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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MEC up as much as 15.6% in early trading to HK$0.89
MEC TO COMMENCE CHINA COAL SHIPMENT
The 311 km Khushuut Road has been inspected and passed by The Mongolian Authority
HONG KONG, 27 November, 2011 – Mongolia Energy Corporation Limited (HKSE:276) (“MEC”) is pleased to announce the ready commission of the Khushuut Road.
MEC completed construction of the 311 km Khushuut Road at the beginning of November 2011. It was successfully accepted by the State Commission Inspection Committee made up of 25 members on 6 November 2011. MEC is expected to receive the final conclusion permission in writing on 28 November 2011. Once it has been received, MEC will commence coal shipment exporting to China.
MEC is the first mining company to successfully construct the longest hard-surface paved road for coal transport in Mongolia.
The Khushuut Road has a distance of 311 km in length, stretching from Khushuut mine site to Yarant (Mongolia) and Takeshensken border (Xinjiang). The road crosses five sub-provinces of Khovd (Darvi, Tsetseg, Altai, Uyench, Bulgan). There are 17 bridges and more than 200 waste water pipes built along the Road.
The Khushuut Road was built and commissioned for a payload of up to 110 tones.
A completion of a paved road has a direct positive impact to reduce the operating costs to the mining business. What used to be a gravel travel road which takes over 8 hours to travel to the border will now only take 4 hours.
The road project being the biggest infrastructure development project for Khovd province, and one of the large scale road investment projects by privately owned mining enterprise in the Mongolia history. It provides many social benefits to the local community. Not only does it provide an efficient mode of transportation for all the local residence, the road project itself also created hundreds of jobs for local provinces and a considerable income for provinces and state.
Coal trucks traveling on paved road will minimize a negative environment impact to the area by minimizing the potential dust which normally caused by coal transport on gravel roads. In addition, a paved road provides a safer road environment for coal shipments.
MEC being the first is now a role model for all mining projects in Mongolia to build the infrastructure (road) prior to shipping minerals for export. It's such an environmentally friendly decision which is praised by many Mongolians and government bodies.
MEC Chief Executive Officer Mr. James Schaeffer Jr. said, “The commission of the Khushuut Road indicates a milestone in our coking coal exporting and our team will continue our efforts in all aspects to expand our Khushuut operations.”
Link to release
C@: Trading Halt Request
November 28, C @ Limited (ASX:CEO) --
C @ Limited (ASX Code: CEO) (“CEO”) request and immediate voluntary trading halt on it securities and provides the following information in accordance with Listing Rule 17.1:
· The trading halt is requested to allow CEO time to undertake discussions with a number of parties in respect of the terms of the capital raising under the Prospectus dated 9 November 2011 and prepare the relevant announcement and documentation pending those discussions.
· CEO request that the trading halt be lifted on the earlier of the release of an announcement to the market or the commencement of normal trading on Wednesday 30 November 2011.
· CEO expects the trading halt will be ended by the making of an announcement of the kind referred above.
· CEO is not aware of any reason why the trading halt should not be granted.
…
Link to release
TVN: Company Update
November 25, TVN Corporation Limited (ASX:TVN) -- The directors of Modun Resources Ltd are pleased to provide the following company update:
Change of Company Name
At the EGM held last week, shareholders passed a special resolution to change the name of TVN Corporation Limited to Modun Resources Ltd (“Modun”). The name change reflects the company’s focus on Mongolian coal projects. More information on the company and the nature of our business can be found by accessing our new website at: www.modunresources.com. A revised ASX Trading Code will be announced to the market upon confirmation from ASX.
Drilling Complete
Drilling for the 2011 drill season at Nuurst has now been completed. The data collected to date will be used for the release of Modun’s maiden JORC reportable Coal Resource in December 2011.
The original drilling programme commenced in July of this year as a technical due diligence programme. Having discovered a significant coal sequence on the early holes, the focus moved to a resource drill-out on the south western portion of the Nuurst Project Licence XV-008159: the 2011 Targeted Resource Area.
During the 5 months since signing the option to acquire the licence, Modun has:
· obtained all approvals necessary to explore the licence area
· completed the acquisition of the Nuurst Licence – the licence is 100% owned by Modun Resources
· obtained foreign investment approval and established an office in Ulaanbaatar
· mobilised a drilling team in July that peaked at 49 people and 4 diamond drill rigs on site by early November
· completed 7411 m of diamond drilling over 26 holes
· appointed a leading Mongolian coal geologist, Enkhbayar Batmunkh who has 35 years experience, most recently as Senior Coal Geologist for Peabody-Winsway. Mr Batmunkh will be Modun’s full time Exploration Manager focusing on acquisition and exploration of coal projects in Mongolia
· appointed CSA Global to undertake the resource estimation work on the Nuurst Project
· continued to undertake due diligence and negotiations on potential acquisitions of coking and thermal coal projects within Mongolia
Drilling equipment has now been de-mobilised from site, the camp is being dismantled and the logging of the last holes is being finalised over the coming week.
Exploration of Nuurst
The Nuurst Project currently has an exploration target1 of 200 to 300 million tonnes of thermal coal in the Targeted Resource Area defined in Figure 1. This area represents less than 15% of the overall licence area. Historical drilling has identified coal intercepts outside the 2011 Targeted Resource Area and the coal sequence remains open along strike to the North. A review of the prospectivity of the remainder of the licence area will be conducted over the northern winter months, with a view to defining next season’s exploration activities.
Maiden JORC Reportable Coal Resource in December
Modun Resources is on schedule to deliver a maiden JORC reportable Coal Resource in December of this year. CSA Global are currently compiling the information and working towards the resultant resource estimate.
