Cash Minerals to buy uranium properties in Mongolia

Cash Minerals Ltd has entered into a Heads of Agreement with East Asia Minerals Corporation to purchase a 100% interest in EAM Exploration LLC, a wholly owned subsidiary of East Asia that owns a portfolio of very prospective uranium properties inMongolia.

The project portfolio includes seven properties, Ulaan Nuur, Ingenii, Enger Ar, Sevsul Bulag, Hutul, Unegt and Bukht Uul, totaling approximately 155,500ha. Three of the properties, Ingenii, Ulaan Nuur, and Enger Ar have historic Soviet uranium resources totaling approximately 25 million pounds of uranium. Drilling by East Asia in 2006 and 2007 confirmed the presence and grades of historical uranium intersections. Mineralization is open and there is good potential to expand the mineralized zones and delineate resources which are likely to be amenable to In-Situ-Recovery.

Cash Minerals will pay to East Asia US$2,000,000 in cash upon signature of the Definitive Agreement and issue East Asia that number of common shares equal in value to US$1,000,000 to be determined upon the date of entering into the Agreement. The company will grant a 1.5% Net Smelter Royalty to East Asia on all properties; a previously existing 1.5% NSR applies to the Enger Ar property.

Mongolia to decide soon on uranium JV with Russia

The Government of Mongolia could soon decide on establishing a joint venture with Russia to develop a Mongolian uranium deposit, the head of the Russian civilian nuclear power corporation, Rosatom, said on Tuesday. At a meeting with Russian Prime Minister Vladimir Putin in the Black Sea resort of Sochi, Sergei Kiriyenko said that Russia had signed an intergovernmental deal on the uranium joint venture early in 2009 but the project stalled due to the change of government in Mongolia. 

"Already after the election, we signed an agreement with the new government and in January signed a specific protocol. The government of Mongolia has made a decision on the Dornod-uranium deposit. This deposit is in the ownership of the government of Mongolia," Kiriyenko said. He added that Russia had transferred all the constituent documents on the joint venture to the Mongolian side and the secretary of the Mongolian Security Council has confirmed to Rosatom that a final decision on contributing the deposit to the joint venture would be made soon.

Kiriyenko said work on the deposit could be launched quickly as the deposit was located 300 km (186 miles) from Russia"s neighboring Chita Region where a mining enterprise was situated and whose specialists and equipment could be used in the uranium deposit development.

Rosatom increased production of uranium by 25% in 2009 and has set the task of increasing uranium output by at least 11% in 2010, Kiriyenko said.

Finance Minister explains proposed graduated royalty rates

The Government yesterday decided that a bill to amend the Law on Mineral Resources should be submitted to Parliament for approval. The draft proposes graduated royalty rates to replace the 68 percent windfall tax. Minister for Finance S.Bayartsogt explained the provisions in the draft to media and then answered questions.

The draft was prepared after considering suggestions from the Mongolian National Mining Association and entrepreneurs and companies operating in the mining sector. Not all of these were accepted.

What does the Government want?
The Finance Ministry studied many types of taxes and then formulated the present draft. There will be a basic five percent royalty fees on every mineral commodity. This will be raised by one percent, up to a maximum of 5%, as commodity prices increase. When a ton of copper ore costs USD 5,000 or less, the royalty payable will be the basic 5 percent. When the price reaches USD 6,000, the royalty will become six percent. Rising gradually, the royalty will be 10% when prices exceed USD9,000.

As for gold, the basic rate will apply until price per ounce is below USD 900. It becomes six percent when the price reaches USD1,000, seven percent at USD1,100, eight percent at USD1,200 and 10 percent if the price exceeds USD1,200.

For zinc it will be 5 percent for below USD 2,000, 6 percent at USD2,500, 7 percent at USD 3,000, 8 percent at USD 3,500 and so on.

Royalty on molybdenum will be 6 percent when the price per ton is USD40,000, 7 percent when USD45,000, 8 percent when USD50,000, 9 percent when USD55,000, and 10 percent when it crosses USD 55,000.

Coal will be in two groups - raw and processed. In the case of the first, royalty will be 5 percent when the price is USD 25 per ton, six percent when USD35 per ton, 7 percent when USD 45, 8 percent when USD 55, 9 percent when USD65 and 10 percent if the prices exceeds USD65 per ton. As for coked coal, it will be 5 percent for price below USD100 per ton, 6 percent for USD130, 7 percent for USD160, 8 percent for USD190, 9 percent for USD210 and 10 percent if the price is above USD 210.

He said the royalty graduation will not affect the Oyutolgoi mine.

Source: http://www.news.mn/

Mongolian companies unite to work at Tavantolgoi

Some 700 Mongolian companies have come together to stake their claim to work in Tavantolgoi in the face of the Government’s perceived lack of support to domestic enterprises. Their union is called “Mongol 999+”. The leadership is still tentative about their course of action but believes that support from more companies would mean more openness and fairness.

They do not use the word “consortium” for their union. Every company must pay MNT 1 million to join 999+. The plan is to use the total money collected as capital for a company where all members will have shares.

The whole thing is full of risks. A great deal of money is involved and there is no clear thinking on future plans. What will happen if they are not chosen to work in the project? The authorities are certainly not happy.

Our politicians talk about revolution, but it seems the business sector is showing the way.

D.Zorigt: Draft Tavantolgoi project to be submitted to Security Council next week

Minister for Minerals and Energy D.Zorigt answers questions on the situation regarding Tavantolgoi.

What was the decision of the Government?
The Government decided to submit the draft to the National Security Council. The mine will be owned by the state fully. Operator and marketing company will be selected. It will also be responsible for production and investments. Furthermore, the participation of domestic companies will be ensured. There is a special reference in the contract to support the value added production. The documents will be presented to National Security Council next week. It will decide how to settle the problem. The Government will discuss it again before submitting to the Parliament.
What about the company selection?
Mongolian and foreign companies will participate according to the selection procedures. They must have technical and mining experience, and use environmentally friendly technology. We will also study whether accidents happened in the history of the company operation. Their treatment towards the environment and the company’s history will be studied. More detailed information will be given when the Parliament begins discussing it.
What about the advance payment?
It will be more than Oyutolgoi’s advance payment. We will work on this. But it is too early to give a certain figure because the negotiations have not started.