Mongolia Energy Corporation Limited · HKEX:276
Mongolia Energy — Corporate Update (November 2011)
36 slides from Mongolia Energy's corporate update, November 2011
Slide 1: Khushuut Coal Project Update
Mongolia Energy Corporation (Stock code: 276) Khushuut Coal Project Update November 2011 ENERGY RESOURCES DEVELOPER
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements that involve risks and uncertainties and intended to be covered by applicable safe harbor principles under applicable national and federal securities legislations. These statements are generally indicated by the use of forward-looking
Slide 3: Executive Board and Management
Executive Board and Management Simon Lo: Chairman Over 20 years of experience in the financial, securities and futures industries, including many trans-border transactions Served on the Board of Directors of a number of listed companies Identified and secured the resources projects for the com
Slide 4: Executive Board and Management
Executive Board and Management James J. Schaeffer, Jr: Chief Executive Officer Formerly Executive Director of Asia Pacific of John T. Boyd Company, a leading international mining and geological consulting firm and the technical adviser to China Shenhua’s IPO Leading industry expert and highly re
Slide 5: Executive Board and Management
Executive Board and Management James J. Dolan: Country Director Designate - MoEnCo Over 20 years experience in financial management in the international mining industry covering Russia, Kyrgyzstan, Finland, Peru, Spain. Extensive experience in external audit, tax and fiscal negotiations with gov
Slide 6: Table of Contents
Table of Contents Section 1 Introduction & Company Overview Section 2 Update on Khushuut Coal Project Section 3 Xinjiang Coking Coal Market Overview Section 4 Conclusions 6
Slide 7: Introduction & Company Overview
Introduction & Company Overview 7
Slide 8: Business Model: Energy Resources Developer
Business Model Energy Resources Developer MEC’s business model is to acquire concessions and to put in place a strong in-house team, including industry veterans in the geological, mining and legal areas to lead exploration and the development of the concessions. In this sense it is “an energy and
Slide 9: Our Businesses
Our Businesses Coal Oil & Gas Minerals 9
Slide 10: MEC Assets: Coal, Minerals, Oil & Gas
MEC Assets Coal, Minerals, Oil & Gas COAL MINERALS OIL & GAS 34,000 hectares of coal 2,986 hectares of ferrous concessions in Khushuut and metals concessions in Bayan- Mongolia Western Darvi in western Mongolia Olgiy, western Mongolia 32,000 hectares of coal, ferrous and non-ferrous metals con
Slide 11: MEC Assets (cont'd): Projects in Western Mongolia
MEC Assets (cont’d) Projects in Western Mongolia MEC has Coal, Ferrous & Non-ferrous Metals Concessions in Western Mongolia 11
Slide 12: Update on the Khushuut Coking Coal Project
Update on the Khushuut Coking Coal Project 12
Slide 13: Khushuut Project Overview
Khushuut Project Overview Khovd, Western Mongolia The Khushuut Coking Coal Mine is located in the Darvi Soum District of Khovd Province in western Mongolia 210 km south of the provincial capital of Khovd 1,500 km west-southwest of Ulaanbaatar 310 km northeast of the Yarant border crossing be
Slide 14: Professional Partners: John T. Boyd Company
Khushuut Project Overview Professional Partners John T. Boyd Company (“Boyd”) Independent Technical Advisor Over 60 years of expertise in completing reserves audits and stock listing requirements for coal companies Conducted more than 2,000 reserves audits, including audits for some of the largest c
Slide 15: Professional Partners: Fenwei Energy Group
Khushuut Project Overview Professional Partners Fenwei Energy Group (“Fenwei”) Marketing and Coal Quality Consultant Fenwei Energy Group is one of the premier energy consulting companies with a high degree of expertise and experience in China’s coal industry The scope of services range from field in
Slide 16: Professional Partners: China National Administration of Coal Geology
Khushuut Project Overview Professional Partners China National Administration of Coal Geology - 129 Exploration Team Exploration Company Team 129 is an experienced exploration team under China National Administration of Coal Geology’s No. 1 Exploration Bureau It provides drilling and other aspects o
Slide 17: Professional Partners: Leighton LLC
Khushuut Project Overview Professional Partners Leighton LLC (“Leighton”) International Contract Miner Has been operating in Mongolia since 2007 A subsidiary of Leighton Asia (part of the Leighton Group), Leighton Holdings is the world’s largest contract miner, listed in the Australian Stock Exchang
Slide 18: Resources Exploration: Progress to Date
Resources Exploration Progress to Date MEC has been actively working on exploration of resources and planning of the Khushuut Coking Coal Mine in Khovd Province, western Mongolia since 2007 Exploration program overseen by independent technical advisor John T. Boyd Co.; drilling carried out by Ex
Slide 19: Resources Exploration (cont'd): Favorable Geology
Resources Exploration (cont’d) Favorable Geology The coal bearing strata are contained in the middle Permian- Principle Coal Seams(1) Seams & Nº of Drill Hole Nº of Coal Quality age Khushuut Formation, which is over 700 m thick Splits Intercepts Analyses N 1 0 Predominantly fine-to-medium sandst
