Poly-Metal Exploration Projects in Mongolia
9.2013
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Contents
1. Purpose
2. General Introduction
3. Corporate Overview & Management Team
4. Exploration Projects Introduction – Technical
Location of Projects
Macro/Regional Geology
Micro/Project Geology
5. Mineralization & Resources Estimation (Preliminary)
6. Future Business Plan
7. Reasons to Invest in Hunnu Global Mining Corporation
Purpose
This PPT aims at introduction of Hunnu Global Mining Corporation’s (as “HGMC”) 3 poly-
metal exploration projects in Dornod Aimag, North-Eastern part of Mongolia, which is
regarded as one of the most potential resources regions of Mongolia.
HGMC plans to raise USD4 million to complete the exploration works in order to get
certain areas in Tsoonogtiin Shil and Gandan Shil under mining permits in the next 12
months, and would like to explore co-operation with potential investors who are
interested in poly-metal projects.
General Introduction
HGMC owns 3 poly-metal exploration permits :
1) Bor Tolgoi (12703X) Area: 119 km²
2) Gandan Shil (12704X) Area: 224 km² Total Area: 570 km²
3) Tsoonogtiin Shil (12705X) Area: 227 km²
Located at Dornod Province, Mongolia, in the middle of the cross section between China, Russia and
Mongolia and at the center of Derbugan’s international metallogenic belt (Duoemuote mine area)
with high grade poly-metal mineralization (Ag, Au, Cu, Mo, Pb, Zn, Sb, U...).
Within the Derbugan metallogenic belt, there are the famous volcanic sedimentary basin and the
uranium mineralization domains in Dornod, covering about 2,000 km² [refer “Uranium Geology”
(p415-417)] where presence of numerous ( > 40 within 400,000km2) large-scale operating and/or
large poly-metal and uranium deposits. A few major operating ones are neigboring to us
The region is and our exploration permits are having good resources potential, mature mining
environment with facilities and proximity to transport lines to 3 major markets – China, Korea and
Japan.
Corporate Overview-Current
100%
Mr. Chinbat 100% Wealth LLC
12703X
QCC Mining Corp 32%
Khunnu Metal LLC 100%
Treasure LLC 12704X
Great Ord LLC 18% Imperial LLC 12705X
50%
Corporate Overview-Final(In Process)
QCC Mining Corp
100%
Mr. Chinbat 50% 100% Wealth LLC 12703X
Hunnu Global Mining Corp
(BVI Company) 100% Khunnu Metal LLC 100% Treasure LLC
12704X
Imperial LLC 12705X
50%
NOTE: already applied with the Mongolian government to transfer shareholders
interest into Hunnu Global
Management Team
• Owner of Erdes Mining LLC, over 20 years mining & energy operation and investment experience in Mongolia. Erdes Mining is one of the 5 principal committee members of Mongolia Mining Association, and Erdes Mining / Chinbat has been representing the Mongolia Mining Association to be the Advisory member to the Presidential Mining Committee and the Ministry of Mining & Land. Member of Mongolian Petroleum Association and currently holding one of the largest crude oil exploration permit in Mongolia.
Luvsandash Chinbat
Chairman
• Nearly 30 years of mine design, planning and engineering experiences. 7 years of overseas experience in Sweden and Canada. Former Director of ENFI Guangxi Branch and Project Director of Jinchuan Nickel & Poly-Metal Mine. Experiences in designing, building and restructuring mining projects in China, and developing cuntries.
Cai HongXia
CEO
• MBA, CMA. Experienced in finance. Quentin Tsang
CFO
• PhD in Economics. Banking and finance professional. Last 4 years specializing in mining operation and governmental dealings. Ex-Joint CEO of Olon Ovoot Gold Mine (Mongolia), advisor to Erdes Mining, Dadi Mining and Sinobo Mining.
Chudanjii Sharav
COO
• Ex-banker and corporate manager, nearly 10 years experience in mining investment and consulting including 4 years in Mongolia, former CEO of Olon Ovoot Gold Mine and GPL in Mongolia.