About the Nuurst Coal Project:
The Nuurst Project is a wholly owned 3,451 Ha exploration licence located 120 kms south of Ulaanbaatar in an area with a number of operating coal mines. Nuurst is 6 km from existing rail infrastructure providing low cost access to the key coal export markets of China, South Korea and Japan.
Recent drilling has identified significant coal seam development over 3 km of strike in a northerly direction, and 1.5 km across the south western portion of the licence area. This coal seam development remains open to the North.
We continue to review the potential acquisition of other coking and thermal coal projects in Mongolia.
Link to release
Tembusu: Appointment of a director and an executive vice president ("EVP")
November 25, Tembusu Investments Limited (LON:TIL) --
The board of directors of Tembusu (the "Board") is pleased to announce the appointment of Mr Chung Dongwook as a non executive director of the Company and also of Mr Enrique Lopez de la Mesa as EVP Corporate Development, a non-Board position.
Mr Chung is a businessman living in Mongolia and has been involved in a number of natural resources ventures. He has a network of contacts in Mongolia.
Mr Lopez de Mesa is a senior natural resources and finance professional possessing capital markets experience. He has been active with such mining groups as Sino Vanadium Inc., Alpaca Resources Inc. (a Peruvian mining exploration company) and Southern Oregon Gold Corp.; in addition he has served as director of several TSX-V, NASDAQ, OTC and PLUS-traded resources companies, including Veraz and Petrolympic, where he served as Chairman. For the past 15 years, he has had an Asian practice involving a range of companies with a focus on China and Mongolia. Previously he was a Canadian vice-president for a leading Hong Kong mid-market financial services group. His investment banking and corporate finance experience at PWC Securities and Barclays plc's investment bank included debt and equity issues, mergers and acquisitions and valuations; he has completed over 50 transactions, principally in natural resources. Recently he was involved in the acquisition and development of an iron ore mine in Mongolia.
The Board believes that both Mr Chung and Mr Lopez de Mesa will add value to the Company over time.
The Board is also please to announce that it has appointed both Mr Chung and Mr Lai Seng Kwoon to the four subcommittees of the Board. These subcommittees are Management, Audit, Remuneration and Nominations.
Link to release
FeOre Limited Prospectus
November 1 --
Link to Prospectus
Mongolia's Tavan Tolgoi to list in U.K., Hong Kong
LONDON, November 27 (MarketWatch) -- Mongolian state-owned coal miner Tavan Tolgoi is preparing to list its shares in London, Hong Kong and Ulan Bator, in a process which could value the firm at as much as GBP10 billion, the Sunday Times reported.
The company aims to float at least 15% of its shares in London, the newspaper said, citing unnamed sources close to the situation.
Mongolian Prime Minister Sukhbaatar Batbold wants to complete the three-way listing by March next year, but the sources are skeptical that such an ambitious timeline can be met.
Tavan Tolgoi controls the world's largest deposit of coking coal, a key ingredient in making steel.
The London listing will cover rights to the eastern part of the deposit in Mongolia's South Gobi region, which holds an estimated 7.5 billion metric tons of coal.
The report said Deutsche Bank and Goldman Sachs are handling the listing.
A spokesman for Tavan Tolgoi couldn't be reached for comment.
Link to article
Iron ore prices to cool off as China set to raise output
November 26 (Accord) Iron ore prices, which have been steadily climbing to touch $200 per tonne, may cool off in the long run as China is all set to increase iron ore production. The country has just identified 4-5 billion tonne iron ore mines near Mongolia and this may impact their buying pattern in the global market. The current upswing may not continue for long as China is trying to bring new mines into production.
Since China is the largest producer of steel and is a large buyer of iron ore from the global market, the new development is expected to influence their purchases. Since they buy a substantial quantity of iron ore from India, a drop in their off take could have a bearish effect on Indian exports.
In the next few months, the outlook on prices is expected to remain bullish as the global steel industry is led by the revival in demand from the Chinese steel makers. The trading community expects prices to remain firm in the next few months.
Link to article
Xinjiang Carries Coal from Mongolia (i.e. Khushuut)
URUMUCHI, Nov 24, 2011 (SinoCast Daily Business Beat via COMTEX) -- Xinjiang autonomous region of China and the Republic of Mongolia officially realized coal transportation on November 23.
Mongolia has lots of coal resource but the coal conversion is insufficient due to limited capacity of mineral product exploitation and deep processing. However, Xinjiang is short of 1.6 million tons of coking coal every year, particularly No. 15 coking coal for steelmaking. In 2008, the two sides began to seek trade and economic cooperation in a wider range so as to shape a development pattern that enables regional economic advantages to complement each other and boosts industrial transformation and upgrading.
On November 7, the 360-kilometer international highway between Mongolia and Xinjiang that was located at Tarkshiken port of Qinghe County in Xinjiang passed inspection. The two sides agreed that this special coal channel would be a long-term transportation line. Through this highway, vehicles from Xinjiang can carry coal from the Khushuut mine of Mongolia while vehicles from Mongolia can go to the circular economy demonstration park of overseas resource processing located in Qiaerkutu Town of Fuyun County. It is predicted that by the end of the 12th five-year plan period, there will be 10 million tons of coking coke carried from Khushuut mine to Xinjiang.
Source: www.hexun.com (November 24, 2011)
Link to article
Manas Petroleum Corporation to Present at the Visor Capital Central Asian Conference & at Luncheon Event
BAAR, Switzerland, November 24, 2011 -- /PRNewswire/ -- Manas Petroleum Corp. ("Manas") (OTCBB: MNAP / TSX.V:MNP) today announced that CEO Peter-Mark Vogel, will present a corporate overview of the Company at the Visor Capital Central Asian Conference day of November 24, 2011. The event will take place at 23 Austin Friars, London, UK.
