Being “sent to outer Mongolia” has often been used to describe a place you would be exiled to as a punishment.
But with the country recently celebrating 100 years since the Mongolian Revolution of March to July 1921, and more and more evidence uncovering the nation’s world class resource riches, it is now a place where junior miners, in particular, want to be.
Since the 2010s, mining has become the backbone of Mongolia’s economy. National mineral deposits uncovered to date – primarily coal, copper and gold – have been estimated to be worth in the trillions.
A prime example of the country’s potential riches is the Rio Tinto-operated Oyu Tolgoi Project, rated as one of best endowed copper and gold mines in the world.
A recent World Bank Mongolia Country Economic Memorandum noted that since the advent of large-scale mining in 2004, Mongolia’s economy has grown at an average rate of 7.2% per year, making it one of the fastest-growing economies in the world.
While, that sudden flood of riches has raised concerns over a risk of the country being hit by a “resource curse”, the World Bank noted that there are many encouraging signs of improved macroeconomic management in recent years, providing the newly elected government an opportunity to further strengthen its reform credentials.
The World Bank reported that there appears to have been an unprecedented shift in the fiscal management of the country since 2017. For example, the fiscal balance has been in surplus in two of the last three years, the public debt-to-GDP ratio has declined for three consecutive years, and more than 2.5% of GDP have been annually transferred to the Stabilisation and Future Heritage Funds for the last three years – “remarkable achievements given Mongolia’s checkered history of macroeconomic management,” according to the report.
‘Flourishing Sector’
A recent article published on the Investing News Network described Mongolia as a resource-rich country that is at a turning point in its history.
It said that Mongolia has been called the last frontier for large-scale mining projects, with the unprecedented success of mines such as Oyu Tolgoi setting the stage for a flourishing precious metals sector.
The mining industry employs 3.6% of the country’s population and at the peak of the country’s mining boom, Mongolia’s total exports surpassed US$1.84B.
While a recent COVID-19 outbreak has caused consternation, the flood of new explorers and developers into Mongolia will be buoyed by the fact the country is now achieving one of the best vaccination rates in the world, recently announcing that over 60% of the population have now had two vaccination shots.
So who are the junior Mongolian explorers and developers to watch out for?
Steppe Gold
TSX-listed Steppe Gold Limited (TSX: STGO) is making strong progress with its Altan Tsagaan Ovoo (ATO) gold and silver project located in the territory of Tsagaan Ovoo soum, Dornod province of Eastern Mongolia.
The ATO Project is comprised of one mining licence (MV-017111) over an area of 5,492.63 hectares.
The company is currently studying expansion opportunities at ATO, with president and CEO, Bataa Tumur-Ochir, recently reporting that the company is forecasting strong production growth for the remainder of the year.
“We have now mined over 1.8M tonnes of ore with 1.4M tonnes stacked on the leach pad. With a new fixed crusher in place this summer, we are planning a record year for stacking in 2021,” he said.
Steppe Gold’s ATO resource now sits at 2.45M oz Au Eq, with a recent update doubling the resource and providing confidence on a planned production profile of approximately 150,000 gold equivalent ounces per year and an estimated ten-year plus mine life.
The company’s feasibility study for that major production expansion is on track to be finalized in the near future, with a focus now on Phase 2 preparations.
“Project lender discussions are advancing and we are optimistic that timely debt financing will allow us to continue uninterrupted with long lead item procurement and Phase 2 construction, already underway.”
ION Energy
Another TSX-listed Mongolia specialist, ION Energy Ltd (TSXV: ION), recently announced the successful completion of its maiden exploration drilling programme at the 100% owned Baavhai Uul Lithium Brine Project in south eastern Mongolia.
The company reported that 21 core drill holes were completed for 823.2m, with brine samples collected and initial samples submitted for analysis.
CEO, Ali Haji, noted that basin targets remain open and brines intersected are shallow and will be further tested by additional drilling and sampling.
“The company is highly encouraged by the stratigraphic lithologies and brines intersected in the maiden drilling programme at Baavhai Uul and both basin targets remain open in area,” Mr Haji said.
“These are the first of many exciting Lithium Salar targets that ION Energy is generating in Mongolia for drilling in 2021.”
Xanadu Mines
Dual-listed Xanadu Mines Ltd (ASX: XAM | TSX: XAM) recently confirmed shallow copper mineralization and commenced drilling at the Red Mountain copper-gold district in Mongolia.
In its joint venture with the Japan Oil, Gas and Metals National Corporation (JOGMEC JV) Xanadu is undertaking a targeted approximately 2,450m programme at Red Mountain.
The company’s confidence has been boosted by assay results returned from a 1,000m trenching programme which confirmed additional, shallow high-grade copper mineralization at Stairy and extending zones of mineralization seen in historic trenches.
Significant results include: OUTR100 returned 8m @ 2.03% eCu from 136m and OUTR104 returned 8m @ 1.94% eCu from 4m.
Exploration drilling will now focus on the shallow high-grade targets identified via trenching and previous drilling.
Its CEO, Dr Andrew Stewart, said the Red Mountain district is being progressed as a standalone high-grade copper project, complementing the advanced large-scale Kharmagtai copper-gold district.
“We are very excited by shallow copper mineralization in our surface trenching at Red Mountain,” Dr Stewart said.
“This confirms the mineralized structures are sub-vertical and up to twenty-four meters wide, potentially extending well over a kilometre. Importantly, our latest geological interpretation suggests these may be linked to a large-scale porphyry system at depth.
“The quality of Stairy and of the Red Mountain district continues to improve, laying a strong foundation for our new drilling programme.”
The Stairy prospect consists of a 1.5km by 1km zone of sheeted mineralized structures hosted within the Stairy Intrusive in the central east of the Red Mountain Mining Lease.
With a supportive government and world-class minerals riches, Mongolia is no longer seen as somewhere on the periphery – especially among the junior mining brigade.
