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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Alex who wrote (64924)	3/3/2001 7:19:52 AM
From: robingrayson	Respond to of 116753

34% increase in gold production this year expected in Mongolia There are many places where gold mining is ignored by western analysts due to the mining being: a) placer gold (not understood by most western investors) b) by private local mining companies (no role for brokers or investor newsletter writers). I am skeptical of any figures for world gold production that ignore such factors. You won't find the following information anywhere else.... GOLD BOOM IN MONGOLIA - EXTRACTS FROM RESEARCH REPORT March 2001 Researcher: Robin Grayson, General Director, Eco-Minex International Ltd. in Ulaanbaatar emiweb@magicnet.mn Gold production in Mongolia has risen every year since 1991 and in 2000 reached 11.5 tons, 99% from placer gold mining. The forecast by Eco-Minex is for a sharp increase of 34% in 2001 to 16 tons, expected to rise further in 2002. The gold boom is driven by the private sector. The success rate of license holders in getting Mining Licenses into gold production has generally been very high, 30 of the 33 companies in 1993, 47 of the 54 companies in 1994 and 52 of the 60 companies in 1995. However this success rate is not quite as high as it appears, as many companies held more than one Mining License. The high speed of conversion of Mining License into an active placer gold mine is still impressive. 101 companies achieved placer gold production from Mining Licenses in the 2000 season. However, analysis demonstrates an enormous disparity between the top 10 'large' producers and the remaining 91 'small' producers. The biggest change from 1999 to 2000 has been the sudden rise of two small producers into leading positions. - Mongol Gazar Ltd. was 25th with 60.9 kilos in 1999 but leapt to 1st place with 1.6 tons in 2000. - Altan Dornod Mongol Ltd. was 74th with a mere 4.3 kilos in 1999, but leapt to 3rd place with 1.2 tons in 2000. The placer gold industry of Mongolia is determined by the handful of larger gold producers and that the large pool of small producers are virtually irrelevant. While this is true on the basis of the production figures for 2000, this study shows the situation to be much more complicated. In particular, a significant number of smaller producers have the potential to rapidly become large producers provided certain conditions are fulfilled. Forecasts for the 2001 season is for a 34% increase in placer gold output, based on analysis of the top 13 producers. The top ten are listed below. TOP PLACER GOLD PRODUCERS IN MONGOLIA - 2001 FORECAST 2001 kilos 2000 kilos %change 1st Mongol Gazar Ltd. 2,300 1,603 +43.48% 100% Mongolian private limited company Increasing washing plants from 3 to 5. First full year of production of major new placer mine. 2nd Altan Dornod Mongol. 1,900 1,252 +51.76% 100% USA registered Russian-owned private limited company First full year of operation of large gold dredge at Zaamar (www.placersoftheworld.bizland.com for details) 3rd Shijiir Alt Ltd. 1,800 1,186 +51.77% largely state-owned enterprise, part Mongolian, part Russian New large gold dredge to be launched in June 2001, to add to the company's existing large gold dredge 4th Erel Ltd. 1,400 1,384 +1.16% 100% Mongolian private limited company Declining placer reserves and lower grades but increased efficiency 5th Gatshuurt Ltd. 750 757 -0.92% 100% Mongolian private limited company Main placer mine nearing exhaustion, expansion of new placer mine in west 6th MAC 580 580 +0.00% 100% Mongolian private company (also in JV with Tyhee Resources at Bumbat hard-rock mine) No change expected in placer production 7th Haailast Ltd. 550 75 +633.33% 100% Mongolian private company Resumption of full-scale mining after privatisation by auction last year, with increased efficiency 8th Argos Ltd. 350 144 +143.06% 90% Russian, 10% Mongolian private company First full year as own producer, previously solely a contract miner 9th Datsan Trade Ltd. 300 237 +26.58% 100% Mongolian private company Expansion of first big placer mine near Uvs in western Mongolia 10th Monpolymet Ltd. 290 270 +7.41% 100% Mongolian private company Consolidation, but with 1 ton a year gold dredge project (40% owned by Java Gold Corporation JVAG) Most of these companies are interested in private investors for placer gold and joint ventures for hard-rock gold. Local interest rates on commercial bank loans are 4-6% per month in USD, but the mines still make strong profits. Contact me if you want further details of the Mongolia gold boom and how to invest in it. Robin Grayson General Director Eco-Minex International Ltd emiweb@magicnet.mn