Cover Mongolia: [CPSI NewsWire: ETT May Sell Pre-IPO Convertible Bonds, IPO Won't Be Rushed

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. Follow CPSI NewsWire on Twitter, Facebook

Mongolia Consider Pre-IPO Convertible Bond Sale for Erdenes

March 5 (Bloomberg) Erdenes Tavan Tolgoi, the Mongolian coal miner planning an initial public offering this year, may sell convertible bonds before listing, Minerals and Energy Minister Dashdorj Zorigt said.

The bonds may be sold to a "long-term, strategic investor," Zorigt said today in an interview while attending the Mongolia Economic Forum in Ulan Bator, the capital. The government won't press Erdenes TT, as the company is known, to complete the IPO before a parliamentary election in June, allowing the timing and place of sale to be decided on a "commercial" basis, he said.

The IPO will mark Mongolia's first listing of a state-run miner overseas as the country seeks to use its mineral riches to support an economy that grew a record 17.3 percent last year. The government has considered London, Mongolia and Hong Kong for the share sale, seeking to raise more than $3 billion.

The 6 billion-metric-ton Tavan Tolgoi coal deposit is one of the world's biggest untapped sources of the resource and one of two projects transforming the mostly rural economy into China's biggest supplier of coking coal, a steel-making material. The Rio Tinto Group-led Oyu Tolgoi copper and gold field, set to be the third-largest globally by 2018, is due to start output within six months, according to the mining company.

The mining industry accounts for 30 percent of Mongolia's gross domestic product and 32 percent of government revenue, the Oxford Business Group said in a Mongolia 2012 report, which was distributed at the forum.

Rising Production

Erdenes TT produced about 1 million tons in its first year of mining at the East Tsankhi area of the Tavan Tolgoi field. Output will increase to at least 3 million tons this year, Chief Operating Officer Graeme Hancock said in January.

Aluminum Corp. of China is Erdenes TT's main buyer after signing a six-year accord that also stipulates that 30 percent of its purchases must be delivered to ports for resale to Japanese trading companies Itochu Corp. (8001) and Mitsui & Co. (8031), and Korea Resources Corp. (RESCOZ)

The expansion of Erdenes TT to a planned production of 15 million tons, or 40 percent of Mongolia's total coal output in 2010, depends on construction of a rail road to China and the resolution of a tender for the West Tsankhi area of the Tavan Tolgoi site, for which the company also owns the license.

Spring Start

Rail construction is due to start this spring with the routes south to China and northeast to Russia being "very important" for Mongolia's development, Zorigt said. China buys about 80 percent of Mongolia's exports, while Russia has touted a route via its Far East territories as an alternative way to reach commodity buyers in Japan and South Korea.

Discussions over who will develop the West Tsankhi area, which could produce 15 million tons of coal a year, the same as Erdenes TT's east site, are still on and Mongolia expects a deal can be reached "very soon," Zorigt said, without giving more details.

Mongolia in March 2011 shortlisted six groups, including Vale SA (VALE), ArcelorMital, and Peabody Energy Corp. (BTU), to develop the West Tsankhi site. In June, China's Shenhua Group (SHGCLZ), a consortium led by OAO Russian Railways (RZHD) and Peabody, the largest U.S. coal miner, was announced as the winner before the government said it would review the results.

"They are all still being considered," Zorigt said.

The infrastructure development of southern Mongolia has been boosted by the Tavan Tolgoi and Oyu Tolgoi projects and the government is interested in promoting "quite a few" other projects in resources that could do the same for other parts of the country, Zorigt said.

Still, Mongolia won't restart issuing new mining licenses this year to weed out speculators, Zorigt said.

"We want more government control over this to make sure people with the licenses truly invest in the mining and exploration," Zorigt said. "In December we will decide" when new license issues can begin, he said.

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Mongolia to Start Marketing Public, State-Backed Bonds March 8

March 6 (Bloomberg) The Development Bank of Mongolia LLC, a state-backed lender, will begin meeting with investors this week to offer dollar-denominated bonds in the country's first public offering of government-guaranteed foreign debt.

