THREE HILLS "AND DARVI HARD ROCK-GOLD DEPOSIT PROJECT BY ALTAN DORNOD MONGOL LLC. Prepared by

Transcription

1 1 THREE HILLS "AND DARVI HARD ROCK-GOLD DEPOSIT PROJECT BY ALTAN DORNOD MONGOL LLC Prepared by

2 Contents 2 Overview of Mongolia Mongolian gold industry Legislation About Altan Dornod Mongol LLC Introduction of the licenses Advantages of Three Hills and Darvi Project Geological settings Three Hills and Darvi zone General resource estimation Exploration schedule and Required investment

3 Overview of Mongolia 3 Until 1990 year, Mongolia was a satellite country of Soviet Union and with soviet geologists assistance and surveys Mongolian mining sector was partially explored. The result of cooperation was one of the biggest copper and molybdenum Erdenet deposit in the world. Since 1990 year, Mongolia is transformed from planning economy to market economy. In the period of , Mongolia has faced with mining boom which pushed the economy growth to 15-20% in a year. In last 15 years, in Mongolia was explored significant in the world deposits such as biggest copper and gold deposit Oyu-Tolgoi, coaking coal deposit Tavan-Tolgoi. The economy has become increasingly reliant on the mining sector its share of GDP today stands at 20 percent, twice the ratio of a decade ago and the lack of diversification amplifies the impact of changes in commodity prices. The economy picked up in 2017, primarily on the back of positive developments in the mineral sector, and the growth outlook remains positive for 2017 and Capital: Ulaanbaatar Official language: Mongolian Legislature: Parliamentary Area: 1,566,000 square km Population: 3.1 million GDP: 12.5 billion USD

4 Mongolian gold industry 4 Licenses Mongolia has totally 3,174 licenses in all mining elements including: 1. Mining licenses 1, Exploration licenses 1,712 In this amount of licenses gold licenses: 1. Mining licenses Exploration 322 Reserves Type of Gold deposits Number of Deposits Reserves in tones Number of Deposits Reserves in tones Number of Deposits Reserves in tones Stream-gold Ore-gold Metal deposits containing gold Total

5 Mongolian gold industry 5 Gold Mining between years Years Mined gold in tones Stream gold situation in Mongolia. To maintain Mongolian economy the Government had approved Gold-1 project in and mined ton of gold. Gold-2 project started in 2015 until now and mongolian companies mined ton of gold and sold to Mongolian Central Bank, which is monopolized buyer of gold by London Metal exchange price. Ore gold situation in Mongolia. The main problem of ore-gold in Mongolia is technologic problems and high exploration expenses. Any mongolian company does not have history of mining of ore-gold deposits. Only few companies with Canadian, Australian or Chinese investment are mining the ore-gold in Mongolia, because of high investment to build concentrating plant.

6 Legislation 6 The main legislation that govern the mining sector are the Constitution of Mongolia, the Subsoil Law, the Common Minerals Law, the Land Law, the Investment Law, the Environmental Protection Laws and National Security Law. In addition, various resolutions are issued by the Parliament and the Government of Mongolia for the implementation of these and other laws that affect the mining sector. The most notable resolution is the one enacted by Parliament approving by the State Policy on Minerals. Mongolian mining and exploration industry is regulating by the Minerals law The mining industry is administered by Ministry of Energy and heavy Industry and the Mineral Recourses and Petroleum Authority of Mongolia, a government s implementing agency. In 2014, with the assistance of Mongolian Gold Producer s Association, amendments made to the Minerals Law. The royalty fee was decreased from 10% to 2.5% which intensified the mining from 2.1 tonn in 2010 to 20.1 ton in 2017 year and delivering to Central Bank of Mongolia who has monopoly right to export. By Resolution 94 from 11 March 2015 of the Government of Mongolia approved the measures to increase gold production and accelerate the economy

7 About Altan Dornod Mongol LLC Altan Dornod Mongol (ADM) was incorporated in 1997, with 100% investment from Russia, had around 1,700 employees including Russians making up over 80% of the entire workforce at the time. As a result of the Mongolian Law on Windfall Profits Tax at 68%, investors from the Russian Federation opened a dispute resulting in cessation of the company s operations in The issue was resolved in 2011 when Russian investors took the case to an international arbitration court. * Goldstream Mongolia Inc, incorporated in British Virgin Islands, is 100% shareholder of Altandornod Mongol LLC Altandornod Mongol LLC was purchased by Goldstream Mongolia Inc * in September 2011 along with its other related companies, and associated tax and other debts, enabling it to officially recommence operation on 20 April The company s new management settled off accrued tax debts, bank loans and other debts which was more than 300 million USD.

