Singapore, February 14, 2023 -- Moody's Investors Service ("Moody's") has today affirmed the Government of Mongolia's long-term B3 issuer and foreign currency senior unsecured bond ratings and maintained the stable outlook. The short-term issuer ratings are affirmed at Not Prime.

Mongolia's B3 rating balances elevated liquidity and external risks against strong growth prospects, as well as a debt repayment profile that has settled at more sustainable levels compared to the past. Following a recent sovereign debt refinancing transaction, Mongolia's financing needs for the next few years have diminished to more manageable, albeit still high, levels. Moreover, the recent relaxation in China's COVID policies, coupled with continued progress on Mongolia's infrastructure and logistics networks and the development of major mining projects will support a gradual recovery in foreign currency revenue and allow GDP growth to rise to potential rates over the next few years. At B3, the credit profile also incorporates institutional weaknesses and a lack of economic diversity that raises volatility in growth and fiscal outcomes.

The stable outlook is premised on the view that external liquidity risks will remain elevated but manageable. While financing pressures may spike at various junctures given Mongolia's sizeable market debt obligations through to the end of 2026, Moody's expects that the government will continue to have access to markets at costs that are not prohibitive, containing probable risks of a credit event to levels consistent with a B3 rating.

Mongolia's local-currency country ceilings remain at B1. The two-notch gap to the sovereign rating reflects a large government footprint in the economy, high commodity reliance in overall revenues, and still-high external imbalances. The foreign-currency country ceiling remains at B3, representing a two-notch gap to the local currency ceiling, to take into consideration Moody's assessment of weak policy effectiveness and high external debt that point to transfer and convertibility risks at times of heightened external vulnerability.

Please click on this link https://www.moodys.com/viewresearchdoc.aspx... for the List of Affected Credit Ratings. This list is an integral part of this Press Release and identifies each affected issuer.

RATINGS RATIONALE

RATIONALE FOR THE STABLE OUTLOOK

FUNDING PRESSURES HAVE ABATED FROM ELEVATED LEVELS AND WILL REMAIN MANAGEABLE

Moody's expects Mongolia will retain adequate market access that together with continued access to bilateral and multilateral funding will allow it to meet upcoming financing requirements. Mongolia's liquidity and external funding challenges have begun to abate since the end of 2022, and foreign exchange reserves have gradually recovered on the back of improvements in exports and trade credit inflows, as well as one-off inflows such as principal repayments on project financing loans by Oyu Tolgoi, Mongolia's largest copper mine. Moreover, a debt refinancing exercise conducted at the start of 2023 has materially reduced the maturities due in 2023 and 2024.

Following significant logistics disruptions related to China's zero covid policy, exports improved considerably in December, buoying foreign reserves. Looking ahead, the end of border disruptions and an accelerated pace of recovery in the Chinese economy will support export growth, although Moody's anticipates that in nominal terms export growth will slow as commodity prices moderate, even as import growth remains strong.

In mid-January, the government issued a $450 million bond, alongside the launch of a tender and exchange offer of $200 million. Investors who participated in the tender and exchange had outstanding 2023 or 2024 bond maturities replaced at par value by cash or new bonds maturing in 2028. Following this, the government's Eurobond maturities are reduced to $82 million in 2023 and $390.7 million in 2024.

While the refinancing exercise has reduced the government's direct borrowing requirements, outstanding maturities by the Development Bank of Mongolia LLC (DBM, B3 stable), which is entirely owned by the government, remain, including a JPY30 billion ($231 million) government-guaranteed samurai bond due in December 2023 and a $500 million bond maturing in October 2023. Funding for the samurai bond has been secured by DBM. However, Moody's expects that ongoing financial difficulties linked to DBM's high loan loss rates on problem assets indicate a strong likelihood that government support will be required to meet at least part of DBM's October 2023 bond maturity, even though the bond is not backed by a government guarantee.

Under these assumptions, Moody's estimates the sovereign's gross borrowing requirements at 12.8% of GDP in 2023, which will entail the government seeking additional financing for the year, potentially from market sources. While global funding conditions remain tight, Mongolia's recent bond offering demonstrates a level of market access that supplements other funding sources, such as those supported by its close engagement with international financial institutions.

