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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FEO closed +20% on its debut on Thursday to 30c, closed at 29c on Friday
FeOre trades above IPO on first day, eyes first rail haulage of Mongolian iron ore within two years
December 15 (Proactive Investors) FeOre (ASX: FEO), a Mongolia-focused iron ore explorer, has performed well in its first hour of public life on the ASX with shares changing hands above its A$0.25 IPO price.
On a day when the Australian market is down 1.5% FeOre shares have traded up at $0.26, with about 873,000 shares traded up to just after midday.
The company was admitted to the ASX yesterday following a successful IPO of up to 140 million shares at A$0.25 to raise up to $35 million.
Interestingly, FeOre is targeting the first rail haulage of iron ore for sale from its 108.7 million tonne Ereeny project in Mongolia within 24 months of its listing on the ASX.
The company 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 for the transport and purchase of its iron ore product.
The Ereeny Project, which is located 60 kilometres from the major trans Mongolian railway line between Russia and China, 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.
Link to article
VOR closed 7.35% higher to 7.3c
KM Copper Project Exploration Update
December 15, Voyager Resources Limited (ASX:VOR) --
Ø Drilling at the flagship KM Copper Project has continued to intersect broad zones of copper mineralisation identified by geological logging and field portable X-Ray Fluorescence (XRF) analysis within the identified hydrothermal breccia pipes at Cughur, Gaans and Aranjin. Better mineralised intercepts include:
at Aranjin:
§ 103 metres from 63 metres at (KMR0015RCD),
§ 161 metres from 97 metres (KM0124D),
and at Gaans:
§ 66 metres from 14 metres (KM0083D) and
§ 104 metres from 137 metres (KM0154D), at Gaans
Ø A significant number of assays remain outstanding with currently 14 batches, or approximately 60% of the 25,000 meters drilled to date, awaiting results. It is expected a significant proportion of the analytical backlog will be cleared within the coming month.
Ø Voyager has placed an Exploration Target* of between 50 and 150 million tonnes at between 0.8 and 1.5% copper on the hydrothermal breccias at the KM Copper Project. This does not include the larger Copper Porphyry target.
Ø Significant alteration zones associated with porphyry stocks have recently been identified with deep drilling being carried out to identify large tonnage porphyry systems. It has been deduced that a porphyry stock or cluster of porphyry stocks, exists at the KM Copper Project which act as feeders to the shallow hydrothermal breccias.
Ø The mineralisation identified at Aranjin, the third of the five breccia pipes to have been targeted and drill tested, is along a two kilometre plus continuous structural trend that runs from Cughur in the southwest to Aranjin in the northeast. Previous drilling at Cughur has returned some of the best copper results in Mongolia since the discovery of the Giant Oyu Tolgoi Copper Deposit. Better results include:
§ 116 metres at 2.4% copper and 7.2 g/t silver from 30 metres (KM0012RCD) at Cughur
§ 46 metres at 1.1% copper and 14.1 g/t silver from 16 metres (KM0068D) at Gaans
Ø Mineralisation has also been intersected in drilling on a further two prospects, namely Gaans North and Zam Daguukh with results pending.
Ø Voyager has now completed 157 RC drill holes, 47 diamond core drill holes and 18 diamond core drill tails on the project. Ongoing exploration and drilling continues to strengthen Voyager's belief that the KM Copper Project is an exceptional porphyry copper project.
Ø Camp and facilities have been improved at the KM Copper Project to allow for the continuation of drilling over the Mongolian winter.
…
Link to release
EGI closed up 3.88% on Thursday in NY
Entree Intersects Gold on Its 100%-Owned Shivee West Property, Mongolia
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 14, 2011) - Entrée Gold Inc. (TSX:ETG)(NYSE Amex:EGI
)(FRANKFURT:EKA) ("Entrée" or the "Company") recently completed its 2011 exploration program on the Company's 100%-owned portion of the Shivee Tolgoi mining licence ("Shivee West") in Mongolia. Partial results have been received from a 2,470 metre, shallow, reverse circulation drill program at Zone III. The results demonstrate that significant gold extends for over 300 metres northwards from the previously known Zone III area outlined in surface trenching and limited drilling completed between 2004 and 2007. Values of up to 1.82 grams per tonne ("g/t") over 14 metres have been returned (EG-RC-11-112) from the initial four holes completed in the recent 23 hole drill program.
Greg Crowe, President and CEO of Entrée stated, "Previously we had sporadic but encouraging gold results from surface trenching and drilling. From 2007 to 2010, rapid developments at the Oyu Tolgoi on porphyry copper-gold mineralization shifted our focus towards exploring for similar potential on the Shivee West property. In 2011, we decided to re-evaluate the gold potential at Zone III, in light of the rapid rise in gold prices since 2008 and especially the more significant rise in 2011. The initial drill results are very encouraging and our plans for continued exploration there will be determined after all drill results have been assessed."
Shivee West (100% Entrée) 2011 Exploration
Trenching and shallow reverse circulation ("RC") drilling at Zone III were completed from September to November over near-surface oxidized epithermal gold mineralization and its strike extension to the north, an area of 200 metres by 1600 metres. It was explored with 1,120 linear metres of excavator trenching and 23 RC holes totalling 2,470 metres. The drill and camp have now been demobilized for the winter.
Trench sampling in 2011 returned 0.69 g/t gold over 6.0 metres and a separate interval of 1.44 g/t gold over 6.0 metres. This compares with 2002 trench sampling which returned gold values up to 0.51 g/t over 22 metres and 1.39 g/t over 18 metres. Grab samples of siliceous material in the Zone lll area have returned between 0.2 g/t and 29.2 g/t gold.
Results from the first four RC drill holes are encouraging and confirm the occurrence of more widespread gold mineralization in an epithermal environment. Of particular note is the fact that these first four holes are located in an area centred 300 metres north of the previously outlined area of gold mineralization at Zone lll. Mineralization remains open to the north and at depth. This Zone III system is coincident with an extensive magnetic low and gold in soil anomaly from MMI sampling, which can be traced over at least 2.5 kilometres of strike length.
The potential for deep Oyu Tolgoi style porphyry style copper-gold mineralization remains elsewhere on the Shivee West property and was evaluated in 2011 with geological and geophysical surveying prior to the RC drilling. A 1,670 line-kilometre magnetic survey was completed over a belt of rocks which show similarities with the Devonian-aged units which host the nearby Oyu Tolgoi deposits. A geological consultant also re-evaluated the results of historic drilling in light of recent advances in the understanding of mineralized porphyry systems worldwide and on-going work to advance the understanding of the controls on mineralization at Oyu Tolgoi. Testing of three separate areas for deep porphyry potential within this belt of rocks has been recommended.
Togoot
On September 20, 2011, the Company entered into a purchase and sale agreement with an arm's-length private Mongolian company to sell the 14,031 hectare Togoot mining license for gross cash consideration of approximately CAD$1.6 million. The transaction closed on November 18, 2011. The Company considered coal targets that it had identified on the Togoot license to have limited upside potential. The sale permits Entrée to focus all of its Mongolian resources on exploration at Shivee West.
Joint Venture Property
Exploration and development drilling are continuing on the adjacent Entrée-Oyu Tolgoi LLC ("OTLLC") Joint Venture Property (the "Joint Venture Property"). OTLLC, a subsidiary of Ivanhoe Mines and the Government of Mongolia, is the manager with overall responsibility for operations on the Joint Venture Property.
During the first half of 2011, OTLLC completed four deep exploration holes to the north of the Hugo North Extension deposit. None of the holes intersected mineralization. On the Heruga deposit, two existing holes were deepened but did not intersect significant mineralization. An additional hole tested an IP target to the southwest of Heruga and intersected strong advanced argillic alteration with minor associated copper mineralization. Additional detailed geophysical surveys have also been completed over selected areas of the Joint Venture Property.
Exploration drilling on the Joint Venture Property is continuing with two drill rigs both now testing targets on the Javhlant licence. A proposed 2012 budget for exploration work on the Joint Venture Property has been presented to the joint venture management committee and is awaiting final approval.
Link to release
East Asia Minerals Announces Completion of $8 Million Brokered Private Placement and $5 Million Non-Brokered Private Placement
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 15, 2011) - East Asia Minerals Corporation (the "Company") (TSX VENTURE:EAS) is pleased to announce the completion of the private placements previously announced on October 7, 2011 and November 7, 2011. Through a syndicate of agents led by RBC Capital Markets and including Jennings Capital Inc. and Cormark Securities Inc. (collectively the "Agents"), 16,000,000 units of the Company (each, a "Unit") were issued and sold on a "best efforts" agency basis at a price of $0.50 per Unit for aggregate gross proceeds of $8,000,000 (the "Brokered Offering"). Concurrently, 10,000,000 Units were issued pursuant to a non-brokered private placement at a price of $0.50 per Unit for aggregate gross proceeds of $5,000,000 (the "Non-Brokered Offering"). The net proceeds of the Brokered Offering and Non-Brokered Offering will be used for general working capital purposes.
Each Unit consists of one common share in the capital of the Company and one non-transferable common share purchase warrant (a "Warrant"). Each Warrant will entitle the holder thereof to purchase one common share at a price of $0.78 until December 15, 2013.
As consideration for their services in connection with the Brokered Offering, the Agents were paid a cash commission of $250,000 and received 500,000 Warrants.
In addition, the Company has issued 3,450,000 share purchase warrants to investors who participated in its private placement that was completed on July 13, 2011 (the "July Private Placement") on the basis of one full share purchase warrant for every share purchased in the July Private Placement (the "Warrant Transaction"). Each share purchase warrant issued pursuant to the Warrant Transaction will allow the holders thereof to subscribe for one common share at an exercise price of $1.17 per share until December 15, 2013.
All of the securities issued pursuant to the Brokered Offering, Non-Brokered Offering and the Warrant Transaction are subject to a hold period expiring on April 16, 2012.
This news release does not constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction.
Link to release
North Asia Res (00061) redeems US$13m convertible bonds
December 16 (ET Net) North Asia Resources (00061) said it has received redemption letters from Business Ally and Grandwin Enterprises on 30 November 2011, requesting for the redemption of the convertible bonds.
North Asia Resources has yesterday fully redeemed the US$3 million convertible bonds and the US$10 million convertible bonds plus accrued unpaid interest.
North Asia Resources in the course of negotiations with Business Ally in relation to the US$30 million convertible bonds which may involve possible alteration of the terms. (HL)
Link to article
Link to NAR release
Ivanhoe Energy CEO Friedland steps down, no replacement named
December 15 (Bloomberg) Ivanhoe Energy Inc. (IE), the Vancouver- based oil producer with operations in China and Ecuador, said Robert Friedland stepped down as chief executive officer as it adopted a new management structure.
Friedland, 61, and Carlos A. Cabrera, 60, will serve as executive co-chairmen, Hilary McMeekin, a company spokeswoman, said today. David Dyck, 50, will remain president and chief operating officer.
"We're moving to a two co-chairman management structure," McMeekin said.
Friedland was Ivanhoe Energy's founding chairman. Cabrera, who has served as CEO of China's National Institute of Low Carbon and Clean Energy, joined the Ivanhoe board as an independent director in 2010.
Robert Abboud, the lead independent director, relinquished the position of co-chairman and will remain on the board, the company said in a statement.
Ivanhoe rose 2.3 percent to 90 Canadian cents in Toronto.
Link to article
Link to IE release
Asia Coal: Interim Results 2011
December 16, Asia Coal Limited (HK:835) --
…
MANAGEMENT DISCUSSION AND ANALYSIS
BUSINESS REVIEW
During the six months ended 30th September 2011 (the "Period"), the Group continued to engage in coal mining business and distribution of health and beauty products and services. But the logistic services business has been discontinued during the Period.
In the coal mining segment, the Group continued to hold the mining rights to the Saikhan Ovoo coal deposit in the Bulgan province of Mongolia. The JORC compliant resources report prepared by independent technical advisers shows estimated resources for the Saikhan Ovoo coal deposit in excess of 190 million tonnes. The coal resources estimated (on air dry basis) based on the analytical work on 165 coal samples taken from 27 boreholes with a total of 5,222 metres drilled are as follows:
JORC Class | Volume, m3 | Tonnes |
Measured | 6,565,000 | 11,467,000 |
Indicated | 64,852,000 | 112,831,000 |
Inferred | 39,057,000 | 69,494,000 |
Total | 110,474,000 | 193,792,000 |
Owing to the tight cashflow and the cost-saving measures of the Group, minimal exploration work has been carried out on the mine during the Period.
In the health and beauty segment, three additional new Dermagram shops or beauty centers have been opened in Hong Kong during the Period to provide better services and more convenient shop location to the customers. New Dermagram product lines including the Sakura Whitening Program, the Derma V Program and the UV Solution have been launched during the Period to provide more comprehensive product range for the customers.
In July 2011, the Group disposed of a subsidiary in the logistic services segment at a consideration of HK$2,000,000 because of the continuing losses and unsatisfactory performance of the segment and has discontinued its logistic services business.
…
Link to report
Tembusu: Result of Adjourned Annual General Meeting
December 16, Tembusu Investments Limited (LON:TIL) --
By a notice dated 9 November 2011, the Annual General Meeting ("AGM") of the Company was convened on 9 December 2011 at 10 am at 600 North Bridge Road #12-06/07 Parkview Square, Singapore 188778. There was no quorum at that meeting and by virtue of Articles 67(1) of the Company's Articles of Association, the AGM was adjourned to 16 December 2011, 10 am at 600 North Bridge Road #12-06/07 Parkview Square, Singapore 188778.
The Board is pleased to announce that at the adjourned AGM, the shareholders resolved that the name of the Company be changed to Nova Resources Limited.
In addition, the other resolutions that were passed at the AGM are:
1. The Auditor's Report and the Financial Statement for the year ended 31st December 2010, signed by two directors on behalf of the Board of Directors are hereby adopted.
2. The following three persons be elected directors of the Company, so to serve until the next Annual General Meeting or until their respective successors are elected or appointed:
(i) Chan Fook Meng
(ii) Lai Seng Kwoon
(iii) Chung Dongwook
3. Jeffreys Henry LLP of Finsgate, 5-7 Cranwood Street, London EC1V 9EE, United Kingdom be and is hereby appointed to act as auditors to the Company until the close of the next Annual General Meeting.
Link to release
ResCap Securities: Initiating Coverage on Undur Tolgoi Minerals Inc.
December 2011 -- We initiate coverage on Undur Tolgoi Minerals Inc (UTM:CNSX) following its successful private placement. The company is a mineral exploration company based in Vancouver with a copper/gold asset in Mongolia. We rate the company a SPECULATIVE BUY recommendation. At the moment we do not have enough information to originate a target price of the company's shares, which we aim to do in 2012 once further exploration work has been completed by the company.
Copper – one of the best supported of base metals over the long term
Despite some near term caution, copper is still one of the best supported base metals from a fundamental perspective over the long term considering various supply side issues. Given supply side considerations, Mongolian copper potential is at the forefront of the long term supply solution. Mongolia is widely recognised as one of the last remaining mining frontiers with potential for the development of globally significant projects.
Doorstep to China, Up the Copper Belt from World-class Oyu Tolgoi
The company's primary asset is the 100% owned Undur Tolgoi exploration license covering 9,260 hectares located approximately 100km from world-class Oyu Tolgoi copper and gold mine (estimated to be the largest copper-gold mine in the world when production commences in 2012/3).
Exploration – strong probability of a continuation of the geological body of Porphyry Copper as at Oyu Tolgoi
As within the license area, mapping, rock chip sampling NI 43-101 compliant report was prepared by Micromine and a report on reconnoitering-verification work have recently been completed, quartz veining was found to be light grey to white grey, and rarely white in colour. As a result of sampling by Monrecsur, some anomalous values identified including 200m long, 5m thick 0.55g/t Au dark grey quartz vein and 1132ppm Cu, 4236ppm Zn 8000ppm, Pb 1.11% quartz vein with visible malachite and pyrite mineralisation were identified. Drilling is expected to begin in Q1 2012. Thus far, sampling has identified copper and gold anomalies within the license area. Further exploration work has been recommended.
