MANAGEMENT’S
DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
OF ORGANIZATION SINCE INCEPTION TO SEPTEMBER 1, 2004
This section of the
prospectus includes a number of forward-looking statements that reflect our
current views with respect to future events and financial performance.
Forward-looking statements are often identified by words like: believe, expect,
estimate, anticipate, intend, project and similar expressions, or words which,
by their nature, refer to future events. You should not place undue certainty on
these forward-looking statements, which apply only as of the date of this
prospectus. These forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from
historical results or our predictions.
We are a start-up,
pre-exploration stage corporation and have not yet generated or realized any
revenue from our exploration activities.
Our auditors have issued a
going concern opinion. This means that our auditors believe there is substantial
doubt that we can continue as an on-going business for the next twelve months
unless we obtain additional capital to pay our bills. This is because we have
not generated any revenue and no revenue are anticipated until we begin removing
and selling minerals. Accordingly, we must raise cash from sources other than
the sale of minerals found on the property. That cash must be raised from other
sources. Our only other source for cash at this time are investments by others
in Mongolian Explorations Ltd. We must raise cash to implement our project and
stay in business.
To meet our need for cash
we are attempting to raise money from this offering. Whatever money we do raise
will be used as set forth in the Use of Proceeds section of this prospectus. If
we find mineralized material and it is economically feasible to remove the
mineralized material, we will attempt to raise additional money through a
subsequent private placement, public offering or through loans. If we do not
raise all of the money we need from this offering to complete our exploration of
the property, we will be required to find alternative sources, like a second
public offering, a private placement of securities, or loans from our officers
or others. We have discussed this matter with our officers and directors,
however, our officers and directors are unwilling to make any commitments to
loan us any additional money at this time. At the present time, we have not made
any arrangements to raise additional cash, other than through this offering. If
we need additional cash and cannot raise it we will either be required to
suspend exploration activities until we do raise the cash, or cease exploration
activity entirely. If we raise the maximum amount from this offering, we believe
the money will last a year and allow us to operate for a period of at least
twelve months. Accordingly, we believe we will not be required to raise
additional capital during the next twelve months. Other than as described in
this paragraph, we have no other financing plans.
Our exploration program is
explained in as much detail as possible in the business section of this
prospectus. We are not going to buy or sell any plant or significant equipment
during the next twelve months. We will not buy any equipment until we have
located a body of ore and we have determined it is economical to extract the ore
from the land.
We may attempt to interest
other companies to undertake exploration work on the property. We do not intend
to try to develop the reserves ourselves. By this we mean that when we locate a
property that we believe has the potential to be mined, we will invite other
mining production companies to assist us. We anticipate the other companies will
have the expertise and financing for the mining property. This is a common
practice which is used in the junior mining sector.
37
If we are unable to
complete any phase of exploration because we do not have sufficient money, we
will cease exploration activities until we raise more money or try to find a
joint venture partner to complete the exploration work. If we cannot find a
joint venture partner and do not raise more money, we will cease exploration
activities. If we cease exploration activities, we will seek other mining
opportunities.
We do not intend to hire
any employees at this time. All of the work on the property will be conducted by
unaffiliated independent contractors that we will hire. The independent
contractors will be responsible for surveying, geology, engineering,
exploration, and excavation. The geologists will evaluate the information
derived from the exploration and excavation and the engineers will advise us on
the economic feasibility of removing the mineralized material.
Limited Operating History; Need for Additional Capital
There is no historical
financial information about us upon which to base an evaluation of our
performance as an exploration corporation. We are a pre-exploration stage
corporation and have not generated any revenue from our exploration activities.
We cannot guarantee we will be successful in our exploration activities. Our
business is subject to risks inherent in the establishment of a new business
enterprise, including limited capital resources, possible delays in the
exploration of our properties, and possible cost overruns due to price and cost
increases in services.
To become profitable and
competitive, we conduct into the research and exploration of our properties
before we start production of any minerals we may find. We are seeking equity
financing to provide for the capital required to implement our research and
exploration phases.
We have no assurance that
future financing will be available to us on acceptable terms. If financing is
not available on satisfactory terms, we may be unable to continue, develop or
expand our exploration activities. Equity financing could result in additional
dilution to existing shareholders.
