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Company Presentation
Strictly Private and Confidential
October 2010
(HKEx: 0975)
1. Company Overview
631887
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308253
220
500
0
100
200
300
400
500
MMC SG Q MA MEC Hidili Fushan
World class hard coking coal reserves closely locat ed to China
Company Overview – Mongolian Mining Corporation (“MM C”)
Hard Coking Coal Resources Closely Located to China One of the Largest Mongolian Hard Coking Coal Resou rces
Item Bowen Basin Moatize Basin
Ash % (ad) 9.1 8.5 10.5
Sulphur % (ad) 0.60 0.53 0.85
CSN 8.5 7.3 9.0
Romax % 1.23 1.12 1.31
(3)(1)
(2)
Source: Mozambique, and Bowen Basin source: Wood Mackenzie. MMC source: Norwest ITR.Notes:(1) Average of seams 0C, 3A, 4A and 4C on a washed coal basis.(2) Average of Goonyella, Oaky Creek, Poitrel and Blackwater mines.(3) Average of Moatize and Benga mines in Mozambique.
High Quality Hard Coking Coal Product
Tavan Tolgoi Fault
Tsankhi Coalfield
Tavan Tolgoi SynclineSouthwest Coalfield
Borteeg Coalfield
UHG Coalfield
Ukhaakhudag SynclineBortolgoi Coalfield
Eastern Coalfield
Tavan Tolgoi Anticline
Coal Bearing Strata
Current Mining Area
DalanzadgadOvoot tolgoi
Zuunbayan
46 km 225 km
Khangy Mandula
Gashuun Sukhait/ Ganqimaodu
Shiveehuren Ceke
Jinquan
Linhe XixiaozhaoBaotou
Hohhot
Bayan obo
Bayan hua
Mongolia
0 200
Kilometers
Planned Railway
Existing Railway
UHG
Ukhaa Khudag (“UHG”)
2
(Mt) Mongolia China
Source: Company filingsNotes:(1) In accordance with the JORC code; Data from prospectus.(2) In accordance with the Canadian NI 43-101 standards; Data from 2010 June Investor Presentation.(3) In accordance with the Canadian NI 43-101 standards; Data from Baruun Naran pre-feasibility study dated 20 March 2008.(4) Data from company website.(5) Data from MEC August company presentation.(6) In accordance with a mix of JORC code and Chinese standards. Data from 2009 Annual Report.(7) In accordance with a mix of JORC code and Chinese standards. Data from Jan 2010 corporate presentation.
Resources Comparison
(1) (7)(6)
Fushan
(5)(2) (3) (4)
114
286
China
15.214.7
10.7
7.0
3.8
1.8
0
4
8
12
16
2009 2010E 2011E 2012E 2013E 2014E
Contracted Sales Un-secured Sales
(ROM Mtpa)
2.6
2.1
2.9
1.10.9
0
1
2
3
M ST MAK Qinghua-MAK SG
Company Overview – Mongolian Mining Corporation (“MM C”)
Largest HCC Producer and Exporter In Mongolia
(ROM Mt)
53% CAGR
Coking Coal Hard Coal
Export – Proxy of Production (Jan – Aug 2010) (1)
Source: Mongolian General Customs Office and company filings.Notes:(1) Jan – Aug 2010 coal export from the Mongolian General Customs Office.
Rapid Production Growth Secured by Offtake
Already the largest hard coking coal producer with rapid growth and secured sales
MMC Small TT SouthGobiMAK
� Ramp-up plan committed and publicly announced by Leighton
3
Shareholding Structure Post HK IPO (1)
MONGOLIAN MINING CORPORATION
(Cayman Islands) (HKSE Stock Code: 975)
100.0%
UHG Mining
Offshore
Onshore
PublicFloat
MCS Petrovis Shunkhlai EBRD Kerry45.3% 11.8% 5.1% 3.2% 8.3% 6.3% 20.0%
Note: As at September 2010.(1) Excluding greenshoe.