Additionally, President & Director Dr. Werner Ladwein will present a corporate overview of the Company at a luncheon event held in Munich, Germany at the Restaurant Kaefer on November 25, 2011 at 12:00 p.m. CET.
The presentation will also be available on the Company website at http://www.manaspetroleum.com
Link to article
Link to presentation
GOVERNMENT BONDS TRADED
November 23 (MSE) Accordance with resolution No.30 of the Great Khural of June 3th 2011, resolution No.208 of Government of Mongolia of 2011.07.06, decree No.165 of Finance Minister of Aug 8th 2011, securities’ request No.9-3/4769 of Ministry of Finance of Nov 22nd 2011, the Government bond worth MNT 12.5 billion with the value of MNT100,000 tugriks registered at MSE’s security’s listing.
Today, the government bonds worth of MNT12.5 billion bond action took place at 1pm at Mongolian Stock Exchange, and worth of MNT 2.5 billion were traded during the bond action. The bond specifications are given below:
Link to article
Mongol Bank: Tugrug rate will not be cut
November 26 (news.mn) Officials of Mongol Bank held a press conference on Thursday to officially inform that the tugrug rate will not be cut next year, denying rumors that the rate would be cut twice in connection with depositors’ savings in US dollars.
According to the officials, the bank sector had total active capital of MNT 8.2 trillion at the end of October. That’s MNT 2.7 trillion more than at the same time a year earlier.
The bank sector has total capital of MNT 830.2 billion and the officials noted that banks’ profits are increasing.
Link to article
Study: Ulaanbaatar metro possible by 2020
November 26 (news.mn) A metro construction research team reported the results of a two-year study to the mayor on Thursday.
According to JAICA research, 60 percent of the capital’s population is served by public transportation. To avoid overloading, the report says, Ulaanbaatar’s public transportation system should be renovated.
The mayor said that new public transportation service will be established and construction of a metro will begin in 2013. Underground construction will start in the center of the capital.
The Asian Development Bank has researched public transit possibilities in three areas: metro, light railway, and special bus lanes. The bank believes special bus lanes are the best way to improve public transportation in Ulaanbaatar. According to the bank, one kilometer of metro construction costs between USD 45 million to USD 100 million and one line takes ten years to build. Special bus lanes can be built in less than two years.
But metro construction is what has been chosen, and work will start in 2013 and finish in 2020, said the research team.
Link to article
JUST GROUP TO BUILD A BUTCHER FACTORY IN RUSSIA
November 24 (infomongolia.com) The Russian Interfax agency reported that the Mongolian "Just Group" holding will be building its meat producing factory in the Buryat Republic of the Russian Federation in the spring of 2012.
The factory is to be built in the Tapkhar village near the main road of Khyakhta – Ulan-Ude.
"Just Group" has also opening its subsidiary company in Buryat Republic in the framework of this project. According to preliminary calculations, the factory will be built at the expense of 30 million USD. The raw material for the new factory will be supplied from Mongolia, whereas the factory's storage capacity is 3.6 thousand tons of meat.
This factory, which is planned to be opened in 2013, will be employing over 200 people.
By the statistics of 2010, Just Group occupies 32.3 percent of stock preparations, 26.0% of butchering capacity, 30.0% of meat storage capacity and 22.8% of meat exporting of the nation. Moreover, Just Agro (meat producing factory), Just Oil (Oil products import and Distribution), Just Finance (Banking and Finance Industry), Just Construction (Construction) and Just Mining (Gold Mine at Olon Ovoot in Umnugovi aimag) are included in its subsidiary companies.
Link to article
Copper Investing In Mongolia
November 25 (Jon Springer, Seeking Alpha) Mongolia's predicted economic boom hinges on the premise that the Oyu Tolgoi copper-gold mine will be a driver of the economy's growth. Mongolia's GDP in 2010 was $6.8 billion. Oyu Tolgoi is expected to produce over $3 billion per year using prices of $850/oz. for gold, $14/oz. for silver, and $2/pound for copper. The current prices for all these commodities are higher -- copper prices are more than 50% higher while gold and silver are both approximately double those prices -- thus the effect of Oyu Tolgoi on the Mongolian economy will be greater.
Source: Sufiy blog
Looking at the above chart, it is worth asking if China is the sole driver for copper demand, and if China's demand for copper can continue. Indeed a huge case for Mongolia's growth rests upon its wealth of natural resources combined with its proximity to China.
Source: East Asia blog.
It is broadly expected that China's GDP will continue to grow. Stringfellow Investments makes the case below that copper price and China's GDP have been closely correlated.
Source: Stringfellow Investments of South Africa
Stringfellow Investments in March 2011 surmises, "China is expected to increase its current annual copper consumption from 5.4 kg per capita to a massive 10kg per capita in the future ... China recently released its 12th Five-year plan for National Economic and Social Development. Some of the development projects mentioned in the report [which will need copper] include:
· Upgrading of existing ports as building new ones.
· New airport.
· New hospitals.
· Spending on highways, conventional rail and high speed rail.
· Investing in both, nuclear and hydro-power plants.
· Development in fuel pipelines.
· Spending on transmission networks."
A November 15, 2011, article in the Wall Street Journal claims, "China Copper Hunger Fades." Of course, on September 16, 2011, the Wall Street Journal had an article titled "Chinese Copper Imports to Remain High Despite Global Slowdown."
Brook Hunt, the metals research arm of Wood Mackenzie, suggests that copper demand will continue. Ian Littlewood of Brook Hunt was interviewed for an August 2011 report that anticipates world demand for copper - used in power and construction - will reach 20.3 million tonnes in 2011, helped by stronger than anticipated growth in Europe and the United States. Brook Hunt created the two charts below. The first shows the divergence between Chinese copper demand and Chinese copper production. The second chart shows an anticipated trend of declining copper production in the coming decade despite new copper mines coming on line.