As a result, Moody's estimates foreign exchange reserves will remain broadly stable at around $3.1 billion at the end of 2023 from $2.9 billion in December 2022. Coupled with the extended repayment schedule, this will result in Moody's External Vulnerability Indicator (EVI), which measures the ratio of maturing external debt to reserves, at 227% in 2023 and 211% in 2024. Although reserve adequacy has stabilized, Moody's assesses that Mongolia's EVI remains a credit constraint at these levels. Continued pressures on the exchange rate and still high inflation driven by core food and energy prices, which has not alleviated even after the debt refinancing exercise, are also reflective of these pressures.

RATIONALE FOR THE B3 RATING

MINING PROJECTS, CONSTRUCTION ON INFRASTRUCTURE SUPPORT GROWTH POTENTIAL

Mongolia's potential growth continues to represent an underlying credit strength. Moody's estimates real GDP growth will increase to 4.5% year-on-year in 2023 from 3.7% in 2022, before gradually rising toward a potential rate of 6-7%. Potential growth remains well supported by demand for copper, which will benefit from ongoing global trends toward decarbonization including the adoption of copper-rich battery electric vehicles.

After a decade of operations, ongoing underground mining operations at Oyu Tolgoi will reach sustainable production of high-grade ore by the first quarter of 2023. Coal production is also likely to remain strong for the near to medium term, supported by demand from China, mainly for steel-making with limited substitution risk. Coal exports will be supplemented by the increase in rail connectivity under the recently operational rail infrastructure projects.

DEBT BURDEN WILL STABILIZE, ALTHOUGH CONTINGENT LIABILITY RISKS REMAIN

Strong nominal GDP growth and revenue performance will support stabilization in fiscal and debt metrics. Fiscal performance markedly improved in 2022 on the back of stronger mineral revenue growth, resulting in the deficit consolidating materially to 1.8% of GDP from 6.5% in 2021. This reverses a sharp widening in the fiscal deficit and a build-up in the debt burden during the pandemic years that unwound fiscal consolidation achieved between 2017 and 2019.

Some support measures, such as the Child Money Program, have acted as a permanent drag on fiscal buffers. However, although Moody's expects the fiscal deficit to widen from recent low levels in 2023 and 2024 to around 5-6% of GDP, strong nominal GDP growth will likely result in the debt ratio consolidating to 56.3% of GDP in 2023, from 60.4% in 2022, with a gradual downward drift over the forecast horizon. This is in line with the B-median of 56% in 2023.

Fiscal strength remains a significant credit constraint for Mongolia. With nearly all the government debt in foreign currency, Mongolia's fiscal strength and credit profile are highly vulnerable to a significant depreciation of the tugrik. Moreover, Moody's assesses that contingent liability risks from state-owned enterprise (SOE) debt will remain material. Recent offtake barter agreements by Erdenes Tavan Tolgoi (the state-owned mining company) illustrate the risks of such liabilities crystallizing on the government's balance sheet, which are magnified by weak governance structures around SOEs.

INSTITUTIONAL WEAKNESSES EXACERBATE VULNERABILITIES TO COMMODITY PRICE CYCLES

Also incorporated in the B3 rating are generally loose, pro-cyclical policies. Although debt and liability management has significantly improved over the years, a tendency toward expansionary fiscal policies remains and is typically heightened during commodity price upswings. In addition, despite some of the laws instituted over past years to strengthen central bank independence, the use of quasi-fiscal exercises still prevails in some respects, particularly in the form of the subsidized mortgage program. Governance and supervisory capacity around state-owned enterprises is also weak – as evidenced by large loan losses at DBM. Finally, recent allegations around 'coal theft' indicate that the heavy concentration of natural resources in the economy, coupled with weaknesses in the institutional framework can manifest in corruption.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS

Mongolia's ESG Credit Impact Score is highly negative (CIS-4), driven by a high exposure to environmental risks, a moderately negative social risk issuer profile score, and a weak governance profile. A high government debt burden and other immediate liquidity pressures constrain the sovereign's financial capacity to respond to environmental and social risks.

Mongolia's exposure to environmental risks is highly negative (E-4 issuer profile score), related to an economy that is highly dependent on the production and exports of hydrocarbons, with implications for waste and pollution levels. Mongolia is also vulnerable to water scarcity driven by mineral extraction, deforestation, and desertification.

Exposure to social risks is moderately negative (S-3 issuer profile score). The uneven distribution of incomes, is balanced by a young population coupled with a strong social safety net that has enhanced the provision of health and education benefits.