The sale, part of the $600 million Euro Medium Term Note program the bank arranged with ING Groep NV last December, will start with a series of investor meetings on March 8, ING said today in a e-mailed statement. Deutsche Bank AG (DBK) and HSBC Holdings Plc (HSBA) have also been mandated to arrange meetings with investors for the sale, the statement said.

Mongolia is raising funds overseas to build rail and power projects and expand its main industry, mining. The nation's economy expanded 17.3 percent last year, among the fastest in the world, as government spending in real terms doubled in the last two years, the World Bank said last month.

"The economy is entering another spring," Prime Minister Sukhbaatar Batbold told the Mongolian Economic Forum on March 5. In the past two years, the country's working population expanded the most in half a century, he said.

Mongolia overtook Australia in June as the biggest supplier of coking coal to China, with the mineral accounting for almost all its export growth last year, the World Bank said. China accounts for 80 percent of Mongolia's exports.

A further increase in coal and iron ore exports to neighboring China won't be possible without more rail lines and power plants, with most of Mongolia's bulk commodities crossing the border by truck, according to Ulan Bator-based Trade and Development Bank, a corporate bank part-owned by Goldman Sachs Group Inc. (GS)

Funding Needs

The country will need as much as $68 billion by 2015 to invest in new mines, roads, houses, farming and social spending, Trade and Development Bank estimated in October. Domestic sources will probably account for less than 27 percent of that, with the majority coming from foreign direct investment and international capital markets, the bank said.

The Development Bank of Mongolia sold $20 million of one- year bonds to ING in December in a private placement. The bonds carried a 6 percent coupon and a 1 percent fee, the bank's First Deputy Chief Executive Officer Bolormaa Luvsandorj said in December.

A medium-term note program simplifies the process for issuers seeking to sell overseas bonds as it provides one standardized document. It allows for a continuous sale of debt across currencies and at various times, as opposed to a single bond issue.

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S&P Rates DBM's Inaugural Issue Of U.S. Dollar Notes 'BB-'

SINGAPORE (Standard & Poor's) March 6, 2012--Standard & Poor's Ratings Services today assigned its 'BB-' foreign currency issue rating to the proposed issue of U.S. dollar notes by Development Bank of Mongolia (DBM). The bank's inaugural issue is a senior unsecured drawdown from its US$600 million euro medium term note program, which we rated 'BB-'. The tenure of the proposed issue is expected to be between three and five years.

DBM is wholly owned by the government and is the only policy bank in Mongolia. The bank's mandate is to secure financing for a variety of projects that constitute key components of the government's development strategy. These include railroad and road transportation, infrastructure for housing projects, energy, and industrial development.

All payments related to the notes under the program have the unconditional, irrevocable, and timely guarantee of the government of Mongolia (BB-/Positive/B). The obligations rank pari passu with other external debt obligations of the sovereign. We have equalized the issue rating with the sovereign credit rating on Mongolia because of the strength of the sovereign guarantee and ownership, and the bank's policy role.

The sovereign ratings on Mongolia reflect the country's underdeveloped, resource-based economic profile and weak policy environment. Mongolia's exceptionally strong growth outlook over the medium term, and moderating public and external debt ratios balance these weaknesses. Continued strong donor and multilateral support also underpin the rating by ensuring a moderate debt-servicing burden.

Link to release

MMC: Amendment to US$180M Loan-Facililty

March 6, Mongolian Mining Corporation (HK:975) --

The board of directors (the "Board") of Mongolian Mining Corporation (the "Company") is pleased to announce that on 5 March 2012, Energy Resources LLC, an indirect whollyowned subsidiary of the Company, entered into an amendment and consent agreement (the "Amendment and Consent Agreement") with the European Bank for Reconstruction and Development ("EBRD"), Nederlandse Financierings-Maatschappij Voor Ontwikkelingslanden N.V. (Entrepreneurial Development Bank of Netherlands) (the "Bank of Netherlands"), and Deutsche Investitions-und Entwicklungsgesellschaft mbH (The German Investment and Development Company) (the "German Company"). Pursuant to the Amendment and Consent Agreement, the parties agreed to amend the terms of the US$180 million term-loan facility under the loan agreements entered into by Energy Resources LLC with (i) EBRD on 12 May 2010 (as amended and restated on 11 August 2010 and further amended on 8 October 2010), (ii) the Bank of Netherlands on 11 August 2010 (as amended on 13 October 2010), and (iii) the German Company on 11 August 2010 (as amended on 13 October 2010), respectively. The proceeds of such US$180 million term-loan facility were applied to the development of the Group's coal handling and preparation plant (the "CHPP") and related infrastructure at Ukhaa Khudag mine of the Company (the "UHG mine").