Slide 20: Substantial Established Resource Base
Resources Exploration (cont’d) Substantial Established Resource Base Boyd calculated a Coal Resource estimate in accordance with the international JORC Standards for the two major seams at Khushuut The Khushuut Mine resources consist of both premium coking coal and weathered coal that are surfac
Slide 21: Mining Method & Plan: Low-Cost, Open Pit Operations
Mining Method & Plan Low-Cost, Open Pit Operations Conventional open pit operations using diesel-powered equipment are deemed most appropriate for the Khushuut Mine due to: Mine location Geologic setting Local workforce Ability to maintain multiple pits Utilization of hydraulic excavator
Slide 22: Coal Production Price Estimates
Coal Production Price Estimates Using coal sale price estimates from Fenwei and its own mining cost estimates, Boyd in Oct 2009 has calculated economically extractable coal resources for the Khushuut Mine at: Economic Life-of-Mine Resources Coal Price(1) Economic LOM Resources Strip Ratio (US$/t)
Slide 23: Mining Costs and Production Schedule
Coal Production (cont’d) Mining Costs and Production Schedule Mining Cash Operating Costs(1) Life-of-Mine Total Coal In Place (US$ MM) (US$/t) Waste Removal 1,659 2.76(2) Mining 112 0.81 Coal Processing 258 1.87 Administration & Other Mine 295 2.14 Other Cash Mining Costs 526 3.75 Total 2,850 20.64
Slide 24: Capital Expenditure Plan: Exploration and Infrastructure
Capital Expenditure Plan Exploration and Infrastructure Capital expenditures to date have been focused primarily on exploration work, mining related infrastructure and road construction. By the end of Mar 31, 2011: approximately US$56 MM have been spent on exploration and technical reporting a
Slide 25: Average Price of Coking Coal in China
Capital Expenditure Plan Exploration and Infrastructure Average Price of Coking Coal in China (VAT-included) Price (RMB) 1600 1500 1400 1300 1200 1100 1000 900 9 0 0 0 1 1 0 1 9 9 9 9 0 0 0 0 9 0 0 1 9 0 9 0 1 b1 r1 b1 r1 r1 r1 g0 p0 v0 c0 g1 p1 v1 c1 l0 l1 n0 n1 n1 n1 t0 t1 y0 y1 y1 Ju Ju Ma Ma Ap
Slide 26: Capital Expenditure Plan: Infrastructure and Mining Equipment
Capital Expenditure Plan (cont’d) Infrastructure and Mining Equipment Capital Expenditure: Infrastructure US$ MM Amount(1)(2) Coal Processing Plant(3) 60.0 Roads(4), Airstrip & Associated Infrastructure 41.5 Mine Site Power Plant (c.25 MW) 30.0 Raw Coal & Coke Handling, Storage & Weighing Facilities
Slide 27: Khushuut Project Milestones: Exploration and Mine Development
Khushuut Project Milestones Exploration and Mine Development Khushuut exploration work continues: Independent Technical Review was completed by John T. Boyd Company on 16 Oct ’09 and was published by MEC on 18 Oct ’09 Coal quality and drilling (lithologic/structure) findings from the 2008 dril
Slide 28: Khushuut Project Milestones: Business Development
Khushuut Project Milestones (cont’d) Business Development Business development: In Oct 2009, a 200 tonne bulk sample of high-quality coking coal was delivered to a prospective customer, Baosteel Group Xinjiang Bayi Iron & Steel Co. Ltd. (“Baosteel Bayi”), in Xinjiang Province for full scale test
Slide 29: Xinjiang Coking Coal Market Overview
Xinjiang Coking Coal Market Overview 29
Slide 30: Market Study: Fenwei's Conclusions
Market study Fenwei’s Conclusions MEC has, as an ongoing process, commissioned the services of Shanxi Fenwei Energy Consulting Co. Ltd. to conduct market studies to assess the demand for Khushuut coking coal Fenwei concludes that the Xinjiang Market had great potentials for MEC that “Khushuut co
Slide 31: Market Study: Fenwei's Price Estimates
Market Study (cont’d) Fenwei’s Price Estimates Coal Pricing: Fenwei evaluated market conditions and coal pricing for the Khushuut Coking Coal delivered to customers in Xinjiang Autonomous Region, PRC Fenwei’s estimated price of Khushuut Coking Coal delivered at Urumqi area(1) Price Projection by Y
Slide 32: Conclusions
MEG MONGOLIA ENERGY CORPORATION Conclusions
Slide 33: Corporate Strengths
Corporate Strengths World Class Metallurgical Coal Deposit at Khushuut Low Cost Structure Significant Potential for Expansion and Longer Mine Life Strong Government Support Strong Metallurgical Coal Demand in Xinjiang Strong Prospects for Additional Discoveries Experienced Management Team 33
Slide 34: Mission & Vision
Mission & Vision Our Mission MEC’s mission is to acquire, explore and develop energy and mineral resources with related projects in a professional, sustainable and responsible manner Our Vision We aim to achieve global recognition as an energy and resources company while maximizing returns to stakeh
Slide 35: Thank You
THANK YOU Contacts: 40/F, New World Tower 1, 16-18 Queen's Road, Central, Hong Kong Tel: (852) 2138-8000 Fax: (852) 2138-8111 Email: ir@mongolia-energy.com Website: www.mongolia-energy.com
Slide 36: MEC Shares
MEC Shares MEC Shareholders[1] (As of 28 October, 2011) Other Directors 0.11% Mr. Simon LO Lin Shing Public & his associates 81.53%[3] 18.36%[2] Listing Information HKEx Stock Code 276 Board Lot 1,000 Number of Shares Issued 6,606,547,828 Notes 1. The above information is compiled based on the infor