Strong and Leading International Partner – Firebird
UTM is backed by Firebird, one of the leading private equity investors in Mongolia. Firebird has proven itself as a highly experienced operator in Mongolia with over 6 years and US$300 million of current NAV in country. Firebird is the largest investor on the Mongolian Stock Exchange with a track record of 300%+ returns and UTM is an opportunity for investors to invest alongside Firebird in an international publicly listed context. Firebird invested C$2.5 million of the C$7 million raised at $0.20/share.
Link to ResCap
ResCap: Appointment of Head of ResCap Securities LLC
December 12 (ResCap) It is with pleasure that we announce Mr. Enkhbayar Davaatseren as the Head of ResCap Securities LLC, effective 1 November 2011.
Mr. Davaatseren has been with ResCap Securities since its inception in 2010 and instrumental in the development, research, trading and client services roles. Mr. Davaatseren is a Mongolian national with extensive knowledge of the Mongolian brokerage, trading, underwriting and investment advisory climate. Mr. Davaatseren has five years of experience within the domestic securities market, worked closely with the Mongolian Stock Exchange and brings to the ResCap Securities team his proficiency of dealing with capital market transactions particularly in Mongolia. Mr. Davaatseren graduated from the Mongolian National University, appreciated for its quality of education both locally and internationally, and speaks fluent Mongolian and English. Mr. Davaatseren's contact details are below:
Enkhbayar Davaatseren, enkhbayar@resource-cap.com, +976 9900 7069
We thank Temuulin Enkhmunkh for his hard efforts over the last year with ResCap Securities. Mr. Enkhmunkh continues to work closely with ResCap in an advisory consulting role.
Link to release
Monet Capital: Initiating Coverage on Aspire
December 14 --
Monet Capital initiates coverage on Aspire Mining Limited (ASX:AKM) and recommends a Speculative BUY rating with the target stock price of AUD 0.79 based on our comparables valuation and risk analysis.
Aspire Mining is a coking coal developer and hosts one of the highest grades of vitrinite coal in Mongolia in its 'Ovoot Tolgoi' mine in the north of the country. Whilst the product is rich and plentiful, the success of the company rests on developing key infrastructure to ship the coal from the mine. We see Aspire as a speculative play with potential to be acquired by a larger international miner or take advantage of Mongolia's infrastructure expansions.
Highlights
· High Quality Coal – Aspire's Ovoot Tolgoi hard coking coal deposit boasts one of the highest quality reserves in Mongolia. The ash content is the lowest in Mongolia at 8%, and CSN is the highest in the country at 9.0. The product contains 96-97% vitrinite and would need to be mixed with a cheaper coal in order to meet the current standard for steel production. The steel industry is moving towards more energy efficient furnaces that require the top quality coking coals, and as such Aspire's product will be extremely valuable to China or Russia for steel furnaces. Given the scarcity of this resource we also expect its value will rise in the coming years, adding a significant premium to our Aspire valuation.
· Huge exploration upside potential – Only 20% of the Ovoot license has been explored to date, and Aspire Mining has 2 other 100% owned coal prospects ready to explore and develop. All licenses lie along the proposed rail route north-west of the existing rail line, strategically positioned to benefit once it is commissioned. The company is targeting 500Mt resource count for its Ovoot coking coal following the latest exploration drills.
· Strong Shareholder base with cooperation potential – Two large coal producers have taken a large interest in Aspire. Noble group (8.6%) and SouthGobi Resources (19.9%) are both very active in Mongolia and have seen potential in this young coal developer. The next stage in Aspire's plan will be to attract a larger player to help build infrastructure, making these current shareholders a valuable connection.
Link to website
Asia Pacific Properties JSC Commences Trading on the Mongolian Stock Exchange
APP announces its listing intentions and assets being injected
Mongolia (PRWEB) December 14, 2011 -- Pursuant to a shareholder meeting convened on December 11, 2011; Sudut JSC, a company listed on the Mongolian Stock Exchange, has passed a shareholder resolution to change the company's name to Asia Pacific Properties JSC. The company's ticker has also been changed from UNH to APP.
During the meeting the shareholders also unanimously approved the injection of a 100% interest in the Rural Development Corporation LLC ("RDC") and the Oasis luxury residential development project into the newly named company, both of which were acquired from Asia Pacific Investment Partners ("APIP").
Rural Development Corporation is a real estate development company focused on developing and commercializing residential and commercial real estate projects in 2nd and 3rd tier cities in Mongolia, which are in close proximity to the mining boom-towns in the Gobi Desert. RDC's portfolio currently includes 13 properties in locations characterized by high levels of excess demand for quality residential and commercial real estate assets combined with low levels of competition and land construction prices. RDC's existing portfolio enjoys very high levels of capital appreciation and yields of up to 40% per annum. The management team behind RDC has extensive experience in renovation and construction and a expertise in property acquisition, ownership procedures, laws, and regulations in Mongolia. RDC has surveyed numerous key cities along the mining supply chain and has a strong pipeline of acquisition opportunities. RDC's value is estimated at circa US$6 million, all of which will accrue to APP shareholders without dilution, as a consequence of RDC being gifted by APIP to APP in order to build value.
The Oasis luxury residential development is currently in its final stages of planning and will commence construction in early spring. Pre-sales are already extremely strong and it is anticipated that the whole building will be fully sold prior to construction beginning. The building will be located off Seoul Street in the heart of Ulaanbaatar's entertainment district. It will comprise of circa 30 luxury residential units with a total saleable area of approximately SQM 3,600. The development is expected to be completed in Q1 2013, with profits of circa US$4 million, all of which will accrue to APP shareholders.
Lee Cashell, Chairman of Asia Pacific Properties, commented:
"With the solid asset base and profitable businesses being injected into APP, we expect to see a strong surge in APP's share price over the next six to twelve months. This will be further accentuated with the high earnings multiples on offer on the Mongolian Stock Exchange."
Asia Pacific Properties will remain majority owned by Asia Pacific Investment Partners. APIP is a leading Mongolia focused operating company that is primarily engaged in property, cement, financial services and natural resources.
Link to release
MSE NOTICE: Bill Gorman Ending MSE Assignment
December 16 (MSE) Mr. Bill Gorman LSEG appointed Advisor to the Mongolian Stock Exchange has completed his assignment and will no longer be in service.
He leaves Mongolia on the 21st of December. We wish to express our sincere appreciation to Mr.Gorman for his valuable contribution and wish him every success in his future endeavors.
The Board of Directors and Staff of the Mongolian Stock Exchange
Link to article
TWO COMPANY'S SECURITIES REGISTRATION CHANGES
December 16 (MSE) According to article No.6.38, 50.3 of Mongolian Stock Exchange Listing Rule and requests of "Munkh-Undes" JSC and "USIB" JSC about registration changes, resolution No. 227 and 228 of MSE Chief Executive Officer of Dec 16th 2011, the following changes were made to securities registration:
· company name "USIB" JSC to "MUDIX" JSC and its letter code USB to MUDX
· company name "Munkh-Undes" JSC to "Bluesky securities" JSC and its letter code AHR to BSKY
Link to article
Newcom Partners with IFC to Support Sustainable Growth in Mongolia
Ulaanbaatar, Mongolia, December 13, 2011 (Newcom) — IFC, a member of the World Bank Group, is investing $40 million in diversified investment company Newcom Group to support its expansion in Mongolia and strengthen infrastructure and other sectors key to the country's sustainable development.
IFC's financing will help Newcom develop a number of projects across sectors such as renewable energy, transportation, communication, and real estate, contributing to the growth of Mongolia's infrastructure and the diversification of its economy. These projects include increasing the installed power capacity through Mongolia's first grid-connected wind farm and expanding operations of Eznis Airways in the country.
Mongolia is experiencing a pivotal time in its resource-led economic development. World-class mining projects will drive strong economic growth and create demand for sectors around the supply chain. Fitch Ratings recently upgraded Mongolia's long-term debt rating to B+ from B.
"IFC provides critical financing and expertise when we need them most," said Bayanjargal Byambasaikhan, Chief Executive Officer of Newcom Group. "Newcom is apromoter of clean technology, and innovation, and our partnership with IFC will strengthen our capability to lead sustainable businesses in the country."
Hyun-Chan Cho, IFC Country Manager for China and Mongolia, said: "It is one of IFC's priorities to support sustainable development and help diversify the natural resource-led economy in Mongolia. The partnership with Newcom will also enable us to stimulate job creation and support sectors that are critical to the country's future growth."
Since 2002, IFC has invested more than $130 million in Mongolia's private sector covering banking, manufacturing and agribusiness. IFC is also providing advice to the government and companies to improve business inspections and corporate governance.
Link to release
Macmahon ups debt facility (, received strong interest in standalone financing for TT venture)
December 19 (Dow Jones) CONTRACTOR Macmahon Holdings has nearly doubled its funding facilities to $475 million, and separately received strong interest for standalone financing of its Tavan Tolgoi coal venture in Mongolia.
Macmahon said today its previous facility was worth $240 million, but it had secured support to raise this from banks including Commonwealth Bank of Australia, HSBC and Sumitomo Mitsui Banking Corp.
"In light of current financial market uncertainty this is an excellent outcome for the company," said Theresa Mlikota, Macmahon's chief financial officer.
Macmahon was awarded preferred contractor status for part of Mongolia's massive Tavan Tolgoi coal-mining project, in a joint venture with Germany's BBM Operta Group in August.
The Tavan Tolgoi joint venture expects to start mining up to 15 million tonnes a year of coal from the project next year.
Link to article
Government Decisions will Affect the Tavan Tolgoi IPO
December 17 (business-mongolia.com, source: Mongolian Mining Journal) The following is an interview concerning the IPO of Erdenes Tavan Tolgoi with the CEO of Edenes Mongol B.Enebish, member of the board of directors of the Mongolian stock market B.Bold, and the President of the investment bank MICC D.Achit-Erdene.
How is the preparation for Erdenes Tavan Tolgoi's IPO on the international market going?
B.Enebish: The mining operation is going smoothly. We've started started exporting coal. We got 250 million dollars of advance payment from the coal mining which we deposited to the "Human Development Fund". Preparations for exchanging stock on the international and domestic stock markets are well underway. Since April, we've been collaborating with 4 banks: Goldman Sachs, Deutsche Bank, BNP Paribas, and Macquarie. In November, the government made decisions about the structure of the stock exchanging company and what market to go on. They have made instructions to exchange 10-20% of the stock in the domestic market and exchange the remaining 80-90% on the London and Hong Kong stock markets by creating a company registered in England. We are quite busy at the moment as we are in the main stages of preparation. Requests to the London and Hong Kong stock market will be sent within this year. We have already sent some of the necessary documents to Hong Kong. It is predicted that the stock exchange will commence in the coming month of April.
It is being said that in April, the Government will make monetary by making the face value of 10-20% of Erdenes Tavan Tolgoi's stock to 1 million tugrugs per ctitzen. Is this the way Erdenes Tavan Tolgoi's stock is entering the Mongolian market? Also, can you elaborate on the term face-value?
B.Bold: First of all, it is highly likely that the current ideas will take some sort of adjustments and modifications. Accountants and tax surveyors have precise ideas on the difference of face-values and market-values. The problem is that the face-value might be anywhere from 1 tugrug to 1 cent. Only the accountants will constitute the price. I remember that Mongolian Energy Resources had a budget of 70 million dollars when they went on the Hong Kong stock market. That's the price they had in terms of accounting. But they ended up gaining a market value of 4 billion dollars. So before we do talks with just the face-value at hand, the Government and the Ministry of Finance should try to make positive adjustments. It is the first time one our strategic mines is going to be priced on the global market, so we shouldn't rush things.
The talk about Erdenes Tavan Tolgoi's IPO has been going on for some time now. The public is anticipated to know how much the share price per stock is going to be. The Parliament has been saying that 10-20% stock is 1 million tugrugs to each person, so doesn't this already give away the price? It seems like the Parliament is doing the job of the investment banks and advisers for them.
B.Bold: It is important for a democratic society to have individuals with their own opinion on things. But of course, personal opinions and professional advice are two completely different things. If the 76 parliament members have become advisers to Tavan Tolgoi and making their own valuations of the price, they're not exactly doing the right thing. The ones who should be estimating the price are the Banks and advisers. How much it will be will depend on the current financial situation. There will be of course an estimation beforehand. But first we will need to think about what's happening on a global level. The price of metal is dropping in China. This means the price of coking coal which is used to manufacture metal is also going to drop. Plus, the drop of stock prices in Europe and we have a situation in which it is highly difficult to come up with an estimation.
D.Achit-Erdene: There seems to be two concepts that are being discussed here: The first is face-value, which is the price accountants estimate. This price is usually the lowest. It could be anything from 1 tugrug to 1 cent. The second is market-value. which is determined by buyers and sellers. After a certain amount of sales between large scale investors, be get the final price.
Handing out 1 million tugrugs worth of stock to 2.7 million people almost sets the price itself. I don't have the exact numbers so I can't say for sure but giving 2.7 million people stock worth 1 million tugrugs which is 10% of the entire company is giving away 2 billion dollars worth of stock. This sets the company's entire price at 10-20 billion dollars. It is doubtful that it will reach this price but at the same time, it is necessary. So I'm afraid this will have effects on the IPO process.
How will the Government affect the IPO?
B.Enebish: First of all, instead of talking about the face value, they should focus on informing the public that they are giving 20% of the company to the people, and that they are turning their stock into money. If they go around telling the public of how much the face value is and how much money that they might be getting, it might result in some severe backlashes.
Link to article
Japan, Mongolia agree to accelerate talks for free trade deal
TOKYO, December 14 (Kyodo) -- Japanese Prime Minister Yoshihiko Noda and visiting Mongolian parliament speaker Damdin Demberel agreed Tuesday to accelerate efforts to start talks toward a free trade agreement, the Foreign Ministry said.
They also discussed Japanese companies' participation in developing the Tavan Tolgoi mine in Mongolia, which is believed to have one of the world's largest reserves of coal, the ministry said.
Noda also expressed gratitude for Mongolian support in the wake of the March earthquake-tsunami disaster, according to the ministry.
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Mongolia passes new election law ahead of 2012 parliamentary election
ULAN BATOR, Dec. 15 (Xinhua) -- The State Great Khural, Mongolia's parliament, passed a measure Thursday to revise the country's election system.
Under the new law, 28 of the parliament's 76 lawmakers will be elected using a proportional system, or vote for political parties, while the remaining 48 will be individual candidates nominated by their parties.
The previous election system was majoritarian and elected individual candidates.
"After three years, we finally revised the election law. Passing of this law was not an easy task for the parliament. The election law revisions are very significant. Now the new law needs to be promoted among the public," said Damdin Demberel, the parliament speaker
Revision of the current law previously stalled in parliament as the parties disagreed on proposed changes. Most minority parties pushed for a proportional system where voters would vote for a party rather than for candidates.
In order to gain a seat in the parliament, a political party must get five percent of the total national vote.
Sanjaa Bayar, the former prime minister and chairman of Mongolian People's Party, proposed the proportional electoral system in 2007. However, the proposal was blocked by the Mongolian Democratic Party then headed by President Tsakhia Elbegdorj.
The 2008 parliamentary election results were disputed by the Mongolian Democratic Party and the disagreement led to post-election riots.
Both parties began to work intensively on the revision of the election law after 2008.
Parliamentary elections are held every four years. The next is scheduled for June.
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MICROCAPITAL BRIEF: Incofin Lends $6m to Microfinance Institutions Vision Banco of Paraguay, Lazika Capital of Georgia, Credit Mongol of Mongolia, Forus Bank of Russia
December 14 (MicroCapital.org) Belgian company Incofin Investment Management (Incofin IM) has disbursed loans through microfinance investment funds it manages to four microfinance institutions (MFIs): USD 3 million to Vision Banco of Paraguay, USD 1 million to Lazika Capital of Georgia, USD 1 million to Credit Mongol LLC of Mongolia and USD 1 million to Forus Bank of Russia [1, 2, 3, 4]. The loans to Vision Banco and Forus Bank were disbursed through VDK MFI Loan Portfolio, while the loan to Lazika Capital was made available through the Impulse Fund [1, 2, 4]. The loan to Credit Mongol was disbursed in two tranches: USD 500,000 from Incofin CVSO and USD 500,000 from Impulse [3].
