MONGOLIAN MINING (HKG:975) PAVED ROAD’S ACCEPTANCE BY STATE COMISSION IS IMMINENT, BARGAIN PRICE TO ENTER FOR LONG TERM

Automobile Roads Inspector Mr. Gerelt-Od of General Agency of Specialized Inspections of Mongolia has informed Frontier Securities that State Commission has officially worked on 245 km Ukhaa Khudag – Gashuun Sukhait paved road of Energy Resource LLC, a fully owned subsidiary of Mongolian Mining Corporation. The road is main export road between MMC’s mine and Gashuun Sukhait/ Gantsimadao border crossing between Mongolia and China. The Commission inspected the road and informed the company of minor repairs to be made. After repairs are made and implementation report is submitted, the Commission is to review and accept the road. Frontier Securities views that the acceptance is imminent.Frontier Securities reiterates its recommendation that MMC is oversold and at current price of 6.17 it is a bargain and BUY for long term.

Paved road has been completed and it is even going to be used by Erdenes TT yet everybody is fleeing the coal stocks in HK, also Mongolian coal prices are at record US$100 per ton. If one compares MMC against its peers, undervaluation of MMC is noticeable. Despite short-term volatility caused primarily by global macro-weakening and Mongolian concerns, we view that it is great opportunity to buy MMC at such sizeable discount before commencement of paved road exports, the stock is below IPO price of 7.02 about a year ago yet how much progress have been achieved since a year ago.The whole world has become suddenly risk-adverse but Mongolian coal remains very much in demand.