the mine is expected to enter commercial production in 2013.

Under the current ownership structure, Ivanhoe owns 66% of Oyu Tolgoi and Rio Tinto owns 49% of Ivanhoe. However, Rio has made no secret of the fact that it wants a direct ownership stake in the project.

Ivanhoe stock has always traded at a high valuation, as investors trusted chief executive Robert Friedland to fetch a huge takeover premium for Oyu Tolgoi (as he has done with other assets). After the arbitration ruling, investors are much less confident it will happen. "It totally removes the takeover premium," said John Stephenson, senior vice-president and portfolio manager at First Asset Investment Management.

Investors also have little confidence that an outside company will make a bid for Ivanhoe, since Rio's stake is a natural deterrent. Rio also has a right of first offer that is in effect until October of next year.

Link to article

 

Ivanhoe Mines Ltd (IVN) Shares Downgraded to a "Hold" Rating by TD Newcrest Analysts

December 13 (LUSA) Ivanhoe Mines Ltd (NYSE: IVN) was downgraded by equities research analysts at TD Newcrest from a "buy" rating to a "hold" rating in a research note issued to investors on Tuesday.

Separately, analysts at BMO Capital Markets upgraded shares of Ivanhoe Mines Ltd from a "market perform" rating to an "outperform" rating in a research note to investors on Wednesday, September 28th. They now have a $24.00 price target on the stock, down previously from $28.00. Also, analysts at Credit Suisse (NYSE: CS) upgraded shares of Ivanhoe Mines Ltd from a "neutral" rating to an "outperform" rating in a research note to investors on Tuesday, September 27th.

Ivanhoe Mines Ltd. (IVN) is an international mineral exploration and development company. The Company's principal mineral resource property is the Oyu Tolgoi Project, located in Mongolia. The Company also has two subsidiaries, through which it holds interests in coal resource properties in Mongolia, and molybdenum, rhenium, copper, gold and uranium resource properties in Australia. Its subsidiary, SouthGobi Energy Resources Ltd. (SGQ), owns and operates the Ovoot Tolgoi Coal Project located in Mongolia. The CompanyĆ¢€™s subsidiary, Ivanhoe Australia Limited (Ivanhoe Australia), owns the Cloncurry Project located in Queensland, Australia. IVN also holds interests in several other mineral resource projects in Asia, including a 50% interest in the Kyzyl Shear Project, located in Kazakhstan, through a shareholding in Altynalmas Gold Ltd. (Altynalmas Gold).

Shares of Ivanhoe Mines Ltd traded down 15.70% during mid-day trading on Tuesday, hitting $17.45. Ivanhoe Mines Ltd has a 52 week low of $12.11 and a 52 week high of $29.29. The stock's 50-day moving average is $20.43 and its 200-day moving average is $21.2. The company has a market cap of $12.894 billion.

Link to article

 

Rio Tinto Doesn't Plan Ivanhoe Bid After Arbitration Ruling

Dec. 13 (Bloomberg) -- Rio Tinto Group, the world's third- biggest mining company, said it won't seek full control of Mongolian project partner Ivanhoe Mines Ltd. after an arbitrator ruled in its favor in a shareholding dispute.

Rio said today it may seek to boost its Ivanhoe stake to a "majority position" after the expiry of a Jan. 18 deadline, without any plans for a full takeover bid. Ivanhoe, 49 percent owned by London-based Rio, slumped as much as 17 percent in Toronto trading.

Ivanhoe may now rush to lure rival bidders for the 51 percent of the company not owned by Rio before the bar on Rio buying shares in the market expires, Macquarie Group Ltd. said. At stake is control of one of the world's largest untapped copper and gold deposits in Mongolia that Rio estimates will cost about $6 billion to build and has been forecast to make up one-third of Mongolia's economy by 2020.

"We believe Ivanhoe will rapidly seek to maximize competitive tension in terms of potential bids for the remaining 51 percent," Lee Bowers, a Macquarie analyst based in Sydney, wrote in a report today. "Whether there is a credible bidder ready to move on such a time-frame at a sufficiently definitive price is the key question.'

Ivanhoe fell 22 percent to C$16.56 in Toronto, the biggest decline since October 2008. Rio advanced 2.1 percent to 3,185 pence in London.

Future Intention

The independent arbitrator's ruling means that from Jan. 19 Rio will be able to buy Ivanhoe stock without being diluted by the Vancouver-based company's shareholder rights plan, Rio said. ''Rio Tinto reserves the right to change its intention in the future," it said today of its decision not to pursue a bid.

Ivanhoe said today that the company and its legal team continue to evaluate the implications of the arbitrator's decision.

Rio is now unlikely to seek a takeover of Ivanhoe, valued at about $15 billion, following the ruling, analysts at Credit Suisse Group AG and Macquarie said before the company's statement.

"We understand that Rio Tinto has no current intention of making a full takeover bid," Bowers said. Rio has first right of refusal on any new issue of Ivanhoe shares as well as the sale of Ivanhoe's stake in the Oyu Tolgoi asset, Macquarie said.

The arbitrator also decided in favor of Rio in a dispute in which Ivanhoe claimed Rio broke covenants in the 2006 agreement not to engage in activities without Ivanhoe's permission that could affect control of Ivanhoe.