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Credit Mongol LLC was established as a limited liability company in 2000 as part of the European Union Tacis Programme, which seeks to help countries in Eastern Europe and Central Asia transition into market economies. Credit Mongol provides microloans to small and medium-sized enterprises and currently serves six regions in Mongolia. As of June 2011, Credit Mongol reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 10.7 million and a gross loan portfolio of USD 8.85 million. As of December 2010, it reported ROA of 7.08 percent and ROE of 26.7 percent.
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Mining audit released
December 17 (news.mn) The National Committee of Mining Protection, Monitoring and Organizing Transparency released its 2009 audit on Thursday.
The audit was performed by the English firm Hart Noirs Ltd and the Ulaanbaatar Audit Corporation.
363 mining companies that paid taxes in 2009 were audited. Also audited were 23 ministries and agencies, 26 budgetary organizations, and the governors' offices of 20 aimags, six districts, and 120 soums.
The audit says MNT 737.8 billion in taxes, fees, and donations were collected in 2009, with the Erdenet Factory paying 50.3 percent of that amount.
Erdenet Factory collected MNT 358.8 billion for the state budget in 2009, Ivanhoe Mines (Oyutolgoi LLC) MNT 142.8 billion, and Boroo Gold MNT 38.9 billion.
The 2010 audit will be released soon. A total of 274 companies have been involved in the 2010 audit, 177 of which are exploiting and 87 exploring. Ten are oil companies.
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UB RAILWAY JOINT VENTURE BECOMES UIC MEMBER
Ulaanbaatar, Mongolia, December 14 /MONTSAME/ The Ulaanbaatar Railway Mongolia-Russia joint venture has become an official member of the International Union of Railways (UIC).
The decision to accept Mongolia was made at the 79th UIC General Assembly held on December 7-8 in the UIC headquarters in Paris, France. Representing Mongolia, a delegation led by T.Ochirkhuu, the head of the Ulaanbaatar Railways, attended the general assembly.
By becoming the very first Mongolian railways organization to get the UIC's membership, the Ulaanbaatar Railways joint venture has gained rights to participate in the UIC's activities, to receive information on new railway technologies and techniques, on rules and standards updates, to share experiences, to cooperate with countries in the sector, and to co-implement projects and programs.
Moreover, opportunities are now given to the Ulaanbaatar Railways to mediate in tackling any problems among railways of other countries, to be provided with equal ties and to put forward proposals at assemblies.
In conjunction with the UIC's decision, the UB Railways head T.Ochirkhuu gave a report at the assembly, and then exchanged views with Mr. Yoshio Ishida, the UIC chairman; Jean-Pierre Loubinoux, the UIC vice chairman; and other officials.
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MAKH IMPEX JSC AND JUST AGRO LLC TO PREPARE THE MOST MEAT RESERVE
December 14 (BDSec) This winter, 12 thousand tonnes of meat will be stored nationwide. 22 companies registered with the Mongolian Meat Association have been awarded contracts to process the meat on December 11.
The companies will be paid MNT 500 per kg of meat, with the money coming from the state budget. Most of the meat will be supplied by two companies, "Makh Impex" JSC and "Just Agro" LLC. The reserve meat will be on sale starting January 15th next year and the price will set based on the market price.
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Mongolia Looks to Middle East
December 17 (The Diplomat) Mongolian President Tsakhia Elbegdorj has just finished off an important visit to the Middle East looking to forge new partnerships with wealthy Gulf States flush with petro dollars. The trip, which included stops in Kuwait and Qatar, was aimed at attracting investment dollars into Mongolia's burgeoning economy.
While in the Kuwaiti capital, Elbegdorj met with the emir, Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah and discussed how the countries can expand their relations. As Mongolia continues to grow as an international player, it has been rapidly expanding its diplomatic press with potential wealthy investors. In 2009, for example, Mongolia opened up an embassy in Kuwait City that was reciprocated by the opening of a Kuwaiti embassy in Ulan Bator the following year.
Elbegdorj aimed high during his visit by targeting the state-owned Kuwait Investment Authority (KIA), one of the world's biggest sovereign wealth funds with equity of over $200 billion. The director of the fund explained Kuwait's interest in Mongolia by noting that both countries are continually "exploring the possibilities of cooperation in infrastructure, agriculture and minerals sectors." The KIA essentially acts as steward and investor of Kuwait's massive petroleum income by searching the globe for lucrative long term investments. The KIA director acknowledged that Mongolia and Kuwait "are located far apart from each other," but stressed the common linkages and emphasized Kuwait's desire to "explore all possible investments and implement them in practice."
Mongolia has been pressing Kuwait and the other Gulf States for years now with an aggressive public relations campaign illuminating the benefits of doing business with the growing Central Asian economy. However, the charm offensive has thus far not resulted in a large influx of investment from the region. The KIA and other powerful sovereign wealth funds in the region have expressed concerns about a lack of information and research needed before making a comprehensive investment. There are also real questions about the obstacles to private sector investment in Mongolia's hallmark sectors such as mining and agriculture.
Politics has also been playing a role in Mongolia's outreach efforts. Earlier this year, Elbegdorj railed against authoritarian regimes in the Middle East and expressed solidarity with Arab Spring movement. This position wasn't altruistic, however, as Mongolia has an interest in promoting democracy in its own region, which is dominated by kleptocratic holdovers from the Soviet Union. Elbegdorj has been heralding his nation's brand as a democratic strategic ally in Central Asia. Mongolia's international diplomatic push is based around increasing its economic ties with both emerging and established markets with deep pockets.
This summer, Mongolia took over as chair of the Community of Democracies – an international group of democracies or states that are democratizing. Mongolia is proud to represent these ideals and is shrewd in celebrating its status in order to further its ties to foreign investors. Elbegdorj emphasized this point with his trip to Kuwait and followed through with the democracy caveat while in Qatar to attend a United Nations session on the "Common Values of Democracy and Civilizations: Role of Education of Democracy." He told the audience in Doha that "Mongolians history of peacemaking through acceptance of all religions was as significant a policy as our idea of democracy today. Freedom is what's valued most by nomadic people, that's why the basis of democracy is so strong in Mongolia." We'll see if his words are listened to and – more importantly – if Mongolia is able to continue its delicate tap dance around authoritarian states with flush bank accounts.
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Banking jobs: the next steppe
December 15 (FT Blog) Made redundant in the City? Down-sized in New York? Fed up in Frankfurt? The Golomt Bank of Mongolia has just the job for you.
According to an advertisement in Thursday's FT , the bank is seeking "to further develop its corporate finance, retail banking and internal audit divisions and wishes to appoint experienced professionals". Candidates need to be fluent in English, but not, it seems, in Mongolian, which should widen the pool somewhat.
Of course, you'd have to move to Ulan Bator. But, after years of isolation, it's now a boom town with international mining companies spraying around their money in one of the globe's fastest-growing economies. And friends from financial services may already be there – the London Stock Exchange earlier this year sent staff to the land of the Gobi desert to help run the Mongolian bourse.
Best of all, you get to avoid all those anti-banker jokes.
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Peabody: The Mongolian Mining Journal Honors Peabody Energy's Ereen Restoration Project as the Best Eco Mine in 2011
ST. LOUIS, Dec. 16 - The Mongolian Mining Journal has honored Peabody Energy's Ereen restoration project with the 2011 Best Eco Mine Award for environmental protection. The award recognizes Peabody-Winsway Resources for its role in restoring the former coal mine site near Bulgan to healthy grasslands.
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RENAC's Global Education Project Supports the Development of Sustainable Energy Supplies in Mongolia
BERLIN, DECEMBER 14 --(BUSINESS WIRE)--This week, with the support of the German Federal Foreign Office, public and private representatives from Mongolia's energy sector dealing with renewable energy and energy efficiency met educational specialists from Germany's Renewables Academy (RENAC) in Ulaanbaatar to define training needs along the value chains. The bilateral talks and workshops formed part of RENAC's accomplished "TREE - Transfer Renewable Energy & Efficiency" international training program, whose aim is to develop national strategies for training specialists in the development of sustainable energy supplies.
Renewable energies will get more and more important in the near future in Mongolia. Using current estimates of population growth, Mongolia may experience a three-fold increase in energy demand by 2020.
In the most cases, supplying rural areas with electricity from the centralized power system is neither economically feasible nor technically possible. At the same time renewable energy applications are most suitable for the nomadic lifestyle. Mongolia has abundant renewable energy resources for solar technologies, wind energy and hydropower. In order to benefit fully from renewable energies, to maintain already existing systems properly and to build up an own clean energy industry, one of the biggest challenges is the training of personnel with appropriate skills. In addition suitable political and economic conditions must be created.
During the Mongolian-German talks and workshops, the requirements and conditions for a training program on renewable energy and energy efficiency issues in the country's educational institutions and for different professional groups were defined, and strategies developed for their implementation in practice. To follow this up, RENAC is planning a series of training courses for policy makers, to be held next year, on creating effective policy frameworks for the development of renewable energies, together with other courses dealing with the implementation of the technologies in practice.
RENAC, based in Berlin (Germany), has already been supporting the development of the renewable energy and energy efficiency sector on an international scale over the last 3 years through its internationally recognized TREE education project. To date, with the support of the German Federal Environment Ministry, courses have been undertaken with participants from more than 50 countries. In November the German Federal Foreign Office took over promotion of the project. Mongolia has been included in the list of target countries, together with others such as Azerbaijan, Kazakhstan, Russia, Tajikistan, Turkmenistan and Ukraine. The TREE project has already won acclaim, both nationally and internationally, through a number of awards.
About RENAC: RENAC, based in Berlin, is an international provider of education and training and other services related to professional education in renewable energies and energy efficiency. Its range of services includes open and in-house courses, e-learning, consultancy and support of third parties in course design - from drawing up of curricula through to setting up training centers.
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Potential gains and potential losses with Copper
December 18 (UB Post) Copper is often viewed as a barometer for the global economy. As one of the main raw materials of the industrialized society, this red metal has an ability to forecast economic situations. Today's European debt crisis and China's slowdown have both battered international copper prices.
Originally, Mongolia only exported copper. Now, Mongolia generates high revenue from the exportation of coal, iron ore and other precious metals. Recently, the income from coal export doubled copper concentration export earnings. However, copper is still the main source of the budget revenue.
This year, for example, it is estimated to collect 402.6 billion MNT from coal, and 561.2 billion MNT from copper. Moreover, the red metal likely to get back its moniker "engine of Mongolian economy" when Oyu Tolgoi, the world's largest untapped copper-gold deposit, starts production. Therefore, the large swings in commodity prices in recent months are a source of concern. Supported by strong demand in China, the copper price by February this year had surpassed its all time record, reaching USD 10,190 a ton on London Metal Exchange (LME). However, since August it have fallen by more than 20 percent to USD 7,263 a ton now and, with the global economic environment deteriorating, could fall further. As we can keep track of LME copper prices to gauge Mongolian export and fiscal earnings, let's take a precise look at copper market.
Mongolian Copper
Statistics show that in first 9 months of this year, Mongolia exported 475 thousands ton of copper concentration and earned USD 828 million. Thanks to high prices at world market in first half of this year, the dollar value of copper exports rose by 30 percent. However, in volume terms, exports are barely changed, as country's single largest mine is the Erdenet deposit. However, the bright future is waiting for Mongolian copper industry.
Ivanhoe Mines is on target for production at Oyu Tolgoi commencing in the second half of 2012, according to its third quarter report. The impact of this huge project on the Mongolian economy will be significant, that Cameron McRae, Oyu Tolgoi`s CEO, pointed out that the mine would boost the GDP of the country by 33 percent by 2020. According to Cameron McRae, by 2019 Oyu Tolgoi will become one of the top five copper mines in the world, and will surpass the production of Erdenet. Moreover, earlier this year, BMO Capital Markets listed Oyu Tolgoi as the best new copper project for long-term profits, ranking the mine as the second best new source of copper in terms of production capacity. Furthermore, there are other signs that Mongolia will face copper export bonanza very soon. Tsagaan Suvarga, another strategically important copper deposit, likely to be operational since 2015, according to D.Zorigt, the Minister of Mineral Resources and Energy. Mongolia has 1.2 billion tons of copper ore reserves, and copper export likely to hit a million tons by 2020, he stated at "Metals Mongolia 2011″ forum.
However, the concern is even more acute as stresses in the global economy became deeper. The Telegraph reported that Rio Tinto, which owns 49 percent of Ivanhoe Mines, warns of slowing markets. Rio`s CEO Tom Albanese said Rio was yet to feel the full brunt of the European crisis, though he voiced concern Europe's plight would inevitably touch China, its biggest buyer.
China consumes about 40 percent of global output of around 16 million tons in 2010. However, the current economic issues across Europe and the United States could downsize China's role as the world's largest copper consumer, and then affect the country's copper demand, experts warned. The manufacturing monster-China is expected to suffer a rapid slowdown following the collapse in demand across the Eurozone, its largest export market.
Unstable Fund
During the previous boom in commodity prices, Mongolia did not save enough of the windfall revenues. Therefore, when the copper price, which hit USD 8,900 in the summer of 2008, fell to a figure three times lower due to the financial crisis within just a half years time, the government had no choice but to borrow money from donors. Because the subsequent fall in prices directly impact export and fiscal revenues, making the GDP growth fell from 8.9 percent to minus 1.3 percent in 2009. In order to avoid experiencing such a hardship again, the Parliament adopted the Fiscal Stability Law, which mandates the saving of excess mineral revenues in a Stabilization fund.
However, a future problem of the Stabilization Fund is that the fund is expected to reach only MNT 219 billion by the end of this year, amounting to merely 2 percent of GDP. "This suggests limited space to provide a stimulus in case of sharp terms of trade shock that undermines mineral revenues," the World Bank warned.
The Ministry of Finance is estimated, that Stabilization fund will earn 381 billion MNT next year, 168 billion coming from the copper industry. According to the budget of 2012, copper price is expected to be at USD 9,760 per ton next year while its balanced price is calculated to be at USD 6,663 per ton. In other words, the Stabilization Fund could not accumulate money from copper production, if prices fall below USD 6,663.
So, there are risks that optimistic forecasts from Ministry of Finance may not materialize, as the news and media are full of gloomy forecasts and dire predictions about copper prices.
The Bank of America Merrill Lynch forecasting lower average copper prices in 2012 of USD 7,750 per ton, compared with USD 8,785 per ton in 2011. "Copper prices have already dipped below our long-held forecast of USD 7,500 per ton for 2012. And now we see prices falling back to USD 6,000 or even lower next year," pointed out experts at Capital Economics.
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Mongolia issues 107 uranium exploration licenses
December 16 (news.mn) According to the Nuclear Energy Authority, 107 uranium exploration licenses have been issued in Mongolia so far. Two uranium exploitation licenses have been issued as well.
The agency also says the state spent MNT 16 billion for uranium exploration in 2009, MNT 25.1 billion in 2010, and MNT 37.1 billion in 2011.
Specialists say most exploration work is being done in Dornod, Sukhbaatar, and Dornogobi aimags. A total of nine uranium deposit mines have been identified in the country, and these mines have an estimated 68,500 tons of uranium.
Forty-three exploration licenses have been granted in Dornogobi aimag, 26 in Dornod aimag, and 19 in Sukhbaatar aimag. Twenty-eight companies have finished research and test work and have begun to prepare to exploit uranium deposits.
Some companies are planning to exploit uranium beginning in 2014 and to build uranium processing facilities in Dornod, Dornogobi, and Dundgobi aimags.
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U.S. anxious to secure nuclear waste disposal site as China emerges on scene
December 14 (Mainichi Japan) As the world shifts away from the business of recycling plutonium-based nuclear fuel, the construction of facilities to handle nuclear waste remains a nagging issue. After plans to construct an international disposal facility in Australia fell through, the United States and Japan moved forward in negotiations to build such a facility in Mongolia, an inland country which is believed to hold rich deposits of uranium.
The United States placed importance on the issue of nuclear nonproliferation, while Japan, advancing a national strategy to export nuclear power plant technology, had been looking for countries to accept its spent nuclear fuel.
Undraa Agvaanluvsan, a special negotiation representative at Mongolia's Foreign Ministry who resigned in September, told reporters who visited the Mongolian capital of Ulan Bator in April that the land earmarked to build a waste disposal facility was located near a uranium mine in the Gobi desert. She said that in the future, Mongolia wanted to secure an advantage in promoting exports of its nuclear fuel by accepting spent nuclear fuel. This involved employment of a "nuclear fuel lease" system in which a factory to produce uranium-based nuclear fuel would be built using Japanese and U.S. technology, and Mongolia would export this fuel while accepting spent nuclear fuel from overseas.