Mongolia has a highly negative governance profile score (G-4 issuer profile) reflecting weak executive institutions and policy effectiveness against ongoing structural reforms.

GDP per capita (PPP basis, US$): 12,585 (2021) (also known as Per Capita Income)

Real GDP growth (% change): 1.6% (2021) (also known as GDP Growth)

Inflation Rate (CPI, % change Dec/Dec): 13.8% (2021)

Gen. Gov. Financial Balance/GDP: -6.5% (2021) (also known as Fiscal Balance)

Current Account Balance/GDP: -13.4% (2021) (also known as External Balance)

External debt/GDP: 215.4% (2021)

Economic resiliency: b1

Default history: No default events (on bonds or loans) have been recorded since 1983.

On 09 February 2023, a rating committee was called to discuss the rating of the Mongolia, Government of. The main points raised during the discussion were: The issuer's institutions and governance strength, have materially decreased. The issuer's fiscal or financial strength, including its debt profile, has not materially changed. The issuer's susceptibility to event risks has not materially changed.

FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS

FACTORS THAT COULD LEAD TO AN UPGRADE

The rating would likely be upgraded upon evidence of a sustained build-up in the foreign exchange liquidity buffer supported by non-debt creating inflows, that alleviate external liquidity risks from sizeable debt obligations. A consistently falling debt burden accompanied by steady improvements in debt affordability would alleviate fiscal constraints and drive upward rating momentum. These indications would likely relate to improvements in the management of domestic public finances, containing the government's funding requirements and the economy's external financing needs. Efforts towards gradually diversifying the economy away from its reliance on commodities that reduce growth volatility and susceptibility to boom-bust economic cycles would also be credit positive.

FACTORS THAT COULD LEAD TO A DOWNGRADE

A rating downgrade could transpire from widening gross borrowing requirements significantly above our baseline assumptions, and/or rising government liquidity risks that point to difficulties in meeting these borrowing needs. Persistent external financing gaps that threaten macroeconomic stability would also exert downward rating pressures. A sustained shock to growth, for instance through the derailment of large mining projects, would also be a trigger for downward rating action.

The principal methodology used in these ratings was Sovereigns published in November 2022 and available at https://ratings.moodys.com/api/rmc-documents/395819. Alternatively, please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.

The weighting of all rating factors is described in the methodology used in this credit rating action, if applicable.

REGULATORY DISCLOSURES

The List of Affected Credit Ratings announced here are a mix of solicited and unsolicited credit ratings. For additional information, please refer to Moody's Policy for Designating and Assigning Unsolicited Credit Ratings available on its website https://ratings.moodys.com. Additionally, the List of Affected Credit Ratings includes additional disclosures that vary with regard to some of the ratings. Please click on this link https://www.moodys.com/viewresearchdoc.aspx... for the List of Affected Credit Ratings. This list is an integral part of this Press Release and provides, for each of the credit ratings covered, Moody's disclosures on the following items:

• Rating Solicitation

• Issuer Participation

• Participation: Access to Management

• Participation: Access to Internal Documents

• Endorsement

• Lead Analyst

• Releasing Office

For further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found on https://ratings.moodys.com/rating-definitions.

For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the issuer/deal page for the respective issuer on https://ratings.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

The ratings have been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://ratings.moodys.com/documents/PBC_1288235.

Please see https://ratings.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the issuer/deal page on https://ratings.moodys.com for additional regulatory disclosures for each credit rating.

Anushka Shah

VP - Senior Credit Officer

Sovereign Risk Group

Moody's Investors Service Singapore Pte. Ltd.

71 Robinson Road #05-01/02

Singapore, 068895

Singapore

JOURNALISTS: 852 3758 1350

Client Service: 852 3551 3077

Gene Fang

Associate Managing Director

Sovereign Risk Group

JOURNALISTS: 852 3758 1350

Client Service: 852 3551 3077

Releasing Office:

Moody's Investors Service Singapore Pte. Ltd.

71 Robinson Road #05-01/02

Singapore, 068895

Singapore

JOURNALISTS: 852 3758 1350

Client Service: 852 3551 3077

South Korean telecommunications giant KT Corp. said Wednesday it has signed a partnership deal with the Mongolian government and the central Asian country’s business delegation to strengthen strategic cooperation in exploiting mineral resources and realizing digital transformation in the finance sector.