The loan bears interest semi-annually at the floating rate of six-months LIBOR plus agreed margin per annum. The principal amount of the loan of US$120 million is repayable in 11 equal semiannual installments ending on 15 May 2016 and the principal amount of the loan of US$60 million is repayable in two equal installments on 15 May 2015 and 15 May 2016, respectively. As of 31 December 2011, the outstanding principal amount was US$169,090,909.

Pursuant to the Amendment and Consent Agreement, the margin per annum will be reduced to 3.25%-3.75%, and certain securities of the loan will be released, namely the pledge of mining license 11952A of the UHG mine and pledge of shares in Energy Resources LLC, in replacement of security over fixed assets such as Company's CHPP expansion which was commissioned in February 2012 and the water supply infrastructure assets.

The Company believes that these amendments will enable the Company to reduce its cost of financing and increase its credit profile, thus increasing the ability of the Company to fund its further expansion and development.

The project financing and the amendments represent a long-term support of the lenders as well as the execution capability of the Company in developing the UHG mine.

Shareholders and potential investors of securities of the Company are advised to exercise caution when dealing in the securities of the Company.

Link to release

KCC closed +17.65% to 30c

Kincora Copper Limited Announces Exploration Results and Its 2012 Strategy

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 5, 2012) - Kincora Copper Limited (TSX VENTURE:KCC) ("Kincora" or "the Company") announces updated exploration results and details of the 2012 drilling campaign for the Bronze Fox project in Mongolia, which occupies 223km2 of land 140km northeast of the Oyu Tolgoi project, on the same copper belt.

Having completed the 2011 exploration campaign, the results continue to demonstrate the significant potential of the Bronze Fox project. Encouraged by the extent of mineralization within the license area, the 2012 exploration campaign will continue to define the resource potential.

Commenting on today's announcement, Igor Kovarsky, President and CEO of Kincora, said: "These are the final results from the 2011 exploration campaign which continue to demonstrate that Bronze Fox (Buyant License) hosts a large area of copper and gold mineralization, open at depth and in every direction with high grade intersections. These results combined with those announced on 20 February are a great development for the project. We are also pleased to announce our 2012 strategy which aims to define a maiden resource."

Drilling highlights

In 2011 Kincora completed a total of 12,435m of diamond (core) drilling. Of the 23 holes drilled, 22 holes hit copper-gold or gold mineralization. The significant results include:

· In West Kasulu:

· Hole F27 intersected some small intervals of over 1g/t of Au (up to 2.48g/t Au) and also 30-40m of copper mineralization:

o Including 37m from 139m at an average 0.4% CuEq, with up to 3.03% Cu and 1.66g/t Au

· F28 had over 750m of consistent copper mineralization, with Mo mineralization zones up to 0.9% Mo, and ending in a mineralization zone

o Including 116m from 260m with average 0.4% CuEq and up to 0.89% Cu and 0.32g/t Au. Including some small intervals with >1g/t Au (up to 1.76g/t)

· Mineralization in hole F29 started from the surface; the hole ended in a very strong argillic alteration zone with disseminated pyrite and minor chalcopyrite which is potentially related to a porphyry mineralization system. Above 326m, a total of 209m of copper mineralization was intersected and locally up to 2.26g/t Au was encountered.

o Including 12m from 62m with mineralization up to 0.61% Cu at average 0.4% CuEq

· In hole F31 at a depth of around 550m, a porphyry dyke was intersected with some porphyry xenoliths containing over 5% of chalcopyrite. Assay results received indicate this porphyry dyke contains 0.4-0.7% Cu with up to 0.63g/t of associated Au. With the highest Cu assay return over 5% Cu and highest Au of 1.45g/t at 7-10m depth

o Including 110m from 6m at an average of 0.4% CuEq

· F46: 10m from 61m at 0.5% CuEq

· F48: 42m from 142m at 0.5% CuEq, with up to 1.06 g/t Au and 0.72% Cu. Also, 50m from 292m at 0.4% CuEq, with up to 0.93% Cu