In order to dispel fears about nuclear proliferation, a U.S. negotiation team led by Daniel Poneman, deputy secretary of energy in the U.S. Department of Energy presented a framework to Undraa and other officials under which Mongolia would accept spent nuclear fuel held by Taiwan and South Korea, which hold large amounts. U.S. officials further explained that if nuclear waste in interim storage at the Rokkasho Reprocessing Plant in Japan's Aomori Prefecture was transferred, then it would be possible to secure the funds to construct and maintain a disposal facility. Though Japan denies it, during the initial negotiation stage, the U.S. told Mongolia that it could look to Japan for funding to build a disposal facility.
On Feb. 3 and 4 this year, preparations were made to sign an agreement on the Mongolian plan in Washington, and Japan sent Harufumi Mochizuki, a former administrative vice minister at the Ministry of Economy, Trade and Industry who served as an adviser to the Cabinet Secretariat and was in charge of exports of nuclear power plant technology under the administration of then Prime Minister Naoto Kan. Japanese nuclear reactor manufacturer Toshiba Corp. was also present at a working-level meeting on the first day, as it aimed to secure a place in the business.
However, the Japanese Ministry of Foreign Affairs, which had been left out of negotiations, stepped in at this stage and stopped Japan from signing the agreement, saying there were too many problems with it. Then on March 11, Japan was struck by a magnitude-9.0 earthquake and tsunami that trigged the ongoing crisis at the Fukushima No. 1 Nuclear Power Plant, and discussions on the waste disposal facility were shelved.
After the Mainichi Shimbun reported the plans in May, an opposition campaign was launched in Mongolia, and in September this year, Mongolian President Tsakhiagiin Elbegdorj issued an order prohibiting negotiations, effectively putting an end to the plans.
Another country that has eyed concessions for building a nuclear waste disposal facility under a "nuclear fuel lease" system is China, which is widely expected to become a nuclear power plant superpower second to the United States in 10 years' time.
"There's a possibility that China and Russia will dominate the global nuclear power plant market in the future," says Akira Omoto, a commissioner of the Japan Atomic Energy Commission.
In 2006, U.S.-based Westinghouse Electric Co., which operates under the wing of the Toshiba group, conceded technology for a new AP1000-type reactor to China in exchange for securing a contract to export nuclear power plants there. China subsequently developed its CPR1000 reactors, and is planning exports from 2014. It has also decided to build a high-level radioactive waste final disposal site in Gansu Province in the Gobi desert near the border with Mongolia, and is preparing to sell nuclear power plant technology overseas by offering to accept spent nuclear fuel, just as Russia is aiming to do.
China has also reached an agreement to export two old-model reactors to Pakistan, which is developing nuclear weapons. This has raised concerns from the United States and other parties from the perspective of nuclear nonproliferation.
Richard Stratford, a nuclear nonproliferation leader in the U.S. State Department, lamented in a lecture at the end of March that the rise of emerging nations had weakened the United States' grip. While it still has power, it wants to secure a place that will accept spent nuclear fuel. The project previously proposed in Mongolia strongly highlights the United States' anxiousness.
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What Investors Should Know About Uranium In Mongolia
December 14 (Jon Springer, Seeking Alpha) The real quantity of Mongolia's natural resources cannot yet be know. Weighed down by communism from 1921 to 1991, followed by poor economic times thereafter, and still troubled by poor but now developing infrastructure, it is one of the last great frontiers of natural resources.
There are two laws of note that effect uranium mining in Mongolia. As of January 2011, Mongolia had about "1,170 mineral deposits and 7,654 occurrences" (Mongolia 101). Among those, the Minerals Law of 2006 declared 15 deposits strategic. The laws governing these strategic deposits state that the government can "acquire up to 34% of ownership rights from the license holder, if the exploration work has been financed purely with private funds, and up to 50% of ownership rights, if the exploration work has been financed partially with state funds, including capital invested during the Soviet times" (Mongolia 101, italics added). Three uranium deposits are on the list of 15 strategic deposits.
Beyond these 15 strategic resources, "foreign investors can own 100% of any registered business and it is not legally required to have a Mongolian partner" (Mongolia 101) except in the case of uranium. The Uranium Law of 2009 created both a government regulatory authority and the state-owned MonAtom. Under the law, all prior uranium licenses were canceled and had to be re-registered with the government. Moreover, when the licenses were re-registered, it was on the condition that investors understood and accepted that the government uranium company MonAtom could take 51% ownership of any uranium license without compensation to the license holder.
In addition to Mongolia's MonAtom, Russia's Atomredmetzoloto
[ARMZ] has extensive uranium license rights, some extending back to the communist era. One could question the relevance of all of this when, as of 2009, Mongolia was believed to have only 1% of the world's known recoverable resources of uranium. However, three of the biggest companies in uranium development -- AREVA, Cameco, and Denison Mines -- all have operations in Mongolia. Among other notable ventures, there is the private Mongolia Forward, which has former U.S. Ambassador to the United Nations John Bolton on its board of directors and former Montana U.S. Senator Conrad Burns on its advisory committee. Mongolia Forward is in negotiations to form a joint venture with MonAtom.
On the above list, Mongolia ranks 15th. Here are some salient points from a April 2011 Reuters report on MonAtom's Tsogtsaikhan Gombo:
· He believes reserves are 80,000 tons, not 49,000.
· He believes with investment the reserves could "rise to above one million tons."
· "We want green development and nuclear is the number one choice."
· "We have the ambition to build the capability of nuclear energy in Mongolia, and the ambition to supply nuclear power plants in Northeast Asia."
· The government wants its first nuclear facility by 2020.
· Uranium development ties are being coordinated with countries including the Untied States, France, and Japan, to diversify from the interests of Mongolia's two neighbors, China and Russia.
· France's AREVA and Mongolia signed an agreement in October 2010 for uranium exploration and mining.
Frontier Securities, a Mongolia brokerage, in a press release on its Mongolia Expert Series stated in September 2011:
"Today's proven reserves amount to roughly 70,000 tons and there is strong belief that they may rise up to 100,000/120,000 tons within the next 2 years. There is also high speculation as per the country's potential in uranium deposits with the IAEA's red book having indicated estimates of up to 1.39 million tons untested reserves, which if proven would constitute the largest reserves in the world. MonAtom is more conservative, capping such a number to 500,000 tons." [Note: vis-a-vis the above chart from 2009, 1.39 million tons would be 2nd to Australia.]
In an interview from June 2011 (video), Mr. Tsogtsaikhan Gombo of MonAtom stated that the government was aware that current uranium laws made Mongolia less competitive, and there was a government committee working on a revision of the 2009 Uranium Law (video is 4 minutes, relevant quote at 2:30).
Three International Companies
AREVA (ARVCF.PK)
AREVA is a major international uranium and industrial company based in France, with a market cap of $10 billion. Its 100% owned subsidiaries AREVA Mongol and Cogegobi have been present in Mongolia since 1996. They have "28 licenses covering more than 14,100 kilometers," primarily in the East Gobi (the southeast of the country). AREVA Mongol has worked in cooperation with Japan's Mitsubishi Corporation since December 2009. AREVA commenced uranium recovery operations in Mongolia for the first time on December 1, 2010 (notably after the 2009 Uranium Law was put in place). Not coincidentally, one month earlier a cooperation agreement between France and Mongolia was signed, which also defined "a clear and solid framework for AREVA to explore and mine uranium in Mongolia."
The cooperation agreement of November 2010 also refers to Mongolia viewing France as "its third neighboring country." Mongolia's two neighbors are China and Russia. Mongolia government policy is a policy of pursuing third neighbors around the world to maintain geopolitical balance for itself with its two larger neighbors.
AREVA is building a "small-sized factory" for its mining operations that will be complete in 2 to 3 years. "It's projected that the factory [will] process uranium to yellow powder by 2017 and export that " According to China's Xinhua news agency, AREVA Mongol will export uranium to France and Kazakhstan for enrichment starting in 2017.
Cameco (CCJ)
Cameco is a major international uranium focused company based in Canada, with a market cap of $7 billion. Cameco established Cameco Mongolia in 2005. Cameco Mongolia is still in the exploration phase. It has used Major Drilling (MJDLF.PK) for the exploration and been pleased with safety and environmental preservation, a relevant issue since Camecospinoff
Centerra Gold (CAGDF.PK), and its Boroo subsidiary, has had issues with the Mongolian government's environmental laws, though it has now "duly completed rehabilitation work". Their properties are ineastern Mongolia
.
Denison Mines (DNN)
Denison Mines is an international uranium focused company based in Canada, with a market cap of $550 million. It has properties in the U.S., Canada, Zambia and Mongolia. Denison holds a 70% interest in the Gurvan Saihan Joint Venture [GSJV] along with 15% partners: the Mongolian government and Geologorazvedka (a Russian government company). Thus, the company is partnered with both of the governments heavily involved in Mongolia's uranium history.
Denison licenses cover 685,632 hectares (6,856 square kilometers). It was noted in March 2011 that Denison planned to spend CAD$7.4 million on exploration and development in Mongolia in 2011. Four days later, Denison released an update on the NI 43-101 resources of the Hairhan deposit. Details summarized by the media were, "the new report by Roscoe Postle Associates, estimated 12.26 million tonnes of indicated resources at a grade of 0.062% U, or 19.78 million pounds of U308, representing a 151% increase over the last study in February 2007. Inferred resources were calculated at 5.54 million tonnes grading 0.040% U, or 5.81 million pound of U308, representing a 67% boost over 2007." Additional plans for the Hairhan license include:
· changing it from an exploration license to a mining license
· an in-situ recovery plant
· commencing "site construction and development activities"
The Roller Coaster
East Asia Minerals Corporation (EAIAF.PK)
East Asia Minerals is a diversified miner with properties in Indonesia and Mongolia. It had a market cap of $55 million on December 10, 2011. Its properties in Indonesia include gold, silver, copper, and molybdenum. In Mongolia, East Asia Minerals properties include uranium and phosphate. East Asia Minerals website seeks to address some recent issues about Indonesia's mining laws.
Why is East Asia Minerals dubbed "the roller coaster"? With a 52 week high of $8.62 and a closing price on December 9, 2011, of $.71, it has been an eventful year, and for that matter-- an eventful 5 years for the share price. Investors should understand that the share price has been driven by East Asia Minerals Indonesia holding, as there is no production yet at any of its Mongolia assets. Its Mongolia assets received 1 page of attention in the company's 20 page corporate presentation.
Indonesian challenges have resulted in a change in management. Additionally, East Asia Minerals announced a private placement for shares on October 7, 2011, to raise $10,000,000 by selling 20,000,000 shares for $.50.
Among East Asia Minerals 11 uranium projects in Mongolia, 3 are "ready for resource drilling" per the company website: U1 Ingenii (Nars), U2 Ulaan Nuur, and U3 Enger Ar.
East Asia Minerals last issued an update on its Mongolia holdings in September 2011. For more up-to-date information on East Asia Minerals, I suggest following the news feed about the company. East Asia Minerals' share price issues are due to events in Indonesia, but there is one more stock in the uranium sector in Mongolia that has problems uniquely in Mongolia.
One Pure Play, Many Problems
Khan Resources (KHRIF.PK)
Since my first research article about Mongolia in June, Khan Resources, despite a $12.5 million market cap, has been a story I have followed closely. I have since been to Mongolia, developed contacts there, and increased my knowledge about Mongolia a lot. The fate of Khan Resources remains a mystery.
Since the Mongolian government repealed the 2006 Windfall Profit Tax in 2009/2010, the development of mining interests in Mongolia has boomed. The Uranium Law of 2009 is what is left out of the below timeline, because it runs counter to the narrative about Mongolia's mining boom. Yet, Western Prospector, once another Canadian uranium company, is now owned by the China National Nuclear Corporation on the below timeline. Western Prospector owned licenses for the Mongolian strategic deposit at Gurvan Bulag.
Uranium is one of the many important natural resources Mongolia holds. Based on facts, one could make an educated guess that the Uranium Law of 2009 will not be amended to be in line with the rest of the Mongolian mining boom's narrative until after there is resolution in the matter of Khan Resources.
Khan's website home page shows a map of Mongolia with a stake in Dornod, one of the three strategic uranium deposits among Mongolia's 15 strategic deposits. Dornod is believed to be Mongolia's biggest uranium deposit. Khan's website says its "assets consist of is interest in the 'Dornod Uranium Property,' which is held through a 58% interest in the Main Dornod Property (mining license 237A) and a 100% interest in the Additional Dornod Property (exploration license 9282X)."
The same page of Khan Resources' website begins to discuss the history of the site, its discovery in "1972 by a Russian Geological Expedition," "open pit mining in 1988," "until 1995, some 590,000 tonnes of ore grading approximately 0.1% U was hauled" to a processing facility in Russia, and "Because the property was extensively explored and developed by the former Soviet Union, the bulk of Khan's work has concentrated on verification and infill drilling plus core sampling for metallurgical work."
While there is a 250-page NI 43-101 report from 2009, and Khan's belief that the property can produce "3.5 million pounds of uranium oxide over a 15 year mine life," genuine due diligence on the company requires reading legal briefs and researching international law, not understanding mining reports. Revisiting the law governing the 15 strategic deposits of Mongolia: The laws governing these strategic deposits state that the government can "acquire up to 34% of ownership rights from the license holder, if the exploration work has been financed purely with private funds, and up to 50% of ownership rights, if the exploration work has been financed partially with state funds, including capital invested during the Soviet times" (Mongolia 101, italics added). The Uranium Law of 2009 adds the kicker that state-run MonAtom can take 51% ownership of any uranium license without compensation to the license holder.
Khan Resources And ARMZ
Khan's 58% interest in Dornod was actually a 58% interest in the Central Asia Uranium Company [CAUC], which was 21% owned by the Mongolian government and 21% owned by Russia's Atomredmetzoloto, the Russian government's nuclear conglomerate. An April 2010 article details, "Dornod contains at least 28,000 tons of uranium, and Russian experts in particular believe further and better exploration could uncover twice that amount."
The same April 2010 article provides the following timeline:
· May 2009, Russian Prime Minister Vladimir Putin makes a state visit to Mongolia "that focused on Russian participation in mining Mongolian uranium."
· July 2009, the Uranium Law passes (as mentioned above) that gives the Mongolia government the right to own 51% in uranium ventures.
· August 2009, Russian President Dmity Medvedev makes a state visit to Mongolia with ARMZ parent company's Rosatom's chief Sergei Kiriyenko.
· October 2009, Khan Resources receives a hostile bid for "65 Canadian cents per share (about 35 million U.S. dollars) for Khan's CAUC stake." Khan Resources refuses the offer.
· Khan Resources "accused ARMZ of negotiating with the Mongolian government without recognizing Khan's interest in the deposit." ARMZ counters by "accus[ing] Khan Resources of negotiating with the Mongolian government over the Russian company's interest in Dornod."
· Under the uranium law, Khan's license was suspended.
· Khan Resources got a separate bid from the China National Nuclear Corporation "at 96 cents [Canadian]" or "some 53 million U.S. dollars." This deal fell through due to failure to get regulatory approval.
· "ARMZ, Khan Resources, and the Mongolian government continue to trade accusations about breaches of their agreement. The Mongolian government has also opened an investigation into the legality of Khan Resources' licenses in Mongolia."
The way this situation has been presented recently in the Mongolian press as of November 2011:
"The governments of Mongolia and Russia signed an agreement to establish a uranium-mining company called Dornod Uran LLC in December 2010... But Dornod Uran has not been established yet because a Canadian mining company called Khan Resources has complained to an international arbitration panel... With the establishment of Dornod Uran delayed, AREVA could be exporting yellow powder before the Russian-backed company."
Reuters reported the debut of Khan's case against ARMZ in August 2010. The full 31-page legal filing is available to the public. As this May 2011article from Canada's Globe And Mail notes, Khan's $700 million lawsuit against ARMZ "alleges that the Russian firm wrongly excluded the Canadian company from the Dornod project and waged a campaign to discredit it" (this is referred to as a $300 million case in most media sources, however the original legal filing indeed demands $700 million). Khan Resources further contends it invested $21 million in the Dornod property and its development since 2003 while ARMZ "contributed virtually nothing."
