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Mongolia Energy Corporation Corporate Presentation January 2009. Focused. Professional. Realists. Disclaimer.

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Mongolia Energy Corporation

Corporate Presentation

January 2009

Focused. Professional. Realists.


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Disclaimer

This presentation contains forward-looking statements that involve risks and uncertainties and intended to be covered by applicable safe harbor principles under applicable national and federal securities legislations. These statements are generally indicated by the use of forward-looking terminology such as believe, expect, anticipate, estimate, plan, project, target, may, will or other similar words that express an indication of actions or results of actions that may or are expected to occur in the future. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this presentation. These forward-looking statements are based on our own information and on information from other sources we believe to be reliable. Our actual results may be materially less favorable than those expressed or implied by these forward-looking statements which could affect the market price of our shares. You should also read the risk factors set out under our circulars and announcements for each of the transactions, which are deemed incorporated and form part of this presentation and as qualification to the statements relating to the relevant subject matters. All figures in this presentation are approximation. This presentation does not constitute any invitation to acquire securities and is intended for reference only.

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About MEC

FOCUSED.

MEC is focused on acquiring, exploring and exploiting its resources.

PROFESSIONAL.

MEC works with internal and external professionals.

REALISTS.

MEC uses a network of cooperation for sustainable development and monetization of its projects.


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Vision and Value

Our Vision

is to develop MEC into a leading energy company in the energy and related resources sector with a global brand recognition.

Our Value

lies in implementing our projects in a sustainable manner, paying due care to the environment and the partnership with the peoples where we do business.

To achieve our vision and value, we have assembled and will be expanding our global team and network of co-operations. We will not be content with our vision until we achieve a global reach.

This is our vision. This is our value.


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Our Milestones 2007

Jan

Sep

First Acquisition.

Concession Areas: 34,000 hectares for coal resources.

Location: In “Khushuut” and “Darvi”, western Mongolia.

Exploration: In Khushuut, within 600 hectares demonstrated 149 million tonnes of JORC resources.

Quality: Primarily premium quality coking coal.

Co-operation: China COSCO indicates transport guarantees.

Details: In mid-2009, there is a scheduled 3 million tonnes per annum mining operations concentrating on coking coal.

Market: Xinjiang, PRC, through a 340 km “Khushuut Road”, budgeted for RMB866 million. This is being completed.

May

Dec

Second Acquisition.

Concession Areas: 32,000 hectares for coal, ferrous and non-ferrous metals resources.

Location: In “Gants Mod”, western Mongolia.

Valuation: 66,000 hectares acquired on “as is” basis supports the net asset value of MEC of HK$14 billion or HK$2.20 per share.

Third Acquisition.

Benefits: 20% of 487,509 hectares of an oil and gas project.

Location: In western Mongolia.

Co-operation: CNPC Daqing Petroleum. To study feasibility prior to proceeding with project. Also, to co-operate on other projects


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Our Milestones 2008

Jan

Mar

May

Jul

First Acquisition.

Completion: This follows demonstration of the 460 million tonnes of coal resources to Chinese standards.

Fourth Acquisition. To be completed in 2008.

Benefits: 20% of multi-metals project with demonstrated 235,600 tons of tungsten trioxide and 49,400 tons of tin resources.

Location: Xinjiang, PRC.

Fifth Acquisition.

Concession Areas: 263,008 hectares for coal, ferrous and non-ferrous metals resources.

Location: “Olan Bulog” and “Gobi Altai” areas, western Mongolia.

Disposal.

Real Estate: Disposes of basement and ground floor of Bank of America Tower for HK$540 million.

Feb

Apr

Jun

Sep

Financing.

Convertible Note: Chow Tai Fook Nominee Limited.

Terms: 2011, HK$2 billion zero coupon convertible note.

Conversion Price: HK$7.30 per share. 273 million shares. Around 4.33% of MEC on fully diluted basis.

Appointment.

Executive Director: Mr. Liu Zhou Wei, Deputy Secretary of All China Federation of Trade and Industry as Executive Director.

Mr. Liu was formerly a PLA military general. Mr. Liu assists MEC with PRC market access.

Sixth Acquisition. Partially completed.

Acquisition: Acquired 25% of Xinjiang Kaiyue Yuan.

Purpose: Through Xinjiang Kaiyue Yuan to acquire 20% stake for 2 billion tonnes of coal resources under two joint ventures with PRC geological bureaus in Xinjiang and an interest under other projects of Xinjiang Kaiyue Yuan.