Edwin Chan
• More than 50 years of non-ferrous metal mining research, engineering, operations and construction experience. Led and edited various China’s mining design manual and standard. Expert in North Eastern Region of Mongolia geology and mining. Chief Technical
Advisor of Daxinganling Mining Group (SOE) and Evaluator of Tsav Mine (Mongolia).
Prof. Guo Chunlin
Chief Mining Engineer
and Planner
• Former Chief Geologist of Inner Mongolia Chifeng Geological and Mineral Exploration Development Institute. Expert in Eastern Region of Mongolia and Heilongjiang geology. Experienced in Mongolian geology especially in North Eastern region. Former chief
geologist of Tsav and 2 other mines in Dornod.
Prof. Wang Zixiang
Chief Geologist
• More than 40 years experience in mining economics and evaluation. Former director of ENFI department of mining economics and evaluation. Experienced in evaluating mining
projects in Mongolia.
Prof. Li Qiaoxue
Mining Economist
• B.Sc. in Geology, Mongolian University of Science and Technology. 10 years of geological
experience in Mongolia.
Pro. Tang Jigang
Geologist
Vandandorj Zemee
Geologist
Professor, Chief Mineralogy and Petrology Expert of China
Technical Team
Map1: Location of Projects
Gandan Shil 224km2 Tsoonogtiin
Shil 227km2
Bor Tolgoi 119km2
Map 1: Country Map of Mongolia & Location of 3 EP
Note: (1) About 50 km to Chinese Border with custom "KHAVIRGA“
(2)15 km to the CHOIBAISAN - MANZHOULI RAILWAY
Ⅱ. Macro/Regional Geology
(a) Dergunbel – Daxinganling Poly-Metal Belt (refer to map 2,3,4,5)
(b) Surrounding Operating Poly-Metal & Uranium Mines (refer to map 6,7)
Map 2: • Geotectonic Areal Division, Distribution of Super-large and Large Deposits and Mineralization Zonation in Western
Slope of Daxinganling in the Border of China, Russian & Mongolia; • The zone covers 2000 km2 having over 40+ confirmed and operating poly-metal resources deposits in 400,000 km2
(12704X)
(12705X)
(12703X)
Map3:REGIONAL GEOLOGY Mongolia NE locates in between the active Erliandawa continent shelf and the static Xiwuerte continental shelf, it is an active faulting belt and is one of the most famous geology belt having concentration of poly-metal mineral resources and porphyry type copper/molybdenum-lead-zinc-gold-uranium. It holds the largest known uranium deposit of Mongolia.
Map4:Regional Geology And Minerals The exploration permits are located at the South-eastern of the China-Mongolia Erguna Cu-Mo-Zn-Au-Ag belt, which is
a continuation of China’s Erguna porphyry Cu-Mo poly-metal belt. Tsoonogtiin Shil and Gandan Shil are on the 2 main
fault lines of the belt. Immediate neighboring our exploration permits have many operating poly-metal mines.