A separate article from February 2011 notes that the Russian government cited article 13 of the Hague Convention and refused to accept the lawsuit or serve notice to ARMZ.
Khan Resources And The Mongolian Government
Separately, Khan filed an international arbitration case against the government of Mongolia and MonAtom in January 2011 under United Nations Commission on International Trade Law [UNCITRAL] Arbitration Rules.
This filing by Khan indicates the agreement that formed CAUC was formed in 1995 with WM Mining, ARMZ and the Mongolian government as equal 1/3 partners. Based on a cash infusion, WM Mining's share increased to 58%, as approved by the Mongolian National Security Council in February 1997. In July 1997, WM Mining's shares became part of what we'll simply call Khan Bermuda. Khan Resources of Canada acquired Khan Bermuda in July 2003, and this was subsequently affirmed by partners ARMZ and the Mongolia government in a corporate resolution of October 2005. This is the portion of Khan Resources history regarding the main Dornod property.
There is also the question of the Additional Dornod Property in which Khan Resources believes it has a 100% interest. This was acquired from Western Prospector in April 2005. Western Prospector was a Vancouver-based company founded in 1998. Further details on the history of the Additional Dornod Property are limited to the facts in the filing.
According to Khan's current corporate presentation, its action against the Mongolian government seeks $200 million in compensation.
Khan Resources Since 2009, The Unclear Facts That Beg More Questions
It gets more confusing, as some details have been left out to make this as readable as possible. Below is Khan's timeline from its 2010 Annual Report which covers activity and share price from January 2009 to December 2010. Interesting notes along the timeline include when the Mongolian Nuclear Energy Agency [NEA] invalidated all of Khan's Mongolia licenses in April 2010 [#6], a court in Mongolia and an appeals court in Mongolia both say Mongolia's NEA decision to invalidate Khan's licenses is not legal [8 & 9], and Mongolia's NEA stands pat that they will not reissue any licenses to Khan [10]. On pages 6 and 7 of the report (link in the caption below) Khan responds at length to seven allegations by the Mongolia NEA as to why Khan's licenses have been invalidated.
An undated 2011 article by Mark Godfrey notes that, "suggestions that Mongolia has reverted to Soviet-era laws favouring Russians are rubbished by N. Algaa, Executive Director of the Mongolian National Mining Association (MNMA). He says the country's new Nuclear Energy Law, passed in July 2009... grants 'similar treatment to companies from every country.'" The article additionally cites anonymous sources "that the MonAtom and ARMZ joint venture, signed during a visit to Mongolia by the Russian president, was over-favourable to Moscow. Licensed to explore Dornod and separate resources in East Gobi, the joint venture will not be subject to Mongolian taxes, partly because it'll be operated entirely with Russian labour." [This data is not confirmed. Anonymous sources cannot be verified.]
An interview from February 2010 with Mongolian Member of Parliament Z. Enkhbold frames the issue at hand differently. According to Mr. Enkhbold, the problem is that Khan had exploration licenses for areas with previous mining activity during the communist era. This breached "provision 2.3 of article 17 and provision 1.4 of article 19 of the Mineral Law of Mongolia. It is illegal to issue exploration licenses in the previously mined areas." Yet, he then says that these previously mined properties which were left dormant for some time require, "re-evaluation on deposits, restor[ation of] the infrastructure of the mine area and updated feasibility stud[ies]." Thus, it seems that the work one does under the auspices of an exploration license are required for the terrain in question but this work needs to be done under the auspices of a mining license because of prior activities at these sites. Yet, it was the government that granted the exploration licenses to Khan Resources in the first place.
Most recently, on October 31, 2011, Khan won a motion in Canada's Ontario Superior Court that said ARMZ should be served papers. However, this is an international case involving Russia, Mongolia, and the U.N. A complete resolution of these cases could take many years.
One Other Junior Uranium Miner And A Few Notes Of Interest Pertaining To Uranium In Mongolia:
Solomon Resources (SLMZF.PK). Market cap $1.4 million. Properties in Canada, the U.S. and Mongolia. Reading Solomon Resources page onMongolia, this company has experienced similar rulings by the Mongolia courts as those Khan Resources has:
"In the written decision of the Mongolian Supreme Court dated November 24th, 2009, received by Solomon on December 15th, 2009, Justices Punstag, Sumya, and Tungalag affirmed the ruling of the lower court and found that the manner in which the Mongolian Cadastral Office handled the various licence applications was improper and further clarified the process to be followed by the Cadastral Office in issuing the disputed exploration licences in accordance with Mongolian law."
Red Hill Energy which had a few uranium deposits in Mongolia is now part of Prophecy Coal (PRPCF.PK). The World Nuclear Association site on Mongolia still cites Red Hill Energy as a uranium property holder in Mongolia (as of its October 2011 update). However, Prophecy Coal's 1st quarter 2010 report states clearly on page 10, "During the year ended December 31, 2009, the Company wrote-off its investments in all the uranium licenses in Mongolia, as management determined the licenses did not have sufficient merit to continue exploration."
The China National Nuclear Corporation and related entities have interests in uranium in Mongolia. These do not present investment opportunities.
Ties between India's and Mongolia's uranium interests have been established since 2009.
Conclusion:
Mongolia has uranium resources that place it in the top 15 countries for uranium resources in the world. Mongolia's resources are relatively unexplored and Mongolia's uranium resources once explored could be firmly among the top 5 countries in terms of global uranium resources.
Mongolia's mining laws regarding uranium are particular, and less favorable to foreign entities than its other mining laws. There are multiple large international uranium interests operating effectively and without problem in Mongolia, all in good standing with the Mongolian government.
The case of Khan Resources is worth watching. The Khan Resources case is a problem hanging over the uranium industry in Mongolia, and possibly hanging over any legal revision to the 2009 Uranium Law. The settlement of the Khan Resources case may signal a realignment that will lead to further growth in Mongolia's uranium industry.
Disclosure: I cited data from Mongolian brokerage ResCap in this article. ResCap is partially owned by Origo Partners (OPP.L). I am long Origo Partners. Frontier Securities whose data I cited in this article is one of multiple brokerage companies I have invested funds with in Mongolia to-date. I have no positions in any other stock mentioned in this article and no intention to purchase or sell any holdings mentioned in this article in the next 72 hours.
Additional Disclosures: I am not an attorney. I have made a best effort to present all the facts I have learned so far regarding Khan Resources, ARMZ and the Mongolian government. I have no personal or financial interest in any party winning, losing, or settling this case. If there are additional details I have omitted, I will print them in the comments below post-haste as submitted, verbatim, from any party involved in this matter.
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Thoughts On Mongolia Growth Group's Mandal Insurance Unit
December 18 (Jon Springer, Seeking Alpha) Mongolia Growth Group (MNGGF.PK) was formed in December 2010. On June 20, 2011, a press release announced that their Mandal Insurance division was now the best capitalized insurance company in Mongolia. This article is a follow up on my November 25, 2011 article about Mongolia Growth Group's private placement, and their real estate business.
How could Mongolia Growth Group become the best-capitalized insurance company in Mongolia in six months?
Mongolia Growth Group only needed $5 million to become the best-capitalized insurance company in Mongolia. The fact is that the penetration of the insurance market to-date in Mongolia is minimal.
To understand why there are not any major international insurance companies opening an insurance business in Mongolia, consider that the size of the population in Mongolia is about the population of Chicago. Now, take the population of Chicago and spread that population over the size of a country a little smaller than Alaska, and make the average annual income less than $5,000, with those below the median annual wages earning less than $3,600 per year. Add to that, a local language that is unique to the country's small market size.
For these reasons, no major fast food company (no McDonald's, no KFC) has entered the Mongolian market, let alone a major international insurance company making a footprint in the local market. The other side is that high-end retail stores such as Louis Vuitton, Dior, and Armani, have seen enough economic growth and wealth creation in Mongolia that they have opened stores in Mongolia.
Why start an insurance company in Mongolia?
The first guiding investment principal of Mongolia Growth Group has two parts.
Part 1: The economy of Mongolia is going to boom because it has significant untapped resources that will cause Mongolia's GDP to grow more than 10% per year for the next 20 years.
Part 2: Find ways to gain leverage on the economic boom caused by Mongolia's mineral wealth. Do not invest in mining. Figure out what other investments and businesses do well in countries that have had natural resource booms and invest in those.
What does the management at Mongolia Growth Group know about insurance?
The management team of Mongolia Growth Group determined that insurance was a good line of business to enter in Mongolia based on the history of growth in other natural resource country booms such as Qatar and Kazakhstan. Then, they studied the market and targeted personnel from locally run Mongolian insurance companies to bring onto their team.
In March 2011 Mongolia Growth Group announced a partnership to enter the property and casualty insurance market with United Mongolian Corporation [UMC]. The CEO of UMC, Mr. Ganzorig Ulziibayar, formerly also CEO of Prime Daatgal Insurance, continues in his capacity as CEO of UMC.
Prime General Insurance was one of the three best-capitalized insurance companies in Mongolia before Mongolia Growth Group's Mandal existed (Prime's 2009 annual report). The former CEO of Prime, Mr. Ganzorig Ulziibayar is now also President of Mongolia Growth Group's Mandal Insurance unit. The former Executive Vice President of Prime, Mrs. Davaanyam Myagmar (aka M. Davaanyam), is now CEO of Mandal Insurance. Four other executives from Prime joined Mr. Ganzorig Ulziibayar and Mrs. Davaanyam Myagmar at Mandal.
Mandal launched their first national advertisement on September 15, 2011 (English translation of the ad appears in the link). According to Mongolia Growth Group's October 2011 shareholder letter, Mongolia Growth Group's new 5-story headquarters will be named the Mandal Building, a 5-story advertisement for the insurance unit's business.
Who will buy insurance?
According to the World Bank's October 2011 quarterly report on Mongolia, the average Mongolian earns $1.50/hour. This works out to less than $300/month. In light of this, it is understandable that the economy is growing rapidly and the government's recent announcement of a 53% increase in wages for government employees makes sense. It is this low-wage small-economy starting point combined with vast untapped natural resource wealth that causes people to project 10% or greater growth for the Mongolian economy for the next 20 years. The coming wage growth will create a need for insurance that could not be there earlier because there was not enough money in the economy for insurance earlier.
It is also this starting point for growth that causes insurance penetration to be minimal currently. Auto insurance penetration is less than 5% of the population, however the government has a law pending making auto insurance mandatory by January 2013. Mongolia Growth Group's November 2011 shareholder letter notes, "[O]n October 6, 2011, The Government of Mongolia passed a law mandating that all vehicle owners and drivers must purchase liability insurance starting in January of 2012. The traffic police will be checking the drivers for insurance in October 2012."
Home insurance penetration also is currently less than 5%. One source quoted me actual insurance penetration of the Mongolia market at 3/10 of 1%. At this point, very few people use mortgages to purchase a home, and either buy a home outright, rent, or live otherwise (e.g. nomadically; also, every Mongolian at birth has the right to claim 6/10 of 1 hectare of land by putting up a fence around a property not claimed by anyone else previously). The government is changing the society's outlook on mortgages in its current low-income housing project that will provide 6% loans on home purchases for first-time homebuyers. As the use of mortgages increases in Mongolia, insurance will become requisite on the home for both the lender and the person or entity that holds the mortgage.
There are more obvious lines of insurance in the mining sector in Mongolia. These companies, and their employees bottom to top, all have a full array of insurance needs. As the mining sector ramps up, there will be a ramp up in the number of people employed by the mining sector, and their insurance needs as individuals and as companies will grow with the development of the mining sector. Oyu Tolgoi, the copper-gold mine that will boost GDP by more than 25% by itself is slated to begin production in the second half of 2012. Other mines large and small are close behind it.
Additionally, the November 2011 Mongolia Growth Group newsletter highlighted a previous announcement by the company that "Mandal officially rolled out its dedicated Expat VIP services last week. It has been in beta testing for two months and the response has been very positive. Foreigners wants a sales team that doesn't just speak their language when buying insurance; they want a full package that even involves a representative arriving at the scene of an accident and handling their insurance claim in their preferred language as well. Thus far we are impressed by the response from the Expat community."
For all these insurance issues, the Mandal Insurance team has an expert group of personnel with experience insuring in Mongolia working together with conservative risk analysts from Canada questioning each risk line by line. They have shared with me some proprietary methods of how they analyze the insurance market, and they are thinking about the details of the market in detail oriented and innovative ways.
For the truly detail oriented, a brief history lesson on Prime Insurance in Mongolia
Top management at Mandal came with experience from local top insurance company Prime. Petrovis, a privately held Mongolian company that is the largest Mongolia petroleum concern, formed Prime in 2001. In 2010, Tenger, a local conglomerate that most notably also owns Xac Bank in Mongolia, became a 50% owner of Prime alongside Petrovis. In 2011, six top executives at Prime left to go to Mandal Insurance, the company that is now the best-capitalized insurance company in Mongolia. Other local insurance competitors in addition to Prime Daatgal include Mongol Daatgal and Bodi Group's Bodi Insurance.
Disclosure: I am long Mongolia Growth Group (MNGGF.PK) and long Ivanhoe Mines (IVN). I have not placed any trades in Ivanhoe Mines in the 72 hours prior to publication of this article and will not for 72 hours after publication of this article. I am participating in the current private placement of Mongolia Growth Group that closes December 23, 2011. I have had a request in to fact check my data with the World Bank in Mongolia for one week. I have not heard back yet and have decided to publish the data based on their reports on wages and earnings in Mongolia as I have interpreted them. Any errors are my own and will be noted upon clarification from the World Bank in the comments.
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Ivanhoe Mines' Share Price: Should It Go Down Like This?
December 16 (Jon Springer, Seeking Alpha) The Oyu Tolgoi copper-gold mine is a joint project of Ivanhoe Mines (IVN), Rio Tinto (RIO) and the Mongolian government. The impact of the mine's copper and gold on the Mongolian economy will be significant to the point that Cameron McRae of Rio Tinto, who is CEO of the mine, was quoted September 8, 2011, saying the mine would boost the GDP of the entire country by 33% on its own by 2020.
The breakdown of ownership of Oyu Tolgoi is actually that Ivanhoe Mines owns 66% of the project and the Mongolian government owns 34% of the project. Rio Tinto comes into play as it now owns 49% of Ivanhoe Mines, and thus it indirectly owns approximately 33% of Oyu Tolgoi.
On August 24, 2011, it was made public that Rio Tinto had increased its stake in Ivanhoe Mines by 2% from 46.5% to 48.5% at an average cost of $18.98. It has since added another .5%. 49% is the maximum ownership of Ivanhoe Mines that Rio Tinto is allowed to have until January 18, 2012.
For the second time since September, Ivanhoe Mines shareholders are emotionally putting selling pressure on the company's stock price as can be seen in the two dramatic drops. Above, the dot is on September 8, as stories that the Mongolian government was seeking to raise its stake in Oyu Tolgoi from 34% to 50% started to show up in the global media onSeptember 9, 2011.
Original reports of the action was reported accurately as, "A group of 20 members of Mongolia's parliament are petitioning for changes in the [Oyu Tolgoi] agreement to give the Mongolian government a larger share of the mine proceeds." This transitioned and began to be reported as "The government of Mongolia is seeking to boost its stake in one of the world's largest undeveloped copper-gold mines."
In numerous sources, reports cited "the government" wanting "to bring forward the date at which the government, which had a 34% stake in the project, moved to 50%" by 30 years to the present time. Bloomberg, The Australian, the BBC, the Wall Street Journal, and others picked up this story as "the government" wanting to change the Oyu Tolgoi agreement.
However, the parliament has 76 members. As can be found in the archives of my Mongolia news blog I wrote on September 27, 2011:
"The idea of renegotiating the agreement is a proposal by 20 Mongolian lawmakers (not a majority; about a quarter of parliament) at this juncture. There are elections in Mongolia next summer and Oyu Tolgoi which is ramping up toward production is a juicy item to pick on (keeping in mind that a fully producing Oyu Tolgoi will boost Mongolia's GDP by more than 30%). Rio Tinto's McRae has warned - and I agree - that the government would be shooting themselves in the foot if they go back and change the deal now. Furthermore, as there seems to be a global economic pull back, this would be a particularly bad time to discourage foreign direct investment in Mongolia. Thus, while I believe that this may be an ongoing topical election issue to gain some votes among those who think the government got ripped off in the Oyu Tolgoi deal, I think that ultimately the government will have the vision to realize future deals that could be negotiated on different terms depend on first honoring those deals they have made in the past."