Support from Shareholders
ProposedRailway
Wash Plant Power Plant Trucking Operations
Paved Road
PublicFloat
Energy Resources LLC
Supported by blue chip shareholders with diversifie d backgrounds
� Global vision
� Local network
� Industry expertise
� Alternative financing solutions
4
MMC’s Strategies
To develop MMC into a leading mining company in Asi a
Improve our transportation infrastructure
Optimize existing resources and reserves
Exploration and acquisition as an established Mongo lian mining company
Mongolian MiningCorporation
5
Expand coal mine production
Complete construction of our coal handling and wash ing plant
Continue to develop and diversify our long-term cus tomer base and establish our own brand
Strong commitment to corporate social responsibilit y
Company Highlights
Mongolian MiningCorporation
Highly Favorable Industry Fundamentals
1 2
MMC is currently the only vehicle providing exposur e to Tavan Tolgoi coalfield, one of the world’s largest undeveloped hard coking coal re sources
Strategic Location –Hard Coking Coal Closely Located to China
Low Cost Producer with ASP and Margin Expansion
4
Mongolia Based Company Operating to International Practices
5
Leading Mongolian Producer With World Class Coking Coal Reserves
3 6
High Production Growth among Asia Peers
6
2. Company Highlights
Europe22%
Asia Ex-China17%
Other8%
China47%
North America
7%
4.6%
2.6%
China Rest of World
Highly Favorable Industry Fundamentals
Source: World Steel Organization.
Source: AME.
2009 Global Steel Production: 1,219Mt
Apparent Finished Steel Demand Growth (09 ~ 19E, %)
351
516
580
355
488
536
300
350
400
450
500
550
600
2004A 2009A 2015EDemand Supply
4
(28)
(44)
(60)
(50)
(40)
(30)
(20)
(10)
0
10
2004A 2009A 2015E
Net Exports Net ImportsSource: Wood Mackenzie.
China Represents Half of World’s Steel Production… China is Now a Net Importer of Coking Coal…
… And Leads the World in Demand Growth
1
(Mt)
Overall Net Supply in China (Mt)
…With Widening Supply Deficit Going Forward
China is the world’s largest consumer of coking coa l with rapidly widening supply gap
7
Undeveloped Developed
Tavan Tolgoi (“TT”)
Moatize Basin
Bowen Basin
Resources (bn tonnes)
Production 2009 (Mt)
Quality
– CSN 8.5 9.0 7.3
Total Producers 2 4 >15
World Class Coking Coal Resources…2
World Class Hard Coking Coal Closely Located to Chi na One of the Largest Undeveloped Coking Coal Fields
Source: Company filings, website.(1) Based on data from Queensland Department of Mines and Energy as of November 2007.(2) Export as proxy of production(3) Central Queensland’s 2009 production used as proxy for Bowen Basin. (4) Tavan Tolgoi’s coal quality based on Ukhaa Khudag’s average of seams 0C, 3A, 4A and 4C on a washed coal basis; Bowen Basin’s coal quality
based on average of Goonyella, Oaky Creek, Poitrel and Blackwater mines; Moatize Basin’s coal quality based on average of Moatize and Benga.
Tavan Tolgoi could become the next Bowen Basin at t he door step of China – MMC is ideally positioned, and currently provides the only availab le exposure to the Tavan Tolgoi coalfield
(4)
7
10
6
Tav an Tolgoi Mozamb ique Bowen Basin
N/A
3.3
Tavan Tolgoi Mozambique Bowen Basin
92.8
(1)
(3)
Operating
Deposits
Target Market Region (“TMR”)
WesternCanada
Appalachia
Elga (Russia)Tavan Tolgoi(Mongolia)
Shanxi (China)
Maruwai (Indonesia) Bowen
Basin
Moatize(Mozambique)
8
(2)
Project Feasibility
�Bankable Feasibility Studies across all project modules
Mine Ramp-up / Equipment
� Fully visible ramp-up to 15Mtpa ROM production in 2013
� Full commitment by Leighton
Wash Plant
� First module fully operational in early 2011
� International standards
Transportation
� Paved road substantially completed by end of 2010
� Proposed railway: 30-year license in 2nd stage of the Mongolia railway development plan
2 …and Leading Mongolian Producer
MMC is one of the most advanced coking coal produce rs in Mongolia, with world class operations
9
Production Ramp-up Secured by High Quality Off-take Agreements
High Production Growth3
Source: Company filings.