3 EPs
AduChuluun
• Open-pit • mining S=40000sq
Tsoonogtiin Shil (12705X)
227km2
Bortolgoi (12703X)
119km2
Ulaan
Madai Dornod
Gurvanbula Tsav Poly
• EAR-1: 6500t
• Grade: 0.17% (U3O8) • RAR:10000t
• RAR:29000t • EAR-1:4000t • Grade:0.28% (U)
• XinXin • Deposit:6800万t • Zn: 2% • Pb: 1.2% • Au: 0.21g/t • Ag: 53 g/t
Gandan Shil (12704X)
224km2
Lamchuluut
Dormente
• Deposit:4957.1万t • Produc=on Level:4000t/d • Grade:
Mo 0.1% MMo 51588t
Cu 0.147% MCu 72789t
• Deposit: 1403.96万t
• Cu 1.157%, Mo 0.03%
• Ag 15 g/t, Au 0.3g/t
• MCu: 16.16万t, MMo: 4414t
• MAu 4192kg, MAg 211.03t
• Deposit:900万t • Zn: 2.5% • Pb: 4.1% • Au: 0.25g/t • Ag: 155-288 g/t
Map 5: Nearby Operating Mines & Deposits
Ⅲ. Micro/Project Geology(1)
A. Historical Geology Works – Russians & Mongolians (refer to map 6)
B. Latest Geological Works – Done by owner (refer to 7、8、9)
Pre 2012
Purpose: To have a preliminary understanding on the macro geology of
our 3 EPs, and to find coal in Bor Tolgei
Works: ☆ Prior to 2012, the Mongolian partner had done mapping and
survey works on the 3 EPs to 1:100,000, and seismic/IP on Bor
Tolgei
☆ Map 7 – Bor Tolgei seismic – brown coal
Results: Identified a clear large ore-body of brown coal (3,000 – 4,500
kcal) in the western part of Bor Tolgei EP which can be extracted
with Open-cut mining method
Map6:Russian Geology Map Gandan lies on the same basin of volcanic quaternary sediments which houses and neighbors to our EP the
famous uranium & poly-metal mines: Mardi, Dornod, Gurvenbulag, Ulaan Tsoonogtiin neighbors Tsav, Lam chuluut, Dormente, and 2 other confirmed poly-metal mines [Bor Tolgei neighbors with the famous Aduchuluun brown coal mine [2 main fault lines are running through our Gandan and Tsoonogtiin EPs
Ⅲ. Micro/Project Geology(2) From 2012 April
Stage1: Exploration Work (April – December 2012)
Purpose: to identify potential uranium & poly-metal areas
Works:
I. Mapping and Surveying, Trenching and Sampling, Geochemistry & IP –
13 lines covering 12.1 km, and Gamma
Map 8 – Gandan – Gamma / Geochemistry – uranium
Results:
I. Mapping and Survey done for the whole Gandan (1:50,000); seismic
45km ; Tsoonogtiin (1:50,000)
II. identified a continuous uranium ore-body in the western part of Gandan
having an inferred resources of 4147 tons;
III. identified 2 anomalies of poly-metal by geochemistry in Gandan
IV. Rock chips in trenches and IP in Tsoonogtiin indicated potential poly-
metals of Au, Cu, Mo, Zn, Pb in north and central part.
Gamma
Surveyed
27km2
Gamma
surveyed::18km2
图 8(1): Gamma & Geochemistry Surveyed Area - Gandan
Geochemical Z1 Au-Ag-Mo-Sb-Cu-Zn-Pb Poly-metal :9km2
Geochemical Z2 Mo-Pb-As-Sb-Cu-Zn Poly-metal :11km2
图 8(2): Radio-active Areas
Ⅲ. Micro/Project Geology(3) Stage2: Exploration Work (April till now)
Purpose: To further investigate the poly-metal in Tsoonogtiin Shil and Gandan
Works:
I. Mapping and Survey (1:10,000 / 1:5,000) -95 km2 for Tsoonogtiin / 45 km2 for
Gandan; geophysics (magnetic survey, Dipole-dipole) and geo-chemistry in 3 anomaly
areas totaling 18.5 km2 in Tsoonogtiin.
II. Map 9 - geophysics, geochemistry, trenching, rock chip assaying - anomalies combined
results
III. Map 10 – potential iron ore & poly-metal ore-body from geophysics and geochemistry,
rock chip assaying
Results:
I. confirmed U in Gandan and the potential to increase the resources
II. 3 anomaly areas of poly-metal identified; one is a silica based poly-metal; one is an
iron ore & poly-metal and one is a poly-metal of cu/mo
III. The iron ore & poly-metal anomaly has a high grade iron out-cropping and its IP
anomaly dipped down to over 500m; the geology company opines that it is a large
iron-ore / poly-metal ore-body;
IV. the silica based poly-metal anomaly strengthens towards and in south, which has great
potential to have a large porphyry poly-metal deposit.