No Rio Breach

Rio said in a regulatory filing last year that Aluminum Corp. of China, that country's biggest aluminum producer, indicated an interest in acquiring a minority stake in Ivanhoe or in the Oyu Tolgoi project. Chinalco, as the Chinese company is also known, is Rio's biggest investor.

Rio was found not to have breached its obligations, Ivanhoe said yesterday. Ivanhoe's shareholders' rights plan may remain in effect until its scheduled expiry in April 2013, the Vancouver-based company said.

The purpose of Ivanhoe's shareholder rights plan, adopted by the board of directors in April 2010, "was to protect all shareholders, while allowing takeover bids that are made to all shareholders and that satisfy certain conditions," it said in the statement.

Link to article

Related:

Entree Gold Provides Update on Arbitration Between Rio Tinto and Ivanhoe MinesMarketwire, December 13

Ivanhoe Mines Evaluating Implications of Arbitration Decision on Company's Shareholders' Rights PlanMarketwire, December 13

 

CEO: CAPITAL RAISING AND MONGOLIAN COAL LICENCE ACQUISITION

December 13 -- C @ Limited (ASX: CEO, or the Company) is pleased to announce that it has completed the issue of 34,000,000 shares under the priority and general share offers to raise a total of $17,000,000.

In accordance with the terms of the Share Sale Agreement dated 26 October 2011, the Company has remitted a payment of US$7,670,000 to Peabody-Winsway Resources LLC as consideration for the acquisition of BDBL LLC, a Mongolian company which owns eight highly prospective Mongolian coal licences located in the Ovorhangay and South Gobi provinces. Further details regarding the acquisition and the licences are set out in the Company's prospectus dated 9 November 2011.

As approved by shareholders at the Annual General Meeting on 30 November 2011, the Company has also issued a total of 2,950,000 options and 500,000 performance rights. An appendix 3B for the capital raising shares, options and performance rights follows this announcement.

Link to release

 

Coal Mongolia 2012 Broadcasting on Bloomberg TV

December 13 (Coal Mongolia 2012) "Coal-Mongolia 2012" Conference has officially been broadcast on Bloomberg TV and placed on Bloomberg.com site today.

The coal industry of Mongolia, having recently attracted significant amounts of foreign direct investment, has become a true catalyst and driving engine of the country's booming economy.

According to international analysts, Mongolia has coal resources exceeding 100 billion tons, and its annual production levels are expected to increase incrementally, reaching 40-60 million tons in coming years, with a potential to reach 100 million tons per annum.  

At this critical juncture of the industry's development, 'Coal Mongolia', a premium investment forum of the industry, is being organized for the second time, featuring this time advanced coverage and substance.

"Coal Mongolia-2012",  involving over 1000 participants, shall take place in Ulaanbaatar city on February 9th and 10th of 2012. Over 100 companies will exhibit and their preparations are underway.  

Thus far,  companies such as Mongolia Energy Corporation, Gemcom Software Australia Inc, Mongolian Mining Corporation, Gobi Coal and Energy, Baganuur JSC, Caterpillar, Wagner Asia Equipment, Wirtgen GroupProphecy Resources (Red Hill Energy), Monnis International, Trade and Development Bank of Mongolia, have pledged their support for the event.

It should be noted that confirmed is a total of 23 prominent presenters, and this includes the Minister of Mineral Resources and Energy D. Zorigt, the Minister of Road, Transportation, Construction and Urban Development Kh. Battulga.  

Link to Coal Mongolia 2012 website

 

B.Batjargal: Development Bank to finance railroad projects first

December 14 (news.mn) B.Batjargal, the head of the Budget Policy Board of the Finance Ministry and the head of the Representative Managing Council of the Development Bank (DB), answered our correspondent's questions about the DB's recent activity.

Q: The DB announced a bond issue last week. Why did the DB decide to issue the bonds at this time?

A: Foreign investors have favorable opinions of Mongolia, however global financial markets have not been favorable. The DB is planning to issue bonds worth USD 600 million by the end of the year and next year in phases. This means that Mongolia is issuing debt documents with low rates in comparison to similar countries.

The DB also has rights to issue bonds worth USD 20 million after signing of a contract last week. 

Q: When will the USD 20 million be issued to the DB? 

A: USD 20 million came in to the DB last Friday from ING Group. This is a big indicator because the DB has begun its activity with the Government guarantee on the international market in a short period of time. 

Q: Why will the capital be allocated to the railway sector first? There are some projects, such as the "100,000 Apartments" program, still waiting for financing.

A: Railway is basic infrastructure and we should build it in the first step. Then we can build a power plant, big processing factories, and apartments. It's the right plan. 

The Government has asked the DB to finance new railway projects in 2011. That is why USD 20 million will finance railway construction. In this case Mongolia can sell mining products on the international market at competitive prices. 

Railway construction needs a total of USD 5 billion, and USD 55 million will be financed at first, according to the plan. Railways from Dalanzadgad to Tavantolgoi and Zuunbayan, from Sainshand to Baruun-Urt and Choibalsan will be started in the first phase. 

Contracts between the new railway project and 30 companies are currently held. The contracts cost USD 31.8 billion and the DB will finance them and monitor implementation.

Q: What sector will be financed next? 

A: The next projects are Sainshand Industrial Complex and New Creation. But projects can not be financed directly. Projects that meet technical and economic requirements at the international level will be financed. The DB will finance projects that support economic growth, reduce foreign trade loss, increase investment profit, and generate new jobs. 

