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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HAR trading +1.11 to 45.5c at time of writing
Haranga: Mineralised Intersections Continue at Two Further Iron Ore Targets at Selenge
March 29, Haranga Resources Limited (ASX:HAR) --
• Substantial iron mineralisation has been confirmed at both the Dund Bulag and Huiten Gol Prospects within the Selenge Iron Ore Project area in Mongolia.
• Extremely wide iron lodes have been identified at Dund Bulag. Results include:
Ø 60m at 20% Fe from 10m in hole DBDH-1
(incl 6m at 35% Fe from 63m)
Ø 85m at 22% Fe from 121m in hole DBDH-1
Ø 20m at 24% Fe from 0m in hole DBDH-3
Ø 54m at 22% Fe from 98m in hole DBDH-5
(incl 6m at 31% Fe from 145m)
• An Exploration Target* of 120 to 250Mt of iron ore has been estimated for Dund Bulag.
• High grade iron intersections have been discovered underneath surface outcrops at Huiten Gol, including:
Ø 6m at 40% Fe from 35m in hole HGDH-4
Ø 6m at 41% Fe from 33m in hole HGDH-5
Ø 3m at 55% Fe from 146m in hole HGDH-5
• Both prospects received minimal drilling in 2011 but will be targeted in the 2012 exploration program.
• A JORC Code compliant resource of 32.8Mt at 24.4% Fe was recently announced at the neighbouring Bayantsogt Deposit.
• ‘Magnetite skarn hills’ such as Bayantsogt and Dund Bulag have proven amenable to low strip ratio mining and simple, coarse beneficiation at nearby Eruu Gol, Mongolia’s largest iron ore export mine.
• Metallurgical testing on all mineralisation at Selenge is underway as part of the preliminary Scoping Study.
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UTM last traded March 26 at 20c
UTM Reappoints Rapello as Director and Ganbaatar Resigns
ULAANBAATAR, MONGOLIA--(Marketwire - March 28, 2012) - Undur Tolgoi Minerals Inc. ("UTM" or the "Company") (CNSX:UTM) announces that Saruul Ganbaatar has resigned as a director of the Company. Mr. Ganbaatar is stepping down to avoid potential work load conflicts during UTM's critical ramp up phase. The Company is pleased to announce that former director Paul Rapello has agreed to rejoin the Board effective immediately. The directors thank Mr Ganbaatar for his interest in UTM and wish him well in his other endeavours.
UTM is a mineral exploration company entirely focused on Mongolia, and which through its wholly owned subsidiaries, owns 100% of the "Undur Tolgoi" mineral exploration license. This license consists of 9,620 hectares of property situated 100 kilometers from the world-scale "Oyu Tolgoi" copper and gold mine. In addition, UTM's management is actively reviewing potential acquisitions and strategic industry alliances.
NAR: Annual Results 2011
March 28, North Asia Resources Holdings Limited (HK:61) --
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BUSINESS REVIEW
Overview
During the financial year end of 2011, the Group remained focus on advancing its operational plans for the iron and gold mining, coal trading and logistics businesses in Mongolia. Although delayed by extreme weather conditions and a nation-wide fuel shortage, the Group started its gold mining operations at the Khar Yamaat mine site during the second half of 2011 and successfully sold all of its gold extracts. Its iron ore mining operation at the Oyut Ovoo mine site also commenced dry production during the year. However, production was temporarily halted due to some technical problems and the Group dedicated its attention on resolving the issues with the equipment supplier and in carrying out further testing and fine tuning of the equipment. The newly invested logistics business commenced operation and has started generating some revenue.
During 2011, the Group did not acquire any new projects or assets in the mining and resources sectors although it was actively seeking for opportunities. A framework agreement entered into in July 2010, for the acquisition of two additional iron mines in Mongolia was terminated on 25 May 2011 based on mutual agreement.
Iron mining
The Group owns a 99.99% interest in Golden Pogada, which holds a mining right license for Oyut Oyoo Mine, a 12.01 sq-km iron ore mine located in south-central Mongolia.