Other than as described
herein, we have no other financing plans.
Critical Accounting Policies
Our discussion and analysis
of its financial condition and results of operations, including the discussion
on liquidity and capital resources, are based upon our financial statements,
which have been prepared in accordance with accounting principles generally
accepted in the United States. The preparation of these financial statements
requires us to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses, and related disclosure of contingent
assets and liabilities. On an ongoing basis, management re-evaluates its
estimates and judgments.
The going concern basis of
presentation assumes we will continue in operation throughout the next fiscal
year and into the foreseeable future and will be able to realize its assets and
discharge its liabilities and commitments in the normal course of business.
Certain conditions, discussed below, currently exist which raise substantial
doubt upon the validity of this assumption. The financial statements do not
include any adjustments that might result from the outcome of the uncertainty.
38
Our future exploration
activities are dependent upon our ability to obtain third party financing in the
form of debt and equity and ultimately to generate future profitable exploration
activity or income from its investments. As of
September 1, 2004, we have not generated any revenue, and have experienced
negative cash flow from exploration activities. We may look to secure additional
funds through future debt or equity financings. Such financings may not be
available or may not be available on reasonable terms.
Overview
Our financial statements
contained herein have been prepared on a going concern basis, which assumes that
we will be able to realize our assets and discharge our obligations in the
normal course of business. We incurred an accumulated net loss of
($127,977), ($139,254) and ($184,249) for the period from inception to December
31, 2003, to March 31, 2004 and June 30, 2004, respectively. To date, we have no
revenue.
We did not earn any revenue
during the 2003 fiscal year. Our auditors’ report on our 2003 financial
statements contained an explanatory paragraph stating that due to recurring
losses and negative cash flow substantial doubt exists as to our ability to
continue as a going concern. See also March 31, 2004 and June 30, 2004 Interim
Financial Statements – Note 2 Continuance of Operations.
During the period ended
December 31, 2003, we executed shareholder loans totaling approximately
$157,410. There can be no assurances that additional equity or other financing
will be available, or available on terms acceptable to us.
Our financial statements
included in this report have been prepared without any adjustments
that would be necessary if we become unable to continue as a going concern and
are therefore required to realize upon our assets and discharge our liabilities
in other than the normal course of exploration activities.
Results of Operations
Cash Balances
The
company maintains its major cash balances at one financial institution, Bank
of Montreal, located at First Bank Tower, 595 Burrard Street, Vancouver,
British
Columbia, Canada. The balances are insured up to Cdn$60,000 per account by the
Canada Deposit Insurance Corporation. As at September 1,
2004, the Company had a cash balance of $28,477. At September 1, 2004, there
were no uninsured cash balances.
Fiscal 2003 (Ended December 31, 2003)
Operating
expenses from inception to period ended December 31, 2003, totaled $127,977 and
the company experienced a net loss of ($127,977) against no revenue. The major
expenses during this period were professional fees of $7,000, exploration costs
of $99,291, travel and lodging expenses of $13,082, and consulting fees of
$8,000. The company did not incur any expenses for wages, rent, and telephone.
The earnings per share
(fully diluted – weighted average) was a net loss of $0.044 from inception
to period ended December 31, 2003.
39
Three Months Ended March 31, 2004
We experienced an increase
in our net loss from ($127,977) as at December 31, 2003, to a net loss of
($139,254) from inception to March 31, 2004, which is a net loss of ($11,277)
for the period ended March 31, 2004. We are unable to provide a comparison for
the three months ended March 31, 2004, and three months ended March 31, 2003, as
we were not incorporated until August, 2003.
Six Months Ended June 30, 2004
From inception to June 30, 2004, we experienced an accumulated net loss of ($184,249), with
a net loss of ($11,277) and
($56,272) for the three months ended March 31, 2004 and six months ended June
30, 2004, respectively. We are unable to provide a comparison for the three
months ended March 31, 2004 and six months ended June 30, 2004, as we were not
incorporated until August, 2003.
