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MINERAL RESOURCE ASSETS DEVELOPMENT

MINERAL RESOURCE ASSETS DEVELOPMENT. Corporate Strategic Vision. FORWARD LOOKING STATEMENTS. FORWARD-LOOKING STATEMENTS

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MINERAL RESOURCE ASSETS DEVELOPMENT

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  1. MINERAL RESOURCE ASSETS DEVELOPMENT Corporate Strategic Vision Strictly Confidential

  2. FORWARD LOOKING STATEMENTS • FORWARD-LOOKING STATEMENTS This presentation includes certain “forward-looking statements.” All statements, other than statements of historical fact, are forward-looking statements that involve various risks and uncertainties. There can be no assurances that such statements will prove accurate, and actual results and future events could differ materially from those anticipated in such statements. Such information contained herein represents management’s best judgment as of the date hereof based on information currently available. The company does not assume the obligation to update any forward-looking statement. • NOTICE TO RECIPIENT This presentation has been prepared for, and is being distributed to a limited number of knowledgeable investors in connection with a proposed financing, Corporate financing source ( or the “Company”). The recipient acknowledges that the information contained herein is confidential and proprietary to the Company, and that it may not be disclosed without prior written consent to third parties other than the recipient’s agents, employees and representatives who require such material for the purpose of evaluating this proposal and a related financing decision. The material and information presented herein may be subject to change or modification without notification. The recipient acknowledges that this document is not intended to be solely relied upon as a basis for any financing and related decisions. Additional information will be provided upon request Strictly Confidential

  3. CONTENT • Corporate mineral assets resources and location • Mineral resource assets development stage • Mineral resource strategic assets development • Mineral resource assets quality and economic financial aspects • Asset project development plan medium and short term • Mineral assets investment program • Management • Regulation and license Strictly Confidential

  4. CORPORATE MINERAL RESOURCE ASSETS • More than 240 mineral assets have been evaluated since 2005 throughout Mongolia • 62 various mineral assets retained including 18 various mineral deposits • Ongoing exploration and drilling on 46 licensed fields Strictly Confidential

  5. CORPORATE MINERAL RESOURCE ASSETS • 5 high grade thermal & coking coal - 607.4 million tonnes of proven resource and targeting 2.5-3 billion tonnes • 2 large tonnage thermal coal - 3.8 billion tonnes • 1 gold - 459.42kg proven reserve targeting 6 tone • 2 molybdenum - 58238.94tonnes of proven reserve targeting 800.000 tones, and minor Cu 67,585.1t, Re 9 t • 1 lithium, strontium, potash - 1,420,000.0 T net metal Li and Strontium 408,000.0 Tnet metal, Potash sulphate22,0 MT. Potential lithium carbonate tonnage could exceed 10MT. • 1 Rare earth elements - 37,3 MT oxide of proven reserve targeting 6 Mt over group of licenses, plus unexplored Fe over 2.2kmx300m area, co-product of P2O5, by product of strontium. • 1 Fluorite - 475,000,0 T of proven resource with potential of 1.1 Mt resource • 1 Limestone - 544,877.0 T of proven resource with potential of 300.0 MT resource • 1 Cu- Fe Under resource evaluation • 1 Cu-Mo Under resource evaluation • 2 Pb-Zn Under resource evaluation Strictly Confidential

  6. DOMINATED RESOURCES AND RESERVES OF KEY COMMODITIES • Erdenetsogt – 2400 Mt • Eruult – 1400 Mt • Khotgor – 3000 Mt • Dalan – 33 Mt • Nalaikh – 24 Mt Strictly Confidential

  7. DOMINATED RESOURCES AND RESERVES OF KEY COMMODITIES Lithium Strontium deposit, Rare earth elements deposit ranking are evaluated and estimated as world class deposits Strictly Confidential

  8. CORPORATE MINERAL RESOURCE ASSETS COAL • Life of mine 16 years • Saleable mine reserve 16.1 Mt • Reserve 23.4 Mt • Capex $34 M USD • Opex $26 USD per tone • Sales price $45 USD per tone • Employee 210 • NPV 210 M USD Nalaikh underground coal mine located 45 km from Ulaanbaatar High quality thermal coal 6400 kcgl/kg over Infrastructure highly developed in Nalaikh district Strictly Confidential