As reported in our 2011 interim report, the Group faced some unexpected challenges in the form of adverse weather conditions, nation-wide diesel shortage and technical problems with its production equipment and machinery, during the first half of the year. The mining operation at Oyut Ovoo was halted pending resolution of the technical issues. During the second half of the year, management dedicated its attention on fixing the technical issues together with the equipment supplier.
There has also been a similar delay in the overall construction progress of the transit and loading dock near the Choir train station, and the rail extension line linking the docking facility to the main rail line of the Choir station (the “Choir Project”). Moreover, as a result of an increase in the required area of construction of the Choir Project and significant escalation of the prices of fuel, materials and labor, the construction of the Choir Project has been further delayed. The Group is in negotiations with China Railway Mongolia Investment LLC (“CRMI”), its logistics partner, regarding the estimated construction cost to complete the Choir Project.
The Group did not sell any iron ore products during the year as management’s efforts were devoted towards resolving the technical issues at the Oyut Ovoo Mine. Towards the end of the year, when the technical issues have almost been resolved pending further testing and fine tuning of the equipment, the Group consulted its logistics partner, CRMI and other sources, with regards to the sales logistics of its iron ore products. In February 2012, CRMI informed management that since the Group has not yet established the required scale of production at the Oyut Ovoo Mine and as a result of the delay in the completion of the Choir Project, the Group will have to bear the logistics related costs of transporting the iron ore products from the Oyut Ovoo Mine to Erenhot, the border town near to China. CRMI has provided the Group with an estimate of the transportation cost. Given that the iron production schedule has been prolonged (as reported in our 2010 Annual Report) and we have not established the required scale of production, we lack the bargaining power to attract other large-scale buyers who will be willing to absorb the transportation costs. Furthermore, based on recent information, it will be tough to find buyers which will absorb the costs of transportation given the logistics conditions in Mongolia.
The Group believes that CRMI is still the most ideal logistics partner to provide the required transportation services due to CRMI’s ability to access the railway systems in both Mongolia and China. The increase in transportation cost will affect the cost structure of operating the iron business and affect the overall profitability of the iron business going forward and as such, the management has made a decision to impair the carrying amount of the mining right as a result of the decrease in the fair value of the business enterprise value of the iron business as valued by Greater China.
Gold mining
Dadizi Yuan LLC* (“Dadizi Yuan”), a wholly-owned subsidiary of the Group, holds mining and exploration licenses in respect of two alluvial gold mines (the “KY Gold Mine”), located in Khar Yamaat Khongor and Sharin Gol Soum of Darkhan Uul aimag, Mongolia.
During the second half of the year, since no production activities were being carried out at the Oyut Ovoo Mine, management spent more effort on the gold production at the KY Gold Mine.
After completing the preparation work and topsoil excavation, the KY Gold Mine commenced operation in July 2011 and it managed to recover some of the lost productivity as a result of the delay encountered during the first half of the year. All the gold products recovered were also successfully sold during the year in accordance with the Group’s modus operandi which is to produce and sell within a short interval so as to reduce the security costs of safeguarding our gold inventories and reduce our risks from carrying these valuable stocks.
The Group’s gold mining operation progressed quite smoothly during the second half of the year and it did not encounter any other significant interruptions. The gold mining activities stopped around end of October at the onset of the winter season.
Coal Trading and Logistics
During the year under review, the Group dedicated its efforts into the setting up of its coal trading and logistics operations at both the Ceke and Gants Mod border crossings. Ceke and Gants Mod are the two major border crossings for coal transportation at the Sino-Mongolian border in the coal-rich South Gobi region.