Liquidity and Capital Resources
Historically, the company
has financed its cash flow and operations from the sale of stock and notes
payable to shareholders. The company’s total cash and cash equivalent
position as at December 31, 2003 and June 30, 2004 was $75,989 and $32,141
respectively. As
at September 1, 2004, we had a cash balance of $28,477.
From inception to the
period ended December 31, 2003, net cash used in operating activities,
consisting mostly of loss from operations, was ($84,121), and for the three
months ended March 31, 2004, accumulated net cash used in operating activities
increased to ($88,598), mainly from loss of operations. From inception to the
six months ended June 30, 2004, accumulated net cash used in operating activities
increased to ($127,969), again mainly from loss of operations.
For the period
from inception to December 31, 2003, net cash resulted from advances from
shareholders in the amount of $157,410. For the three months ended March 31,
2004, and six months ended June 30, 2004, there were no advances to us.
Working capital deficiency
as of December 31, 2003 was ($92,777), and for the three months ended March 31,
2004, the working capital deficiency increased to ($104,054). For the six months
ended June 30, 2004, the working capital deficiency decreased to ($99,049).
Current Capital Resources and Liquidity
Our capital resources have
been limited. We currently do not, and will not, generate revenue for
exploration activities, and to date have relied on the sale of equity and
related party loans for cash required for our exploration activities. The
company has no external sources of liquidity in the form of credit lines from
banks. No investment banking agreements are in place and there is no guarantee
that the company will be able to raise capital in the future should that become
necessary.
Plan of
Operation
We have proceeded with the
exploration of the Altan and Ovorkhangai mineral licenses to determine whether
there are economic and commercially exploitable reserves of gold and/or base
metals. We have undertaken reconnaissance level exploration work to determine if
our properties have any potential for developing exploration targets. We have
commenced with Phase I of the exploration programs on both licenses. As of the
date of this prospectus, we have spent $8,556 on
the Altan property. By the terms of a license agreement, we were required to
spend $10,000 by December 31, 2003, however, we will spend the remaining balance
of $1,444 from Phase I and add it to the Phase II requirements. As such, Ton Fei
Fred Tham & Associates have granted us an extension until December 31, 2004,
to spend $26,444 on the Altan property.
40
With regard to the
Ovorkhangai property, we were required to spend $10,000 by February 28, 2004,
however, due to inclement weather and frozen land, we were unable to work on the
property until mid-March. As such, we are currently doing work on the property,
which we anticipate will total $24,500 and not $10,000.
We had $75,989, $71,740
and $32,141 in cash reserves as at December 31, 2003, April 13, 2004, and
June 30,
2004 respectively. As at September 1, 2004, we have $28,477 in cash reserves.
Although our cash balance has decreased, as at September 1, 2004, we incurred
the majority of our mineral property costs and expenses for Phase I of the
exploration programs. As such, even if we are unable to sell any shares in this
offering, we anticipate being able to operate for the next twelve months and
be
able to pay administrative expenses and the balance of the offering expenses.
However, we would not be able to pursue Phase II of the exploration programs.
Accordingly, even after factoring in expenses such as offering expenses and
consulting fees, we were able to proceed with Phase I of both
exploration programs without additional financing. If we are able to sell all
of
the shares being offered from this offering, and if the shareholders demand
repayment on their loans, we will be able to repay all $107,410
($50,000 of the $157,410 shareholders’ loans have been deferred until
December 31, 2006, with interest to accrue from July 1, 2005 at 10% per annum on
the $50,000). See Exhibit 10.11. However, completion of these exploration
expenditures will require further capital to enable us to meet the exploration
expenditure requirements under the option agreements for the period through
December 31, 2006.
We will assess whether to
proceed with Phase II of the exploration programs upon completion of an
assessment of the results of Phase I from each property’s geological
exploration program. We will require additional funding in the event that we
decide to proceed with Phase II of the exploration program. The anticipated cost
of the Phase II exploration program is $60,000 ($25,000 for Altan and $35,000
for Ovorkhangai) which is not in excess of our projected cash reserves remaining
upon completion of Phase I of the exploration program. We anticipate that
additional funding will be in the form of equity financing from the sale of our
common stock. However, we cannot provide investors with any assurance that we
will be able to raise sufficient funding from the sale of our common stock to
fund future phases of the exploration programs. We do not have any arrangements
in place for any future equity financing. Further, as previously mentioned, we
have promissory notes in the amount of $157,410. However, $50,000 of the
$157,410 promissory notes have been deferred until December 31, 2006, with
interest to accrue from July 1, 2005 at 10% per annum on the $50,000. See
Exhibit 10.11. If we are only able to obtain minimal funding in our primary
offering, we anticipate we will be unable to repay all of the notes payable.