Q: The DB was supposed to issue MNT 800 billion in bonds in 2011 but never did. What about that?

A: The DB had planned to issue MNT 800 billion in 2011 and it has issued MNT 300 billion so far. I agree that the DB is still inexperienced. The DB will issue a guarantee of MNT 1.5 trillion in 2012. Also we have planned the DB fund of MNT 33 billion in 2012. Then the DB could raise a financial fund of MNT 2.2 trillion next year. 

Link to article

 

U.Enkhtuvshin: Draft election law should pass soon

December 14 (news.mn) MPP caucus chairman U.Enkhtuvshin concurs with his DP counterpart that the two caucuses are close to an agreement on the last outstanding issue of the draft election law.  

The issue concerns the minimum percentage of the vote a candidate must receive before he or she is transferred from a seat that represents an electoral district to an at-large seat in Parliament.

"If the two caucuses agree," U.Enkhtuvshin said, "a draft election law will be passed soon."

The DP and MPP caucuses have agreed to a 48-28 arrangement in Parliament. But the MPP believes that only candidates who win at least 45 percent of the vote in the 48 majority electoral districts should be transferred to the 28 at-large seats. 

Link to article

Related: Ch.Saikhanbileg: MPP and DP caucuses close to agreementnews.mn, December 14

 

Chinese locomotives exported to Mongolia

December 12 (Railway Gazette) MONGOLIA: CNR Dalian has completed five 1520 mm gauge diesel locomotives for export to Mongolia, its second delivery to the country.

They have 16V240ZJD engines rated at 2940 kW, and feature air-conditioning and a toilet for crew comfort.

Link to article

 

Mongolian-made bus makes its debut

December 13 (news.mn) On Tuesday, Ulaanbaatar city officials received the first bus designed by Mongolian engineers.  The JT 1BV bus was manufactured by Erdu LLC and Mongolian Electric Transportation. After two days of testing, it will be licensed for public transportation.

The bus has 28 seats. It burns less fuel and emits less pollution than other buses.

The Public Transportation Office will determine what routes the new bus will run.

Erdu LLC officials say the company will produce 100 to 120 buses annually after its factory is completed next March.

Link to article

 

Speaker D.Demberel meets with officials in Japan

December 13 (news.mn) Speaker D.Demberel is visiting Japan at the invitation of the Speaker of Japan's House of Councilors. He visited the cities of Kyoto and Hiroshima and met with the speaker, K.Hirata, on Monday. 

K.Hirata thanked the Mongolian people for their assistance after Japan was hit by an earthquake and tsunami last March.  

Also on Monday, D.Demberel met with the speaker of Japan's House of Representatives, T.Yokomichi, who suggested the two nations cooperate on a strategic partnership soon. The two sides agreed that parliamentary relations between the two countries should develop at a high level.

Japanese officials expressed their belief that Japan would participate in the Tavantolgoi investment agreement, and D.Demberel stated that Mongolia's parliament would approve the agreement. He also said that Mongolia supports Japan's request to become a permanent member of the UN Security Council and requested that Japan support Mongolia's requests to join ASEAN and APEC. 

After meeting with the two speakers, D.Demberel toured the chamber of the House of Representatives. 

Link to article

 

MNT 34 billion in anti-pollution money goes unspent

December 13 (news.mn) The National Committee of Ulaanbaatar Air Pollution Reduction held its regular meeting on Monday and officials discussed implemented projects. 

At the meeting, committee chairman D.Battulga and Mayor G.Munkhbayar reported that MNT 34 billion that was to be spent on anti-pollution projects was unspent and will be returned to the budget.

Fifteen projects for reducing air pollution are planned for next year, with MNT 105 billion allocated for implementation. 

The next meeting of the committee will be held on January 10, 2012, at which specialists will report on the air pollution situation.

Link to article

 

JAPANESE CONSTRUCTION COMPANY TO BUILD APARTMENT BUILDINGS IN ULAANBAATAR SOON

December 13 (InfoMongolia.com) The Keisei Masaki Construction Co. Ltd which is located in Hokkaido of Japan plans to start construction works in Mongolia soon, reported the Japanese paper "Nippon Keizai Shimbun" on December 13, 2011.

With the construction date starting from spring of 2012, the company aims to construct two apartment buildings for middle class communities in the capital city of Ulaanbaatar. To compete with other major Mongolian construction companies, Keisei Masaki set up its subsidiary company "Hoshi Mongol" in Mongolia in October 2011.

According to the company's plan, a 12 storey and 6 storey buildings with convenient centers in its will be constructed.

The company intends to sell a studio or one-room apartment at 2.5-3 million Japanese Yen or app. 32,000-38.500 USD. "As we have examined, the apartment blocks are high in demand as the middle class communities are on the rise in Mongolia", said "Keisei Masaki" company representative.

Also, the company considers that it has advantages over other overseas companies in terms of the experience of constructing buildings in cold weather conditions as Hokkaido has the same cold weather as Mongolia during the winter time.