In June 2011, a non-wholly owned Mongolian subsidiary of the Group, Global Link Logistic LLC (“GLL”), entered into a coal transportation agreement with a Mongolian coal mining company, whereby GLL has agreed to transport the coal products from one of its coal mines to the unloading station near the Gants Mod border using heavy-duty trucks. In meeting its undertakings on the agreement, GLL purchased a fleet of heavy-duty trucks made for coal transportation and set up an operation camp site near the coal mine. GLL formally commenced its logistics operation after several successful test runs during the second half of the year. Towards the end of the year and after it has generated some cash flow from its operation, GLL made another capital investment to expand its fleet of heavy duty trucks to cope with the high level of demand for transportation services from its Mongolian trading partner.
A trial run for the Ceke operation (which involved both road and rail transportation) was carried out towards the end of the year in review. The Group purchased raw coal from Ceke which were transported by rail to Baotou, Inner Mongolia. The Group intends to have the raw coal washed and then sold to local end-users, including coal-fired power plants and steel factories, as the selling prices for washed coal are higher than that of raw coal. The trial run has not yet been completed as the washing process requires more time and resources during the winter months due to the extreme weather conditions. If the trial run is successful, the Group intends to dedicate more resources into this new line of business.
During the year, GLL’s logistics business has already generated some revenue for the Group. We believe that the logistics business has good potentials in Mongolia as the country currently lacks robust logistics and supply-chain infrastructure and efficient transportation systems, however, we will need to invest more time and capital into this business before it can start generating significant profit for the Group.
OUTLOOK
The Group has had to overcome many unpredictable challenges in its mining operations during the first half of 2011. During the second half of the year, the Group was able to get into pace with its production plans for the gold mining operation and it also started operating its logistics business, however, its iron mining operation remained stalled pending the resolution of the technical issues. Towards the end of the year, the Group was faced with certain financial obligations with the holders of its convertible loan notes, which put further pressure on the Group’s resources for the operation of its businesses.
In 2012 and beyond, the Group expects to face further challenges including resolving the technical issues and obtaining the necessary approval of water usage from the local government for the required scale of operation at the Oyut Ovoo Mine. The Choir Project will also require more effort and additional resources to complete. The Group’s newly invested coal trading and logistics businesses will help to diversify the Group’s revenue stream and also strengthen the Group’s financial position, however, these businesses are still in the early stages and will require more time and resources to be invested before they can make an impact on the Group’s overall performance. The outlook for the Topasia Group is also uncertain as the inflationary pressures in the PRC continue to drag down corporate profitability.
Furthermore, the financial obligation on the US$30M CB will be due for redemption towards the end of 2012, unless they have been fully converted or restructured.
While many challenges lie ahead, the Group believes that it will be able to weather these challenges and it hopes to steer the Group towards a more stable platform. The Group is currently engaged in active negotiations with various parties for the acquisition of new businesses and the disposal of certain slower performing assets of the Group including a restructuring of its convertible loan notes.
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Mongolia fever continues as XacBank hits the road
Mongolian lender XacBank will start a roadshow on Thursday to pitch a dollar bond to investors in Europe and Asia, becoming the third issuer from the country to approach the market this year.
March 29 (Euroweek) XacBank is hoping to follow the success of Mongolian Mining Corp and Development Bank of Mongolia, which drew $11.75bn of demand between them, demonstrating the strong appetite for Mongolian credits.
“Real money investors have now opened up for Mongolia, so these issuers are taking advantage of this,” said a banker away from the deal.
The bank will meet investors in Hong Kong, Singapore and London from Thursday and may issue a Reg-S bond next week, depending on feedback from investors and the condition of the market. ING Bank and UBS are arranging the roadshow.
Moody’s downgrade looming
XacBank’s transaction will be drawn from its $300m euro medium term note programme, set up by ING and UBS last year. Bankers in the deal are hoping that investors’ appetite for the two recent Mongolian issuers will also apply to XacBank — and will be more than enough to overcome Moody’s plan to downgrade Xacbank, along with three other Mongolian lenders.
“Given the strong momentum and investor sentiment that we have seen towards Mongolian credits, we are hopeful that XacBank will go very well,” said a banker close to the deal.