As stated earlier in this prospectus, the promissory
note will only be repaid if/when we sell all 6,000,000 shares in the primary
offering. As such, if we are only able to obtain the minimal funding, we
anticipate it will hinder our exploration programs on the Altan and Ovorkhangai
properties.
41
We believe our cash
reserves are sufficient to meet our obligations for the next twelve month period
and to pay for the legal and accounting expenses of complying with our
obligations as a reporting issuer under the Securities Exchange Act of 1934.
These expenses will be in addition to the cost of completing Phase I of the
exploration programs.
If we do not complete the
cash payments or the exploration expenditures required under the option
agreements, then our options will terminate and we will lose all rights and
interests in the mineral claims. If we do not secure additional financing we may
consider bringing in a joint venture partner to provide the required funding. We
have not however, undertaken any efforts to locate a joint venture partner. In
addition, we cannot provide investors with any assurance that we will be able to
locate a joint venture partner who will assist in funding the exploration of the
mineral claims. We may also pursue acquiring interests in alternate mineral
properties in the future. (See “Management’s Discussion and Analysis
or Plan of Operation”)
42
DESCRIPTION
OF PROPERTY
We have options to acquire
100% interests in the Altan and Ovorkhangai property licenses, as described in
detail in Item “Description of Business”. We do not own or lease any
property other than our options to acquire interests in the Altan and the
Ovorkhangai Property Licenses.
Net Smelter Royalty
A 1.5% net smelter royalty
payment is required to be paid to Ton Fei Fred Tham and Associates for both
properties. Net smelter royalty is defined as the net revenue generated fro the
sale of the metal or product produced by a mine. The payments are required to be
paid annually and will continue as long as the mine is in production. The
payments are limited to cash, unless another method is agreed upon by both
parties. If we are unable to pay the royalty payments or fall short of our work
exploration programs, we will lose our interests in the Altan and Ovorkhangai
property mineral licenses.
UNDURSHIL
AIMAG (ALTAN) PROPERTY – SUMMARY DESCRIPTION REPORT
Location and Access
The Altan project area is
located in the Undurshil district and spans the Dundgovi province of Mongolia
(figure 1). These provinces are located approximately 385 kilometers south of
Ulaanbaatar, the Capital of Mongolia. The central point of the license is
located approximately 75 kilometers southeast of the nearest town named
Undurshil. Access from Ulaanaatar to the town of Undurshil is via the Mongolian
interstate highway and access from Undurshil to the property is via a gravel
road.
43
44
Property and
Ownership
The property was
originally comprised of 20,000 hectares (located on map sheet L49-109) in the
Dundgovi provinces of Mongolia. However, on August 23, 2004, pursuant to a
“Memo Regarding Downsizing of Undershil Aimag (Altan) Property,” the
Altan property has been reduced to 8,000 hectares. See Exhibit 10.12. The claims
are under license number 4767X, which is held by Ton Fei Fred Tham &
Associates. The license was issued on September 27
th
, 2002 and is
valid for a period of two years and eleven months (see Figure 2 for license
boundary). Pursuant to the above-mentioned “Memo Regarding Downsizing of
Undershil Aimag (Altan) Property, the license has been renewed as of August 23,
2004.
|
License Number
|
Hectares
|
Date Issued
|
Period
|
|
4767X
|
20,000
|
September 27, 2002
|
2 years 11 months
|
Figure 2, Altan Claim Boundary Location
45
Conditions to keep mineral title
In order to maintain the
mineral title, payments must be made to the Mineral Resources Authority of
Mongolia at the following rates:
-
US $0.05 per hectare for the first year and
US $0.10 per hectare for each of the second and third years.
-
US $1.00 per
hectare for each of the 4
th
and 5
th
years during the first
exploration license renewal.