Link to article

 

BPC Banking Technologies inks deal with Golomt Bank, Mongolia

SmartVista to underpin the Bank's ATM network

Rotterdam, Netherlands, 13 December 2011 (BPC Banking Technologies) – BPC Banking Technologies, the leading provider of Open System e-payment solutions for the global financial industry, announced it has won a contract to supply a new ATM network management solution with the leading bank in Mongolia, Golomt Bank. The Bank is the largest player with the highest number of card merchants and the widest card acceptance in the Mongolian payments card sector and leads with a 60% market share of card transactions.

Following a comprehensive evaluation process Golomt Bank tapped BPC's SmartATM solution to manage its ATM network across the country. The Bank has achieved its leadership position by setting new standards in the local financial services industry, using new technologies and pioneering innovative, cost effective ways of expanding business and creating new products to benefit customers. As part of its ongoing program of using state-of-the-art technology and processes to enhance its service quality, efficiency and cost effectiveness, the Bank chose to implement a new ATM management system in cooperating with BPC Banking Technologies.

SmartATM is part of the SmartVista end-to-end e-payments suite and is a sophisticated ATM network management product. The new solution will allow Golomt Bank to significantly improve its ability to service and monitor its terminal networks. The Bank will also be able to introduce new services to its clients thanks to SmartATM's support for a wide range of standard ATM transactions including cash withdrawal, balance inquiries, PIN change, mini-statements, envelope cash deposit, and funds transfer. Value-added transaction services include cash-in, mobile telephone top-up, service activation and utility and bill payment. Extended ATM functions such as payment services, repayments, cash recycling, and currency conversion are also supported.

The solution will be integrated into the Bank's existing IT infrastructure providing a high-level of network resilience and a consequent improvement in customer service.

"As the pioneer of introducing MasterCard card and Visa card services in Mongolia, Golomt Bank has a strong focus on innovation in banking services and client satisfaction. We are looking forward to benefiting from our early mover advantage in the market and to strengthening our leadership position. SmartATM brings a wealth of state-of-the-art features and functions to deliver new services to our clients as well as providing us with a very effective platform to manage the network's operation," said Zorig Khaidar, Director of Card Management Center, Golomt Bank.

"As the ATM channel has grown increasingly important to banks, BPC created SmartATM – a sophisticated ATM network management system that allows clients effectively to service and monitor their ATM networks. We are proud to be working with such a progressive institution as Golomt Bank and are excited to raise the BPC flag over another new country," added Vasily Grigoriev, CEO, BPC Banking Technologies, "We are looking forward to building on this success to work with other banks in Mongolia".

Golomt Bank: Golomt Bank is Mongolia's largest bank in terms of Total Assets per 2010 audited accounts and manages 25.2% of the assets of the domestic banking system. The Bank is a pioneer within the Mongolian banking system introducing new products and services such as card services, IT, electronic banking, private banking and investment banking to the market. The Bank is the only bank selected by Amex and IATA as an exclusive partner in Mongolia after a comprehensive competitive evaluation. It is also only the Mongolian Bank enjoying direct Tier 2 equity related capital from leading commercial entities: Credit Suisse, Abu Dhabi Investment Council and Swiss Mo Investment AG. Golomt Bank has been recognized by the Banker and Euromoney (both are leading global financial magazines) as Mongolia's Bank of the Year 2011 in recognition of its role as the nation's leading bank. For more information, visit the Bank's website at http://www.golomtbank.com

Link to article

 

Bodi Group to launch a new domestic carrier for Mongolia – Mongolian Airlines

December 13 (Centre for Aviation) Bodi Group, one of the largest corporate conglomerates in Mongolia, is launching Mongolian Airlines, a new domestic airline in Mongolia. The carrier, which appears to be affiliated with MIAT Mongolian Airlines, will compete with former MIAT subsidiary company Aero Mongolia (owned by Monnis Group) and Eznis Airways

(owned by Monnis Group). According to reports in the local media, an agreement on the establishment of the airline has been signed between Bodi Group and MIAT, enabling Bodi to ultimately benefit from the planned privatisation of MIAT in coming years. 

While details are being slowly confirmed, Nordic Aviation Capital CCO Jim Murphy confirmed to CAPA that it has sold the carrier a Fokker 50 aircraft (local media reports had stated Nordic Aviation Capital leased the aircraft to the carrier) to support the launch of operations. The carrier, based in Ulaanbaatar, reportedly plans to gradually increase its fleet to four aircraft, according to reports from the Business Council of Mongolia. Aero Mongolia, a former domestic arm of MIAT before it was sold to the Monnis Group in 2001, also operates Fokker 50s. There are three Fokker 50s in service in Mongolia at present, according to OAG Fleet iNet, with regional aircraft comprising 75% of the nation's fleet.

Mongolia fleet breakdown for aircraft as at 12-Dec-2011

 
Source: CAPA – Centre for Aviation & OAG Fleet iNet

Bodi Group is one the largest business groups in Mongolia with 13 subsidiary companies and six JVs, and a workforce of over 1400 employees. Bodi Group, established in 1993, is engaged in the fields of banking financing, property development, real estate, media, trade and services. The Bodi Group has representative offices in Beijing, Berlin and London.

Mongolia – second smallest Asian aviation market

Mongolia is the second smallest of the 24 aviation markets in Asia after Bhutan, with fewer than 15,000 international seats and a domestic market which, up until now, has only had two competitors. In addition to Aero Mongolia and Eznis Airways, Blue Sky Aviation, Central Mongolian Airways and Sky Horse Aviation have been granted Air Operator's Certificates but are not operational.