Moody’s, which rated the deal Ba3, placed XacBank on review for downgrade, as well as Golomt Bank, Khan Bank, Trade and Development Bank of Mongolia. Moody’s expects XacBank to be downgraded by one notch, bringing its rating in line with the sovereign.
“Investors already know what the status is,” said another banker in the deal. “It’s not specific to XacBank. It’s a reality of the whole rating methodology and adjustments have to be made. But we will have to see how it goes. It’s hard to predict what will be the people’s reaction to something that has not yet happened.”
The bank will use the proceeds of the bond sale for debt refinancing and general corporate purposes, said Fitch, which has rated XacBank’s proposed bond deal B.
XacBank will be the third issuer from Mongolia this year after two other first time issuers in the global bond market — and only the fourth Mongolian borrower to ever tap the bond market.
Trade & Development Bank of Mongolia was for a long time the only Mongolian credit to sell bonds, issuing three deals worth $250m. But Development Bank of Mongolia sold $580m of bonds in the second week of March, and Mongolian Mining followed with its own $600m deal, and origination bankers now expect several more deals in the country.
March 28 (UB Post) The Head of the Secretariat of the Government Ch. Khurelbaatar has expressed his position on issues of the two ministers that are currently, “battling” through the media. The Minister of Justice and Home Affairs Ts.Nyamdorj has informed the press of the railroad construction contracts that the former Minister of Ministry of Road, Transportation, Construction and Urban Development Kh.Battulga made without notifying the Government.
Ch. Khurelbaatar has also replied to the demands made by the Democratic Party to implement, organize and provide for the unification of Provincial and Parliamentary Elections.
He has stated, “The Government does not have the authority to meddle with the election process of the provinces because the law states that municipal organizations are to be in charge of the process and that the General Election Committee has only a professional advisory capacity.”
Ch. Khurelbaatar has listed the reasons why he believes the Government approves of D.Lundeejantsan’s proposal to separate the elections. “The District Council’s authority is for four years and the Provincial Elections were held on October 2008, and if the two elections are to be held in June 2012, interference with the policies of the District Council would be a ‘violation’ of their rights. Also in the certified policy of 2007, it was stated that the Provincial Elections are to be held on Wednesdays, but the Parliaments Election policy dictates that it be held on Monday. So when the election dates have a gap of 2-3 days, will the people come and go to vote?
On top of this, the deadlines of the two elections are different. When thousands of people are nominated, the press and media which have a duty to equalize the information distribution will have a hard time, and this will affect the vote and the administrations.”
In what stage is the strategic selection of investors for Tavan Tolgoi?
We have lengthened the Tavan Tolgoi contract procedures to continue with the Ukhaa Khudags work. I was in charge of the Tavan Tolgoi contract, and Kh.Battulga was my Deputy, so he knows the reasons for the hold up. There are two major problems with the companies from Russia, China and Japan. We were to create a company called Mongolian Infrastructure Development with the Russians, which would have granted Tavan Tolgoi permits to build railroad tracks to Sainshand.
When we approached them to make a legal contract they replied with, “We will follow the contracts made earlier with the Ministry of Road, Transportation, Construction and Urban Development. Why are you making changes to the permits we were to receive, and why will 51% of the interest of the railroad tracks, which pass through Russia being given to your Government and the rest to the strategically selected investors.”
During last Wednesday’s meeting, Deputy Minister Purevdorj was asked about the contracts made with Korea and China, to which he replied, “Contracts were made, but Ministers have not been informed about this.”
When I asked Kh.Battulga whether these contracts were made he answered, “No,” but later I have saw signed contracts.
It is illegal for Government officials to sign such contracts without the approval of the cabinet. We try to make the Government procedures as open as possible to the public, but a Government official can’t go around secretly signing contracts of such magnitude as the Tavan Tolgoi on his own account. We still haven’t told the companies from Russia, China, and Japan of this matter.