-
US $1.50 per hectare for each of the
6
th
and 7
th
years during the second exploration license
renewal.
Rock Formations
The Altan property displays
typical basin (lows) and range (highs) style topography. The basin is covered
with flat lying Devonian (geological period from 345 million to 405 million
years ago) to Cenozoic (geological period from 63 million years ago) sediments,
with topographic highs associated with igneous intrusions (produced under
conditions involving intense heat; “igneous rock” is rock formed by
solidification from a molten state) of carboniferous (from 280 million to 345
million years ago, of or relating to the Carboniferous geologic era;
“carboniferous rock system”) granite.
The surficial (pertaining
to or occurring on or near the earth’s surface) geology of the Altan
property consists of old sediments and modern sand and gravel deposits,
constituting 60% of the surface exposure. The remaining part of the property is
composed of carboniferous Matad (an area in Mongolia) rock granitic (granite
formed rock which is “very hard”) complex, limestone and sandstone
formations, and Cretaceous (geological era from 63 million to 135 million years
ago) basalt (the most common type of solidified lava).
Previous geological studies
have shown two geological regions: the Olziit and the South Mongolian Belts,
which are separated by a Fault that runs through the center of the property. A
portion of the Olziit Metallogenic Belt (geological belt containing or made of
or resembling or characteristic of a metal) overlays the northern section of the
property and the dominant mineralization associated with this belt includes base
metal, precious metal, and gold deposits. A portion of the South Mongolian
Metallogenic Belt (geological belt containing or made of or resembling or
characteristic of a metal) overlies the southern area of the property.
Mineralization found in this belt includes base metal, manganese, and
gold-silver mineralization.
The Present Condition
All mineral claims are
currently in good standing with the Mongolian Government and are readily
available for the company’s activities.
Work Completed
2003
The company is currently
involved in a grassroots exploration in Mongolia and in October 2003, Rio
Minerals Limited of Vancouver was contracted by Ton Fei Fred Tham &
Associates to undertake a reconnaissance geological investigation of the Altan
property.
46
The geological program
consisted of prospecting (looking for mineralization) and ground truthing
(testing the validity of the government geology maps) the Matad (an area in
Mongolia) rock complex, the Erdenebayan (an area in Mongolia), and the Hotol (an
area in Mongolia) rock formations. The Matad (an area in Mongolia) rock complex
is located in the north-east portion of the property whereas the Erdenebayan and
Hotol rock formations are located in the southern part of the property. While on
the property, the Rio Minerals crew undertook prospecting and ground truthing
(testing the validity of the government geology maps). A total of nine ground
truth locations (verifying the data on the map verses what seen on the ground)
were observed.
Costs for Past
and Future Programs
Past Programs Cost
The past mineral
exploration programs on the Altan Property have cost $8356.00 USD to date.
|
Future Program
Cost
|
|
Travel
|
2 persons - 4 days
|
|
$ 2,250.00
|
|
Ulaanbaatar to interpret data/plan
|
2 persons - 1 day
|
|
$ 850.00
|
|
Field
|
2 persons - 05 days
|
|
$ 4,250.00
|
|
Mongolian Driver/Interpreter
|
2 persons - 07 days
|
|
$ 560.00
|
|
Mongolian Geologist
|
1 person - 07 days
|
|
$ 455.00
|
|
Camp Cook
|
1 person - 07 days
|
|
$ 250.00
|
|
|
|
Sub total:
|
$ 8,615.00
|
|
|
|
Expenses:
|
|
|
|
|
Visas
|
2 persons - 1 country
|
|
$ 160.00
|
|
Accommodation
|
|
|
$ 950.00
|
|
Meals
|
|
|
$ 950.00
|
|
Supplies and Rentals
|
|
|
$ 650.00
|
|
4 x 4 vehicle rental
|
1 vehicle - 7 days
(gas incl.)
|
|
$ 550.00
|
|
Air tickets
|
2 persons
|
|
$ 3,500.00
|
|
Satellite phone
|
$ 500.00
|
|
|
|
Assays and shipping
|
|
|
$ 1,500.00
|
|
Report
|
Report
|
|
$ 4,500.00
|
|
Consumables
|
Maps, etc.
|
|
$ 375.00
|
|
|
|
Subtotal:
|
$13,635.00
|
|
|
|
Total
|
$22,250.00
|
Source of Power
Currently, there are no
sources of power on the Altan property; however, the use of portable gas and
wind electric generators are common throughout Mongolia.