8 Introduction of the licenses 8 Totally four exploration licenses are held by Altandornod Mongol LLC, and they locates together in 20 km NE from Darvi soum, 200 km SE from Hovd province and 1250 km west from Ulaanbaatar. Exploration licenses located in gold bearing Nuur zone of metallogenic belt of Western Mongolia. Our geologist s team had been worked on that licenses in summer, 2013 and then it was outlined Au-Ag mineralized couple of zones and several grab samples were collected from couple of zones that names with Three Hills and Darvi on exploration licenses. # License # Three hills project Name of the License Granitoid-related Au (Ag, Cu), Au-sulfide vein, ephithermal Au, Au-quartz vein Related to met. rocks and shear zones Hectar Issued date Holder 25 metallogenic belts 1 XV Bumbat alag Altan dornod mongol LLC 2 XV Tungalag hotol Altan dornod mongol LLC 3 XV Taliin tolgoi Altan dornod mongol LLC 4 XV Tungalag hutal Altan dornod mongol LLC

9 Advantages of Three Hills Project 9 Three hills project Au-Ag-Cu All licenses are locates in between two deeper faults with structure of Au-Cu mineralization that Tsagaan shiveet and Bumbat, which contains Darvi and Nuur metallogenic belts. Lot s of occurrences and deposits were found in this belt in western Mongolia. Exploration licenses of Golden Rio LLC are locates kilometers to NE from our licenses. The structure along this belt has probably containing potentially resource of Au-Cu mineralization which type of vein, porphyry and breccias pipes will be found. It would be possible to find Au-Ag mineralization deposit in along this corridor. Magmatic criteria is a part of Togtokhshil complex to outlined east and southern part of property, and it is locates usually along North and South, sometimes outlined to Northeast. Au-Ag mineralization has related with intrusion from deep magmatic source.

10 Geological settings 10 The Darvi area has a high potential for gold, silver and copper in hard rock quartz vein environments. Gold-Silver mineralization of the Darvi region is frequently controlled by the SW trending Tsagaan shiveet regional fault or several of the many related parallel faults. The origin of the Three Hills Gold-Silver field is attributed to the intersection of SE trending tectonic features with the NE trending Nuur fault zone. The gold is localized in areas of increased of metasomatites, profound alteration of rocks due to beresitization (Ca, K, C02 enrichment and Fe, A1, Si02 depletion) and propylitic alteration with the introduction of quartz vein zones.

11 Deposit type 11 The region is prospective for High Sulphidation Epithermal mineralisation. Epithermal systems are broadly split into two types, Low and High sulphidation. The mineralisation conceptual model. Conceptual models and genetic classifications of epithermal deposits Figure 6-1 shows end-member high- and low-sulphidation styles to be part of a broader range of hydrothermal systems. (Corbett, 2005).

12 Three Hills and Darvi zone 12 THREE HILLS Three hills zone is located in central part of license XV , and it is outlining from NE to SW round shaped meters. There has look s volcanic breccias, tuffaseous, sandstone and siltstone with alteration which silicified, sericitic and sulfidization. Looks pyrite, arsenic, chalcopyrite and galenite. Topography is normal with three small hills are formed Gurvan tolgoi zone. Host rock is medium altered to berisitization and cut by q-he-slf vts. There will possible overburden target in depth with volcanic breccias pipes which low temperature, low pressured epithermal systems. Evolution single quartz veins that contain Au-Ag-Cu mineralization with combination of stock works are identified and most high grade of Au is ppm in OE-TH-313. DARVI Darvi zone is locate in western part of license XV , and it is outlining from NE to SW direction along meters long. Width of alteration zone is meters, and there has look s volcanic breccias, tuffaseous, tuffsandstone and siltstone that cut by Togtokh shil intrusive (granite, granosyenite, dykes) with alteration which silicified, sericitic, strong limonitization and sulfidization. Looks pyrite, arsenic, chalcopyryte, Barite and galenite. There will possible overburden target in depth with volcanic breccias pipes which low temperature, low pressured epythermal systems. Evoluation single quartz veins that contains Au-Ag mineralization with combination of stockwork system, it was taken 14 grab samples from this zone, to identified and most high grade of Au is ppm in OE-BA-138.

13 General Resource Estimation 13 THREE HILLS DARVI м м м м м2 1 Proven reserve Au 3.2 т Just 10 holes have been drilled 2 Possible resourse Au 20 т 2 Possible resourse Au 5 т 3 Probable resourse Au 35 т< 3 Probable resourse Au 15 т<

14 14 Exploration schedule and Required investment USE OF INVESTMENT Total Exploration expenditure 2,200,000 2,500,000 4,700,000 Laboratory verification of samples 300, , ,000 Transportation of samples 200, , ,000 Development studies 300, , ,000 Site maintenance costs 300, , ,000 General and Admin costs 300, , ,000 JORC standardization 300, , ,000 Total 3,900,000 4,320,000 8,220,000