Seventh Acquisition. To be completed.

Benefits: 20% of 1.18 million hectares of an oil and gas project. The Ergel XII Petroleum Block. This follows an open tender.

Co-operation: After ratification of the production sharing contract will invite CNPC Daqing Petroleum to assist on the project.


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Board andManagement

  • Simon Lo – Chairman

  • Over 20 years of experience in the financial, securities and futuresindustries,including many trans-border transactions

  • Served on the Board of Directors of a number of listed companies

  • Liu Zhuo Wei - Executive Director

  • Mr. Liu holds a bachelor degree from Harbin University of Science and Technology

  • Mr. Liu joined the People's Liberation Army in 1969. As from 1983, Mr. Liu was with the People's Liberation Army General Staff Department and General Armaments Department involving in the development of military equipment and construction program.

  • Expert in rocket propulsion design and construction.

  • In 2007, Mr. Liu joined All-China Federation of Industry & Commerce and is currently its deputy secretary.

  • James J. Schaeffer, Jr – CEO

  • Formerly Executive Director – Asia Pacific of John T. Boyd Company, technical adviser to China Shenhua’s IPO in 2005

  • Leading industry expert, highly regarded by a number of major Asia-Pacific and global corporates and banking and financial institutions in the energy and resources sectors

  • Mohan Datwani – General Counsel

  • Formerly a global partner of an international law firm, Paul, Hastings, Janofsky & Walker

  • A specialist in structured transactions, including various energy and resources-related projects for major international corporations and banking and financial institutions


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  • Cai Yi –Director of Oil and Gas

  • PhD in Mineral Resource Prospecting and Exploration from China University of Geosciences

  • A specialist in Oil and Gas sector

  • Participated in a number of national oil and gas research projects

  • Published over 10 journals in renowned publications such as Petroleum Science

  • Gordon T. Poon – Director of Investor Relations

  • Over 20 years’ experience in investment banking, worked in corporate finance in London in the 80’s, and capital markets trading and sales in North America, Tokyo and Hong Kong

Board andManagement

  • Frank Witzel – Chief Geological Consultant

  • Over 33 years’ experience in exploring for coal, metals, uranium, oil shale and other industrial minerals

  • Previously served as Associate Senior Geologist for leading mining consultancy John T. Boyd Company

  • Ren Xiang – Consultant

  • Mr.Ren is the highly regarded father of geothermal studies in China.


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Share Related Data

Shareholding Structure

0.12%

16.95%

Other directors

Liu Cheng Lin

Lo Lin Shing, Simon

Public*

19.85%

63.08%

*Note: For information, Dato’ Dr. Cheng Yu Tung has 3.72% interest and Dr. Cheng Kar Shun has 6.34% interest in MEC.

Listing Information


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Industry Overview


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Industry Overview

Coal

Coal Production and Consumption

(1997&2007)

Source: BP Statistical Review of Energy 2008


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Industry Overview

Coal

Coal Prices

(1991 – 2007)

Source: BP Statistical Review of Energy 2008


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Industry Overview

Oil and Gas

Crude Oil Prices

(1961 - 2007)

Source: BP Statistical Review of Energy 2008


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Industry Overview

Oil and Gas

Consumption by Region

Source: BP Statistical Review of Energy 2008


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Industry Overview

Oil and Gas

Imports and Exports 2007

Source: BP Statistical Review of Energy 2008


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Our Business Model

John T Boyd Company

– Independent Technical Advisor

  • Over 60 years of expertise in completing reserves audits and stock listing requirements forcoal companies

  • Conducted more than 2,000 reserves audits, includingaudits for some of the largest coal producers in the US

  • Technical consultant of China Shenhua’s IPO

  • All exploration is with the input and advice of the independent technical adviser

  • The exploration results are analyzed by the independent technical adviser

  • The mining plans are developed with the independent technical adviser


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Our Business Model

Fenwei Energy Group

– Mining Operations Design

  • Fenwei Energy Group is one of the premier energy consulting companies with a high degree of expertise and experience in China’s coal industry.

  • The scope of services range from field investigations, evaluations of coal resources, resource planning and mine commencement, feasibility and market studies, pilot plant and commercialization of technology, environmental impact and assessment.

  • The Company’s expertise includes coking coal evaluation, coke and coking plants, coal chemicals, coal bed methane, coal gasification, clean coal technology, energy system integration, power generation, emission reduction, and coal mine redevelopment.

