Newsletter from Canrim Resources, a Singaporean company focused on mineral resources development in Mongolia

Reflecting on 2014, Mongolia has come far, yet still has further to go. Early in the year many structural issues loomed large. This included the moratorium on the issuance of exploration licenses, development of large scale power projects and the railroad gauge debate, all of which were recently successfully resolved. In light of these productive developments, and a change in government, we see 2014 having been a turning point from the bottom which will result in renewed economic growth going forward. The majority of this growth is projected to come from the resource, power and infrastructure sectors.

On mining, the 239th Government decree of 2014 outlines the issuance of exploration licenses covering 20.94 million hectares to be issued through the bidding process. Of this area, 6.2 million hectares are reported to contain minerals reserves which have been identified though a geological survey funded by the Government of Mongolia. This is what Canrim had predicted would happen and the timing fits with our business model.

We view such news as validation of our ongoing assessment that once the new Government has completed its streamlining of Ministries the issuance of minerals licenses will again commence, thus leading Canrim to bid for multiple properties which will become the principal assets of our project portfolio. Canrim has already selected its prospective areas and completed the necessary steps and paperwork to support our applications. Further, we are currently in discussions and undergoing due diligence on several advanced projects of which we will soon know whether or not they fit our criteria to take further action.

2014 Economic Review:

1. July 1: Amendments made to Minerals Law, Petroleum Law passed

2. July 1: Moratorium on issuance of exploration licenses lifted

3. July 1: Life of exploration licenses extended from 9 to 12 years

4. August 21-22: Chinese President Xi Jinping visits Ulaanbaatar

5. August 22: MRAM issues first exploration licenses in five years

6. September 03: President Vladimir Putin visits Ulaanbaatar

7. November 21: Chimed Saikhanbileg elected as new Prime Minister

8. December 02: MPRP joins incumbent DP to form coalition government

9. December 22 MMC, Shenhua, Sumitomo Consortium win Tavan Tolgoi tender

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