Stage3: Drilling (work-in-progress)
Purpose: to confirm the iron-ore and poly-metal resources by drilling
Works: initially 1000m+10%(refer to Map11)
Map 11:Drilling (work-in-progress)
Mineralization & Resources Estimation (Preliminary)1
According to the Russian and Mongolia geology reports and recent geological
works done by the owner:
Gandan Shil:
I. Russian estimated the resources in the EP from 10,000 – 28,000 tons
II. 2012 geological works confirmed that in 1.45km2 area of western part of
the EP, with depth up to 70 m, there are inferred resources of 8.294
million tons ores @ 0.05%, amounting 4147 tons of U
III. The potential for U may be increased if further exploration works to cover
a larger areas and a deeper depth, as the neighboring mines of Mardi,
Dornod, Gurvanbulag and even Ulaan found U down to 400 meters.
Mineralization & Resources Estimation (Preliminary)2
Bor Tolgei:
I. Field trips found brown out-cropping
II. Seismic and IP works identified that a large brown coal ore-body mixed
with extensive coal shale in the western part of the EP
III. The coal type is similar to the large Aduchuluun brown coal field in the
south;
IV. Apart from the brown coal and coal shale, the top white clay layer of the
brown coal has in big demand from China, which has a market price of
RMB800 per tons, which the company is testing and studying on it
V. The NE part of the EP is neighboring the famous poly-metal Tsav mine of
the similar geology, and has potential for Pb and Zn.
Mineralization & Resources Estimation (Preliminary)3
Tsoonogtiin Shil:
I. Geological works identified 4 main anomaly targets, out of which 3 are
along the big fault line contact zones inside the EP;
II. Northern target is a Au/Cu/Mo target with rock sample from trenches of
showing Au grade 0.5% - 4.25%;
III. Central East – Iron Ore Poly-metal target has high grade magnetic iron-
ore @ 35% out-cropping, the ore-body has an estimated size of 30+m
(wide) x 1,000 m (long) x 500 m (deep), which is quite sizeable and
potential
IV. Central Western silica target - strong anomaly for poly-metal of Au-Ag-
Cu-Mo-Pb-Zn-As, the anomaly zone has a size of 200+ m width x 1,000+
m x 500+ m
Mineralization & Resources Estimation (Preliminary)4
Conclusion:
I. Gandan Shil has confirmed U resources, and according to the
geological information should have potential for open-cut resources of
10,000 – 25,000 tons as suggested by the old Russian information
II. Bor Tolgei has confirmed having potential open-cut brown coal
resources, and a very preliminary estimation between 100 – 200
mtons; yet the focus should be on the coal shale and the white top
clay which have much higher market price and can be mined more
profitably;
III. Tsoonogtiin Shil has confirmed iron-ore resources and potential for
poly-metal. After drilling, the shape of the ore-bodies, the estimated
resources will be known.
Future Business Plan--Planned Geological Works(1)
HGMC has 3 EPs, and the focus will be on following priority:
1. Tsoonogtiin Shil – iron-ore & poly-metal (Au-Cu-Mo-Pb-Zn)
>> 2013 End September – Mid November
Target 1 – silica zone : to carry out 3 drill holes to verify the
mineral resources and the ore-body
Target 2 – iron-ore & poly-metal zone : to carry out 2-3 holes to
verify iron-ore and other mineral resources and the ore-body
>> 2014 April – November
Plans to add a few more drill holes in the iron-ore & poly-metal
zone (Target 2) in order to get the resources to a small measured
and indicated reserves and a big portion in inferred resources
Plans to obtain a mining permit for a certain area with the
completion of a Prefeasibility Study
Plans to continue further detailed exploration works on the Target
1, 3 and 5 with an objective to find out the poly-metal ore-bodies
and resources
Gandan Shil – Uranium & poly-metal
>> 2014 April – November
Plans to carry out drillings in the 1.45 km2 site to confirm the uranium
resources into measured, indicated and inferred reserves and
resources status, and at the same time to carry out IP and GAMMA to
find more Uranium anomalies and resources
Plans to transfer the 1.45 km2 site from EP into Mining Permit with the
completion of a Prefeasibility Study
Bor Tolgei – brown coal & Pb & Zn
>> 2014 April – November
Plans to drill a few drill holes for a small area to confirm the brown
coal resources into indicated and inferred reserves and resources
status, and to apply the transfer of the small area from EP to Mining
Permit with the completion of a Pre-feasibility study.