Eventually, two other members of parliament joined, and it was 22 members of parliament that wanted to renegotiate the Oyu Tolgoi agreement. There is the question of how 29% of the members of parliament seeking a modification became "the government" wanting to change the agreement. If 29% of a parliament or say, the U.S. Congress, can be characterized as "the government" then the range of actions "the government" wants to take in many places worldwide is exponentially larger than previously realized.
One point of this review of the past is that a lot of the news in the media now is a story reported once and then picked up and re-reported by many without a great amount of due diligence. The media could have spun this story that a minority group in the Mongolian parliament made an election-year maneuver to gain attention by suggesting the government's stake in Oyu Tolgoi was raised. In fact, that was what happened.
Instead, the media's voice was that this was a "government" action, which drove the stock price of Ivanhoe Mines down until October 6, 2011, when further announcements made further misrepresentations of the story impossible. On October 6, 2011, the government, Rio Tinto, and Ivanhoe Mines issued a joint statement reaffirming the agreement already in place. This time, it was not members of the government speaking, but was indeed "the government." And thus, the share price of Ivanhoe Mines recovered from its nadir.
The current precipitous drop in Ivanhoe Mines share price has been caused by another recent announcement. As I wrote previously in an article about gold mining investing in Mongolia in general that is titled "Why Ivanhoe, Rio Tinto Are So Keen On Mongolia":
On December 12, 2011, an arbitration ruling in a case between Ivanhoe Mines and Rio Tinto likely changed the trajectory of the two companies and the future of Oyu Tolgoi. A "poison pill" Ivanhoe had created to prevent Rio Tinto from taking over a majority and/or complete ownership of Ivanhoe was struck down. An agreement barring Rio Tinto, a 49% shareholder of Ivanhoe Mines, from making a hostile bid for Ivanhoe Mines will now expire January 18, 2012. Ivanhoe Mines has pointed out that some shareholder rights' provisions "remain in effect until scheduled expiry in April 2013" (Bloomberg; The Globe and Mail).
Rio Tinto's market cap is more than seven times greater than Ivanhoe Mines as of this writing (December 14, 2011, per Yahoo Finance Rio Tinto has a $90 billion market cap while Ivanhoe Mines has a $12 billion market cap). The bottom line is that the impact of Oyu Tolgoi's profits once operational would be far more significant for shareholders in the smaller Ivanhoe than in a company seven time as large.
Shareholders initial reaction has been to sell off Ivanhoe Mines shares in disappointment that that the company will likely be absorbed into the larger Rio Tinto, and that they will not be able to own Ivanhoe Mines through decades of Oyu Tolgoi's peak production years.
As Oliver Belfitt-Nash of Monet Capital, a Mongolian brokerage company, noted promptly in his news update to brokerage clients on December 13, 2011:
Rio's latest win against Ivanhoe marks an important step in consolidating Oyu Tolgoi's ownership. As Rio gains the upper hand, the international giant looks to be edging in on Ivanhoe to eventually take control of Mongolia's prize asset. For Mongolia, this may mean the opportunity to deal with one of the most experienced miners in the world - one that has trodden the political/social line well in the past and knows how to placate all parties involved.
As elections loom [national elections are in June 2012 in Mongolia] resource nationalism bubbles in the local psyche, and mining become the main topic of political discourse, we believe a stronger international partner will help to smooth any further hitches in the plan. The aggressive young Ivanhoe may well give way to a more diplomatic Rio and for the better, in our opinion.
Subsequent to the ruling, Rio Tinto has said they will not necessarilybuy all of Ivanhoe's shares. This may have something to do with the shareholder's rights agreement of Ivanhoe Mines that does not expire until April 2013, or the fact that Ivanhoe Mines is still consider alegal response to the ruling, or it may be gamesmanship by Rio Tinto to avoid savvy arbitrage players pumping up the price of Ivanhoe Mines in the interim.
Mr. Belfitt-Nash updated his comments on December 14, 2011:
Against the expectations of investors, Rio have stated they will not be buying out Ivanhoe... The latest statement was clear enough to cause damage to Ivanhoe shareholders, but vague enough to have not made any promises, and we believe investor fear is the main cause of the drop in [Ivanhoe Mines share] price rather than a change in the true value of Ivanhoe... However, the most likely explanation is that Rio will in fact acquire Ivanhoe but at a price they deem fit. Rio have stated the company will acquire a majority and although they have 'no intention' of buying the rest of Ivanhoe, this may well change come January especially when the company 'reserves the right to change its intention in the future.' After all, the market price [of Ivanhoe] is now a lot more appealing.
Rio Tinto will clearly purchase Ivanhoe Mines shares sooner or later. It is unclear where the advantage to shareholders is of selling now compared to waiting to discover how much Rio Tinto is willing to pay for the shares of Ivanhoe Mines later. However, investors can be emotional and in Ivanhoe Mines first full day of trading after the announcement of the arbitration settlement, Ivanhoe Mines share price was down 22.66%.
Share price aside, the success of Oyu Tolgoi remains certain. The resource is massive. However, the ability to invest in this project in a way that shareholder value will fully appreciate the benefits of this project is narrowing. Other mining companies may provide better leverage to appreciate the gains that will be felt in Mongolia's mining boom.
The facts are, after what transpired in September with Ivanhoe Mines' share price, investors in Ivanhoe Mines have been programmed to be skittish on just about any news. The impact of Oyu Tolgoi's profits on Ivanhoe Mines are still vastly bigger than the impact that those profits will have to Rio Tinto. If Rio Tinto does not buy out shareholders, shareholders still own the same asset they did on December 12, 2011. If Rio Tinto does buy out Ivanhoe Mines, than one would assume they will pay a premium for the purchase.
Yet, in the comparison below (chart 6), Ivanhoe Mines underperforms Rio Tinto every time there is a bout of news about the two companies, and otherwise outperforms Rio Tinto. The net result is the two companies are tracking each other's performance.
Here is that chart and a few other comparisons to consider (all sourced from Yahoo! Finance)
1) Ivanhoe Mines vs. Spider Gold Trust ETF (GLD) that tracks the commodity price of gold, compared over the last six months. Is Ivanhoe going down because the price of gold is going down? No.
(Click charts to expand)
2) Ivanhoe Mines vs. the iPath Copper ETN (JJC) that tracks the commodity price of copper, compared over the last six months. Is Ivanhoe Mines going down because the price of copper is going down? Perhaps partially, but not totally. Ivanhoe Mines underperforms the index by mid-September, outperforms during the no-news period until December, and then swoons to underperforming on news once again in December
3) Ivanhoe Mines vs. two different exchange traded copper funds, First Trust Global Copper (CU) and Global X Copper Miners ETF (COPX), compared over the last six months. Same story as above. Ivanhoe Mines underperforms the indexes going into early October, outperforms during the no-news period until December, and then swoons to underperforming on news once again in December.
4) Ivanhoe Mines vs. Freeport-McMoran (FCX) for the last six months. Freeport McMoran is a company with a $35 billion market cap in the mining and exploration sector. It is the #3 holding of CU (6.08%) and the #6 holding of COPX (4.88%)
5) Ivanhoe Mines vs. Southern Copper Corporation (SCCO) for the last six months. Southern Copper is an exploration and mining company with a $25 billion market cap in the mining and exploration sector. It is the #1 holding of CU (6.56%) and the #3 holding of COPX (5.22%)
6) Ivanhoe Mines vs. Rio Tinto (RIO) for the last six months. Has the market already synchronized the share price of Ivanhoe Mines and Rio Tinto as if their eventually being the same company is a given?
Perhaps Ivanhoe Mines' 52-week low closing price of $12.88 on October 3, 2011, makes sense when you look at the comparisons with the share price of Freeport-McMoran and Rio Tinto, for example. Yet, on all six charts, share of Ivanhoe Mines went down more than any of the comparables in late September and early October. This was news driven.
Trading in a news driven stock, when news comes out, it seems understandable that shareholders will react negatively. Prior experience has informed them that the news is not kind to Ivanhoe Mines' share price. However, its asset is good and it has a willing buyer in place. Investors should consider how other shareholders will react to the news, and should also consider that both the news and reactions to it may not always accurately reflect the company's prospects.
Disclosure: I am long IVN, GLD.
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Why Ivanhoe, Rio Tinto Are So Keen On Mongolia
December 14 (Jon Springer, Seeking Alpha) --
It has been said that the best place to look for a new mine is next to an existing mine. -- Harris Kupperman, Mining Services Primer, Nov. 10, 2009.
If the premise in that quote is true, there is more gold to find in Mongolia. As discussed previously in Bob Johnson's article on Oyu Tolgoi and my article on Copper Investing In Mongolia, the joint venture of Ivanhoe Mines (IVN), Rio Tinto (RIO) and the Mongolian government at Oyu Tolgoi is a massive project.
The November 2011 corporate presentation by Ivanhoe Mines offers insights into the size of this project.
Average annual output of the mine at Oyu Tolgoi during the first 10 years:
· 1.2 billion pounds of copper
· 650,000 ounces of gold
· 3 million ounces of silver
Peak annual production beginning in year 7:
· 1.7 billion pounds of copper
· 1.1 million ounce of gold
· 5.1 million ounces of silver
The total measured, indicated, and inferred resources is significant.
Estimates on the lifetime of the Oyu Tolgoi mine range in a wide ballpark from 40 years to 120 years. There is a lot of mining to be done. The below image, in the middle,shows the Eiffel Tower, the Oriental Pearl Tower, and the CN Tower, drawn to scale with the rest of the images.
It is this mining scale that makes some believe Oyu Tolgoi will boost Mongolia's economic growth and GDP by 25% or more when it goes into production. Oyu Tolgoi is scheduled to go into production in the 2nd half of 2012.
Following the premise from the quote at the start of this article, what prospects are there near the giant existing mine for investors?
First to follow the premise of that quote is Ivanhoe. Ivanhoe additionally has a 50/50 joint venture with BHP Billiton (BHP) 23 kilometers away (pictured above) that they believe will show the mineralized system extends beyond the Oyu Tolgoi property.
Companies Covered And Not Covered By This Article
Seeking Alpha is dedicated to stocks that can be traded in the U.S. Thus, companies traded outside the U.S. will be briefly mentioned here as not covered by this article so that there is a perspective on the broader picture of gold mining in Mongolia.
I have previously covered two stocks at length that could feature in this article as well. Copper-gold companies Kincora Copper (BZDLF.PK) and Voyager Resources (VOYRF.PK) both have properties near Oyu Tolgoi and were discussed at length in my previous article on Copper Investing in Mongolia.
Undur Tolgoi Minerals is so newly formed that its UTM stock ticker does not appear yet on Yahoo Finance as of this December 14, 2011, writing. The company is currently only trading in Canada, has a market cap of about $12 million (as of the private placement's closing on December 8, 2011), and it seems 95% of the company's outstanding shares will be in a 4-month lock up period that concludes March 8, 2012.
James Passin of the Firebird Funds, a hedge fund group with a significant footprint in Mongolia, is chairman of Undur Tolgoi Minerals. Undur Tolgoi's corporate presentation shows a 100% interest in a copper-gold-molybdenum prospect on "9,620 hectares of property located approximately 100 kms from Ivanhoe's 'Oyu Tolgoi' copper and gold mine." (The March 2011 NI-43 101 report on the company's property isavailable; Mr. Passin, and his understanding of investing in Mongolia, can be met via video.)
London traded Central Asia Metals has "a JORC classified resource estimate of 540koz" of gold at its Ereen project in Mongolia (near Boroo which is discussed below), a copper-gold project at Alag Bayan 100 km away from Oyu Tolgoi, as well as molybdenum project in Mongolia and a copper project in Kazakhstan.
Hong Kong traded Mongolia Investment Group and North Asia Resourcesboth have some gold interests in Mongolia. They are both diversified, and gold is not their particular focus.
Diversified Miners With Interests In Gold In Mongolia
Boroo Is Centerra, But Centerra Is Not Just Boroo
Centerra Gold (CAGDF.PK) has mining operations in Kyrgyzstan and Mongolia, along with multiple international prospects. Its subsidiary in Mongolia is named Boroo Gold. The company has a recent market cap of $5.25 billion. Centerra Gold was previously part of Cameco, a company discussed in my article on uranium in Mongolia, and was spun off from Cameco in 2004.
As local Mongolian brokerage ResCap details in its January 2011 Mongolia 101 report:
Boroo started production in 2003, and in 2003 - 2009 the company extracted around 1.26 million oz of gold... [its] reserves are almost depleted by now... The exploration license for Gatsuurt deposit with proven reserves of 1 million oz of gold also belongs to Centerra Gold.
Boroo Gold's (Centerra's) main gold deposit in Mongolia was at the eponymous Boroo deposit. Its past production is part of why gold revenues are in contention for 3rd place in revenues for the Mongolian economy among natural resources as detailed below.
In the clip from Centerra's May 2011 presentation below, one can easily see that the majority of the company's production and revenues are coming from its Kyrgyzstan Kumtor project. The mine at Boroo has actually been closed. However, the mill at Boroo has stockpiles from the Boroo project the company estimates will last two to three years.
In case the chart below is unclear on the importance of Kyrgyzstan to Centerra, a November 2011 article by Greg Klein profiling the company quotes Centerra CEO Steve Lang:
We're probably 95% of the gold production in [Kyrgyzstan] and about 45% to 50% of the country's industrial output.
In the same article by Steve Klein, a couple of other projects in Mongolia are detailed. The aforementioned open-pit Gatsuurt mine is 55 km from the company's mill at the Boroo site. The site is ready to go, structures are in place, transportation trucks and the road from mine to mill are prepared to mine an estimated 1.2 million ounces of gold. However, there is "a 2009 law banning all mining in river basins and forests" that is problematic for this mine. Centerra is clearly trying to work this out with the government on all fronts as a September 2011 article in the UB Postcites, "Boroo Gold is an example of a nature friendly mining company."
Matthew Hill writes that Centerra's goal with production from Gatsuurt is to get its production level up to 150,000 to 200,000 ounces of gold per year. Mr. Hill also notes that the ban on mining in river basins and forests has faced opposition, and led to companies affected threatening to sue the government. Problematically, the government does not have funds to settle claims with all miners affected by the law. Prime Minister Batbold has "formed a parliamentary committee" to revise the law. However, with national elections in Mongolia coming in June 2012, a revision of this environmental law affecting miners has gone onto the back burner and may not be revised until after elections, if it is revised at all.
Third quarter 2011 earning were up 396% year-over-year for Centerra Gold. While the company has promising prospects at Altan Tasgaan Ovoo and Sumber Altai in Mongolia that are detailed in the Steve Klein article, as well as a broad vision for expansion in Asia detailed above, for the time being Centerra is clearly a company whose principal profits are in Kyrgyzstan.
Entree Gold
Entree Gold (EGI) has projects in Australia, the United States, Peru and Mongolia. Entree's resource projects are primarily focused on copper and gold, but they also have some projects with molybdenum, coal, uranium, and iron. Rio Tinto owns 12% of the company and Ivanhoe Mines owns 11% (as of November 2011). Recent market cap is $142 million.
Notably Entree Gold recently had a private placement offering of 10 million shares at $1.25 per share. It was announced on November 30, 2011, that Rio Tinto exercised "its pre-emptive rights in full" and purchased all of the shares offered plus roughly another "1.48 million shares... Total gross proceeds from the offering [were] about $14.35 million."
Despite a highly diversified portfolio, the company's current presentation highlights their proven resources at two projects in Mongolia and one in Nevada in their current corporate presentation.
Thus, returning to the theme that the best place for a new mine is near an old one, Entree's Hugo North Extension and Hergua projects are both joint ventures between Entree and Oyu Tolgoi LLC (the Ivanhoe-Rio Tinto-Mongolia government partnership). Oyu Tolgoi LLC own 80% of the project and Entree owns 20%. In the above section about Oyu Tolgoi, Hugo Dummet is Phase 2 work at Oyu Tolgoi while Heruga is a "future phase."
