May 16 2008

1. BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmmongolia.org
Email: Jim@bcmmongolia.org Issue 24, May 16, 2008
NEWS HIGHLIGHTS:
Business: Khan Resources Announces Offer for Western Prospector; E-Learning Center for
Information Technology Opens; Peabody Energy Interested in Mongolia; ICT Expo
Opens; Consulting Council for Mongolian Investment Gets Assistance; Igor Kovarsky
Joins Kola Mining
(Click here to go to Business section)
Economy: Over 450 Infected With Enterovirus-71; Standing Committee Charges FRC; Taxation
Amnesty Law Approved; Consumer Price Index/Exchange Rates (Click here to go to
Economy section)
Politics: Sant Maral Foundation Releases Politbarometer; MPRP Presents Its Election
Platform; President Enkhbayar Visit Israel; Commitment to Mongolia; Parliament
Considers Expanding Agreement with North Korea
(Click here to go to Politics section)
BUSINESS
KHAN RESOURCES ANNOUNCES OFFER FOR WESTERN PROSPECTOR
Khan Resources Inc. (TSX: KRI) has announced that it will seek to acquire all outstanding common
shares of Western Prospector Group Ltd. to consolidate its position in the Saddle Hills district of
Mongolia and achieve significant synergies from the joint development of Khan Resources' Dornod
uranium deposit and Western Prospector's Gurvanbulag uranium deposit in that district. The offer
is valued at approximately $35 million. The KRI shareholders will own approximately two-thirds of
the combined entity.
Khan Resources already operates Dornod uranium deposit and Western Prospector's Gurvanbulag
uranium deposit in Mongolia. The acquisition of Western Prospector is expected to result in a
combined savings of US $100 million, as a result of the construction of one common mill and the
sharing of infrastructure.
CEO of Khan Resources, Martin Quick, commented "This is a natural combination of two companies
working towards the same goals in the same area. Western Prospector shareholders benefit by
getting access to a rich and advanced Uranium deposit that can quickly be brought into production
and by receiving a premium to their stock price. Khan shareholders benefit from an extensive
exploration potential and by becoming more attractive to the Mongolian government as a mid-tier
near-term producer."
Sources: MARKET WIRE via COMTEX News Network,
Mineral News Daily, www.miningmongolia.mn
E-LEARNING CENTER FOR INFORMATION TECHNOLOGY OPENS
The first Cognitive Center of Information Technology, sponsored by Mobicom, opened May 7, 2008.
The center consists of five sections. For example, “Cognitive with the world”, gives visitors the
opportunity to access information on all countries by using the Google Earth system. The
“Technological apartment” section provides audio-visuals by locating these in electronic format.
The “E-governance” section provides an opportunity to see the latest information technology such
as voting via the internet.
Source: Mongol Messenger
PEABODY ENERGY INTERESTED IN MONGOLIA
Officials from Peabody Energy presented a proposal to President Enkhbayar on developing the
Mongolian coal industry. The proposal was written by leading American entities. In summary, the
proposal consisted of legal, financial, organizational and environmental requirements for the
exploitation of coal deposits. A single authority should manage the coal production and it should be
offered at the highest possible market price. Mongolian workers would be trained and a social fund

2. for Mongolian citizens governed by an independent board. The minerals should be 100% state
property until unearthed. The Director of Government Relations for Peabody Energy, Cartan
Sumner said, “Mongolia has become the center of world minerals. Therefore, the proposal was
based on the idea of establishing equality between interests of the state, citizens and investors.”
President Enkhbayar said: “Mongolia has minimal experience of exploiting large deposits.
I think it would be right to classify the deposits into groups explored by the state and private
sector, establish laws and regulations; then, the state should find the right partners and cooperate
with them. Our decision makers need to exchange information and gain experience in this field.”
Sources: www.olloo.mn
Mongol Messenger
Mineral News Daily, www.miningmongolia.mn
ICT EXPO OPENS
The ICT Expo-2008, sponsored by Unitel, opened Tuesday at the Misheel Expo center. Over 60
companies are taking part in the three day expo introducing new cell phone service, stationary
telephone services, and new software. The expo is co-hosted by the Info and Communications
Technology Agency (ICTA), the Communications Regulatory Committee, and the Misheel Expo center
in conjunction with World Information Day, May 17.
Source: MONTSAME
CONSULTING COUNCIL FOR MONGOLIAN INVESTMENT GETS ASSISTANCE
Last week, Prime Minister Bayar met with Joomart Otorbaev, Senior Advisor at the European Bank
for Reconstruction and Development (EBRD). He expressed his thanks to the EBRD for providing a
grant to cover expenses for the first two years’ proceedings of the Consulting Council for Mongolian
Investment. He emphasized that the Council, which has been established to improve the Mongolian
business environment, create favorable conditions for investment, and to speed-up economic
development, would become the most appropriate mechanism to coordinate and regulate
cooperation between the State, investors and private sectors.
Source: Mongol Messenger
IGOR KOVARSKY JOINS KOLA MINING
Last week, Kola Mining Corporation announced the appointment of Igor Kovarsky as President and
Director of Kola Mining. "Mr. Kovarsky's track record as a pioneering mine developer in the former
Soviet Republics and Mongolia is unrivaled," said Mr. Cary Pinkowski, Kola Mining's CEO. "His
significant role in bringing the Kumtor Mine, one of the world's largest gold mines, and Mongolia's
Boroo Mine into full production has made him a highly sought after Executive. We are proud Mr.
Kovarsky has selected Kola Mining."
Mr. Kovarsky has over 25 years of experience in the construction and mineral sectors in exploration,
engineering, development and operations. Prior to joining Kola Mining, Mr. Kovarsky worked with
Centerra Gold Inc. He served in various roles including Director and Vice President, Government
Affairs & Business Development for Centerra's subsidiaries in Kyrgyzstan, Mongolia and its head
office in Toronto.
Source: http://www.kolamining.com/
ECONOMY
OVER 450 INFECTED WITH ENTEROVIRUS-71
Last Thursday, a case of Enterovirus-71, was reported in Mongolia. By May 12th
, the number of
persons infected escalated from 253 to over 450 as of May 15, according to the Ministry of Health.
The National Emergency Management Agency (NEMA) held a joint meeting with the Ministry of
Health and delivered a preventative notification to all aimags and cities of Mongolia, warning
citizens to immediately report any further occurrences. As a preventive measure, grades K to 5 of
all private and state secondary schools, were placed under quarantine on May 12 for an unspecified
period. NEMA has also issued an order requiring anyone entering at the following borders to
undergo a medical examination: Zamiin-Uud, Byant-Ukhaa and Altanbulag. A ban has been placed
against organizing public activities among people during this quarantine period and all State