It is hard to discuss the development of Mongolia without railroads. There are conflicts with the things we talked about with other countries regarding railroads. That’s why we are consulting with National Security Council on ways that the Government can approach the matter of railroads. It’s impossible to talk about the construction of railroads, since the plan for the railroad track from Tavan Tolgoi to Sainshand has not been completed.
Can you show us the contract?
I have seen the contract and I have already made a request from the Deputy Minister of Roads, Transportation, Construction, and Urban Development to release the contract to the public.
Cabinet to establish state owned railway holding company
Ulaanbaatar, Mongolia /MONTSAME/ The Minister Ts.Dashdorj has introduced to the cabinet an implementation of the state policy in the railway sphere.
The head of the Road, Transportation, Construction and Urban Development Ministry did it on Tuesday at the cabinet meeting called a day earlier due to the Minister's departure to Germany.
The cabinet decided to establish a state ownership-dominating incorporated company that will possess at least 51 per cent of the railway base structure. An order was given to the Minister of Transportation to allot MNT 518 million from the state fund for the company's joint stock and to issue a credit guarantee of MNT 399 billion for the Development Bank of Mongolia to finance the "New Railway" project.
Without limiting a participation of the "Erdenes Tavantolgoi" company in the 49 per cent of the new company, a stock ownership of each investor to this company will be restricted by ten per cent. In addition, the cabinet ruled that it is necessary to issue additional stocks in order to lift state-ownership of both "Mongolian Railway" and "Base structure of national railway" companies to 51 per cent, to offer these stocks to investors and to trade them openly through domestic and foreign stock exchanges.
Tsakhia Elbegdorj starts his state visit in Germany
March 29 (news.mn) Mongolia Tsakhia Elbegdorj have arrived in Berlin on March 28, 2012 with state visit.
During the visit, the State Head will hold bilateral talks with Germany leader Joachim Gauck, meet with Angela Merkel, the German Chancellor; with Norbert Lammert, the President of the Bundestag, also with Klaus Wowereit, a Governing Mayor of Berlin city, and Olaf Scholz, the First Mayor of Hamburg city.
This visit is the first one paid after 12 years, is special because it follows last year’s visit of Angela Merkel to Mongolia, and is considered to have vital importance in widening the Mongolia-Germany comprehensive partnership relations and cooperation and in activating the collaboration in economics, investments, culture and educational sectors.
Germany is a Mongolia’s main partner in Europe. In 2008 signed Joint statement on bilateral partnership between Mongolia and Germany and in 2010 signed Inter government agreement on cooperation in mining, industry and technology sector.
MONGOLIA AND GERMANY LAUNCH NEGOTIATIONS ON COOPERATION
Ulaanbaatar, Mongolia, March 28 /MONTSAME/ Negotiations of the Mongolia-Germany intergovernmental cooperation of development started on Monday in Bonn, Germany.
The negotiations have been co-chaired by D.Battor, the State Secretary of the Mongolia's Ministry of Finance; and A.Gis, a section head of the Federal Ministry for Economic Cooperation and Development, with participation of B.Davaadorj, the Mongolia's Ambassador to Germany; J.Bat-Erdene, the State Secretary of the Mongolia's Ministry of Road, Transportation, Construction and Urban Development; and other officials.
The two sides are discussing a present situation of the development policy cooperation of the countries, projects to be co-implemented in 2012-2013, and the priorities of the bilateral cooperation.
The Federal Republic of Germany has been rendering developmental assistance to Mongolia since 1992. The two countries declared their cooperation of comprehensive partnership during an official visit of the FRG President Horst Kohler paid to Mongolia in 2008.
Cabinet Backs Tax Amendment for Small Businesses
Ulaanbaatar, Mongolia, March 28 /MONTSAME/ The cabinet meeting on Wednesday discussed and backed a draft amendment to the law on value-added tax, and decided to submit it to the State Great Khural.
As the draft says, if the income of a businessman or an enterprise that issue VAT declaration is 50 million or more a year, this enterprise/businessman will be registered as a tax payer, and that a businessman or enterprise will pay one per cent tax if their income is less than MNT 50 million a year.