Eznis Airways celebrates five years of operation

Eznis Airways, which launched commercial services five years ago on 06-Dec-2006, has the largest network of domestic destinations in Mongolia and the highest frequency on these routes. The airline was established in Dec-2006 by Newcom Group, one of the largest holding companies of Mongolia. Its history and milestones is in the background information section.

Since its launch, Eznis Airways has operated 15,450 services and transported over 343,122 passengers. The airline now serves a route network of 14 domestic and two regional destinations with four 34-seat Saab 340B and two 93-seat Avro RJ85 aircraft. The carrier took delivery of its most recent Avro RJ85 in Jun-2011, with the aircraft deployed on domestic services and used to operate charter services for mining companies. The aircraft was financed by Khan Bank.

The first scheduled service of Ulaanbaatar-based Eznis Airways was from Ulaanbaatar to Choibalsan, with the carrier subsequently expanding to cover 14 destinations in Mongolia including Dornod, Bayankhongor, Khuvsgul, Umnugobi, Khovd, Uvs, Zavkhan, Bayan-Ulgii, Gobi-Altai and Uvurkhangai through charter and scheduled operations. The carrier also operates international services to Hailar in China's Inner Mongolia region and Ulan-Ude in Russian Federation's Buryat Republic, and charter services to points in China, Russia and Kazakhstan. "In the future, Eznis Airways plans to [enter] new markets and also increase flight frequency to currently served destinations," the carrier has said. The carrier has authorisation for, but does not yet operate, international services to other points in China, Russia and Kazakhstan. The carrier also plans to expand through strategic partnerships with other airlines, it has said.

Eznis Airways route network: Dec-2011

 
Source: Eznis Airways

Aero Mongolia founded 10 years ago

Aero Mongolia was founded 10 years ago in Jun-2001 and conducted its first domestic service on 03-Jun-2003 with two Fokker 50 aircraft. International services were launched in Dec-2003. The carrier now operates a fleet of three 50-seat Fokker 50 aircraft and has over 130 employees. Monnis Group took over the responsibility of the company's management in Jun-2007. The carrier has a network of two international destinations, namely Hohhot and Irkustk, and six domestic destinations, namely Altai, Hovd Airport, Ulaanbaatar Buyant Uhaa Airport, Ulaangom Airport, Ulgit Airport and Uliastai Airport.

Aero Mongolia network map: Dec-2011

 
Source: Aero Mongolia

69% of the Ulaanbaatar-based carrier's capacity (seats) is deployed domestically, with 31% of total seats (500) deployed on international routes.

Aero Mongolia international vs domestic capacity share: 12-Dec-2011 to 18-Dec-2011

 
Source: CAPA – Centre for Aviation & Innovata

Four international airlines operating into Mongolia

According to Innovata data, MIAT Mongolian Airlines, Air China, Korean Air, Aeroflot, Aero Mongolia and Tianjin Airlines currently operate internationally to/from Mongolia (Eznis Airways also operates one international scheduled service), with the carrier in serious need of increased international access to support its tourism industry and economic growth. According to the Civil Aviation Authority of Mongolia, Mongolia has 34 bilateral air service agreements and five active air service agreements with Russia, China, South Korea, Japan and Germany.   

Mongolia capacity (international seats per week): 12-Dec-2011 to 18-Dec-2011

 
Source: CAPA – Centre for Aviation & Innovata

Mongolia capacity (international seats per week): 12-Dec-2011 to 18-Dec-2011

 
Source: CAPA – Centre for Aviation & Innovata

MIAT Mongolian Airlines operates an international-only network

MIAT Mongolian Airlines, established in Jul-1956 with the help of Aeroflot (which is one of the carrier's two codeshare partnership in addition to Korean Air), is Mongolia's national carrier and operates an international-only network. The carrier, which was formed in 1956, entered the international arena in 1987, and now operates a network covering six destinations from its Ulaanbaatar base, to Beijing Capital, Hong Kong, Seoul Incheon, Tokyo Narita, Berlin Tegel and Moscow Sheremetyevo. 

MIAT Mongolian Airlines routes: 12-Dec-2011 to 18-Dec-2011

 
Source: CAPA – Centre for Aviation & Innovata

MIAT Mongolian Airlines 

 
Source: MIAT Mongolian Airlines

The carrier currently operates a fleet of two B737-800s and one B767-300ER with three B737-800s and one B767-300ER on firm order, according to OAG Data. MIAT and Boeing in Jun-2011 announced the order for two B737-800 aircraft and one B767-300ER aircraft. The order, valued at USD245 million at list prices, marked the first time in more than two decades that the carrier will extend its route network by purchasing Boeing aircraft instead of leasing them. The aircraft on order are scheduled for delivery in 2013 (one B757 and one B737-800) and 2014 (one B737).

MIAT Airlines in Aug-2011 was awarded a grant from the US Trade and Development Agency (USTDA) to develop a new strategic business plan and restructuring plan. The carrier will use the USD400,000 grant to support its planned fleet expansion and to help ensure "greater air transport infrastructure for Mongolia's continued economic growth". The investment in Mongolian aviation by the USTDA is also designed to "encourage the development of Mongolia's small civil aviation sector and address training and capacity needs to assist MIAT in the successful operation and expansion of the airline". This grant, together with the addition of Mongolian Airlines, will change the nature of the nation's aviation sector.