3. garbage sites are to be cleared and sterilized.
Sources: UB Post
MONTSAME
www.chinaview.cn
STANDING COMMITTEE CHARGES FRC
The Parliamentary Committee on Economy delivered a memo to the Financial Regulatory
Committee (FRC), stating that in recent years, individuals have been establishing joint-stock
companies. The entities have been launching public offerings and trading their mineral licenses on
the stock market. In conjunction with these activities, it is important to improve the legal
environment.
The FRC has proposed taking measures to protect the rights and interests of shareholders and to put
strict control over activities of companies launching initiative public offerings until the law on the
stock market is reviewed and the legal environment is improved.
Source: MONTSAME
TAXATION AMNESTY LAW APPROVED
On May 9, 2008, a majority of Parliament members voted on the revised Taxation Amnesty Law.
Parliament endorsed this law in February, but the President vetoed some provisions. Legislators
reconsidered the Presidential veto on April 25, and decided to amend and revise the Taxation
Amnesty Law. The draft amendments were introduced on May 8 and approved the following day.
The revised Taxation Amnesty Law provides: 100% exemption for taxation debts incurred by official
and social insurance commissions; 100% exemption for official taxation debts not paid in time; 10%
exemption for basic debts not paid before January 1, 2008, the remaining 90% to be paid before
January 1, 2009; 100% exemption for bad debts not recovered as of January 31, 2007; 50%
exemption for residual debts imposed by Court decision; 100% exemption for debts due to under-
performance of bank debt repayments and under the authority of the Court Decisions Office.
Source: Mongol Messenger
CONSUMER PRICE INDEX/EXCHANGE RATES
As of April 2008, national consumer prices increased by 5.1 percent compared to March 2008. Food
items increased by 11.1 percent, a major contribution to the increase. The fees for housing, water,
electricity and fuel decreased by 0.4 percent. The Consumer price index (CPI) was up by 13.8
percent compared to the end of 2007.
The nominal rate of togrog against U.S. dollar was 1164.94 togrog at the end of April 2008;
compared with April of 2007, this rate strengthened by 0.01 percent. The nominal rate of togrog
against EUR was 1811.95; compared with April of 2007, rate of togrog weakened 14.4 percent. The
nominal rate of togrog against CNY was 166.71 togrog; compared with April of 2007, the rate
weakened by 10.4 percent.
Source: MONTSAME
POLITICS
SANT MARAL FOUNDATION RELEASES POLITBAROMETER
The Sant Maral Foundation which has been tracking transition in Mongolia for the past 13 years,
presented the results of its newly designed political survey. The table below shows the results of
one of 50 questions from the survey.
A representative sample of 1200 respondents from Ulan Bator, Zavhan, Huvsgul, Suhbaatar and
Dundgobi aimags, was collected from May 2 to May 12, 2008. The survey questions reflect changes
at the end of the time of transition.