Key officials of the Mongolian government and the country’s business delegation visited KT's headquarters in Jongno, central Seoul, a day earlier to sign the memorandum of understanding with the telecommunications firm. It was part of Mongolian authorities’ five-day visit to the country to seek ways to strengthen political and economic ties with Korea, according to the officials.

KT signed a deal with LS Cable & System, the world's third-largest wire and cable maker by sales, and Monnis Group, a Mongolian industrial holding conglomerate, to develop the world's leading suppliers of mineral resources. Under the trilateral agreement, the three sides will lay out a plan for rare earth elements supply to Korea and conduct feasibility reviews on the business.

On the same day, KT’s financial business unit BC Card also signed partnership deals with Mongolia’s food retail giant Cosmo Trade and Aero Mongolia, respectively, to enhance cooperation in the digital voucher business and payment network services centering on Asian routes, the KT officials said.

The telecom giant also invited Mongolian officials to its internet data center in Yongsan, Seoul, and showcased trial payments with Mongolian T-Cards here to check the progress and status of business contracts and agreements signed in Mongolia last month. The agreement between BC Card and the Bank of Mongolia allowed Mongolian visitors here to use the cards conveniently.

Before the recent partnership deals, KT signed agreements with the Mongolian government, the Central Bank of Mongolia and Monis Group in various industries such as resources, finance, health care, digitalization and media. The company’s CEO Ku Hyeon-mo was also appointed as Mongolia’s chief technology officer, becoming the first foreign businessperson to take the honor.

"We will do our best to contribute to the development of Mongolia, alongside the development of Korea through cooperation with other domestic industries," said Moon Sung-uk, senior vice president and head of global business at KT.

By Jie Ye-eun (yeeun@heraldcorp.com)

Mongolian authorities are planning to hold a discussion on online trading for coal export on February 27, in order to help better understand details of coal auction process launched early this month.

The meeting, initiated by the Ministry of Mining and Heavy Industry of Mongolia, is also supported by the Ministry of Economy and Development, Mongolian Stock Exchange, Erdenes Tavantolgoi JSC, Energy Resource LLC and Tavantolgoi company.

During the discussion, participants will be introduced to the rules and instructions related to stock exchange and coal trading, and detailed information how to participate auction, how to enter into contacts, payments and provided with the knowledge to use the trading system correctly, according to a document released by the Ministry of Mining and Heavy Industry.

The meeting will be attended by representatives of the Ministry of Mining and Heavy Industry of Mongolia, interested parties to purchase coal for export, traders, sellers, trade organizers..

Check more details on the Agenda.

If you are interested in the meeting, Click HERE for registration.

(Writing by Tammy Yang Editing by Harry Huo)

For any questions, please contact us by inquiry@fwenergy.com or +86-351-7219322.

Ulaanbaatar Railway JVC (UB Railway) has fulfilled its freight target as of the first half of this month, and railway workers of Zamiin-Uud Railway Junction have set a record by loading 383 wagons during the night shift of February 11-12.

Overachieving the loading target will enable continuous transportation without any interruption, increase wagon turnover and boost freight volume. According to the UB Railway, the increasing size of freight through the Zamiin–Uud Railway Station is demonstrating the increase in export and import and recovery of the border checkpoint.

First Hungarian/British/Mongolian coproduction ‘1242: Gateway to the West‘ by Peter Soos is one of the most expensive historical films supported by the National Film Institute – Hungary. The total budget is approximately 9.47 million euro.

The Mongolian side has been instrumental in providing the cast, stunt performers, costumes, props, and set dressing, while our UK co-producer has been responsible for the sound postproduction and music, as well as playing a significant role in the development of the screenplay and casting process.

The story written by Aron Horvath and Joan Lane is set during the great Mongolian invasions in Europe when Genghis Khan’s military commander Batu Khan is beat back by a Hungarian castle and a spiritual man.

“I have always been fascinated by the Mongolian invasion of Europe, and the idea of producing a film about this historical event has been a personal goal of mine. The Mongolian Empire was a brutal power and had the greatest army at that time, making their sudden retreat in February 1242 all the more intriguing. The reasons behind Batu Khan’s decision remain a mystery to this day, as there is no written evidence. When I shared this story with my longtime friend, director Peter Soós (we worked a lot together, but this is our first feature film together), he became immediately enthusiastic and provided great ideas, so I knew we had to work on this project together”, producer Kornél Sipos told FNE.