China Coal Geology129 Exploration Team

– Exploration Company

  • Team 129 is an experienced exploration team under China Coal Geology’s No. 1 ExplorationBureau

  • It provides the drilling and other aspects of the exploration with the advice of John T. Boyd Company


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Our Business Model

Strategic Cooperation


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Our Operations - Coal

  • Western Mongolia

  • Exploration: In 2007, MEC explored 600 hectares of the coal mine areas, out of the 330,000 hectares of concession areas in Western Mongolia for coal, ferrous and non-ferrous metal resources. The explored area is in “Khushuut” in Khovd Province, western Mongolia.

  • Co-operation: The exploration work was done by a Chinese exploration company, Team 129 of the China National Administration of Coal Geology.

  • Resources: Around 50,000 metres of drilling was done and 460 million tonnes of coal resources were demonstrated including 181 million tonnes of coking coal resources were demonstrated to Chinese standards.


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Our Operations - Coal

  • Western Mongolia

  • Professionals: The drilling work was supervised by John T Boyd Company. Further analytical work so far over an area of the explored area is that there are around 149 million tonnes of JORC in-place resources demonstrated.

  • Mining Operations: MEC is upgrading the foundation, with related building works, of a 340 km road, from Khushuut to Xinjiang, PRC, the "Khushuut Road", budgeted for RMB866 million. 243.8 km of foundation work has been completed interconnecting to an existing road to Xinjiang. This will assist MEC to commence a 3 million tonnes per annum mining operation scheduled for the second quarter of 2009.

  • Market Study: Fenwei has conducted the market study report as part of the mine plan. The results are that there are sustained demands for coking coal by steel manufacturers.

  • Prospects: In 2008, MEC will explore for further prospects, in nearby areas, including Darvi, Khovd Province, western Mongolia and other areas of prospects.


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Our Operations - Coal

  • Xinjiang, PRC

  • Acquisition: MEC acquired 25% of wholly foreign owned enterprise, Xinjiang Kaiyue Yuan with business scope to invest into coal, copper and iron resources.

  • Joint Ventures: MEC through Xinjiang Kaiyue Yuan is acquiring a 20% interest under joint ventures with two Chinese geological bureaus over a targeted two billion tonnes of coal resources.

  • Geological Bureaus: These are Team 129 of the China National Administration of Coal and Geology and Team 156 of the Xinjiang Coalfield and Geology Bureau.

  • Other Projects: As Xinjiang Kaiyue Yuan is authorized to invest into coal, copper and iron resources, the investment in Xinjiang Kaiyue Yuan is anticipated eventually to bring about other projects.


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Our Operations - Coal

Khushuut, Darvi, Western Mongolia & Xinjiang, PRC

First Acquisition

Second Acquisition

Fifth Acquisition


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2008

2009

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Western Mongolia, Khushuut mine

Mine plan, permitting, constructions

Commence production

Xinjiang, PRC

Commence production

Acquisition

Our Operations - Coal

  • Exploration Program: As of 1 October 2008, the fieldwork for Boyd’s 2008 exploration program is complete.

  • Sampling: Coal samples from 2 borings are being arranged to be shipped back to China for testing.

  • Road Construction: Road construction from Khushuut to the Yarant Border Station is being completed.

  • Co-operation: Testing of the samples obtained from the 2 core borings is scheduled to be performed under Team 129’s supervision.


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Our Operations - Oil and Gas

  • Western & Southern Mongolia

  • Acquisition: MEC acquires, as 20% consortium member, 1.18 million hectares of an oil and gas project in Southern Mongolia. This follows contested international bid of Ergel XII petroleum block.

  • Co-operation: MEC will invite CNPC Daqing Petroleum to assist in the project. The production sharing contract is being finalized and ratified with the Government of Mongolia.

  • Collaboration: MEC has earlier collaborated with CNPC Daqing Petroleum in relation to the feasibility study of oil and gas in 487,509 hectares of exploratory project in western Mongolia, which is at the feasibility study stage.

  • Details of Co-operation: CNPC Daqing Petroleum will conduct the feasibility study relating to the exploration of the geology, the technical and economic evaluation of the oil and gas deposits and formulation of exploration plans. Both parties will also work together on other oil and gas exploration projects, including the possibility for bidding for new projects in the area.