· F49: 8m from 110m at 0.7% CuEq, with up to 1.17g/t Au and 0.95% Cu

· 6 holes were drilled in the Buchanan Heights and Sophie North target areas for initial scout drill testing of a potential gold target zone. 4 holes intersected hydrothermal related pyrite and arsenopyrite veins. Assay results showed 1g/t - 4.2g/t Au with associated Cu of 1.88%. Those holes include: F32, F33, F34 and F36

· At drill hole F47 in Dunlop Fox, in addition to the gold intersections announced on 20 February 2012, the assay results show there is associated copper mineralization, in particular:

o 18m from 29m at 0.6% CuEq, including 1m at 2.07g/t Au and 1.86% Cu

o 15m from 84m at 0.8% CuEq, including 1m at 8.39g/t Au

· Detailed drilling information can be found in Kincora's website (www.kincoracopper.com)

2012 Strategy

Kincora's key objectives from its 2012 drilling campaign are to:

· Define a shallow open pit copper resource potential

· Continue to search for high grade copper resource potential at depth

· Define gold targets and resource potential

· Continue with its bolt-on acquisition strategy

The 2012 strategy is expected to cost $5.2 million, and is compiled of:

· Diamond drilling $4.5 million

· DDIP survey $150,000

· Infill soil geochemistry study $130,000

· Detailed geological mapping $50,000

· Other $370,000

2012 Drilling campaign

Kincora's 2012 diamond drilling campaign will begin in March with a total of 16,000m planned. The focus of the drilling campaign will be as follows:

West Kasulu (WK):

· Drill 10 holes with a total length of 4,000m to define open pit potential

· Target new gold and copper areas identified by soil geochemistry and IP anomalies

Leca Pass (LP):

· Drill 5 holes with a total length of 3,000m to define the main mineralization zone

Dunlop Fox (DF):

· Drill 6 holes with a total length of 3,000m to define the known extension of the mineralization zones

· Test the new gold soil and IP anomaly area to define new gold targets

Buchanan Heights (BH):

· Drill 5 holes with a total length of 3,000m to test new targets and also to define the extension of known mineralization zones

New target area:

· Drill outside of the current work concentration zone with 3,000m in total length.

· The work will concentrate in the southern high gold anomaly and chargeability areas

Geological surveys

· Detailed geological mapping for new target areas

· DDIP survey over 50km

· Complete 2011 programme which was postponed due to weather conditions. This includes a geophysical study and DDIP survey on target areas

· 2012 work will concentrate in the southern area which contains:

o VIP anomalies, including a high VIP anomaly area with a potentially concealed porphyry system

o Soil and rock chip high grade gold anomalies and alteration zones

o Magnetic depletion (in the southeast corner)

Infill soil geochemistry study

· Target approximately 3,000 samples

· 50-100m grid for high soil geochemistry anomaly areas to locate mineralization zones, particularly for gold, given the high grade rock chip samples and intersections identified

Link to release

ERD closed -4.6% to 41.5c

Erdene Announces Drilling Program for Altan Nar Gold-Silver Project

HALIFAX, NOVA SCOTIA--(Marketwire - March 5, 2012) - Erdene Resource Development Corp. ("Erdene") (TSX:ERD) is pleased to announce that a review and interpretation of the Altan Nar drilling results has been completed and the next phase of the drilling program designed. Drilling is expected to be underway by the first week of April.