Anticipated Chinese copper production and Chinese copper demand
Anticipated copper production from existing and new mines
Without further back and forth charts here, the point would be that the world is not ending, there will be economic growth, there will be economic growth particularly in China, and that growth will require copper. Even moderated demand from China is still a significant driver of copper demand, and there are other countries with copper demands.
Looking To Mongolia For A Copper Play
The joint venture of Ivanhoe (IVN), Rio Tinto (RIO), and the Mongolian government in the Oyu Tolgoi copper-gold mine is well-documented. The most recent video posted by Ivanhoe is a good summary in 7 minutes. Additionally, Ivanhoe's 3rd quarter report of November 14, 2011, shows that the company is on target for production at Oyu Tolgoi commencing in the second half of 2012. Oyu Tolgoi is part of a larger copper belt and there will be more prospective resources to be explored and developed in the area.
A host of factors that led Ivanhoe to its partnership with Rio Tinto and the Mongolian government in the Oyu Tolgoi project also led Ivanhoe to part with swathes of land it was licensed for until 2005 (the area for which Ivanhoe was licensed in 2005 is indicated by the blue highlighted area in the map above). Currently, Ivanhoe's primary focus is the big red dot labeled Oyu Tolgoi which will have required over $6 billion in capital expenditures by the time production begins in the second half of 2012.
Publicly traded companies now exploring other portions of what was once all Ivanhoe's land in the map above include Entree Gold (EGI), Erdene Resource Development (ERDCF.PK), Kincora Copper (BZDLF.PK), and Voyager Resources (VOG). Additionally there is a promising joint venture between Ivanhoe and BHP Billiton (BHP) at Ulaan Khud North.
Companies that operate in the Oyu Tolgoi copper belt include Erdene Resource Development and Entree Gold. Erdene Resources has properties in Canada, the U.S. and Mongolia, and is diversified in mining from coal to kaolin along with interests in copper-gold deposits. (Erdene is currently conducting a private placement led by Mongolian investment bank MICC.) Entree Gold with three copper-gold properties around the Oyu Tolgoi belt also has properties in the U.S. Australia, and Peru, with interests in coal and uranium along with a focus on copper-gold deposits.
The remainder of this article will focus on two companies that are pure copper-gold plays in Mongolia. When analyzing these speculative companies - Kincora Copper and Voyager Resources - it should be kept in mind that BHP Billiton was the owner of Oyu Tolgoi from 1996 and then unloaded it in 1999. After some notable shallow results BHP Billiton offered to farm out the project in 1999 as their exploration budget was limited. Ivanhoe took a 100% interest in Oyu Tolgoi in May 2000 and had vastly more favorable results at deeper depths. Undoubtedly, BHP Billiton would have kept the property if it had known deeper underground was the largest undeveloped copper-gold mine in the world.
Kincora Copper
138.3 million shares, $44.3 million market cap (as of October 20, 2011)
Kincora Copper's primary asset is the Bronze Fox deposit in Mongolia, located along the same deposit belt as Ivanhoe’s Oyu Tolgoi, 140 kilometers northeast of it. Ivanhoe Mines held the license for Bronze Fox and explored the deposit from 1997 – 2005.
In a speech on March 7, 2005, Robert Friedland, CEO of Ivanhoe Mines gave the impression that he was happy that Ivanhoe owned Bronze Fox as that it owned Oyu Tolgoi. However, in the process of securing Ivanhoe Mines’ rights to Oyu Togloi, it was necessary for Mr. Friedland to relinquish the rights to Bronze Fox.
The licenses for Bronze Fox then passed through a series of owners. In September 2010, Kincora began to acquire interest in Bronze Fox and on August 30, 2011, Kincora made a deal for all remaining shares of Bronze Fox they did not own previously that resulted in the prior owner, Duchintav Khojgor, becoming a member of the board and 20% owner.
Kincora was created by a reverse merger deal in June 2011 involving Origo Partners (OPP in London) and Brazilian Diamonds created Kincora Copper. Until recently, the company's chairman served as interim CEO.
On October 17, 2011, Kincora upgraded management and brought in Igor Kovarsky as president and CEO. The prior CEO Stephen Fabian has remained as Chairman and participated in this decision. Mr. Kovarsky, a native of Russia, was an executive at Centerra Gold (CAGDF.PK) from 1992 to 2008. Centerra has gold mining operations in Kyrgyzstan and Mongolia, and Mr. Kovarsky’s experience in Central Asia is extensive.
Some concerns about the company include its description as an advanced exploration stage company when it has only explored 13% of its property. In the 13% that is well-explored the company has results between .4% and .9% mineralization. Kincora's October 2011 fact sheet shows a cash balance of $6 million; a June 2011 research report showed a balance of $7.5 million which the research report expected to last 18 months at that time .
The above results preceded further results which were announced October 18, 2011, and November 15, 2011. These results from now roughly 80 drilling holes over time, including 21 drilling holes from this year, will help, "design the 2012 exploration program to aggressively attack specific areas based on the results and knowledge obtained," says new President and CEO, Mr. Kovarsky.
The company highlights many positive results in its October 2011 presentation. "Work completed includes geological mapping, ground magnetics, induced polarization, gravity surveys, rock chip sampling, metallurgical testing, petrographics, and diamond and reverse circulation drilling." There is a publicly available research report from ResCap, a Mongolian brokerage part-owned by Origo Partners. Management believes the Oyu Tolgoi belt will be similar to the Chilean copper porphyry systems. While the company says they have numerous water sources and this is cited in research often, specific details of these sources have not been included in recent reports. The site is 80 km (50 miles) from existing power facilities, 20 km (12 miles) from planned railways, and 200 km (120 miles) from existing railways. The board of Kincora Copper includes Altai Khangai, CEO of the Mongolia Stock Exchange and special advisor to the Mongolian Prime Minister; Origo's Mongolia director Luke Leslie who has brought his expertise in natural resources, mergers and acquisitions to Origo from prior posts at UBS and Accenture; and John Rickus, a former top geologist for Rio Tinto and a globally recognized copper porphyry expert with 40 years of experience.