While Entree has access to good resources and a share in Oyu Tolgoi's development, its interests in Oyu Tolgoi are on the outer edges of the mine. One should consider the below timeline from two standpoints:
a) as an investor in Entree Gold, it shows production is not a short-term prospect;
b) as an investor in Mongolia, it shows there is a long tail to the production coming on-line at Oyu Tolgoi, as the timeline is 60 years long.
Importantly, Entree Gold also has a parcel of land called Shivee West in which they own a 100% interest right next to Oyu Tolgoi. Entree Gold is still in the exploration phase of this property, but notably attained a mining license for the property in 2009 (mining license are granted for 30 years and can be extended twice for 20 years per each extension).
Entree Gold's website offers plenty of data to research. This includes the 269 page March 2010 NI 43-101 report which is referred to on the site as the most up-to-date resource assessment on Shivee West, as well as having updated inferred mineral resource estimates for Heruga. There is also the 565 page June 2010 NI 43-101 report with further information on development options for the Hugo North Extension and Hergua deposits.
Erdene Resource Development
Erdene Resource Development (ERDCF.PK), formed in 2002, has a recent market cap of $34 million and has an array of projects (market cap per Yahoo Finance as of December 9, 2011).
In Mongolia:
· cited prospects in its extensive Mongolia exploration include Altan Nar Epithermal Polymetallic-Gold and Nomin Tal Copper-Gold (more on Altan Nar's gold/silver/lead zinc deposit below).
· a copper-molybdenum project in Mongolia at Zuun Mod, 100 km from Ceke in China.
· a copper-silver property near Zuun Mod - 2.2 kilometers northwest - called Khuvyn Khar.
· royalty interest in Xanadu Mines (XAM.AX) Galshar coal project.
· other potential coal projects in Mongolia "100% subject to alliance agreement with Xstrata," an agreement that dates back to 2006.
Outside of Mongolia:
· a 25% interest in the Donkin Coal project in Canada with joint venture 75% interest partner Xstrata (XSRAY.PK).
· a granite royalty and kaolin project in Georgia, USA, the latter of which is a majority 60% interest in Advanced Primary Minerals (APMCF.PK).
At the Mongolia Investment Summit on October 26, 2011 in Hong Kong, Erdene Resource's presentation included 15 slides on their Altan Nar prospect out of a total of 36 slides - nearly half the presentation was about Altan Nar. Recent results from Altan Nar had only arrived on the news wire only on October 12, 2011.
As you can see below, Altan Nar is near Zuun Mod. Furthermore, Zuun Mod and Altan Nar are about 500 to 550 kilometers west of Oyu Tolgoi. A nearby copper-gold project by Voyager Resources (VOYRF.PK) is also noted in the second map below.
Erdene Resource's two page fact sheet discusses all its projects including molybdenum, a resource used in high-strength steel. The fact sheet notes there is an "anticipated deficit" in global molybdenum resources available by 2014. The 64-page NI 43-101 on the Zuun Mod project from June 2011 is available on SEDAR. A summary that provides a good picture of Erdene's positions prior to the Altan Nar discovery in June 2011 is on ResCap's brokerage site.
In an interesting move, on November 16, 2011, after the discovery of gold and other resources at Altan Nar, Erdene Resoure's CEO Peter Akerley announced:
As our company continues to advance our activities in Mongolia, now enhanced by our new gold discovery, we are very pleased to provide Mongolian investors an opportunity to invest in the company. We believe it is of strategic value to the company to increase our Mongolian shareholder base and are pleased to do so through a Mongolian firm reflecting the increasing maturity of the mining investment sector in the country as one of the many benefits of the rapidly growing mining industry.
The private placement was handled by Mongolian International Capital Corporation (also known as MICC). On December 6, 2011, the companyannounced they completed the private placement successfully raising a shade more than the $2 million sought at 40 cents per share.
Micro-Caps
Efforts were made over a period of two weeks to contact several micro-cap stocks in the gold mining sector in Mongolia. These stocks have low market cap valuations under $20 million. Only one responded. Others will be included in future articles when there is sufficient data available.
Meritus Minerals
Meritus Minerals (MERMF.PK) has a recent market cap of $2.25 million. They are currently conducting a non-brokered private placement to raise capital. An e-mail from Managing Director Terry Bates stated that,
Subject to the current financing being successfully completed we will be carrying out diamond drilling on new untested targets on the property over the next few months. We are also in the process of preparing all the reports and information needed to support an application for resource registration and mining license application which will be lodged next year.
Meritus Minerals flagship property is the Gutain Davaa gold project in Mongolia. The company owns a 100% interest in 3,928 hectares. The prospect is about 300 kilometers east of Centerra's Boroo and Gatsuurt deposits.
Mr. Bates acknowledges that there are not any analyst reports on the company. Information on the company's drill results to-date are available both in the corporate presentation and on the company's web page for projects under way. Investing in this company is speculative at this time. There is far more data on the company's website, and it is requisite to review all that data personally prior to investing.
Newsworthy Notes On Ivanhoe Mines And Rio Tinto As This Article Goes To Press
On December 12, 2011, an arbitration ruling in a case between Ivanhoe Mines and Rio Tinto likely changed the trajectory of the two companies and the future of Oyu Tolgoi. A "poison pill" Ivanhoe had created to prevent Rio Tinto from taking over a majority and/or complete ownership of Ivanhoe was struck down. An agreement barring Rio Tinto, a 49% shareholder of Ivanhoe Mines, from making a hostile bid for Ivanhoe Mines will now expire January 18, 2012. Ivanhoe Mines has pointed out that some shareholder rights' provisions "remain in effect until scheduled expiry in April 2013" (Bloomberg; The Globe and Mail).
Rio Tinto's market cap is more than seven times greater than Ivanhoe Mines as of this writing (December 14, 2011, per Yahoo Finance Rio Tinto has a $90 billion market cap while Ivanhoe Mines has a $12 billion market cap). The bottom line is that the impact of Oyu Tolgoi's profits once operational would be far more significant for shareholders in the smaller Ivanhoe than in a company seven time as large.
Shareholders initial reaction has been to sell off Ivanhoe Mines shares in disappointment that that the company will likely be absorbed into the larger Rio Tinto, and that they will not be able to own Ivanhoe Mines through decades of Oyu Tolgoi's peak production years.
As Oliver Belfitt-Nash of Monet Capital, a Mongolian brokerage company, noted promptly in his news update to brokerage clients on December 13, 2011:
Rio's latest win against Ivanhoe marks an important step in consolidating Oyu Tolgoi's ownership. As Rio gains the upper hand, the international giant looks to be edging in on Ivanhoe to eventually take control of Mongolia's prize asset. For Mongolia, this may mean the opportunity to deal with one of the most experience miners in the world - one that has trodden the political/social line well in the past and knows how to placate all parties involved.
As elections loom [national elections are in June 2012 in Mongolia] resource nationalism bubbles in the local psyche, and mining become the main topic of political discourse, we believe a stronger international partner will help to smooth any further hitches in the plan. The aggressive young Ivanhoe may well give way to a more diplomatic Rio and for the better, in our opinion.
Subsequent to the ruling, Rio Tinto has said they will not necessarily buy all of Ivanhoe's shares. This may have something to do with the shareholder's rights agreement of Ivanhoe Mines that does not expire until April 2013, or the fact that Ivanhoe Mines is still consider a legal response to the ruling, or it may be gamesmanship by Rio Tinto to avoid savvy arbitrage players pumping up the price of Ivanhoe Mines in the interim.
Mr. Belfitt-Nash updated his comments on December 14, 2011:
Against the expectations of investors, Rio have stated they will not be buying out Ivanhoe... The latest statement was clear enough to cause damage to Ivanhoe shareholders, but vague enough to have not made any promises, and we believe investor fear is the main cause of the drop in [Ivanhoe Mines share] price rather than a change in the true value of Ivanhoe... However, the most likely explanation is that Rio will in fact acquire Ivanhoe but at a price they deem fit. Rio have stated the company will acquire a majority and although they have 'no intention' of buying the rest of Ivanhoe, this may well change come January especially when the company 'reserves the right to change its intention in the future.' After all, the market price [of Ivanhoe] is now a lot more appealing.
Rio Tinto will clearly purchase Ivanhoe Mines shares sooner or later. It is unclear where the advantage to shareholders is of selling now compared to waiting to discover how much Rio Tinto is willing to pay for the shares of Ivanhoe Mines later. However, investors can be emotional and in Ivanhoe Mines first full day of trading after the announcement of the arbitration settlement, Ivanhoe Mines share price was down 22.66%.
Share price aside, the success of Oyu Tolgoi remains certain. The resource is massive. However, the ability to invest in this project in a way that shareholder value will fully appreciate the benefits of this project is narrowing. Other mining companies may provide better leverage to appreciate the gains that will be felt in Mongolia's mining boom.
Conclusions And Considerations
Copper and coal are clearly Mongolia's two primary exported resources. However, one can see within the data that as the amount of natural resources discovered and mined rises, particularly with copper, there is more and more gold being found in Mongolia as well.
Mongolia's mining frontier is still being explored. There are numerous small mining licenses near the nine principal gold mining properties in Mongolia detailed on Centerra Gold's map of "Significant Potential In Asia" at the end of the Centerra section above.
For those trying to understand the geology and geography better, you will notice near Centerra's property in the north of the country is where other gold deposits such as Ereen are found, By the same notion, to the east and west of Oyu Tolgoi in the south of the country, there are many other copper-gold and polymetallic properties being found. This is a loose guide and not a binding truth, as it should be noted the Erdenet Mining Corporation jointly owned by the governments of Mongolia and Russia is a massive copper deposit not too far west of Centerra's Boroo. The guiding principal of this article that the best place to find a mine is near an existing mine is proving true in Mongolia. Properties near the mining sites of Boroo and Oyu Tolgoi continue to prove this theory.
There are many moving parts in Mongolia's natural resources mining boom. Gold will be one part of that boom in the same fashion that for most companies in this article gold will be one of many resources they profit from.
Disclosures: I am long Ivanhoe Mines (IVN), Mongolia Growth Group (MNGGF.PK) and Origo Partners (OPP.L). Origo Partners is a 45% shareholder of Kincora Copper (BZDLF.PK) and also owns a portion of the brokerage ResCap, data from which I cited in this article. Harris Kupperman, who is quoted at the top of this article is CEO of Mongolia Growth Group (MNGGF.PK). I am participating in a private placement with Mongolia Growth Group which closes on December 23, 2011. I met Mr. Belfitt-Nash and management of Monet Capital in September 2011. I do not have a brokerage account with Monet Capital or ResCap at this time, although I may open an account with them in the future (albeit not in the next 72 hours). I have no positions in any other stock mentioned in this article and no intention to purchase or sell any holdings mentioned in this article or these disclosures in the next 72 hours, nor did I make any such purchases or sales in the 72 hours prior to publication.
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 | | 4,159.20 | 19.40 | 0.47% | 4,141.80 | 4,166.10 | 4,139.80 | - | 16-Dec | | |
Nikkei 225 | NKY:IND | | 8,401.72 | 24.35 | 0.29% | 8,416.21 | 8,433.18 | 8,390.98 | - | 16-Dec | | |
Hang Seng | HSI:IND | | 18,285.39 | 258.55 | 1.43% | 18,025.60 | 18,390.41 | 18,025.60 | - | 16-Dec | | |
FTSE 100 | UKX:IND | | 5,387.34 | -13.51 | -0.25% | 5,400.85 | 5,452.65 | 5,387.34 | - | 16-Dec | | |