Altan Nar Highlights

· Near surface, low sulphidation gold-silver discovery in Q3/Q4 2011

· Multiple gold targets throughout 3 kilometre by 2 kilometre area

· Discovery Zone demonstrates increasing grade at depth with:

o 55 metres of 1.02 g/t gold and 12 g/t silver within 60 metres of surface

o 29 metres of 4.3 g/t gold and 24.1 g/t silver at 110 metres depth

· Discovery Zone traced over 300 metres to the northeast:

o Multiple intersections greater than 1 g/t gold, ranging up to 23 metres in thickness, were returned within a 125 metre wide zone of gold-silver-polymetallic mineralization that is open along strike and at depth

· Anomalous gold-silver bearing mineralized zones intersected in 15 of 24 holes

· Next phase of drilling to commence in April 2012

Altan Nar Exploration Plans 2012

Erdene discovered the Altan Nar gold-silver prospect in 2011 during a regional exploration program on its tenement blocks, covering approximately 200,000 hectares in southwestern Mongolia. Following the discovery of mineralized epithermal-style quartz veins at Altan Nar, an extensive program of ground geophysics (magnetics and induced polarization), mapping, prospecting and soil geochemistry identified numerous gold targets throughout a large area (2 kilometre by 3 kilometre) with anomalous lead and zinc in soil.

Scout drilling in the second half of 2011 confirmed the presence of near-surface gold-silver mineralization ('Discovery Zone') over a strike length of 300 metres, with widths up to 125 metres. A wide intersection of steeply-dipping mineralization (55 metres at 1.02 g/t gold and 12 g/t silver) was encountered in an angled drill hole (TND-09; 45 degree). A subsequent hole (TND-19), drilled 50 metres below TND-09, intersected 29 metres of 4.3 g/t gold and 24.1 g/t silver at an approximate depth of 110 metres, thus confirming higher grades for both gold and silver mineralization at depth. The Discovery Zone remains open along strike and at depth.

Scout drilling was also conducted in Q4 2011 outside the Discovery Zone, over a 1.1 kilometre by 0.9 kilometre area to test other gold-silver targets within the larger 2 kilometre by 3 kilometre target area. Significant gold mineralization (i.e. greater than 0.5 g/t gold over one or more metres) was encountered in eight of 17 holes throughout the target area. Additional drilling is planned for 2012 to test these zones and other gold-silver targets once additional detailed geochemical and geophysical surveys are completed. The geochemical and geophysical surveys will commence once ground conditions permit.

Further drilling through a phased drill program is planned for Q2 2012. The initial focus will be on delineating grade and vertical extent of the Discovery Zone mineralization followed by regional target testing. As results from the phase one drill program provide confidence, the program will shift into defining the dimensions of the Discovery Zone and additional areas being further advanced through the regional target testing.

The drill program will be carried out in three phases:

1. Follow-up drilling in Discovery Zone - Designed to test vertical continuity of gold-bearing zones within the Discovery Zone to a depth of 300 metres; approximately 2500 metres

2. Regional scout drilling of additional gold targets - A series of shallow holes designed to test continuity of gold-bearing zones identified outside the Discovery Zone and initial testing of additional surface targets; approximately 2000 metres

3. Delineation drilling in Discovery Zone - Approximately 50 metre spaced infill drilling (vertically and laterally) within the Discovery Zone; approximately 5500 metres

Prospectors and Developers Association of Canada (PDAC) Convention

Erdene's senior management and technical team will be in attendance at the PDAC 2012 International Convention, Trade Show and Investors Exchange - Mining Investment Show, March 4 to 7, Metro Toronto Conventions Centre - South Building. Investors are encouraged to drop by our booth (#2112) for an update of the Company's projects, including Altan Nar.

Link to release

Altan Rio Begins First-Pass Drilling Program at the Khavchuu Gold Project, Northern Mongolia

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 5, 2012) - Altan Rio Minerals Limited (TSX VENTURE:AMO) ("Altan Rio" or the"Company") today announces the initiation of the first drilling campaign at the Khavchuu gold exploration project ("Khavchuu"), which the Company currently has an option to acquire 100% interest in, covering 7.14 km2 in Tov Aimag, northern Mongolia. The project contains significant geophysical and gold-arsenic geochemical anomalies in a Boroo mine type orogenic gold setting and has never been drilled. The planned reconnaissance drilling is designed to test a large tract of geology over an area of approximately 5 x 6 km, searching for key structural features such as low-angle fault zones. Six holes encompassing 1,800 meters of diamond core drilling are planned.

GEOLOGY

The general geological setting at Khavchuu is very similar to Boroo and surrounding deposits such as Ulaan Bulag. This geology is characterized by large areas of Kharaa formation units (siltstone, sandstone, argillite) of probable Middle Cambrian to Early Ordovician age, intruded by Middle-Late Ordovician Boroo Complex granitoids and later probable Devonian units.