Voyager Resources
1,240 million shares outstanding (September 30, 2011), $100 million market cap (September 30, 2011)
Voyager Resources (VOYRF.PK) has the KM and Khongor copper-gold project in the vicinity of the Oyu Tolgoi copper belt as its prize assets along with the Daltiin Ovor copper-gold project.
It is worth noting that Voyager's Chairman Matthew Wood is the Chairman for multiple companies, including until recently three in Mongolia. Mr. Wood was Chairman of Hunnu Coal (HUNNF.PK), a Mongolian coal interest that has was sold in September 2011 to Banpu (BNPJF.PK) for a 30% premium. Presently, Mr. Wood chairs Haranga Resources, a company which focuses on iron ore in Mongolia and is listed in Australia, and Voyager Resources, a company which focuses on copper and gold in Mongolia.
Voyager's most recent presentation is from October 2011's Mongolia Investment Summit in Hong Kong. Their June 2011 annual report states that limited exploration of the KM property has been completed, but "KM has the potential to host a significant copper porphyry system." Voyager had approximately $11 million in cash available as of September 30, 2011.
(Click to enlarge)
Voyager reported in late October 2011 that it believes the KM property may be a "company making asset." The company has a full report with extensive data on both the Cughur and Gaans copper discoveries on the KM property. The data is too extensive to fit in this article as there is a chart of results that goes on for 1 1/2 pages with a significant proportion of results in the .60 to 2.41 Copper% range. Voyager believes it has some of the most promising copper mineralization results found in Mongolia since the Oyu Tolgoi discovery.
Conclusion
Speculative investments in Mongolia have produced significant returns. The Mongolian economy is in early stage development that will ramp up significantly once Oyu Tolgoi begins production in the second half of 2012. The neighboring Chinese economy is maturing but still growing rapidly. If seeking a pure play on Mongolian copper-gold resources, Kincora Copper and Voyager Resources provide high quality speculative opportunities.
Link to article
Mongolia Growth Group Raises Private Funds To Deploy In Country's Real Estate Market
November 25 (Jon Springer, Seeking Alpha) There is currently only one publicly traded company outside of Mongolia that is a pure play on Mongolia with no investments in the energy or mining sectors. Mongolia Growth Group (MNGGF.PK) announced on November 21, 2011, that it is raising $20 - $30 million in a private placement. Based on the prior investments and statements by Mongolia Growth Group, the majority of these funds will be invested in Mongolia's real estate market. As mentioned previously in my post on investing in real estate in Mongolia, two other local companies that are not publicly traded in the U.S. - Asia Pacific Investment Partners and M.A.D. Investment Solutions - are also both currently raising capital to deploy in the Mongolia real estate market. I have written about Mongolia Growth Group also in a piece about investing in publicly traded stocks that invest in Mongolia.
The flurry of activity to invest in the real estate market in Mongolia could be explained in many ways. The simple answer is there is an expectation of a major ramp up in Mongolia's GDP as the Oyu Tolgoi copper-gold mine is set to begin production in the second half of 2012. Bob Johnson recently wrote a piece on the Oyu Tolgoi mine, a joint project of Ivanhoe (IVN), Rio Tinto (RIO) and the Mongolian government and I have previously discussed the expected impact of the mining sector on the Mongolian economy. However, two figures from Mongolia Growth Group's November 2011 presentation capture the growth story for the Mongolian economy.
Source: ACI Mongolia, The Financial Markets Association, Mongolia Growth November 2011 presentation.
Source: ACI Mongolia, The Financial Markets Association, Mongolia Growth November 2011 presentation.
Reading through all the Mongolia Growth Group shareholder letters this year will provide a good base of knowledge on the company as well. Additionally, board member Bill Fleckenstein was interviewed on Bloomberg TV about Mongolia on November 21, 2011 (6 minutes). Use of capital raised to-date by Mongolia Growth Group is approximately 2/3 for real estate investments and 1/3 for their Mandal Insurance unit, the best-capitalized insurance company in Mongolia since June 2011. I will write about the insurance company in a separate article.
Returning to the first paragraph of this article: why are three firms all raising capital to invest in real estate in Mongolia right now? Mongolia Growth Group's current presentation compares Mongolia to Kazakhstan, a nearby country that recently had a natural resources boom. According to the presentation, in Kazakhstan's Almaty, downtown real estate went up 833% from 2002 to 2008 while downtown land values went up 8,000% during the same time period.
Disclosure: I am long Mongolia Growth Group (MNGGF.PK) and long Ivanhoe Mines (IVN). I have not placed any trades in IVN in the 72 hours prior to publication of this article and will not for 72 hours after publication of this article. I have indicated that I will participate in the current private placement of Mongolia Growth Group and I am reviewing options to participate in a private placement with another private equity real estate investment in Mongolia.
Note: I visited Mongolia September 10 to September 23, 2011. I maintain a weekly news blog on Mongolia and recently posted 5 instablogs about my trip to Mongolia from an investor perspective.