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2008

2009

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Southern Mongolia, Ergel XII Petroleum Block

Production sharing contract, ratification

Our Operations - Oil and Gas

Ergel XII, East Gobi Basin, Southern Mongolia


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2008

2009

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Gobi-Altai

General Reconnaissance

Xinjiang, PRC

Acquisition

Our Operations - Minerals

Western Mongolia

~Ferrous and Non-Ferrous Metal Resources

  • Acquisitions: MEC has acquired title to approximately 330,000 hectares of concession areas in Western Mongolia for coal, ferrous, and non-ferrous metals.

  • General Reconnaissance: In 2008, MEC has commenced general reconnaissance and a program for exploration. These will include exploration for metal deposits.

Xinjiang, PRC

~Multi Metals

First Acquisition

Second Acquisition

Fifth Acquisition

  • Acquisition. MEC is acquiring a 20% interest in certain multi-metals project, with 235,600 tons of tungsten trioxide and 49,400 tons of tin resources.


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Our Infrastructures


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Corporate Social Responsibilities

Social

  • Train and qualify professional workers in Khovd province vocational training centre

  • University scholarship

  • Building of shower facilities in 4 soums

  • Improving medicine reserve in hospitals

  • Khushuut kindergarten

  • Aid for impoverished citizens of Ulaanbaatar city

Employment

  • Strict health and safety policies

  • Local community construction

  • Computer classes in schools

  • Vocational training centre

  • Apprentice practice

Economy

  • Building of Khushuut road

  • Local employment

  • Infrastructure investment


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About Mongolia

Mongolia has an area of around 1.6 million sq km with a population of around 2.8 million people. There is an abundance of natural resources in Mongolia and Mongolia is a democracy. Mongolia celebrates 800 years of history. The people of Mongolia are warm and friendly and there is an almost full literacy rate. The Mongolian language, English, Russian, Korean, Chinese are common languages spoken in Mongolia.


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Future Plans

Khushuut/Gants Mod areas

  • Team 129 will follow BOYD’s proposed program for core drilling to define quality (coking, thermal and PCI coal) for mine commencement

  • Team 129 will complete reconnaissance drilling (wide spacing) adjacent to the area drilled during 2007 in an attempt to expand the Khushuut resources

  • Team 129 will complete reconnaissance drilling in the Darvi area in an attempt to identify potential resources. Approximately 4 holes were drilled in this area at the end of 2007

  • If the MEC geologists identify other coal and metals prospects in the areas of the initial and second acquisition, drill rigs will be mobilized from the Khushuut area for reconnaissance drilling

  • Should reconnaissance drilling for additional coal deposits metals show favorable results, the drilling program will be expanded for more detailed (closer spacing) drilling

  • BOYD will be on site during the Khushuut (Team 129) drilling

  • The resource reports (Team 129 and BOYD) will be updated at the end of the drilling season

  • The mine plan feasibility studies will be updated following the update of the resource reports

  • General reconnaissance of South-western Mongolia region to identify potential new sites


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Future Plans

Water Exploration

  • Initial hydrology work is complete

  • A contract with a local water drilling company has been prepared. Hydrologist has identified 5 potential areas for evaluation

  • Evaluation has started at area closest to Khushuut to develop a water supply for the existing and near term facilities

  • Exploration has been extended to other potential sites

Community

  • To provide local MEC support and improve community facilities, MEC has constructed two small local facilities:

    • Bank building – MEC will be working with Khaan Bank

    • Police building – will provide full time local police presence

Khushuut Camp

  • The existing MEC camp has been upgraded during 2008 to improve conditions

  • Major improvements include:

    • Kitchen/cafeteria facilities

    • Shower and toilet facilities


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Future Plans

Products

  • Coking Coal

    • Mid-2009. Commence 3 million tonnes mining operations after road construction complete.

    • 2010/2011. Expansion to further 2 to 3 million tonnes of coke production.

  • Thermal Coal

    • 2011 and beyond. Power generation. This depends on further exploration and mine plan.

Market Study

  • Shanxi Fenwei Energy Consulting completed an independent market study for the Khushuut coal

Customers

  • China and Europe for coking coal. China for electricity.


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Financial Highlights

*The aggregate turnover from the continuing operations, mainly the private jet business, and discontinued operation, namely the real estate investment disposed on July 15, 2008.


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Investor Relations Contact:

Mr. Gordon Poon, Director of Investor Relations

40th & 41st Floors, New World Tower 1, 16-18 Queen's Road, Central, Hong Kong

Tel: (852) 2138-8000

Fax: (852) 2138 8111

Email: [email protected]

Website: www.mongolia-energy.com


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