Economic gold mineralization in the district is dominated by large tonnage quartz-sericite-sulfide (pyrite, arsenian pyrite and arsenopyrite dominate) alteration zones, commonly known as "QSP", in granitoids. The QSP alteration is readily imaged by IP surveys which show chargeability highs, and magnetic surveys which show coincident moderate low zones (magnetite destruction). Where bodies are exposed geochemistry shows robust gold and arsenic anomalies; where covered the anomalies become very subtle.

RECENT WORK

Altan Rio performed rock sampling and detailed soil geochemical grids (~1,200 samples) in 2011 in the northwestern quarter of the project. This work showed robust arsenic anomalies coincident with IP chargeability highs, over several NW oriented structures. Low-level gold anomalies were also present. This combination - coincident gold, arsenic and IP highs - is fundamental to all economic deposits discovered thus far in the Boroogol District. During sampling, the team also discovered a small zone of quartz veining hosting visible gold.

THE TARGETS

Three main areas will be drilled in our first effort to gain knowledge of the subsurface stratigraphy and structure:

A - Target area A in the northwest part of the project has recently been investigated by a large soil geochemical grid, producing Au and As soil anomalies coincident with IP chargeability of both prospective amplitude and promising size, therefore achieving a first-priority target status. Near-vertical quartz veins in the area locally host visible gold and a gently east-dipping low-angle fault zone has been mapped in the vicinity, which projects at depth into the IP chargeability anomaly. Rock samples in the area reach 0.11 ppm Au and 842 ppm As. Two holes are planned for about 600 m of drilling.

B - Target area B in the northeast quarter, another prospective IP feature, has been rock chip sampled where strong sericite alteration exists along a high-angle structural fabric. The objective is to track the high-angle fabric down structure to a possible intersection with a near-horizontal fault zone. Rock samples in the area reach 0.15 ppm Au and 177 ppm As. Two holes are planned for about 600 m of drilling.

C - Target area C in the south part of the project appears similar geologically to target area A, also hosting gold-bearing quartz veins, and represents a very prospective IP feature in a Boroo complex granitoid - which has proven thus far to be the preferred host unit for large gold deposits in the district. A north-dipping near-horizontal structure has been mapped just south of the area, and therefore projects at depth into the IP feature. Rock samples in the area reach 0.14 ppm Au and 564 ppm As. Two holes are planned for about 600 m of drilling.

Drilling is scheduled to begin in early March with two diamond core drills, and be finished in about a month.

To view the Figures associated with this release, visit http://media3.marketwire.com/docs/ALTAN0305.pdf.

Link to release

MOU closed up 4% to 5.2c Monday. Capital raised at 4c. MOU trading

Modun Resources ups the ante in Mongolia, further coal acquisition

March 6 (Proactive Investors Australia) Modun Resources (ASX: MOU) has been reinstated to the ASX on the news that the company will acquire a large, pre-production coal project in the South Gobi Coking Coal District, Mongolia.

The company already owns the Nuurst thermal coal project in Central Mongolia, which already hosts a coal JORC Resource of 489 million tonnes.

The latest acquisition of the advanced mining Ha (Tsaagan Tolgoi) project with mining license and JORC resource of 45.4 million tonnes is a very neat fit with Nuurst, adding further upside for Modun Resources.

There is also an Exploration Target of 150 million to 250 million tonnes of high quality thermal coal and potential coking coal in the South Gobi Coking Coal District.

Even more compelling for Modun Resources shareholders is that there is planned production from an open pit on the Tsaagan Tolgoi mining licence from December 2012.

The Tsagaan Tolgoi Project is located on an existing mining licence (expiring 2038) 95 kilometres north of the Chinese border, 80 km south of Mongolia's renowned 6 billion tonne coking coal project, Tavan Tolgoi, and 100 km west of the existing paved road and planned rail link into China.

To fund the purchase, Modun will place 187.5 million shares at $0.04 to raise $7.5 million, comprising of two tranches. Tranche one is 105 million shares, with tranche two subject to shareholder approval.