Wind power generation by large-scale enterprises in north China's Inner Mongolia Autonomous Region reached 101.99 billion kWh in 2022, up 8.8 year-on-year, according to the regional bureau of statistics.

Among all leagues and cities in Inner Mongolia, Xilin Gol League reported the highest wind power generation, accounting for 26.7 percent of the region's total, while Hinggan League posted the fastest growth in wind power generation with a year-on-year increase of 57.3 percent.

Xilin Gol League is rich in wind and solar energy resources. The installed power generation capacity of new energies in the league has reached 13.45 million kW, and the annual generation of clean electricity is about 29 billion kWh.

It is expected that by the end of 2023, Xilin Gol will become the first league in Inner Mongolia where the installed power capacity of new energies exceeds thermal power.

Over recent years, Inner Mongolia has accelerated its transformation from a fossil energy base to a clean energy base. Its wind power generation has recorded an average annual growth rate of 15.6 percent over the past five years, 8.1 percentage points higher than the that of all power generation.

Geologist and mining entrepreneur Robert Friedland has a reputation for going where no man would go in search of mineral riches – a strategy that has paid off in the billions for him over the years. In the early 2000s his team discovered the Oyu Tolgoi copper-gold deposit in the Gobi Desert of Mongolia that is of biblical proportions. The discovery would eventually lead to the largest financial undertaking ever contemplated in Mongolia’s history and some projections have it producing over half a billion tonnes of copper annually by the middle of the decade.

Now owned and operated by mining giant Rio Tinto, the Oyu Tolgoi mine has become a symbol of Mongolia’s potential as a mineral-rich province and just like the proverbial light globe that attracts the moths, Oyu Tolgoi has attracted a band of smaller capped hopefuls to the region in search of its sister deposit that many believe may still be lurking out in the Mongolian desert somewhere.

One company that has established itself in the vanguard of that band of hopefuls is Xanadu Mines who sought to create its own legacy in the South Gobi Desert back in 2016. The company unearthed the significant Kharmagtai copper-gold deposit just two short years later which today taunts the market with its potential in a region that is capable of brewing deposits like Oyu Tolgoi. In fact in geological terms, Xanadu’s Kharmagtai discovery is only a good tennis ball throw – or 120kms - to the north west of Rio’s Oyu Tolgoi. Notably the company says Kharmagtai is still open along strike and at depth which is remarkable given that it has already thrown up a 1.1b tonne resource containing a whopping 3mt of copper and 8m ounces of gold.

A preliminary PEA Scoping Study has it delivering a serious 50,000 tonnes of copper a year and a company making 110,000 ounces of gold a year to boot and wait for it ... for at least 30 years.

The Kharmagtai deposit is one of the largest undeveloped copper deposits listed on the ASX and potentially one of the largest globally, with commodity equities research firm MST Access noting in a recent research report:

“XAM is advancing as a potentially globally significant producer of copper and gold, and the senior leadership team has significant mining industry experience. The underlying commodity exposure provides a highly favourable outlook in our view.”

MST says Kharmagtai is shaping up to be an extremely low cost, long life mine. The company says it is targeting an initial all in sustaining cost of US$1.02 per pound of copper for the first five years and the project will likely spit out around US$3.4b in free cashflow over its initially contemplated mine life.

Xanadu estimates it should be able to bring 200,000 tonnes of copper and 500,000 ounces of gold to market in the first five years of production. After this, production is set to increase to 50ktpa of copper and 110ktpa gold with the AISC increasing to about US$1.87/lb for the remaining 25 years of the mine life.

MST Access also suggests some exploration upside, adding “…further exploration upside is likely to provide the greatest opportunity to delineate higher-grade components which can increase metal production rates and reduce unit costs for the same mill throughput and provide increased upfront cashflows to further improve the economics of the project.”

Xanadu is not struggling for money either having attracted the interest of Chinese copper giant Zijin Mining Group. The parties have formed a joint venture to fund the next steps to bring the Kharmagtai project to life.

The first phase of funding saw Zijin take a 9.99 per cent stake in the company. With FIRB and shareholder approval under its belt, Xanadu is now only waiting on approval from the Chinese government to trigger stage two funding, that will see Xanadu add $7.2 million to the coffers, and Zijin increase its stake in the company to 19.99 per cent.

In phase three of the funding, Zijin will part with another US$35 million.

The final approval from the People’s Republic of China is expected any day now, which will trigger phase two and then phase three within ten days of approval.