Clear Statement
The company is currently
involved in a grassroots exploration program on the Altan property and is not
aware of any economic mineralization on the property.
47
OVORKHANGAI
PROVINCE PROPERTY – SUMMARY DESCRIPTION REPORT
Location and
Access
This newly acquired mineral property is located in the Ovorkhangai province of Mongolia, between 46? 00' to 46? 20' North and 102? to
102? 28' East. The property is located immediately west of the town of Arvajheer. Access to Arvajheer is via the Mongolian
interstate highway. Access to the property from the town of Arvajheer is via a gravel road.
Property and Ownership
The property is comprised
of 118,223 hectares located in the Ovorkhangai province of Mongolia. The claim
number is 6524X, which is held by Ton Fei Fred Tham & Associates. The
license was issued on November 7
th
, 2003 and is valid for a period of
two years and eleven months; see Figure 3 for license boundary.
|
License Number
|
Hectares
|
Date Issued
|
Period
|
|
6524X
|
118,223
|
November
7th, 2003
|
2 years 11 months
|
Figure 3. Paleogeographic
Interpretation of Southern Mongolia-Central Asia during the Devonian and the
Paleotectonic reconstruction for the Early Devonian displaying the Tuva-Mongol
arc (simplified and modified from Sengö and Natal’n 1996).
48
Conditions to
Keep Mineral Title
In order to maintain the
mineral title, payments must be made to the Mineral Resources Authority of
Mongolia at the following rates:
-
US $0.05 per hectare for
the first year and US $0.10 per hectare for each of the second and third
years.
-
US $1.00 per
hectare for each of the 4
th
and 5
th
years during the
first exploration license renewal.
-
US $1.50 per hectare for each of the 6
th
and 7
th
years during the second exploration license renewal.
Rock Formations
Investigations were carried
out at the Geological Information Centre in Ulaanbaatar to obtain information
pertaining to the geology and mineral potential of the property.
The majority of the
property, consisting of the western and central portions (approximately 60%), is
underlain by intrusive rocks (diorite, granodiorite, granite). The remaining 40%
of the property, mainly the eastern and southeast portions, is underlain by
sedimentary (resembling or containing or formed by the accumulation of sediment;
“sedimentary deposits”) rocks. The southeast portion is comprised
mainly of Devonian (geological period from 345 million to 405 million years ago)
age to Carboniferous (from 280 million to 345 million years ago, of or relating
to the Carboniferous geologic era; “carboniferous rock system”) age
rocks; consisting of variable chert, shale and sandstone. The north and
north-easterly portions of the property contain younger sediments.
The Mongolian government
geological reports were examined to provide geological information. Report
numbers 3912 and 4098 provided the most pertinent information for the
Ovorkhangai province property.
All geological maps
pertaining to the area were examined closely for mineral occurrences. The focus
of the investigation was to gather data pertaining to base metal (metals such as
copper, zinc, tin molybdenum mainly used for industrial use) and precious metal
(gold, silver, platinum) potential. There are several geochemically anomalous
areas outlined on the geological maps that are mainly anomalous (abnormal
chemistry of the earth’s crust) in tungsten. Several gold location sites
are shown on the geological map for report 3912, but were not referenced in the
accompanying text for the report. There is, however, one gold location site on
the Mineral Occurrence map for Mongolia. This is a gold occurrence that is
located in the northwest corner of the property and is described as an igneous
(produced under conditions involving intense heat; “igneous rock” is
rock formed by solification from a molten state) related gold occurrence. Also,
several placer (an alluvial deposit that contains particles of some valuable
mineral) gold occurrences are found just off the northeast corner of the
property. Another placer gold occurrence is found in the southwest corner of the
property.
The base metal potential
for the property is unknown at this point as there are no known occurrences for
copper, silver, lead, or zinc. Although numerous samples have been taken during
previous surveys, no values approaching economic grade have been obtained.