  9. CORPORATE MINERAL RESOURCE ASSETS COAL • Nalaikh underground coal Mining license MV-000221 • Underground equipment supplier Famur group Poland • Expected commissioning date 3 quarter of 2014 Drilling exploration Pre feasibility study Feasibility study Environmental analysis and action plan Underground mine planning design engineering full completed Local coal selected market analysis report Electric power line, water supply are ready Infrastructure rail way are under discussion Strictly Confidential

  10. CORPORATE MINERAL RESOURCE ASSETS COAL • 574 Mt proven resource on MV-012474 license • Additional exploration programme commenced to identify further coal resources on neighbor XV-016830 exploration license area targeting 2.5-3 billion tonnes Khotgor deposit includes MV-012474 and XV-016830 licenses Khotgor(947Ha) coal deposit lies approximately 1500km west from capital city Ulaanbaatar , 80 km SW from provincial center Ulaangom city, and 55km NE from Bokhmoron Soum of Uvs province Strictly Confidential

  11. CORPORATE MINERAL RESOURCE ASSETS COAL • The major asset associated with the Dalan Project is a thermal coal deposit with resources of 33.4 million tonnes with a nominal calorific value of 4,800 kcal/kg and an average stripping ratio of 2.15 BCM per tonne of coal. Dalan deposit MV-014492 Mining license, 271.73 (Ha) and group of neibourgh licenses, Tsagaan Us XV-008596, Alagtolgoi MV-013132, Ariinkhudag MV-09517. The Dalan deposit area is located in DalanjargalanSoum, DornogobiAimag, approximately 285 km southeast of Ulaanbaatar, Mongolia. Strictly Confidential

  12. CORPORATE MINERAL RESOURCE ASSETS COAL • MoistureWar, % - 39.4 • Moisture Wad,% - 25.81 • Ash (Adry) - 17.3 • Volatiles (Vdaf) - 44.4 • Sulphur (Std) - 1.3-2.2 • Calorific Value(Qr) Kcal/kg - 2943 • Calorific Value(Qd) Kcal/kg - 4881 • Calorific Value(Qdaf) Kcal/kg - 6332 Erdenetsogt MV-017078 coal deposit is located 430km SE of Ulaanbaatar, 85km NNE of the provincial Center Sainshand. The Chinese border is 230 km by rail from Sainshand to Zamiin-Uud border crossing. Coal resource is estimated in accordance with JORC standard by Norwest. Estimated resource of 2.4 billion tonnes Low mining strip ratio 1: 0.17 Strictly Confidential

  13. CORPORATE MINERAL RESOURCE ASSETS COAL • The coal characteristics are as follows: Total moisture (Wp) - 22.2%, Inherent moisture (Wa) - 9.12%, Ash (Aa) – 12.98%, Volatile matter (Vr) - 41.36%, Sulfur (Sc) – 0.71%, low Caloric value (Qar) – 2180 ~5115 kcal/kg to the average of 4023 kcal/kg, high Caloric value (Qgr) – 3512~6886 kcal/kg to the average of 5410 kcal/kg. Caloric value of this area is average of low Caloric value (Qar) is about 4023 kcal/kg. • Estimated coal resource is 1,4 billion tonnes. Eroolt deposit includes a group of licenses including TsagaanZalaat (1098.09Ha), Eroolt (15318.31Ha), and NuurstHudag(4123Ha). Eroolt project is located 640km SE of Ulaanbaatar, 90km east of provincial center Baruun Urt and 25km from Asgat Soum, Sukhbaatar aimag. The properties lie approximately 180 km northwest of check border with China. The dip angle of the coal seam is 0 to 5 degree and the coal seam has stable distribution. The coal is suitable for opencast mining. Strictly Confidential

  14. CORPORATE MINERAL RESOURCE ASSETS MOLYBDENUM • Mo – 25,538.94 T of proven resource 0.04% cut off grade. Minor Cu – 67,585.1 T, Re – 9.0 T. • Early government resource estimation is 650,000.0 Tone Zost Mo deposit is located in Tosontsengelsoum, Zavkhan province. The deposit covers 2 licenses Zostuul XV-04251, and Ovorzost XV-07410. Strictly Confidential

