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KHOTGOR Rare Earth Elements project South Gobi, Mongolia
June 2010
I. Overview
II. Company Background
III. “KHOTGOR” Project Overview
IV. Infrastructure
V. Project Geology
VI. “KHOTGOR” Project Key Highlights
QGX MONGOL LLC
I. OverviewKhotgor Project Highlights
NEW SOURCE OF REE TO THE MARKET
PROXIMITY ADVANTAGE TO THE MARKET
MINING LICENSE
Significantly large resource - approx 200 Mt Inferred classification resource
300 km from Chinese-Mongolian Gashuun Sukhait border
Adjacent to world class UHG (80km) and Baruun Naran (60km) Easy access to the infrastructure
STRATEGIC LOCATION
Successfully defended Resource Estimation with the State and obtained Mining (A) license
II. Company BackgroundQGX Mongol LLC
QGX (former Canadian based company) incorporated in 1994 – first foreign company to obtain mineral license in Mongolia and was listed in TSX
Kerry Holding HK and MCS Holding Mongolia acquired QGX in Sep 2008
QGX BVI “QGX “is a holding company of 7 entities that are primarily involved in mining and mineral exploration in Mongolia
Among QGX’s subsidiaries, there are number of advanced projects including;
Baruun Naran - coking coal property - South Gobi province Bayan Airag - Au, Cu and Ag property - Zavkhan province
The group employs over 100 full time staff with local & international geological and mining expertise
III. The Geographic LocationProject overview
Approximately 530 km from capital city Ulaanbaatar and 300 km from Gashuun Sukhait border
III. The Resource EstimationProject overview
Hellman and Schofield (H&S Australia) has completed resource estimates for the Khotgor REE deposit on data from 26 drill holes in June 2009.
Individual REE assay were converted to oxides and combined with yttrium and expressed as total rare earth oxides (REOs). The REEs are dominated (96.1%) by the light rare earth elements - cerium, lanthanum, neodymium and praseodymium
Classification of Khotgor Resource by Cutoff Grade
IV. InfrastructureLocal Infrastructures and Access to the Market
V. Project GeologyExploration program
EXPLORATION WORK CONDUCTED FROM 2002 to 2009
In 2007 diamond drilling program KH01 to KH03In 2008 KH04 (depth at 574.7 meters), KH05 and KH06 Late 2008 – Feb 2009 20 drill holes
The REE at khotgor are largely contained in apatite rich veining and breccia cement in a large magmatic breccia body composed of mafic to ultramafic alkaline igneous rocks. The REE elements are likely largely contained in the apatite, although apatite may also be abundant in the absence of strong REE mineralization, and phosphate may be a potentially economic product. Primary galena, sphalerite and pyrrhotite are also present, and are locally abundant.
V. Exploration DrillingDrill hole locations & Geologic description
V. Project GeophysicsKhotgor Inverted Chargeability (225 m depth) & Susceptibility (200 m depth)
V. Grade Model3D grade model with Micromine software
0.5 – 1 %
1 – 5.9 %
0 – 0.5 %
REE oxide grade %
VI. Project Key Highlights“Khotgor” Key highlights
1st Resource Estimation approved REE project in Mongolia
The largest resource of REE in Mongolia
Strategically located to fast developing infrastructure
Strong interest in international markets toward REE as it being primary commodities for green technology and high tech
A new source of REE outside of mainland China
Mining license acquisition permitting/allowing additional exploration work to take it to production
When cut-off grade is 1%, the contained metal is over 1 million tonne