▲ Up
00:17 15-11-2018
АКИpress CA-News Tazabek Turmush
People to flood back into Mongolia for exploration, no one questioning geology and prospectivity: Investor
Central Asia | analysis | 14:12, 04 May 2016 | 3034

AKIPRESS.COM - exploration works Xanadu Mines chief executive Andrew Stewart used to need 15 hours to drive to his flagship Kharmagtai exploration site in Mongolia's South Gobi desert.

These days it takes the Australian geologist just five hours, thanks to the paved road that now exists to service Rio Tinto's nearby Oyu Tolgoi copper project, according to The Sydney Morning Herald.

Such are the benefits of exploring for copper and gold in the shadow of a multibillion-dollar mining operation.

That shadow could grow larger in coming days, amid growing speculation that Rio will shortly confirm plans to spend close to US$5 billion expanding Oyu Tolgoi.

Approval of the expansion has been keenly awaited by Australian companies working in Mongolia, and is expected to dramatically improve investor sentiment toward the land-locked Asian nation.

Stewart will be happy to see the expansion approved but says he doesn't expect a return to the feverish days of five years ago, when Mongolia was lovingly termed "Mine-golia" and "Mon-coal-ia" by excited investors.

"I am sure you are going to see people try and flood back into Mongolia for exploration, because no one is questioning the geology and the prospectivity. It is the most sparsely populated country in the world, it has a young motivated workforce, and you are on the doorstep of the world's biggest market," he said, in reference to Mongolia's shared border with China.

"But I think it will be a lot more measured.

"The projects are not there to get feverish about. You get feverish about the opportunity to discover more, but that is quite a long story.

"There has been very little exploration... so it is going to have to go into real grassroots exploration."

In truth, attitudes toward Mongolia have already shifted from the fears about sovereign risk that dominated sentiment just two years ago.

Stewart points to the 20 international banks that in December agreed to lend US$4.4 billion to Rio for the Oyu Tolgoi expansion as an important moment for sophisticated investors.

Shares in Xanadu have already risen from ¢7.5 in September to ¢24 this week, and Stewart hopes that some fresh discoveries will boost that further.

Xanadu already has some promising resources on its tenements, which were purchased from the same Rio subsidiary that owns Oyu Tolgoi: Turquoise Hill Resources.

Stewart worked for Turquoise Hill's predecessor in the large drill team that made the Hugo Dummett discovery that transformed Oyu Tolgoi from a promising province to a major find.

He recalls how that discovery pulled drill rigs away from the tenements that Xanadu is now exploring.

"It was really the discovery of Hugo that saw the concentration of drilling move to Oyu Tolgoi," he said.

Stewart's team will drill 6,000 meters of exploration holes in 2016, and are hoping to find the final piece of the Kharmagtai puzzle.

"It is not one particular deposit that makes it, it is generally a series or a cluster of different deposits," he said.

"Oyu Tolgoi is four deposits; we have found three deposits, we are looking for that fourth center, and we believe discovery of that fourth center will get the project to that next level, and that is what the exploration focus is on at the moment."

Related news:

Xanadu Mines trenches bonanza gold from Oyut Ulaan in Mongolia

17:40 World's most excellent airlines for 2019 revealed17:33 Turkmenistan, Uzbekistan discuss key areas of cooperation17:15 President Jeenbekov receives commanders of CIS border troops16:50 Digital CASA: MP says parliament fears endorsing agreements after power plant breakdown16:45 Parliamentary faction leader suggests probe into leakage of personal information during election campaign16:27 MP gifts 3-storey building for school in remote district of Kyrgyzstan16:20 Kyrgyz athlete wins world weight lifting championship and sets world record16:10 Saudi Arabia to provide $30 million to Kyrgyzstan for construction of schools amid their shortage15:58 Pedestrian tunnel for 28mln soms in Osh region to open in December15:17 Calgary votes against Winter Olympics bid15:04 Kyrgyzstani fighter Altynbek Mamashev new WEF welterweight champion14:45 Construction of new building of Taza Suu municipal enterprise begins in Batken14:40 Court closes 1 case against ex-Bishkek mayor Kubanychbek Kulmatov14:36 Special services of Turkic states discuss situation in Afghanistan, Syria14:35 Campaign in honor of World Diabetes Day starts in Batken14:31 $14.6 million out of $20 million of EDB investment for farm machinery leasing disbursed: Deputy PM14:18 Kyrgyz farmers interested in Belarusian farm machinery14:08 Over 5,000 Kyrgyzstanis have diabetes: Health Ministry14:04 Kyrgyzstan, Turkey discuss military cooperation13:48 ADB allocates $500mln loan to strengthen Turkmenistan's electricity supply and boost regional power trade
© AKIpress News Agency - 2001-2018. All rights reserved
Republication of any material is prohibited without a written agreement with AKIpress News Agency. Any citation must be accompanied by a hyperlink to akipress.com.
Our address:
Moskovskaya str. 189, Bishkek, the Kyrgyz Republic
e-mail: english@akipress.org, akipressenglish@gmail.com;
Tel/Fax: +996(312)65-03-06