Background information

Eznis Airway history and milestones

Source: Eznis Airways

Link to article

Table: Mongolia Related Stocks (Source: Bloomberg)

 

Name

Symbol

$

Price

Change

+-%

Open

High

Low

Volume

Time

% YTD

% 12 m

Indices

ASX 200

AS51:IND

4,193.40

-59.40

-1.40%

4,234.80

4,235.60

4,181.20

-

13-Dec

 

 

Nikkei 225

NKY:IND

8,552.81

-101.01

-1.17%

8,535.52

8,594.32

8,518.80

-

13-Dec

 

 

Hang Seng

HSI:IND

18,447.17

-128.49

-0.69%

18,327.45

18,465.39

18,297.66

-

13-Dec

 

 

FTSE 100

UKX:IND

5,490.15

62.29

1.15%

5,427.86

5,525.96

5,413.70

-

13-Dec

 

 

TSX Composite

SPTSX:IND

11,759.94

-147.95

-1.24%

11,913.58

11,987.47

11,688.23

-

13-Dec

 

 

S&P 500

SPX:IND

1,225.73

-10.74

-0.87%

1,236.83

1,249.86

1,219.43

-

13-Dec

 

 

ASX

Aspire Mining

AKM:AU

A$

0.295

-0.03

-9.23%

0.32

0.32

0.295

1,009,337

13-Dec

-38.54%

-41.00%

Blina Minerals

BDI:AU

A$

0.005

0

0.00%

0.005

0.005

0.005

150,000

13-Dec

-66.67%

-61.54%

C@

CEO:AU

A$

0.042

0

0.00%

0.041

0.042

0.04

0

25-Nov

50.00%

82.61%

General Mining

GMM:AU

A$

0.04

-0.006

-13.04%

0.045

0.045

0.04

206,111

13-Dec

-66.67%

-63.64%

Guildford Coal

GUF:AU

A$

0.8

0.005

0.63%

0.8

0.8

0.765

143,075

13-Dec

9.59%

20.30%

Haranga Resources

HAR:AU

A$

0.305

-0.03

-8.96%

0.325

0.34

0.305

499,555

13-Dec

-52.34%

-33.70%

Hunnu Coal

HUN:AU

A$

1.795

0

0.00%

1.78

1.795

1.78

0

16-Nov

34.46%

45.94%

Modun Resources

MOU:AU

A$

0.052

0.001

1.96%

0.05

0.052

0.048

945,045

13-Dec

420.00%

420.00%

Mongolian Res Corp

MUB:AU

A$

0.14

0

0.00%

0.14

0.14

0.14

80,000

13-Dec

-61.11%

Robe Australia

ROB:AU

A$

0.018

-0.004

-18.18%

0.018

0.018

0.018

34,650

13-Dec

92.51%

135.29%

Voyager Resources

VOR:AU

A$

0.066

-0.001

-1.49%

0.066

0.068

0.064

6,234,892

13-Dec

23.08%

74.90%

Xanadu Mines

XAM:AU

A$

0.365

-0.005

-1.35%

0.365

0.365

0.365

5,000

13-Dec

-35.40%

MSE

A Board

Aduunchuluun 

ADL:MO

MNT

6,000

-350

-5.51%

6,350

6,350

6,000

1,429

13-Dec

-25.00%

-27.97%

APU

APU:MO

MNT

3,300

-170

-4.90%

3,360

3,400

3,250

14,069

13-Dec

65.83%

83.54%

Atar Urguu

ATR:MO

MNT

38,000

0

0.00%

38,000

38,000

38,000

0

2-Dec

111.11%

Baganuur 

BAN:MO

MNT

10,000

-920

-8.42%

11,000

11,000

10,000

235

13-Dec

-4.76%

-5.66%

Mogoin Gol

BDL:MO

MNT

25,500

500

2.00%

25,500

25,500

25,000

353

13-Dec

116.10%

146.38%

BDSec 

BDS:MO

MNT

3,850

150

4.05%

3,800

3,850

3,800

145

13-Dec

54.00%

54.00%

Bayangol Hotel

BNG:MO

MNT

35,000

-1500

-4.11%

36,000

36,000

35,000

9

13-Dec

46.44%

52.17%

Bayanteeg 

BTG:MO

MNT

27,000

0

0.00%

27,000

27,000

27,000

0

12-Dec

388.07%

UB BUK

BUK:MO

MNT

33,000

0

0.00%

33,000

33,000

33,000

0

9-Dec

626.07%

Eermel

EER:MO

MNT

2,800

48

1.74%

2,800

2,800

2,800

180

13-Dec

-2.61%

14.29%

Gobi 

GOV:MO

MNT

5,000

-400

-7.41%

5,200

5,200

5,000

522

13-Dec

-10.71%

-13.03%

Gutal

GTL:MO

MNT

2,251

-44

-1.92%

2,251

2,251

2,251

15

13-Dec

221.57%

Hi B Oil

HBO:MO

MNT

200

0

0.00%