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 | | 3,984.30 | -59.90 | -1.48% | 4,042.40 | 4,042.90 | 3,973.80 | - | 25-Nov | | |
Nikkei 225 | NKY:IND | | 8,160.01 | -5.17 | -0.06% | 8,138.19 | 8,199.67 | 8,135.79 | - | 25-Nov | | |
Hang Seng | HSI:IND | | 17,689.48 | -245.62 | -1.37% | 17,658.78 | 17,827.81 | 17,613.20 | - | 25-Nov | | |
FTSE 100 | UKX:IND | | 5,164.65 | 37.08 | 0.72% | 5,127.57 | 5,200.31 | 5,075.22 | - | 25-Nov | | |
TSX Composite | SPTSX:IND | | 11,462.06 | -23.26 | -0.20% | 11,465.40 | 11,536.77 | 11,420.78 | - | 25-Nov | | |
S&P 500 | SPX:IND | | 1,158.67 | -3.12 | -0.27% | 1,161.41 | 1,172.66 | 1,158.66 | - | 25-Nov | | |
ASX | Aspire Mining | AKM:AU | A$ | 0.315 | -0.005 | -1.56% | 0.305 | 0.325 | 0.295 | 3,565,774 | 25-Nov | -34.38% | -30.00% |
Blina Minerals | BDI:AU | A$ | 0.012 | 0.001 | 9.09% | 0.012 | 0.012 | 0.012 | 455,000 | 25-Nov | -20.00% | -20.00% |
C@ | CEO:AU | A$ | 0.042 | -0.002 | -4.55% | 0.041 | 0.042 | 0.04 | 1,351,972 | 25-Nov | 50.00% | 100.00% |
General Mining | GMM:AU | A$ | 0.05 | -0.003 | -5.66% | 0.05 | 0.05 | 0.05 | 20,000 | 25-Nov | -58.33% | -58.33% |
Guildford Coal | GUF:AU | A$ | 0.79 | -0.01 | -1.25% | 0.78 | 0.8 | 0.75 | 218,717 | 25-Nov | 8.22% | 41.07% |
Haranga Resources | HAR:AU | A$ | 0.235 | -0.005 | -2.08% | 0.26 | 0.26 | 0.235 | 101,530 | 25-Nov | -63.28% | 0.00% |
Hunnu Coal | HUN:AU | A$ | 1.795 | 0 | 0.00% | 1.78 | 1.795 | 1.78 | 0 | 16-Nov | 34.46% | 54.74% |
Mongolian Res Corp | MUB:AU | A$ | 0.125 | -0.025 | -16.67% | 0.125 | 0.125 | 0.125 | 1,000 | 25-Nov | | -68.75% |
Robe Australia | ROB:AU | A$ | 0.018 | 0.004 | 28.57% | 0.015 | 0.018 | 0.015 | 1,359,575 | 25-Nov | 92.51% | 164.71% |
TVN Corp. | TVN:AU | A$ | 0.044 | -0.002 | -4.35% | 0.047 | 0.047 | 0.043 | 2,876,688 | 25-Nov | 340.00% | 340.00% |
Voyager Resources | VOR:AU | A$ | 0.072 | -0.003 | -4.00% | 0.074 | 0.074 | 0.071 | 6,618,385 | 25-Nov | 34.27% | 0.00% |
Xanadu Mines | XAM:AU | A$ | 0.385 | 0.005 | 1.32% | 0.385 | 0.4 | 0.385 | 38,594 | 25-Nov | -31.86% | 0.00% |
MSE A Board | Aduunchuluun | ADL:MO | MNT | 6,900 | -100 | -1.43% | 7,000 | 7,000 | 6,900 | 472 | 25-Nov | -13.75% | -4.76% |
APU | APU:MO | MNT | 3,450 | -100 | -2.82% | 3,595 | 3,595 | 3,450 | 2,138 | 25-Nov | 73.37% | 104.14% |
Atar Urguu | ATR:MO | MNT | 38,000 | 0 | 0.00% | 38,000 | 38,000 | 38,000 | 0 | 22-Nov | 111.11% | 0.00% |
Baganuur | BAN:MO | MNT | 14,350 | 0 | 0.00% | 14,300 | 14,350 | 14,224 | 0 | 24-Nov | 36.67% | 43.51% |
Mogoin Gol | BDL:MO | MNT | 26,005 | -995 | -3.69% | 26,005 | 26,005 | 26,005 | 38 | 25-Nov | 120.38% | 185.77% |
BDSec | BDS:MO | MNT | 3,700 | 0 | 0.00% | 3,750 | 3,750 | 3,700 | 0 | 24-Nov | 48.00% | 0.00% |
Bayangol Hotel | BNG:MO | MNT | 39,000 | 0 | 0.00% | 39,000 | 39,000 | 39,000 | 0 | 24-Nov | 63.18% | 63.18% |
Bayanteeg | BTG:MO | MNT | 27,500 | 0 | 0.00% | 27,500 | 27,500 | 27,500 | 0 | 24-Nov | | 2207.05% |
UB BUK | BUK:MO | MNT | 31,850 | -3150 | -9.00% | 31,850 | 31,850 | 31,850 | 33 | 25-Nov | 600.77% | 0.00% |
Eermel | EER:MO | MNT | 2,700 | -150 | -5.26% | 2,710 | 2,750 | 2,700 | 159 | 25-Nov | -6.09% | 23.85% |
Gobi | GOV:MO | MNT | 4,900 | -80 | -1.61% | 4,900 | 4,900 | 4,900 | 65 | 25-Nov | -12.50% | -20.96% |
Gutal | GTL:MO | MNT | 2,460 | 0 | 0.00% | 2,460 | 2,460 | 2,460 | 0 | 24-Nov | | 0.00% |