10
14.7
10.7
7.0
3.8
0
3
6
9
12
15
2010E 2011E 2012E 2013EContracted Sales Un-secured Sales
57% CAGR
� Ramp-up plan committed and publicly announced by Le ighton
Production Ramp-Up (ROM Mtpa)
MMC has met all key project milestones since incept ion
Strategic Location – Hard Coking Coal Closely Located to China
Distance to Baotou / Regional Chinese Railway Hub
Distance to Hebei, China’s Steel Capital
4
9,000
7,000
600
590
0 2,000 4,000 6,000 8,000 10,000
MMC
Shanxi Coal
Indonesian Coal
Australian Coal
650
1,590
6,000
8,000
0 2,000 4,000 6,000 8,000 10,000
Shanxi Coal
MMC
Indonesian Coal
Australian Coal
(km)
(km)
Source: Company filings and World Shipping Register.Notes:(1) Distance information was estimated according to web resources and company filings.(2) Uses Taiyuan as the starting point.(3) Sea distance estimated by World Shipping Register.
(3)
(3)
(3)
(3)
MMC is one of the closest open pit hard coking coal mines to key steel markets in China
(1)
(1)
(2)
(2)
Mongolia
China
Target Market Region (“TMR”)
Gashuun Sukhait / Ganqimaodu
Baotou Tangshan
We are at the Door Step of China
11
MMC is one of the lowest cost coking coal producers and exporters to the Chinese Market
Low Cost Producer…
Global Cost Curve (FOT to TMR China)
5
Notes: (1) Excludes processing expenses.Source: Wood Mackenzie.
Mongolian Mining Corporation
(1)
12
0
100
200
300
400
500
0 50 100 150Cumulative Production (Mt)
FO
T C
ash
Cos
ts (R
MB
/t) .
0 50 100 150
UHG Rest of the Mines Supplying the TMR
…with ASP and Margin Expansion5
Dalanzadgad
Zuunbayan
Khangy Mandula
Gashuun Sukhait/ Ganqimaodu
Jinquan
Linhe Xixiaozhao
BaotouHohhot
Bayan obo
Bayan hua
Mongolia
0 200
Kilometers
Planned Railway
Existing Railway
Tsagaan Khad
► Largely at minegate
► Increasing portion sold at TKH
► Obtained license to directly truck across border
Sales and Marketing Logistics
Selling Point
2Q09
3Q09
4Q09
1Q10
2Q10
3Q10
4Q10
2011onwards
UHG
► Increased direct trucking across border to customers’ stockpiles
► Vast majority sold at Tsagaan Khad (“TKH”)
China
13
MMC has the ability to sell directly to end users
… With ASP and Margin Expansion (cont’d)
2
55
Off-take SalesShifting Customer Base
14
Source: Company filings.Note: (1) Represents % in currently contracted tonnages; Some end-users have nominated agents for their offtake agreements.
0% 0% 0%
69%
93% 100% 100% 100%
7%
31%
2010E 2011E 2012E 2013E 2014ETraders End Users
Production Growth Largely Secured by Off-take Agreements
% of Traders vs. End Users Secured by Off-take Agreements (1)
15.214.7
10.7
7.0
3.8
2010E 2011E 2012E 2013E 2014E
Contracted Sales Un-secured Production
Shagang
MMC End UsersCoal TraderMongolian Coal Miner
� Entered into direct off-take agreements with MMC
�
�
�
�
�
Mongolia Based Mining Company…6
15
Operating to International Practices6
� Railway design� Paved road feasibility
study
� Railway feasibility study and design
� Wash plant design and construction
� Water supply facility design and construction
� Power plant feasibility study
� Coal mining operator
� Equipment procurement
� Ramping-up of coal production capacity
� Paved road construction management
� Independent technical consultant
� Industry consultant
� Public consultant –Environmental and social responsibilities
… Facilitating success and delivery
16
3. Conclusion
National Mining Champion
Mongolian MiningCorporation
Highly Favorable Industry Fundamentals
Mongolia’s National Mining Champion
Strategic Location –Hard Coking Coal Closely Located to China
Low Cost Producer with ASP and Margin Expansion
Mongolia Based Company Operating to International Practices
Leading Mongolian Producer With World Class Coking Coal Reserves
High Production Growth among Asia peers
17