The vendor SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) will become a 14.9% shareholder of Modun Resources upon approvals.

The acquisition includes two mining licenses. The first known as Tsagaan Tolgoi, is 10,500 hectares which already hosts an exploration target of 150 million to 250 million tonne (grading Qadb 5300 kcal/kg to Qadb 6500 kcal/kg) of high quality thermal coal and potential coking coal.

Tsaagan Tolgoi currently has a 45.4 million tonne coal JORC Resource which has been defined from just 5% of the mining license area.

Significant resource extension work has already been planned at Tsaagan Tolgoi for the 2012 drilling season, with a planned open pit coal production from December 2012.

The second part of the acquisition is the 26,700 hectare exploration licence known as Ajlyn Talbai, located in the South Gobi Coking Coal District.

Highlighting one of the defining factors of the acquisition is the strategic location, being close to existing and planned infrastructure, and near the Chinese border.

Consideration for the deal

For 100% of the Tsagaa Tolgoi project and the Ailyn Talbai exploration licence, the consideration is:

- US$7.5 million in cash;

- US$12.5 million worth of Modun shares calculated at the lesser of A$0.06 per share or the price of any capital raising of more than $2 million prior to completion;

- Options to acquire US$5 million of Modun shares to be issued to SouthGobi after the expiration of 12 months and prior to 60 months;

- Options to acquire, within 12 months from commercial shipment of first coal sales, US$5 million of Modun shares to be issued to SouthGobi; and

- Right to nominate a person to the board of Modun provided SouthGobi retains minimum 14.99% shareholding in Modun.

Mongolian exposure through the Nuurst Project

Other coal exposure for Modun in the country includes the Nuurst project in Central Mongolia, which already hosts a coal JORC Resource of 489 million tonnes.

The company is looking to progress the project in 2012 by completing Scoping Studies, along with the progression of the current exploration licence to a mining licence.

More potential acquisitions in pipeline

Adding some extra interest to the Modun story is that the company is continuing a project review with the aim of expanding its portfolio of licenses in the South Gobi region, with the company currently assessing multiple opportunities.

Modun said, "Whilst acquisition negotiations are continuing on a number of projects, such negotiations are incomplete and may not eventuate in agreed terms."

Link to article

Link MOU release, March 5

STOCK EXCHANGE WEEKLY REVIEW

Ulaanbaatar, Mongolia, March 5 /MONTSAME/ Five stock trades were held at Mongolia's Stock Exchange from February 27 to March 2. In overall, 1.1 million shares were sold of 79 joint-stock companies totaling MNT 526.3 million.

Index TOP-20 was 21567.24 points increasing 528.98 units or 2.5% against the week earlier. The total market capitalization was set at MNT two trillion 105.7 billion increasing MNT 29.6 billion or 1.4%.

Shares of "Tsagaan tolgoi" /74.8%/, "Khangal" /51.9%/, and "Nomt khairkhan" /48.2%/ increased, but shares of "Bayanteeg" /15.0%/, "Ikh barilga" /15.0%/, and "Mongol securities" /15.0%/ decreased.

52 stocks closed higher, 20 shares declined and seven shares remained unchanged.

Shares of "Remikon" /375.3 thousand units/, "Hermes center" /315.9 thousand units/ and "Genco tour bureau" /118.2 thousand units/ were the most actively traded in terms of trading volume and in terms of trading value--"APU" (MNT 109.8 million), "Remikon" (MNT 72.1 million), and "Talkh chikher" (60.9 million).

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Mitsui Seeks Copper Acquisitions With Record $17 Billion Cash: Commodities (and coal in Mongolia)

March 6 (Bloomberg) Mitsui & Co. (8031), holding a record $17 billion in cash, wants to buy mining stakes and expand operations to triple copper output and more than double coal production, easing its reliance on iron ore sales.

The biggest Japanese iron ore supplier is looking to buy 9 million metric tons of annual coal production from Russia, Australia, South America and Africa, Fuminobu Kawashima, head of resources of the Tokyo-based company, said in an interview. Mitsui also wants to add 120,000 tons of copper a year from South America, expecting Chinese demand will expand, he said.