49
The Present Condition
All mineral claims are
currently in good standing with the Mongolian Government and are readily
available for the company’s activities.
Proposed
Exploration Plan
A field investigation of
the undocumented gold occurrences at the northwest corner of the property, the
placer (an alluvial deposit that contains particles of some valuable mineral)
areas at the northeast and southwest corners of the property, and the
examination of the tungsten vein (a layer of ore between layers of rock) area
located in the southeast portions of the property are planned.
|
Program Cost
– Currently in progress
|
|
Travel
|
2 persons - 4 days
|
|
$ 2,250.00
|
|
Ulaanbaatar to interpret data/plan
|
2 persons - 02 days
|
|
$ 1,700.00
|
|
Field
|
2 persons - 06 days
|
|
$ 5,100.00
|
|
Mongolian Driver/Interpreter
|
2 persons - 07 days
|
|
$ 560.00
|
|
Mongolian Geologist
|
1 person - 07 days
|
|
$ 455.00
|
|
Camp Cook
|
1 person - 07 days
|
|
$ 250.00
|
|
|
|
Sub total:
|
$10,315.00
|
|
Expenses:
|
|
Visas
|
2 persons - 1 country
|
|
$ 160.00
|
|
Accommodation
|
|
|
$ 1,580.00
|
|
Meals
|
|
|
$ 950.00
|
|
Supplies and Rentals
|
|
|
$ 650.00
|
|
4 x 4 vehicle rental
|
1 vehicle - 7 days
(gas incl.)
|
|
$ 550.00
|
|
Air tickets
|
2 persons
|
|
$ 3,500.00
|
|
Satellite phone
|
|
|
$ 500.00
|
|
Assays and shipping
|
|
|
$ 1,500.00
|
|
Report
|
Report
|
|
$ 4,500.00
|
|
Consumables
|
Maps, etc. $ 375.00
|
Subtotal:
|
$14,265.00
|
|
|
|
Total
|
$24,580.00
|
Source of Power
Currently there are no
sources of power on the Ovorkhangai province property, however, the use of
portable gas and wind electric generators are common.
Clear Statement
The company is currently
involved in a grassroots exploration program on the Ovorkhangai province
property and is not aware of any economic mineralization on the property.
Property
Selection
The Properties were
selected based on the technical information obtained from the Geologic
Information center in Ulaanbaatar, Mongolia.
50
The technical information
used to select the properties was obtained by Derrick Strickland, a professional
geologist, and Greg Thompson, also a professional geologist, by spending several
days at the Geologic Information center in Ulaanbaatar Mongolia researching
publicly available scientific data.
Altan Property Selection -
The Altan property was
selected based on the proximity to Ivanhoe Mine Ltd and Magnum d’Or
Resources Inc mineral claims. The geologic structure present on the Altan
property it genetically related to the same structures on both Ivanhoe Mine Ltd
and Magnum d’Or Resources Inc mineral claims. Each of the above companies
have had success exploring for mineral resources on their respective properties.
Ovorkhangai Property Selection -
Several gold location sites
are shown on a government geological map, but were not referenced in the
accompanying text for the report. There is however, one gold occurence
referenced on the Mineral Occurrence map for Mongolia. This occurrence is
located in the northwest corner of the property and is described as a granitoid
(resembling granite in granular appearance) related gold occurrence. Also, a
placer (an alluvial deposit that contains particles of some valuable mineral)
gold occurrence is found at the southwest corner of the property.
Derrick Strickland, a
professional geologist, has created two separate geological reports; one on the
Altan property and the other on the Ovorkhangai property.
Greg Thompson, a
professional geologist, and Ivan Bebek have visited the Altan and the
Ovorkhangai properties.
We intend to continue to
use the services of consultants for exploration work on our properties. For
future mineral exploration programs the company intends to use the following
contractors:
-
Derrick Strickland P.Geo, Geologist, B.sc, MBA, a professional geologist with
over 15 years of mineral exploration experience.
-
Greg Thompson P .Geo,
Geologist, B.sc, a professional geologist with over 20 years of minerals
exploration experience.
-
Rio Minerals Limited of Vancouver, B.C., who has been providing mineral exploration services to the mining industry for over
10 years.
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