200

200

200

0

1-Dec

11.11%

17.65%

Khukh Gan

HGN:MO

MNT

189

6

3.28%

183

189

183

6,574

13-Dec

1.07%

18.13%

Hermes Centre

HRM:MO

MNT

59

1

1.72%

58

59

56

7,973

13-Dec

9.26%

18.00%

Jenko Tour Bureau

JTB:MO

MNT

94

1

1.08%

92

94

92

65,926

13-Dec

0.00%

4.44%

Telecom Mongolia

MCH:MO

MNT

2,700

0

0.00%

2,700

2,700

2,700

30

13-Dec

-22.86%

-26.03%

Mongolia Dev Res

MDR:MO

MNT

1,100

0

0.00%

1,100

1,100

1,100

0

12-Dec

-15.38%

-12.00%

Moninjbar

MIB:MO

MNT

140

0

0.00%

140

140

140

0

8-Dec

21.74%

Mongol Nekhmel

MNH:MO

MNT

2,450

0

0.00%

2,450

2,450

2,400

0

5-Dec

88.46%

104.17%

Hotel Mongolia

MSH:MO

MNT

799

1

0.13%

798

799

798

670

13-Dec

38.00%

Darkhan Nekhii

NEH:MO

MNT

7,000

0

0.00%

6,100

7,000

6,010

128

13-Dec

42.86%

40.00%

Nak Tulsh

NKT:MO

MNT

175

0

0.00%

175

175

175

500

13-Dec

-46.15%

-49.28%

Olloo

OLL:MO

MNT

247

32

14.88%

247

247

247

48,769

13-Dec

64.67%

54.38%

Remikon 

RMC:MO

MNT

189

4

2.16%

183

189

182

62,032

13-Dec

162.50%

162.50%

Sharyn Gol 

SHG:MO

MNT

11,119

-381

-3.31%

11,500

11,500

11,119

1,080

13-Dec

5.90%

7.95%

Shivee Ovoo

SHV:MO

MNT

14,050

-950

-6.33%

15,000

15,000

14,050

34

13-Dec

8.08%

8.08%

Sor

SOR:MO

MNT

3,650

50

1.39%

3,600

3,650

3,600

359

13-Dec

386.67%

356.25%

Suu 

SUU:MO

MNT

65,000

0

0.00%

65,500

65,500

65,000

0

6-Dec

209.72%

Tav

TAV:MO

MNT

32,000

0

0.00%

32,000

32,000

32,000

0

8-Dec

Talkh Chikher

TCK:MO

MNT

10,300

0

0.00%

10,300

10,300

10,300

1

13-Dec

178.38%

202.94%

Tavantolgoi

TTL:MO

MNT

9,500

-600

-5.94%

10,100

10,100

9,500

71

13-Dec

64.93%

79.25%

State Dept Store 

UID:MO

MNT

500

20

4.17%

490

500

485

10,847

13-Dec

16.28%

18.48%

Ulaanbaatar Hotel

ULN:MO

MNT

45,999

-1

0.00%

46,000

46,000

45,999

11

13-Dec

67.27%

Mongol Savkhi

UYN:MO

MNT

2,300

300

15.00%

2,000

2,300

2,000

440

13-Dec

318.18%

283.33%

Zoos Goyol

ZOO:MO

MNT

800

0

0.00%

800

800

800

0

12-Dec

1.27%

2.56%

HKEx

Solartech Int'l

1166:HK

HKD

0.195

-0.005

-2.50%

0.198

0.203

0.193

1,373,500

13-Dec

-79.69%

-80.50%

Winsway

1733:HK

HKD

2.49

0.01

0.40%

2.46

2.52

2.41

4,875,000

13-Dec

-44.59%

-40.38%

SouthGobi Resources

1878:HK

HKD

50.5

-2.45

-4.63%

50

50.9

50

39,400

13-Dec

-49.25%

-44.54%

China Gold

2099:HK

HKD

19.92

-0.73

-3.54%

19.9

20.15

19.6

129,700

13-Dec

-52.57%

-53.35%

CNNC Int'l

2302:HK

HKD

2.57

0.2

8.44%

2.48

2.78

2.31

5,521,000

13-Dec

-70.46%

-70.12%

Real Gold Mining

246:HK

HKD

8.81

0

0.00%

8.81

8.81

8.81

0

13-Dec

-34.28%

-36.44%

Mongolia Energy

276:HK

HKD

0.77

-0.01

-1.28%

0.78

0.78

0.76

6,400,043

13-Dec

-66.81%

-68.05%

Zijin Mining

2899:HK

HKD

3.23

-0.11

-3.29%

3.26

3.32

3.2

39,776,162

13-Dec

-31.53%

-32.46%

Mongolia Inv Group

402:HK

HKD

0.049

-0.004

-7.55%

0.05

0.057

0.048

58,430,000

13-Dec

-66.89%

-64.49%

North Asia Resources

61:HK

HKD

0.248

0.014

5.98%

0.23

0.25

0.23

1,820,000

13-Dec

-72.75%

-79.16%

China Daye Non-Fer.