At the meeting, the Ministry of Finance considered as necessity to exempt imported wood, logs, planks and semi-manufactured wood from the tax because it is urgently needed to provide wood factories by raw materials.
Cabinet approves Korea Ex-Im Bank loan to build medical center
Ulaanbaatar, Mongolia, March 28 /MONTSAME/ The cabinet decided on Wednesday to take a loan from the Korea EximBank in order to implement a project on establishing a regional center of medical treatment and diagnosis.
The Minister of Finance D.Khayankhyarvaa has been given a right to sign the loan agreement. A size of the loan has not been clarified yet, but it will be given to the government of Mongolia with an interest of 0.1 per cent per year. The repayment term is 40 years, first ten years are freed from the payment of the principal debt.
The diagnosis and treatment center will be erected near the #2 hospital and provided with the latest equipment and facilities. It is expected that Mongolians will come to this center instead of going abroad.
The Premier told the Health Minister to involve medical doctors in mid-career training with Korean experts after putting the center into use.
ELDERS AND DISABLED TO RECEIVE BENEFITS IN THREE PARTS
Ulaanbaatar, Mongolia, March 28 /MONTSAME/ Bounty of up to MNT one million from the Human Development Fund (HDF) will be given to above 60-year men and above 55-year women.
A related decision was made on Wednesday by the cabinet by altering the rule on granting benefits and bounty of state. Moreover, the disabled children aged up to 16 years as well as people who lost their labor capability will receive the benefits.
According to the Finance Minister D.Khayankhyarvaa, the money will be issued in three parts--from April through June of this year. It has been dictated by the need not to speed up an inflation, he said.
In conjunction with the alteration, obligations have been given to the Committee of State Properties, the “Erdenes MGL” LLC and the “Erdenes Tavantolgoi” company to place in the HDF MNT 312.5 billion in advance and MNT 110 billion of dividend this May.
Mongolia: Could Mining Threaten Tourism Potential?
March 28 (Eurasianet.org) Twenty years ago, when a Dutch cyclist named Rik Idema first passed through Mongolia on a round-the-world biking trip, the country struck him as the most pristine place he'd ever seen. Captivated by the steppe’s stark beauty, Idema later returned to explore the country with a Mongolian friend, Tseren Enebish. They started Tseren Tours together in 1994 and eventually married. Yet while business is thriving, the couple worries about Mongolia’s future as a tourist destination.
"The nomadic culture and vast unspoiled nature is what draws visitors,” said Enebish. “Mining could change that.”
In recent years, mining has eclipsed tourism as an engine for growth in Mongolia. "Traditionally, [agriculture] was always tourism's main competitor, but now it's mining," Indraa Bold, the director of the Mongolian National Tourism Organization (MNTO), a lobbying organization, told EurasiaNet.org.
In 2004 tourism accounted for 13.4 percent of the country’s GDP, according to data from the UN World Tourism Organization. Though the government says tourism still accounts for approximately 10 percent of Mongolia’s GDP, that number is falling. The mining sector’s portion of GDP, meanwhile, is about 30 percent and rising, according to Resource Investment Capital, a consultancy based in Ulaanbaatar. “Regardless of how well the tourism sector performs, from now on any growth will always be overshadowed by mining,” Bold said.
According to Bold, mining companies have acquired land-use rights in several places of historic interest including the Bichigt Khad Valley, which is celebrated for its petroglyphs, the Darkhad Valley, famous for its shamans and stunning landscape, and areas around the sacred meditation sites of Danzanravjaa, a famous early 19th-century lama and poet, in East Gobi. "It's sad to see the landscape and culture in many areas of Mongolia are irreversibly changing because of mining. There's no escaping the fact," she said.
The question that Bold and others ask is why can’t Mongolia -- a country roughly the size of Western Europe but with only 3 million people – continue to enjoy strong growth in both the tourism and mining sectors?