Future Business Plan--Planned Geological Works(2)
Future Business Plan--Fund Raising Work
The owner plans to raise funds to complete the 2014 geological
works and will commence discussions with potential investors.
After obtaining the mining permits, the owner can either talk
with major PRC state-owned mining corporations for co-
operation or to raise further funds from the capital market to
develop the mines.
Future Business Plan -- Budgeting Iitems Tsoontiin Gandan Bor Tolgei
Target USD Target USD Target USD
Trenching 1000m³ 50,000 1000m³ 50,000 1000m³ 50,000
Mapping & Survey 1:5,000 - Target 4 target3 50,000 1:5,000 - 1.5 km2 50,000 1:5,000 - 5 km2 50,000
Sampling 200Kg 100,000 100kg 50,000 100kg 50,000
Core Drilling Target 2 - 3000m 300,000 1.4km2 - 4000m 400,000 5 km2 - 1,000m 100,000
15 holes 20 holes 10 holes
Target 1 - 1,000m 100,000
Target 3 - 1,000m 100,000
Assaying 100,000 75,000 25,000
Mobilization costs 100,000 50,000 50,000
Prefesibility Stdy 50,000 50,000 50,000
Mining Permit Application 50,000 50,000 50,000
Sub-Total 1,000,000 775,000 425,000 2,200,000
Corporate Expenses USD50,000 / month 600,000
ITR Report 100,000 100,000
Investment & Return pursuant to the new exploration program, the funding of USD 4 million is able to obtain: (1) a mining permit within 1.45 km2 in Gandan Shil; (2) a mining permit in Target 2 of Tsoonogtiin Shil, and detailed exploration in Target 1, 3 and 5, (3) a mining permit of a few m2 in Bor Tolgei the mining assets may be suitable to be considered for IPO in early 2014 Resources, Geology & Mining confirmed huge potential poly-metal in the project areas Gandan Shil: Au, Ag, Cu, Mo, Zn, Pb, Sb, U (4,147 tons @ 334) Bor Tolgoi: Brown Coal, Pb, Zn Tsoonogtiin Shil: Fe, Au, Cu, Mo, Pb, Zn project areas have all infrastructures (water, power, railway, roads) for mining poly-metals U, Au, Ag, Pb, Zn, Cu & Mo are precious metals with high market value expected future mining in Gandan Shil & Tsoonogtiin Shil will be open-pit Competent management & operation team experience in mining operation in Mongolia professional geology, mining and processing managers supported by first-class geological mining and processing strategic partners strong political and social connections in Mongolia
Risks
natural disaster risk: not high as this project is located outside frequent
earthquake belt and the project is not at environment difficult site
operation risk: controllable as management team members are
experienced in mining and have strong local connections and
knowledge
country risk (“Mongolian” risk): not high in this project
non-strategic mine
Mongolians own majority
total private investment and without gov’t involvement
official gov’t approvals to transfer ownership off-shore for funding
raising and IPO
strong local political network and social connections
Conclusion-Reason to Invest
Beijing Branch:
Suite 510,Tower3,Beijing Henderson Center, No.18 Jian Guo Men Nei
Avenue,Dongcheng District,Beijing
Tel: +86 6518 7757, 6518 7756
Fax: +86 6518 7756
Mongolia Branch:
New Century Plaza, room 501, Chinggis avenue-15, 1-st khoroo, Sukhbaatar
district, Ulaanbaatar, Mongolia
Tel: 99114733, 99118893
Fax: 322954