Zijin’s investment also provides Xanadu with a strategic partner with significant experience in the mining industry and the resources to bring a project of this size online. This is a major vote of confidence in Kharmagtai and a testament to it’s potential.

MST Access drew attention to this relationship in its report saying of Zijin, the world’s sixth largest global miner; “this partner brings not only the financial ability and technical expertise to get a project like this to the next stage, but also the logistical link to end markets which are “crucial to scale a porphyry project successfully into production.”

With funding secured, Xanadu will now invest heavily in further exploration in the South Gobi Desert and will look to develop addition targets around Kharmagtai whilst also continuing to develop its 100 per cent owned Red Mountain copper-gold project, also in Mongolia which is still at an early stage.

When phase three funding finally kicks in, Xanadu will push Kharmagtai into high gear by completing a pre-feasibility study, which is due in 2024.

Some 30,000m of infill drilling is to be completed at Kharmagtai this year and the resultant data will feed into a maiden ore reserve to be delivered when the PFS is completed.

Kharmagtai is one of the few large scale, long-life, low-cost copper deposits in the world that can be developed within 5 years, placing Xanadu in the box seat as the world starts an inevitable scramble for copper in order to keep up with the electric vehicle juggernaut.

The declining trend of copper discoveries, lower copper ore grades and the shortage of new projects to replace current production levels has caught the attention of industry experts. S&P Global is just one which has predicted there will be a copper deficit starting in 2026 that will last until at least 2030.

The analysis from S&P Global highlights the significance of Kharmagtai as it is one of the few global, near term producers with the potential for enormous scale.

Whilst the South Gobi Desert region that houses Xanadu’s Kharmagtai project was initially considered to be largely devoid of supporting infrastructure in the early days of the Friedland discovery, that does not appear to be the case now. There is now a railway line just 12km from the project, power lines in sight and nearby transport links to the Mongolian/Chinese border.

In an interview with MST Access, Xanadu’s Vice President of Exploration Andrew Stewart pointed to the untapped potential of the South Gobi Desert, emphasising Xanadu was only getting started.

Now we’ve put together a project [that] really lets us take the gloves of us when it comes to exploration as we have no downside risk…now we can really go after the discoveries…we’re looking for a higher, hotter part of the system. We know the grade is increasing at depth.

Xanadu Mines Vice President of Exploration, Andrew Stewart

Stewart added that with some cash in the bank and a major mining partner, there was still some 40km to explore at Kharmagtai and the other nascent project, Red Mountain. He says Xanadu can focus on “sticking holes in the ground” as it works on shoring up more prospects in the region.

The PFS is set to take 18 months and early site works are slated for 2025. If all goes to plan, the first batch of copper concentrate could hit the market by 2027 according to management.

There is always a slight twinge of excitement that involuntarily transgresses ones lower gut when a sizable discovery is made in the vicinity of another existing discovery that is recognised to have biblical proportions.

It remains to be seen just where Kharmagtai will finish up as a copper-gold discovery. However one thing seems certain, with a billion tonne resource already to its name and an owner that has Chinese cash flowing in and a penchant for spending it in the ground, this is not likely to be one of the small ones.

BY: Matt Birney /sponsored

Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au

Sinomine Resources Group, a leading Chinese supplier of battery-grade lithium fluoride, plans to buy a majority stake in a lithium ore mine in Mongolia to further improve its lithium resources.

Sinomine intends to purchase a 51 percent stake in a lithium ore project in Mongolia’s Tsagan Chuluut region from Lithium Century, the owner of the project’s three shareholders, for USD20 million, the Beijing-based company announced.

The URT project is still in the primary exploration stage, and the exact reserve amount is uncertain, Sinomine added, noting that the prospecting right of the project covers an area of over 332 hectares, and its reserves may exceed 1.7 million tons of lithium ore. The area already explored is only 10.5 percent of the prospecting right scope, the firm pointed out.

After the acquisition, Sinomine will issue a loan of up to USD20 million for the geological exploration of the lithium ore project, it said in the statement.

Established in 2013, Lithium Century is an innovative mining company focused on mineral exploration and development of environmentally sustainable extraction of lithium in central Mongolia.

Sinomine was founded in 1999. It is not only the world’s largest producer and supplier of cesium and rubidium but also a leading supplier of battery-grade lithium fluoride in China, as well as the one and only producer of cesium formate worldwide.