661:HK

HKD

0.445

-0.005

-1.11%

0.44

0.45

0.43

2,670,000

13-Dec

-20.54%

-20.54%

Bestway Int'l

718:HK

HKD

0.079

0.013

19.70%

0.084

0.084

0.079

10,000

13-Dec

-43.97%

-41.91%

Asia Coal

835:HK

HKD

0.097

0

0.00%

0.095

0.097

0.095

10,000

13-Dec

-61.20%

-62.69%

Mongolian Mining

975:HK

HKD

6.11

-0.09

-1.45%

6.3

6.3

6

1,294,252

13-Dec

-32.64%

-28.70%

SGX

LionGold

LIGO:SP

SGD

0.84

-0.005

-0.59%

0.845

0.845

0.835

10,521,000

13-Dec

15.07%

37.70%

LSE

Central Asia Metals

CAML:LN

GBp

55

-0.5

-0.90%

55

55

55

0

13-Dec

-39.06%

-37.32%

Petro Matad

MATD:LN

GBp

32.25

-5

-13.42%

37.25

37.25

32.25

1,024,773

13-Dec

-73.57%

-65.42%

Metal-Tech

MTT:LN

GBp

4.625

0

0.00%

4.625

4.625

4.625

6,947

13-Dec

-70.16%

-66.96%

Origo Partners

OPP:LN

GBp

34.5

-1.5

-4.17%

36

36

34.25

92,500

13-Dec

-15.85%

-18.34%

Tembusu

TIL:LN

GBp

2.375

0

0.00%

2.375

2.375

2.375

0

13-Dec

5.56%

North

America

Aberdeen Int'l

AAB:CN

CAD

0.62

0

0.00%

0.65

0.66

0.62

70,400

13-Dec

-23.33%

-3.58%

Blue Zen Mem. Parks

BZM:CN

CAD

0.07

-0.01

-12.50%

0.175

0.175

0.07

558,666

13-Dec

Centerra Gold

CG:CN

CAD

20.81

-0.26

-1.23%

20.98

21.37

20.4

709,288

13-Dec

7.13%

-3.78%

China Gold

CGG:CN

CAD

2.46

-0.08

-3.15%

2.63

2.7

2.39

281,791

13-Dec

-54.70%

-54.10%

Denison Mines

DML:CN

CAD

1.43

-0.02

-1.38%

1.46

1.47

1.43

1,185,306

13-Dec

-58.06%

-59.26%

Denison Mines

DNN:US

USD

1.38

-0.03

-2.13%

1.44

1.44

1.38

846,056

13-Dec

-59.65%

-60.68%

East Asia Minerals

EAS:CN

CAD

0.42

-0.25

-37.31%

0.68

0.68

0.41

1,703,994

13-Dec

-94.77%

-94.23%

Entree Gold

EGI:US

USD

1.12

-0.12

-9.68%

1.22

1.22

1.12

86,219

13-Dec

-67.63%

-60.98%

Erdene Resource

ERD:CN

CAD

0.33

-0.005

-1.49%

0.34

0.36

0.33

167,000

13-Dec

-73.39%

-74.62%

Entree Gold

ETG:CN

CAD

1.21

-0.04

-3.20%

1.19

1.24

1.17

179,489

13-Dec

-65.13%

-57.84%

Fortress Minerals

FST:CN

CAD

4.02

0

0.00%

4.02

4.02

4.02

0

12-Dec

-7.59%

25.23%

Garrison Int'l

GAU:CN

CAD

0.02

0

0.00%

0.02

0.02

0.02

0

6-Dec

-77.78%

-66.67%

Gulfside Minerals

GMG:CN

CAD

0.07

0.01

16.67%

0.065

0.07

0.06

37,600

13-Dec

-26.32%

-33.33%

Green Tech Solutions

GTSO:US

USD

0.05

-0.001

-1.96%

0.06

0.06

0.045

213,550

13-Dec

-99.00%

Ivanhoe Energy

IE:CN

CAD

0.88

-0.02

-2.22%

0.9

0.93

0.88

694,167

13-Dec

-67.65%

-64.94%

Ivanhoe Energy

IVAN:US

USD

0.87

-0.03

-3.33%

0.92

0.92

0.86

785,280

13-Dec

-68.01%

-65.34%

Ivanhoe Mines

IVN:CN

CAD

16.57

-4.71

-22.13%

18.11

21.25

16.5

6,315,111

13-Dec

-27.96%

-29.01%

Ivanhoe Mines

IVN:US

USD

16.01

-4.69

-22.66%

17.4

20.2

15.93

16,120,120

13-Dec

-30.15%

-31.07%

Kincora Copper

KCC:CN

CAD

0.31

0.045

16.98%

0.32

0.32

0.31

63,640

13-Dec

14.81%

72.22%

Khan Resources

KRI:CN

CAD

0.235

0

0.00%

0.24

0.24

0.23

30,400

13-Dec

-51.04%

-41.98%

Lucky Strike

LKY:CN

CAD

0.38

0.01

2.70%

0.37

0.38

0.36

162,000

13-Dec

-73.79%

-74.50%

Lucky Strike

LKYSF:US

USD

0.3677

0

0.00%

0.3677

0.3677

0.3677

0

5-Dec

-74.08%

-69.85%

Meritus Minerals

MER:CN

CAD

0.03

0.005

20.00%

0.025

0.03

0.025

167,000

13-Dec

-85.00%

-83.33%

Manas Petroleum

MNAP:US

USD

0.17

0

0.00%

0.17

0.17

0.165

55,200

13-Dec

-71.67%

-69.09%

Mongolia Growth Grp

MNGGF:US

USD

4.235

-0.002

-0.05%

4.0755

4.2365

4.0755

14,500

13-Dec

Blue Wolf Mongolia