"Iron ore makes a very strong contribution to our profit, and I'd like to see it balanced," Kawashima said. Iron ore, the main raw material for making steel, provides more than half of Mitsui's net income, according to Barclays Capital. (JNK)

The most resource-dependent of the Japanese trading companies has the most cash since 1993, after ore prices gained more than tenfold in the past decade. Separately, Mitsui is expanding mining ventures with partners including Chile's Codelco, Rio Tinto Group (RIO) and BHP Billiton Ltd. (BHP) as metals prices hover near historical highs.

"Iron ore lends Mitsui competitive strength and supports profits, but in the mid- to long-term it's important to widen the pipeline," Barclays analyst Kazuhisa Mori said by telephone in Tokyo. "Copper is a promising commodity."

The company may take advantage of the recent price drop in copper, the metal used in wires and pipes. It has declined 13 percent to $8,618 per ton in London during the past 12 months as concerns over Europe's debt crisis and a slowdown in Chinese economy cut demand.

…

Thermal Coal

Thermal coal sales to Japan, the world's second-biggest buyer of the power-station fuel, are set to rebound this year, according to Citigroup Inc. (C) Purchases may rise 3 percent to 104 million tons in 2012, exceeding last year and 2010, Daiwa Capital Markets says.

All but two of Japan's 54 nuclear plants remain idle almost 12 months after the March 11 disaster, boosting the need for thermal generation.

The spot price for Australian coking coal exceeded $330 per ton as a result of floods in the country, scaling back to $220 per ton currently, JPMorgan said in a Feb. 15 report. Coking coal may bottom out in the April-to-June period before rising as the cost of mining increases, Akira Kishimoto, an analyst with JPMorgan in Tokyo, said in the report.

Finding coal projects at "prices that meet our expectations" is proving tough, Kawashima said. Mitsui still wants to persevere in securing more coal from Mongolia, though a political "reset" there has stalled efforts, he said.

Mongolian Opportunity

Mongolia, which is due for parliamentary elections in June, has delayed last year's decision on which companies will develop the west-central part of a 6-billion-ton Tavan Tolgoi coal deposit. Mitsui bid to develop the West Tsankhi area with China's Shenhua Group (SHGCLZ), the world's biggest coal miner, and is still pursuing that interest, Kawashima said.

State-run Erdenes Tavan Tolgoi agreed to supply all of the coal from the East Tsankhi area to Aluminum Corp. of China Ltd., which in turn is due to sell 30 percent of the total to Mitsui, Itochu, and Korea Resources Corp.

Mitsui will also continue to consider adding iron ore production, Kawashima said. The trader set up a department last year to search for projects also outside of Australia, where all of its ore comes from, he said.

"We're watching and performing feasibility studies on projects in Russia and Africa," he said. "Everywhere has its difficulties but if they find a good asset, we'll go there."

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ADB provides assistance to PHL for wind energy dev't roadmap‏ (and will assess wind resources in Mongolia)

MANILA, March 5 (Zambo Times) — The Asian Development Bank has agreed to provide technical assistance to the Philippines for its wind energy development road map.

In its Quantum Leap in Wind Power Development in Asia and the Pacific project, the ADB said it will also assess wind resources in the Philippines along with three countries, namely Mongolia, Sri Lanka and Vietnam.

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Lottery in Mongolia

March 2 (Lenz Blog) May start operating soon, says the "Monvest" website.

This PDF-file press release from last August by "Monvest Inc.

", a corporation formed in Las Vegas for the purpose of rolling out a lottery service in Mongolia, lays out the plan.

They say they will collaborate with BIZINVIN, a company that has received an exclusive license for operating a lottery from the Mongolian Ministry of Finance. Anybody familiar with basic fundamentals of the gambling business will easily understand the importance of "exclusive licenses" to develop this market.

Their latest press releases say that they intend to list on the Frankfurt Stock Exchange, the first Mongolian company to do so.

In contrast, UNHCR reports that Mongolia abolished gambling by repealing the relevant law in 1999, ending a one year operation of a casino in the Chinggis Khan Hotel in Ulan Bator by a company called "Casinos Mongolia". And the last I heard from Parliament were plans to open a casino in Zamyn-Uud, requiring legislation for the purpose.