  15. CORPORATE MINERAL RESOURCE ASSETS MOLYBDENUM • Mo reserve of Tsagaan Chuluut deposit is bieng calculated as proven and probable reserve at 0.044 cutoff grade contain 32.7thousand tone of Mo in 77.6Mt ore. Detailed exploration work should be extended another 1500m to west and possible to increase the reserve 60 up to 80 thousand tone to bring the total reserve 150thousand tone. • The deposit consists of economic mineral association Mo-Re-Li. The TsagaanChuluut deposit includes MV-012193 and XV-06747 licenses. The Tsagaanchuluut deposit is located in the territory of Umnudelger, and Ulziytsoums of Khentiyaimag, 327km to east from capital city Ulaanbaatar. Strictly Confidential

  16. Mineral resource strategic assets developmentLitium • Financial and economic model • Lithium selected target market analysis and action plan • Mine processing plant engineering Mine development and design Lithium processing plant design engineering Scoping study Environmental analysis and action plan Infrastructure analysis and action plan Bankable feasibility study Metal refining pilot study Strictly Confidential

  17. Mineral resource strategic assets developmentLitium • Magnetic and radiometric survey • Electric and magnetic survey • Gravity surveying and implementation • Topographic and geodetic survey • Full drilling and interpretation • Detailed geological mapping • Sectional interpretation and polygonal resource estimation • Mineralogical petrologic and geochemical investigation • Metallurgical recovery tests • Laboratory Germany, Russia and Mongolia 6400 samples assayed • Mineral reserve estimate report JORC Khukh Del is world class underdeveloped brine lithium, potash and strontium deposit Deposits contain following elements: lithium potassium, strontium, cesiumand boron. Strictly Confidential

  18. Mineral resource strategic assets developmentLitium In addition to the JORC mineral estimate, a resource estimation according to Mongolian standard has also been conducted and can be reviewed below. Strictly Confidential

  19. Mineral resource strategic assets developmentRare Earth Elements • The Mushgiakhudag deposit includes group of licenses MV-014937 BayanTomortei XV-012396 MushgiaKhudag XV-07812 MushgiaUkhaa XV-015277 Khurmentolgoi. • The deposit is located 500km SW from capital city Ulaanbaatar and 32km SW from MandalOvoo sum. In 1983-1984, Russian geological expedition provided first drilling program (with 2800m drilling on 20 bore holes) and estimated over million tonnes of REO in total resources. In 1989-1991, Mongolian geological research team completed exploration work on Central, KhurenKhad and Tumurtei ore zones at MushgiaKhudag (total 8025m drilling on 41 bore holes) and estimated 0.4 million tonnes of REO oxide in total. USGS evaluated its resource as 5,9 Mt REO. Unexplored Fe over 2.2kmx300m area As results of 2007-2009 exploration works we have determined origin of the deposit, complexity of the geological setting, exploration drilling grid density and estimated rare earth 14.4 million tonnes of ore or 194.4 thousand tonnes of rare earth oxides by B category, and probable resources of 1.2 million tonnes of ore or 37.3 thousand tonnes of oxides by C category in compliance mineral evaluation and estimation methods of Mongolia. Strictly Confidential

  20. Mineral resource strategic assets developmentRare Earth Elements Strictly Confidential

  21. MINERAL RESOURCE ASSETS QUALITY AND ECONOMIC FINANCIAL ASPECTS Mineral Resource and reserves are potential Mineral resource and reserve ore are high grade Mineral resource assets location is near main markets and infrastructure Mineral resource each assets are very attractive for investors, customers and partners Mineral resource assets are Economically very profitable and highest indicative NPV and long life mine cycle Reserve should potential increase medium term Strictly Confidential

  22. PROJECT MANAGEMENT TEAM MEMBERS AND PARTNERS • Mckinsey & co - Mining consulting • MMC Minarko - Reserve estimate mine planning • Dassault systems - Mining software • Famur group - Poland underground mining equipment manufacturer • DHMS - Germany underground mining equipment manufacturer • Takraf group- Germany mining equipment manufacturer • Mongolian Minerals Corporation – Canada • Yu Jin Investment - Singapore • Kunming Coal Design and Research Institute - China Erdemmanlai - CEO Ganotgo - Director of Geology and Mining Department Unurjargal - Project manager International relation Purevdorj - Project manager Mining engineer Ser od - Project manager Geologist Lhkagva - Project financial manager Baatar - Project mining engineer Strictly Confidential