Hi B Oil | HBO:MO | MNT | 180 | -10 | -5.26% | 180 | 180 | 180 | 1,654 | 25-Nov | 0.00% | 5.88% |
Khukh Gan | HGN:MO | MNT | 195 | 1 | 0.52% | 195 | 195 | 195 | 602 | 25-Nov | 4.28% | 28.29% |
Hermes Centre | HRM:MO | MNT | 61 | -9 | -12.86% | 61 | 61 | 61 | 851 | 25-Nov | 12.96% | 5.17% |
Jenko Tour Bureau | JTB:MO | MNT | 93 | 2 | 2.20% | 93 | 94 | 93 | 15,446 | 25-Nov | -1.06% | -3.13% |
Telecom Mongolia | MCH:MO | MNT | 2,800 | -199 | -6.64% | 2,800 | 2,800 | 2,800 | 70 | 25-Nov | -20.00% | -17.16% |
Mongolia Dev Res | MDR:MO | MNT | 1,200 | 0 | 0.00% | 1,200 | 1,200 | 1,200 | 0 | 24-Nov | -7.69% | -14.89% |
Moninjbar | MIB:MO | MNT | 138 | 0 | 0.00% | 138 | 138 | 138 | 0 | 22-Nov | 20.00% | 13.11% |
Mongol Nekhmel | MNH:MO | MNT | 2,700 | -100 | -3.57% | 2,700 | 2,700 | 2,700 | 28 | 25-Nov | 107.69% | 150.00% |
Hotel Mongolia | MSH:MO | MNT | 798 | 0 | 0.00% | 798 | 798 | 798 | 0 | 22-Nov | | 85.58% |
Darkhan Nekhii | NEH:MO | MNT | 6,000 | 0 | 0.00% | 6,001 | 6,001 | 6,000 | 56 | 25-Nov | 22.45% | 39.63% |
Nak Tulsh | NKT:MO | MNT | 197 | 0 | 0.00% | 197 | 197 | 197 | 0 | 23-Nov | -39.38% | -43.71% |
Olloo | OLL:MO | MNT | 137 | 0 | 0.00% | 137 | 137 | 137 | 0 | 22-Nov | -8.67% | -16.97% |
Remikon | RMC:MO | MNT | 150 | -1 | -0.66% | 149 | 151 | 148 | 164,077 | 25-Nov | 108.33% | 100.00% |
Sharyn Gol | SHG:MO | MNT | 13,000 | -400 | -2.99% | 13,000 | 13,000 | 13,000 | 600 | 25-Nov | 23.81% | 20.93% |
Shivee Ovoo | SHV:MO | MNT | 18,000 | 0 | 0.00% | 18,000 | 18,000 | 18,000 | 72 | 25-Nov | 38.46% | 29.03% |
Sor | SOR:MO | MNT | 2,100 | 200 | 10.53% | 1,903 | 2,100 | 1,830 | 2,272 | 25-Nov | 180.00% | 147.06% |
Suu | SUU:MO | MNT | 70,000 | 0 | 0.00% | 70,000 | 70,000 | 70,000 | 0 | 14-Nov | 233.54% | 233.54% |
Tav | TAV:MO | MNT | 30,000 | 0 | 0.00% | 30,000 | 30,000 | 30,000 | 0 | 16-Nov | | 0.00% |
Talkh Chikher | TCK:MO | MNT | 10,000 | -1400 | -12.28% | 10,501 | 10,501 | 10,000 | 31 | 25-Nov | 170.27% | 185.71% |
Tavantolgoi | TTL:MO | MNT | 11,000 | 0 | 0.00% | 11,001 | 11,001 | 11,000 | 431 | 25-Nov | 90.97% | 105.61% |
State Dept Store | UID:MO | MNT | 480 | 19 | 4.12% | 470 | 480 | 470 | 1,835 | 25-Nov | 11.63% | 13.21% |
Ulaanbaatar Hotel | ULN:MO | MNT | 57,000 | -3000 | -5.00% | 57,000 | 57,000 | 57,000 | 7 | 25-Nov | 107.27% | 115.08% |
Mongol Savkhi | UYN:MO | MNT | 2,600 | 0 | 0.00% | 2,602 | 2,602 | 2,600 | 0 | 24-Nov | 372.73% | 372.73% |
Zoos Goyol | ZOO:MO | MNT | 800 | 0 | 0.00% | 800 | 800 | 800 | 94 | 25-Nov | 1.27% | 0.00% |
HKEx | Solartech Int’l | 1166:HK | HKD | 64 | 1.125 | 1.79% | 64 | 64 | 64 | 0 | 25-Nov | -29.09% | -26.86% |
Winsway | 1733:HK | HKD | 19.75 | -1.5 | -7.06% | 21.25 | 21.25 | 19.75 | 92,625 | 25-Nov | -83.81% | -80.40% |
SouthGobi Resources | 1878:HK | HKD | 5 | 0 | 0.00% | 5 | 5 | 4.75 | 0 | 25-Nov | -67.74% | -71.43% |
China Gold | 2099:HK | HKD | 34.5 | 0.125 | 0.36% | 34.375 | 34.5 | 34 | 0 | 25-Nov | -15.85% | -12.66% |
CNNC Int’l | 2302:HK | HKD | 2.375 | 0 | 0.00% | 2.375 | 2.375 | 2.375 | 0 | 25-Nov | | -13.64% |
Real Gold Mining | 246:HK | HKD | 64 | 1.125 | 1.79% | 64 | 64 | 64 | 0 | 25-Nov | -29.09% | -26.86% |
Mongolia Energy | 276:HK | HKD | 19.75 | -1.5 | -7.06% | 21.25 | 21.25 | 19.75 | 92,625 | 25-Nov | -83.81% | -80.40% |
Zijin Mining | 2899:HK | HKD | 5 | 0 | 0.00% | 5 | 5 | 4.75 | 0 | 25-Nov | -67.74% | -71.43% |