Industry insiders say competition for human resources has had a significant impact on tourism. "We take young unskilled workers, equip them with necessary language and management skills, and just as they become competent, they leave for better paying mining jobs. Frankly, it hurts," said Enebish, who has seen five of her best employees leave Tseren Tours for mining jobs.
Hospitality and transport services are also increasingly catering to mining interests. "It costs more to fly [from Ulaanbaatar, Mongolia’s capital] to the Oyu Tolgoi [copper-gold mine] site than to Beijing. The demand is not only driving up local fares, but airlines are also too busy to service other parts of the country," said Bold. The recent openings of world-class hotels by global chains like Hyatt and Radisson in Ulaanbaatar doesn't help the industry either. "Everything is clustered in Ulaanbaatar and you can't say it's benefitting the countryside -- the rest of Mongolia -- in any way."
One thing that skews tourism data is the fact that many foreigners traveling to Mongolia ostensibly to pursue business opportunities, enter the country on tourist visas. Government figures state 457,514 tourists arrived in the country in 2011; 43 percent were Chinese. Most arriving Chinese are entrepreneurs, said Stephen Kreppel, director of the Mongolian National Marketing Coordination Office (MNMCO) under the Ministry of Foreign Affairs.
"Most of these travelers are here with business interests. Actual leisure tourists number just about 90,000," Kreppel told EurasiaNet.org. Kreppel questions government policies that encourage mass tourism by building huge tourist complexes and entertainment facilities. He believes the distortion of actual tourist numbers is encouraging flawed policies. "The role of tourism in Mongolia should be to redistribute wealth into the countryside,” he said.
Some tourism operators contend that mining projects have no influence on tourism. "These are localized projects, built away from everything else, where there is no tourism happening. What's the fuss about?" said Zanjan Fromer, founder of Ger to Ger Foundation, which offers community-based tours among nomads (“ger” is the Mongolian word for yurt).
"The area affected by mining is miniscule compared to the total landmass," agreed Kreppel from the MNMCO, though he fears mining-driven inflation will make Mongolia an increasingly expensive destination, and the “Minegolia” image could hurt the country's brand among potential tourists.
Others like Gantemur Damba from Sustainable Tourism Development Center, a local non-governmental organization, are taking a wait-and-see approach. "Mongolia is big enough [for both mining and tourism] at the moment, but with land-protection laws still weak, this can be easily reversed,” said Damba. “What Mongolia requires is clear zoning policies where mining can develop and where locals have the right to retain land-use rights to preserve their [nomadic] heritage—the real tourism product of Mongolia."
Are there any currencies backed by gold?
Santiago, Chile, March 28 (Sovereign Man) --
Dumbfounded.
That’s the only way to describe the reaction that future historians will have when they look back and study the utter perversion that is our global financial system.
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Fortunately there is another place worth considering. For now, gold only comprises about 5% of Mongolia’s $4 billion money supply. Not much. But the important thing to pay attention to is the trend.
A few months ago, the government of Mongolia nearly doubled its gold holdings to 3.5 tons. This is a huge move.
Given the massive resources in the country (coal, copper, gold, oil, uranium, etc.), Mongolia is set to become one the world’s richest countries. And I think we can expect them to continue trading out paper reserves for the gold that’s already under their soil.
It’s possible that, if the trend holds, Mongolia’s gold holdings will back 10% to 25% of the tugrik money supply in just a few years’ time. Over the same period, gold holdings in the US, UK, and Europe will probably decline to less than 2% of their perpetually inflating money supplies.
Moreover, bank accounts denominated in the Mongolian currency (tugrik) yield an impressive 13% to 15% for savers. As far as paper goes, this one actually may be worth betting on.
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"Mogi" Munkhdul Badral
Senior Client Manager / Executive Director
CPS International LLC
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CPS International is a marketing arm of CPS Securities in Mongolia. CPS Securities is a Perth, Western Australia based AFSLicense 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.
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