4. 2. “If Parliament Elections were held tomorrow, which party would you vote for?”
Nationwide
Countryside Ulan Bator % Valid %
MPRP 30.5 17.8 25.5 38.9
Democratic Party 27.2 21.2 24.8 37.8
Civil Will Party 1.7 4.8 2.9 4.5
People’s ’Party - .5 .2 .3
Civil Coalition .8 4.7 2.4 3.6
Third Power Coalition 2.3 3.8 2.9 4.4
Other party - - - -
Independent 4.0 11.2 6.9 10.5
(No answer) 13.2 18.0 15.1
(Don’t know) 20.3 18.0 19.4
See BCM website: Articles/Reports on Mongolia, for complete survey.
Sources: BCM website, Articles/Reports on Mongolia
Sant Maral Foundation
MPRP PRESENTS ITS ELECTION PLATFORM
This week, the Mongolian People's Revolutionary Party (MPRP) presented its election platform with
the intention of focusing on solving urgent problems of development. Under the campaign slogan,
"Justice-responsible state, progressive development-prosperous life", the MPRP intends to launch a
new era of effective development in Mongolia and maintain economic growth at above ten percent.
GDP per capita will reach US $5,000 by 2012. The platform is not just a promise, but a reflection of
public expectation and social demand.
Source: MONTSAME
PRESIDENT ENKHBAYAR VISITS ISRAEL
President Enkhbayar is visiting Israel for the first time. On Monday, he met with Shimon Peres,
President of Israel. They exchanged ideas on the development of relations between the two
countries. Mr. Peres expressed his country's readiness in sharing its experience with Mongolia on
utilizing desert areas to augment the harvest by 20-25 percent. He also promised to give attention
to the development of policy, economy and educational ties between the two countries.
President Enkhbayar and his entourage will attend the Presidential Conference marking Israel's 60th
anniversary and will meet with senior Israeli politicians and business executives in order to find
opportunities for increasing economic cooperation between the two countries. During the visit,
Mongolian Foreign Minister, S. Oyun and her Israeli counterpart Foreign Minister Livni, will sign a
bilateral cultural cooperation agreement.
Source: Odriin sonin
COMMITMENT TO MONGOLIA
Thomas J. Christensen, Deputy Assistant U.S. Secretary of State for East Asian and Pacific Affairs,
responded to a recent article in the Washington Times. It provides the U.S. Department of State’s
and the U.S. Embassy in-Mongolia’s view on the recent series of articles regarding Mongolia:
J. Peter Pham's commentary on Mongolia and the Millennium Challenge Corp. (MCC) was misleading
at best ("Mongolia's challenge," Feb. 21). His prescription — that we cut off the MCC compact to
Mongolia before it even begins to work — would undermine U.S. interests in a nation that is one of
our best friends in Asia.
So, the question is, should we abandon Mongolia and its reform efforts now when progress is being
made? Or should we continue to work with the Mongolians to help them complete their democratic
transition?

5. I would argue that the answer is clear — we should continue to help Mongolians realize their full
capabilities as a free people. The MCC compact, in its ability to reduce poverty and stimulate
economic growth in Mongolia, is one of the best ways we can show our commitment to Mongolia.
See BCM website, Articles/Reports on Mongolia, for complete response.
Sources: BCM website, Articles/Reports on Mongolia;
www.news.mn
PARLIAMENT CONSIDERS EXPANDING AGREEMENT WITH NORTH KOREA
The Mongolian government is backing an intergovernmental agreement to provide work visas to
North Koreans. According to the agreement, Mongolia would allow North Korean workers to work in
the country’s road and construction industries. The number of North Korean workers was not
disclosed. However, there are currently 200 working in construction and a variety of related jobs,
according to the Ministry of Social Welfare and Labor.
Sources: www.Mongolia-web.com
MONTSAME
SPONSORS:
ECONOMIC INDICATORS
MSE WEEKLY REVIEW
For the week ended May 9, 2008, trading activity on the Mongolian Stock Exchange (MSE) totaled
417,400 shares with 39 companies traded. Total market value of transactions was MNT 574.8
million.
The Top-20 Index decreased by 71. 02 points or 0.6 % compared to the previous week closing at
11,712.51 points. The MSE Composite Index decreased by 62.27 points or 1.2% compared to the
previous week closing at 5,123.55 points.
Most active stocks traded were: Jenco Tour Bureau (229,700 shares), Zoos Bank (68,000 shares), UID
(State Department Store) (40,500 shares), Olloo LLC (27,600 shares), and NIC (19,600 shares).
Major share price percentage gainers were: Erdenet zandan (17.4%), Khotgor (15.3%), Selenge shim
(15.2%), Undarga Umnugobi (14.8%), and Mongol nekhmel (14.3%). Major share price percentage
losers were: Genco tur buro (10.8%), Tuul songino usnii nuuts (10.6%), Olloo (9.7%), Moningbar
(7.6%), and Agrotekh impex (6.7%).
Total market capitalization of the 358 stock companies listed on the MSE was MNT 821.5 billion, and
decreased by MNT 6.4 billion or 0.8% from the previous week.
INFLATION
Year 2006 6.0% [source: IMF]
Year 2007 Avg. 9.0% [source: ADB]
Year 2007 *15.1% [source: World Bank]
March 31, 2008 *20.6% [source: MongolBank]
* year over year (yoy)

6. CURRENCY RATES – May 15,2008
Currency name Currency Rate
US dollar US 1163.70
Euro EUR 1794.25
Japanese yen JPY 11.06
British pound GBP 2262.12
Hong Kong dollar HKD 149.20
Chinese yuan CNY 166.27
Russian ruble RUB 48.73
South Korean won KRW 1.11