Mongolia Inv Group | 402:HK | HKD | 34.5 | 0.125 | 0.36% | 34.375 | 34.5 | 34 | 0 | 25-Nov | -15.85% | -12.66% |
North Asia Resources | 61:HK | HKD | 2.375 | 0 | 0.00% | 2.375 | 2.375 | 2.375 | 0 | 25-Nov | | -13.64% |
China Daye Non-Fer. | 661:HK | HKD | 64 | 1.125 | 1.79% | 64 | 64 | 64 | 0 | 25-Nov | -29.09% | -26.86% |
Bestway Int’l | 718:HK | HKD | 19.75 | -1.5 | -7.06% | 21.25 | 21.25 | 19.75 | 92,625 | 25-Nov | -83.81% | -80.40% |
Asia Coal | 835:HK | HKD | 5 | 0 | 0.00% | 5 | 5 | 4.75 | 0 | 25-Nov | -67.74% | -71.43% |
Mongolian Mining | 975:HK | HKD | 34.5 | 0.125 | 0.36% | 34.375 | 34.5 | 34 | 0 | 25-Nov | -15.85% | -12.66% |
SGX | LionGold | LIGO:SP | SGD | 2.375 | 0 | 0.00% | 2.375 | 2.375 | 2.375 | 0 | 25-Nov | | -13.64% |
LSE | Central Asia Metals | CAML:LN | GBp | 64 | 1.125 | 1.79% | 64 | 64 | 64 | 0 | 25-Nov | -29.09% | -26.86% |
Petro Matad | MATD:LN | GBp | 19.75 | -1.5 | -7.06% | 21.25 | 21.25 | 19.75 | 92,625 | 25-Nov | -83.81% | -80.40% |
Metal-Tech | MTT:LN | GBp | 5 | 0 | 0.00% | 5 | 5 | 4.75 | 0 | 25-Nov | -67.74% | -71.43% |
Origo Partners | OPP:LN | GBp | 34.5 | 0.125 | 0.36% | 34.375 | 34.5 | 34 | 0 | 25-Nov | -15.85% | -12.66% |
Tembusu | TIL:LN | GBp | 2.375 | 0 | 0.00% | 2.375 | 2.375 | 2.375 | 0 | 25-Nov | | -13.64% |
North America | Aberdeen Int’l | AAB:CN | CAD | 0.58 | -0.06 | -9.38% | 0.64 | 0.64 | 0.58 | 85,250 | 25-Nov | -28.27% | -5.50% |
Blue Zen Mem. Parks | BZM:CN | CAD | 0.155 | 0.005 | 3.33% | 0.155 | 0.155 | 0.155 | 750 | 25-Nov | | 0.00% |
Centerra Gold | CG:CN | CAD | 19.63 | -0.19 | -0.96% | 20.12 | 20.16 | 19.35 | 123,823 | 25-Nov | 1.06% | 10.53% |
China Gold | CGG:CN | CAD | 2.88 | 0.02 | 0.70% | 2.81 | 2.99 | 2.81 | 62,069 | 25-Nov | -46.96% | -50.34% |
Denison Mines | DML:CN | CAD | 1.29 | 0.02 | 1.57% | 1.25 | 1.32 | 1.24 | 821,931 | 25-Nov | -62.17% | -60.91% |
Denison Mines | DNN:US | USD | 1.22 | 0 | 0.00% | 1.2 | 1.26 | 1.17 | 381,510 | 25-Nov | -64.33% | -61.51% |
East Asia Minerals | EAS:CN | CAD | 0.86 | 0.01 | 1.18% | 0.85 | 0.88 | 0.84 | 41,750 | 25-Nov | -89.30% | -87.38% |
Entree Gold | EGI:US | USD | 1.24 | -0.09 | -6.77% | 1.25 | 1.27 | 1.19 | 144,751 | 25-Nov | -64.16% | -53.38% |
Erdene Resource | ERD:CN | CAD | 0.38 | 0.03 | 8.57% | 0.395 | 0.4 | 0.38 | 8,080 | 25-Nov | -69.35% | -46.48% |
Entree Gold | ETG:CN | CAD | 1.246 | -0.042 | -3.26% | 1.29 | 1.3 | 1.23 | 208,500 | 25-Nov | -64.09% | -53.68% |
Fortress Minerals | FST:CN | CAD | 4.09 | 0 | 0.00% | 4.09 | 4.09 | 4.09 | 0 | 18-Nov | -5.98% | 7.63% |
Garrison Int’l | GAU:CN | CAD | 0.025 | 0.01 | 66.67% | 0.025 | 0.025 | 0.025 | 40,000 | 25-Nov | -72.22% | -54.55% |
Gulfside Minerals | GMG:CN | CAD | 0.08 | 0 | 0.00% | 0.08 | 0.08 | 0.08 | 0 | 23-Nov | -15.79% | -33.33% |
Green Tech Solutions | GTSO:US | USD | 0.082 | 0.008 | 10.81% | 0.095 | 0.095 | 0.082 | 146,498 | 25-Nov | | 0.00% |
Ivanhoe Energy | IE:CN | CAD | 1 | -0.01 | -0.99% | 1.09 | 1.09 | 0.99 | 190,747 | 25-Nov | -63.24% | -56.52% |
Ivanhoe Energy | IVAN:US | USD | 0.96 | -0.02 | -2.04% | 0.96 | 0.9904 | 0.9599 | 177,746 | 25-Nov | -64.71% | -57.33% |
Ivanhoe Mines | IVN:CN | CAD | 19.04 | 0.25 | 1.33% | 18.69 | 19.33 | 18.67 | 788,759 | 25-Nov | -17.22% | -19.63% |
Ivanhoe Mines | IVN:US | USD | 18.21 | 0.31 | 1.73% | 17.82 | 18.44 | 17.82 | 1,528,122 | 25-Nov | -20.55% |