TSX Composite | SPTSX:IND | | 11,635.38 | 130.96 | 1.14% | 11,520.72 | 11,667.32 | 11,508.17 | - | 16-Dec | | |
S&P 500 | SPX:IND | | 1,219.66 | 3.91 | 0.32% | 1,216.09 | 1,231.04 | 1,215.20 | - | 16-Dec | | |
ASX | Aspire Mining | AKM:AU | A$ | 0.31 | 0.005 | 1.64% | 0.31 | 0.315 | 0.295 | 735,148 | 16-Dec | -35.42% | -38.61% |
Blina Minerals | BDI:AU | A$ | 0.005 | -0.001 | -16.67% | 0.005 | 0.005 | 0.005 | 207,069 | 16-Dec | -66.67% | -61.54% |
Draig Resources | DRG:AU | A$ | 0.042 | 0 | 0.00% | 0.041 | 0.042 | 0.04 | 0 | 25-Nov | 50.00% | 82.61% |
FeOre | FEO:AU | A$ | 0.29 | -0.01 | -3.33% | 0.34 | 0.34 | 0.28 | 176,000 | 16-Dec | | |
General Mining | GMM:AU | A$ | 0.046 | 0 | 0.00% | 0.046 | 0.046 | 0.046 | 71,095 | 16-Dec | -61.67% | -64.62% |
Guildford Coal | GUF:AU | A$ | 0.725 | 0.005 | 0.69% | 0.73 | 0.73 | 0.72 | 2,861,686 | 16-Dec | -0.68% | 2.11% |
Haranga Resources | HAR:AU | A$ | 0.32 | 0.035 | 12.28% | 0.29 | 0.32 | 0.29 | 315,711 | 16-Dec | -50.00% | -40.74% |
Hunnu Coal | HUN:AU | A$ | 1.795 | 0 | 0.00% | 1.78 | 1.795 | 1.78 | 0 | 16-Nov | 34.46% | 54.08% |
Modun Resources | MOU:AU | A$ | 0.041 | -0.004 | -8.89% | 0.044 | 0.044 | 0.04 | 6,585,445 | 16-Dec | 310.00% | 310.00% |
Mongolian Res Corp | MUB:AU | A$ | 0.14 | 0 | 0.00% | 0.14 | 0.14 | 0.14 | 0 | 13-Dec | | -61.11% |
Robe Australia | ROB:AU | A$ | 0.019 | 0 | 0.00% | 0.019 | 0.019 | 0.019 | 614,430 | 16-Dec | 103.21% | |
Voyager Resources | VOR:AU | A$ | 0.073 | 0.005 | 7.35% | 0.075 | 0.077 | 0.071 | 13,854,244 | 16-Dec | 36.13% | 98.68% |
Xanadu Mines | XAM:AU | A$ | 0.35 | -0.01 | -2.78% | 0.355 | 0.355 | 0.35 | 216,829 | 16-Dec | -38.05% | |
MSE A Board | Aduunchuluun | ADL:MO | MNT | 5,400 | -600 | -10.00% | 6,000 | 6,000 | 5,400 | 529 | 16-Dec | -32.50% | -22.86% |
APU | APU:MO | MNT | 3,298 | 43 | 1.32% | 3,300 | 3,300 | 3,250 | 1,278 | 16-Dec | 65.73% | 77.79% |
Atar Urguu | ATR:MO | MNT | 38,000 | 0 | 0.00% | 38,000 | 38,000 | 38,000 | 0 | 2-Dec | 111.11% | 106.52% |
Baganuur | BAN:MO | MNT | 9,800 | -1200 | -10.91% | 10,002 | 10,302 | 9,800 | 628 | 16-Dec | -6.67% | -7.55% |
Mogoin Gol | BDL:MO | MNT | 28,751 | 0 | 0.00% | 25,010 | 28,751 | 25,010 | 0 | 15-Dec | 143.65% | 177.81% |
BDSec | BDS:MO | MNT | 3,700 | 0 | 0.00% | 3,700 | 3,700 | 3,700 | 230 | 16-Dec | 48.00% | 48.00% |
Bayangol Hotel | BNG:MO | MNT | 35,000 | 0 | 0.00% | 36,000 | 36,000 | 35,000 | 0 | 13-Dec | 46.44% | 45.83% |
Bayanteeg | BTG:MO | MNT | 23,000 | 0 | 0.00% | 23,000 | 23,000 | 23,000 | 0 | 14-Dec | | 206.63% |
UB BUK | BUK:MO | MNT | 33,000 | 0 | 0.00% | 33,000 | 33,000 | 33,000 | 0 | 15-Dec | 626.07% | |
Eermel | EER:MO | MNT | 2,800 | 0 | 0.00% | 2,800 | 2,801 | 2,800 | 222 | 16-Dec | -2.61% | 12.00% |
Gobi | GOV:MO | MNT | 4,999 | 244 | 5.13% | 4,900 | 4,999 | 4,900 | 1,423 | 16-Dec | -10.73% | -13.05% |
Gutal | GTL:MO | MNT | 2,500 | 220 | 9.65% | 2,500 | 2,500 | 2,500 | 20 | 16-Dec | | 233.33% |
Hi B Oil | HBO:MO | MNT | 200 | 0 | 0.00% | 199 | 200 | 199 | 0 | 14-Dec | 11.11% | 17.65% |
Khukh Gan | HGN:MO | MNT | 193 | -5 | -2.53% | 195 | 195 | 193 | 1,380 | 16-Dec | 3.21% | 2.12% |
Hermes Centre | HRM:MO | MNT | 57 | 0 | 0.00% | 56 | 57 | 56 | 1,920 | 16-Dec | 5.56% | 5.56% |
Jenko Tour Bureau | JTB:MO | MNT | 94 | 0 | 0.00% | 92 | 94 | 91 | 36,142 | 16-Dec | 0.00% | 5.62% |
Telecom Mongolia | MCH:MO | MNT | 2,700 | 0 | 0.00% | 2,700 | 2,700 | 2,700 | 0 | 13-Dec | -22.86% | -25.54% |
Mongolia Dev Res | MDR:MO | MNT | 1,100 | 0 | 0.00% | 1,100 | 1,100 | 1,100 | 400 | 16-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% | |
Hotel Mongolia | MSH:MO | MNT | 799 | 0 | 0.00% | 798 | 799 | 798 | 0 | 15-Dec | | 45.27% |
Darkhan Nekhii | NEH:MO | MNT | 6,999 | 0 | 0.00% | 6,400 | 6,999 | 6,400 | 0 | 14-Dec | 42.84% | 34.62% |
Nak Tulsh | NKT:MO | MNT | 195 | 0 | 0.00% | 195 | 195 | 195 | 50 | 16-Dec | -40.00% | -40.91% |
Olloo | OLL:MO | MNT | 250 | 0 | 0.00% | 242 | 250 | 242 | 74,724 | 16-Dec | 66.67% | 78.57% |
Remikon | RMC:MO | MNT | 170 | -14 | -7.61% | 184 | 184 | 170 | 39,116 | 16-Dec | 136.11% | 139.44% |
Sharyn Gol | SHG:MO | MNT | 11,151 | -249 | -2.18% | 11,121 | 11,400 | 11,121 | 958 | 16-Dec | 6.20% | 8.26% |
Shivee Ovoo | SHV:MO | MNT | 13,001 | -999 | -7.14% | 13,500 | 13,500 | 13,001 | 20 | 16-Dec | 0.01% | 1.57% |
Sor | SOR:MO | MNT | 4,368 | 238 | 5.76% | 4,368 | 4,370 | 4,368 | 71 | 16-Dec | 482.40% | |
Suu | SUU:MO | MNT | 65,000 | 0 | 0.00% | 65,500 | 65,500 | 65,000 | 0 | 6-Dec | 209.72% | |
Tav | TAV:MO | MNT | 32,500 | 0 | 0.00% | 32,500 | 32,500 | 32,500 | 0 | 14-Dec | | |
Talkh Chikher | TCK:MO | MNT | 10,300 | 0 | 0.00% | 10,300 | 10,300 | 10,300 | 0 | 13-Dec | 178.38% | 204.73% |
Tavantolgoi | TTL:MO | MNT | 8,800 | -199 | -2.21% | 8,999 | 8,999 | 8,800 | 902 | 16-Dec | 52.78% | 66.04% |
State Dept Store | UID:MO | MNT | 483 | 1 | 0.21% | 490 | 500 | 480 | 1,483 | 16-Dec | 12.33% | 16.39% |
Ulaanbaatar Hotel | ULN:MO | MNT | 45,999 | 0 | 0.00% | 46,000 | 46,000 | 45,999 | 0 | 13-Dec | 67.27% | 73.58% |
Mongol Savkhi | UYN:MO | MNT | 1,955 | 0 | 0.00% | 2,300 | 2,300 | 1,955 | 0 | 15-Dec | 255.45% | 237.07% |
Zoos Goyol | ZOO:MO | MNT | 830 | 30 | 3.75% | 850 | 850 | 800 | 1,207 | 16-Dec | 5.06% | 0.00% |
HKEx | Solartech Int'l | 1166:HK | HKD | 0.195 | 0.006 | 3.17% | 0.189 | 0.195 | 0.185 | 8,083,256 | 16-Dec | -79.69% | -79.69% |
Winsway | 1733:HK | HKD | 2.37 | 0.04 | 1.72% | 2.31 | 2.42 | 2.31 | 10,379,700 | 16-Dec | -47.26% | -47.04% |
SouthGobi Resources | 1878:HK | HKD | 45 | -3.75 | -7.69% | 47.5 | 47.5 | 44 | 441,047 | 16-Dec | -54.77% | -52.18% |
China Gold | 2099:HK | HKD | 18.76 | 0.76 | 4.22% | 17.9 | 18.94 | 17.9 | 79,400 | 16-Dec | -55.33% | -54.63% |
CNNC Int'l | 2302:HK | HKD | 2.19 | -0.04 | -1.79% | 2.2 | 2.27 | 2.19 | 658,000 | 16-Dec | -74.83% | -75.91% |
Real Gold Mining | 246:HK | HKD | 8.81 | 0 | 0.00% | 8.81 | 8.81 | 8.81 | 0 | 16-Dec | -34.28% | -35.79% |
Mongolia Energy | 276:HK | HKD | 0.75 | 0.03 | 4.17% | 0.72 | 0.76 | 0.72 | 9,122,500 | 16-Dec | -67.67% | -68.35% |
Zijin Mining | 2899:HK | HKD | 3.02 | 0.01 | 0.33% | 2.93 | 3.08 | 2.93 | 43,566,449 | 16-Dec | -35.98% | -34.99% |
Mongolia Inv Group | 402:HK | HKD | 0.049 | 0.001 | 2.08% | 0.047 | 0.049 | 0.047 | 5,566,000 | 16-Dec | -66.89% | -58.82% |
North Asia Resources | 61:HK | HKD | 0.24 | -0.015 | -5.88% | 0.24 | 0.241 | 0.24 | 3,155,000 | 16-Dec | -73.63% | -76.92% |
China Daye Non-Fer. | 661:HK | HKD | 0.425 | -0.01 | -2.30% | 0.435 | 0.44 | 0.42 | 2,475,160 | 16-Dec | -24.11% | -27.97% |
Bestway Int'l | 718:HK | HKD | 0.076 | 0.008 | 11.76% | 0.061 | 0.079 | 0.061 | 355,000 | 16-Dec | -46.10% | -43.70% |
Asia Coal | 835:HK | HKD | 0.105 | 0 | 0.00% | 0.105 | 0.105 | 0.105 | 0 | 16-Dec | -58.00% | -56.79% |
Mongolian Mining | 975:HK | HKD | 5.96 | 0.04 | 0.68% | 6.22 | 6.35 | 5.75 | 4,769,000 | 16-Dec | -34.29% | -31.18% |
SGX | LionGold | LIGO:SP | SGD | 0.845 | 0 | 0.00% | 0.845 | 0.85 | 0.84 | 10,239,000 | 16-Dec | 15.75% | 30.00% |
LSE | Central Asia Metals | CAML:LN | GBp | 55.5 | 1.5 | 2.78% | 54 | 55.5 | 54 | 5,315 | 16-Dec | -38.50% | -36.75% |
Petro Matad | MATD:LN | GBp | 27 | -0.5 | -1.82% | 27.5 | 27.5 | 24.75 | 719,180 | 16-Dec | -77.87% | -69.83% |
Metal-Tech | MTT:LN | GBp | 4.625 | 0 | 0.00% | 4.625 | 4.625 | 4.625 | 0 | 16-Dec | -70.16% | -66.96% |
Origo Partners | OPP:LN | GBp | 35 | 0 | 0.00% | 35 | 35 | 35 | 15,000 | 16-Dec | -14.63% | -17.16% |
Tembusu | TIL:LN | GBp | 2.375 | 0 | 0.00% | 2.375 | 2.375 | 2.375 | 0 | 16-Dec | | 35.71% |
North America | Aberdeen Int'l | AAB:CN | CAD | 0.64 | 0 | 0.00% | 0.64 | 0.65 | 0.62 | 61,200 | 16-Dec | -20.85% | -7.48% |
Blue Zen Mem. Parks | BZM:CN | CAD | 0.05 | 0.01 | 25.00% | 0.05 | 0.05 | 0.05 | 22,000 | 16-Dec | | |
Centerra Gold | CG:CN | CAD | 18.84 | 0.34 | 1.84% | 19.38 | 19.56 | 18.61 | 908,265 | 16-Dec | -3.01% | -6.45% |
China Gold | CGG:CN | CAD | 2.05 | -0.37 | -15.29% | 2.37 | 2.53 | 1.96 | 2,155,358 | 16-Dec | -62.25% | -64.16% |
Denison Mines | DML:CN | CAD | 1.41 | 0.04 | 2.92% | 1.35 | 1.43 | 1.35 | 2,513,807 | 16-Dec | -58.65% | -56.48% |
Denison Mines | DNN:US | USD | 1.34 | 0.04 | 3.08% | 1.31 | 1.38 | 1.3 | 1,168,726 | 16-Dec | -60.82% | -59.39% |
East Asia Minerals | EAS:CN | CAD | 0.52 | 0.07 | 15.56% | 0.46 | 0.53 | 0.46 | 490,400 | 16-Dec | -93.53% | -93.14% |
Entree Gold | EGI:US | USD | 1.12 | 0.05 | 4.67% | 1.1 | 1.15 | 1.1 | 90,374 | 16-Dec | -67.63% | -64.89% |
Erdene Resource | ERD:CN | CAD | 0.32 | 0 | 0.00% | 0.32 | 0.33 | 0.315 | 268,279 | 16-Dec | -74.19% | -74.60% |
Entree Gold | ETG:CN | CAD | 1.17 | 0.05 | 4.46% | 1.15 | 1.19 | 1.15 | 217,329 | 16-Dec | -66.28% | -63.66% |
Fortress Minerals | FST:CN | CAD | 4.02 | 0 | 0.00% | 4.02 | 4.02 | 4.02 | 0 | 14-Dec | -7.59% | -5.41% |
Garrison Int'l | GAU:CN | CAD | 0.015 | 0 | 0.00% | 0.015 | 0.015 | 0.015 | 236,000 | 16-Dec | -83.33% | -75.00% |
Gulfside Minerals | GMG:CN | CAD | 0.07 | 0.005 | 7.69% | 0.07 | 0.07 | 0.07 | 100,000 | 16-Dec | -26.32% | -33.33% |
Green Tech Solutions | GTSO:US | USD | 0.05 | -0.003 | -5.66% | 0.053 | 0.053 | 0.037 | 383,449 | 16-Dec | | |
Ivanhoe Energy | IE:CN | CAD | 0.82 | -0.11 | -11.83% | 0.93 | 0.94 | 0.81 | 16,838,106 | 16-Dec | -69.85% | -67.97% |
Ivanhoe Energy | IVAN:US | USD | 0.79 | -0.08 | -9.20% | 0.878 | 0.91 | 0.79 | 2,288,613 | 16-Dec | -70.96% | -69.02% |
Ivanhoe Mines | IVN:CN | CAD | 17.37 | 0.67 | 4.01% | 17.1 | 17.75 | 16.82 | 1,956,971 | 16-Dec | -24.48% | -27.69% |
Ivanhoe Mines | IVN:US | USD | 16.79 | 0.64 | 3.96% | 16.52 | 17.09 | 16.25 | 5,136,682 | 16-Dec | -26.75% | -27.72% |
Kincora Copper | KCC:CN | CAD | 0.31 | 0 | 0.00% | 0.32 | 0.32 | 0.31 | 0 | 15-Dec | 14.81% | 106.67% |
Khan Resources | KRI:CN | CAD | 0.205 | -0.005 | -2.38% | 0.205 | 0.205 | 0.205 | 4,000 | 16-Dec | -57.29% | -56.84% |
Lucky Strike | LKY:CN | CAD | 0.35 | 0 | 0.00% | 0.35 | 0.35 | 0.35 | 0 | 15-Dec | -75.86% | -76.67% |
Lucky Strike | LKYSF:US | USD | 0.3677 | 0 | 0.00% | 0.3677 | 0.3677 | 0.3677 | 0 | 5-Dec | -74.08% | -73.59% |
Meritus Minerals | MER:CN | CAD | 0.025 | 0 | 0.00% | 0.025 | 0.025 | 0.025 | 39,000 | 16-Dec | -87.50% | -86.49% |
Manas Petroleum | MNAP:US | USD | 0.17 | 0.022 | 14.86% | 0.159 | 0.17 | 0.155 | 254,538 | 16-Dec | -71.67% | -67.31% |
Mongolia Growth Grp | MNGGF:US | USD | 4.0005 | -0.0055 | -0.14% | 4.0123 | 4.089 | 3.9935 | 13,600 | 16-Dec | | |
Blue Wolf Mongolia | MNGL:US | USD | 9.62 | 0.07 | 0.73% | 9.62 | 9.62 | 9.62 | 100 | 16-Dec | | |
Blue Wolf Mongolia | MNGLU:US | USD | 10.1 | 0 | 0.00% | 10.0101 | 10.1 | 10.0101 | 0 | 14-Dec | | |
Manas Petroleum | MNP:CN | CAD | 0.15 | 0 | 0.00% | 0.15 | 0.15 | 0.15 | 0 | 9-Dec | | |
Prophecy Coal | PCY:CN | CAD | 0.4 | -0.03 | -6.98% | 0.42 | 0.43 | 0.4 | 174,613 | 16-Dec | -53.74% | -50.78% |
Prophecy Coal | PRPCF:US | USD | 0.4025 | -0.0176 | -4.19% | 0.3985 | 0.4025 | 0.3985 | 19,000 | 16-Dec | -54.36% | -50.16% |
Puget Ventures | PVS:CN | CAD | 0.49 | 0 | 0.00% | | | | 0 | 17-Sep | | |
SouthGobi Resources | SGQ:CN | CAD | 6.62 | 0.31 | 4.91% | 6.21 | 6.81 | 6.05 | 759,729 | 16-Dec | -45.65% | -46.27% |
Solomon Resources | SRB:CN | CAD | 0.065 | -0.005 | -7.14% | 0.065 | 0.065 | 0.065 | 6,000 | 16-Dec | -69.77% | -62.86% |
Undur Tolgoi Minerals | UTM:CN | CAD | 0.2 | 0 | 0.00% | 0.23 | 0.23 | 0.2 | 6,000 | 16-Dec | | 3900.00% |
Mongolia Growth Grp | YAK:CN | CAD | 4.17 | 0.03 | 0.72% | 4.15 | 4.23 | 4.14 | 28,200 | 16-Dec | | |
---
"Mogi" Munkhdul Badral
Senior Client Manager / Executive Director
CPS International LLC
Telephone/Fax: +976-11-321326
Mobile: +976-99996779
Email: mogi@cpsinternational.mn
P Please consider the environment before printing a copy of this email.
Suite 1213 · Level 12 · 2 Sukhbaatar Square
Sukhbaatar District 8 · Ulaanbaatar 14200 · Mongolia
CPS International is a marketing arm of CPS Securities in Mongolia. CPS Securities is a Perth, Western Australia based AFSL License Holder. To trade ASX and international stocks, feel free to contact me at mogi@cpsinternational.mn or +976-99996779.
Disclosure/Disclaimer
CPS Securities, its directors and employees advise that they may hold securities, may have an interest in and/or earn brokerage and other benefits or advantages, either directly or indirectly from client transactions mentioned in correspondence from CPS International.
CPS International advise this email contains general information only and does not include advice. In preparing this communication, CPS International did not take into account the investment objectives, financial situation and particular needs of any person. As with any speculative mining company there are significant risks.
![Original reports of the action was reported accurately as, "A group of 20 members of Mongolia's parliament are petitioning for changes in the [Oyu Tolgoi] agreement to give the Mongolian government a larger share of the mine proceeds." This transitioned and began to be reported as "The government of Mongolia is seeking to boost its stake in one of the world's largest undeveloped copper-gold mines."](http://static.seekingalpha.com/uploads/2011/12/15/899162-132400986966228-Jon-Springer_origin.png){kind=link}
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