  23. KEY HIGHLIGHTS Strictly Confidential

  24. KEY MILESTONES – SUCCESSFUL TRANSFORMATION INTO FULLY INTEGRATED MINE Strictly Confidential

  25. KEY ASPECTS OF JUNIOR MINERS • Rapid Production Growth leading fully integrated Mongolian mineral resource producer Closest coal and minerals exporter supply to in China’s eastern province Asset quality (ROM ore high grade) Low-cost producer – positioned on the of the global cash cost curve • Planned railway or asphalt road and paved road 1-3 years • Reserves & Resources Overview Rapid Planned Production Growth • Mining • Processing • Transportation • Sales & Marketing Open pit operation (one large open pit and 1 underground mining should be construction and commissioning in 2014) Owns all mining equipment from world renowned suppliers (including Caterpillar Takraf Atlas CopcoFamur and DHMS) Strictly Confidential

  26. KEY ASPECTS OF MONGOLIAN MINING REGULATORY FRAMEWORK • Corporate Income Tax 10% net profit tax • No Export Restrictions No restrictions on minerals exports / no domestic market obligations • Royalties 2.5% - 5% • Mining Licenses Mineral Resources Authority under the Ministry of Mining (pursuant to the new structure of the Government of Mongolia) • Regulatory Authority Initial term of 30 years, can be extended for two additional 20-year periods. Only entities registered in Mongolia are allowed to own mining licenses. 100% foreign ownership is permitted, subject to governmental approval required under the Law on the Regulation of Foreign Investment in Entities Operating in Strategic Sectors (2012). • VAT Exported finished mineral products are subject to zero rate VAT Strictly Confidential

  27. REGULATION AND LICENSES Additional information Types of licenses The Minerals Law of Mongolia contains two types of licenses, as follows: • An Exploration License, which entitles the license holder to carry out mineral prospecting in the license area; • A Mining License, which entitles the license holder to conduct prospecting and exploration work in the license area; Strictly Confidential

  28. REGULATION AND LICENSES License application process Strictly Confidential

  29. REGULATION AND LICENSES License Fee Exploration license • Annual license fees are US $5 per hectare for coal and common mineral deposits and US $15 per hectare for gold, copper, zinc, and iron. • A 2.5% minerals royalty is imposed on coal and common mineral resources whereas the royalty on gold, copper, zinc, and iron is 5%. • A mining license holder investing US $50 million in the first 5 years of the project is entitled to enter into an Investment Agreement with the Government which can stabilize rates of corporate income tax, customs duty, VAT and minerals royalties. License Fee Prospecting license • Annual license fees begin at US $0.10 per hectare in the first year and gradually increase to a maximum rate of US $1.50 per hectare in the seventh through ninth years. • License holders are required to spend certain minimum amounts of funds on exploration activities beginning in the second year of a license. Strictly Confidential

  30. REGULATION AND LICENSES Relevant laws of Mongolia • Constitution of Mongolia • Minerals law of Mongolia • Law of Mongolia on Implementation of the Minerals Law • Prohibiting minerals exploration and mining in protected zones of sources of rivers those originate streams of rivers, drainage basins and forest areas. • Law on Licensing • The Law on Subsoil • Law on Land • Law on Land Fees • Law of Mongolia on Water • Water, Air and Environmental Control Law • Water and Minerals Water Usage Payment Law • Environmental Protection Law of Mongolia • Environmental Impact Evaluation Law of Mongolia • Law on Sanitation • Law of Control on Explosives and Accessories and Explosives Circulation • Chemical Toxic and Dangerous Substance Law • Domestic and Industrial Waste Law of Mongolia • Law of Mongolia on Foreign Investment • Auto Road Law • Business Entity Income Tax Law of Mongolia • Geodesy and Design Law • Law on Labor of Mongolia • Law on Social insurance Strictly Confidential

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