Rick: Here is some really good news from the MGR thread on the Mongolian business environment as it pertains to MGR and IPJ:
June 9, 1997
New Investment Laws Expected to Double Profitability
MONGOLIA GOLD RESOURCES LTD. ("MGR-V;MLIAF-L")
- New Investment Laws Expected to Double Profitability
Dr. David R. Webb, President of Mongolia Gold Resources Ltd. (the "Company") , is pleased to announce that coincident
with the conclusion of the World Bank Conference, held in Ulaanbaatar, Mongolia, June 5th, 1997, new legislation was
introduced and passed in the Parliament (the Great Hural) sending a clear signal that Mongolia is fully committed in its quest to
attract foreign investment, particularly in the mining, and oil & gas sectors.
The following package of legislative amendments will undoubtedly catch the interest of international explorationists:
- 25% reduction in corporate income tax rates (40% to 30%)
- 80% reduction in maximum royalty taxes (12.5% to 2.5%)
- Duties on most imports eliminated May 1, 1997
- Requirements that all gold sales be made to the Central Bank has now been removed
- gold can now be sold to authorized commercial banks at world market prices (LME) as well as to the Mongolian Central
Bank.
- A new cadastral office will be established to computerize registration of exploration licenses on a first come-first serve basis,
without prior approvals.
- Mining licenses and exploration licenses are to considered as assets of the holder making them fully transferable, including the
option of sale without capital gains tax.
It is important to note that these changes have been introduced within two weeks of the recent Presidential election. Mongolia's
current mineral and foreign investment package is now considered to be one of the best in the world.
Thew new legislation allowing for the export of gold is expected to entitle the Company's Bumbat project to qualify for a 3 year
100% tax holiday and an additional 3 years at 50%. This tax holiday would double the Company's annual profit during the first
three years as well as increasing forecasted profitability in the following 3 years.
Those in attendance at the World Bank Conference included: Mongolia Gold Resources, Barrick Gold, Teck Corp., Placer
Dome, Goldfields, Indochina Goldfields Ltd. Golden Tiger, RTZ-CRA, Aarex Resources, the Canadian Embassy, President
Orchibat, President elect Natsaglin Bagabandi, Prime Minister Enksaikhan and Mr. Nyamsambuu, the Minister of Agriculture
and Industry.
The legislative changes announced during the conference, as well as the speed, completeness and manner in which they were
implemented, were overwhelming to all in attendance.
The events of the past week are expected to dramatically increase international mining and exploration activists in the country.
Mongolia Gold is proud to be a leader in this arena and is fully committed to staying at the forefront of these historic
advancements.
TEL: (604) 681-2877 Dr. David R. Webb, President FAX: (604) 681-2879 TEL: 1-800-681-2877
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