Source: Mongolian Mining Corporation            Date: 31 March, 2011

The Mongolian Mining Corporation (MMC) has issued its first full year results following its listing in October 2010. The company is principally engaged in the open-pit mining of coking coal at the Ukhaa Khudag coking coal deposit located within the Tavan Tolgoi coal formation in South Gobi, Mongolia. The highlights of the report are:

§     Coal production volume surpassed 2010 target and more than doubled year-on-year to approximately 3.9 million tons;

§     Remained the largest producer and exporter of high-quality coking coal in Mongolia;

§     Construction of coal handling and preparation plant and other infrastructure projects on track;

§     Successfully listed on the Hong Kong Stock Exchange in October, raising about HKD4,778.0 million;

§     Planned production of approximately 7.0 million tons of run-of-mine (ROM) coal, and wash and processing of approximately 5.5 million tons of ROM coal, respectively, in 2011.

For the year ended 31 December 2010, MMC recorded revenue of USD277.5 million, 314% higher than the USD67.0 million recorded for the previous year. Profit attributable to the company’s equity shareholders was approximately USD60.1 million, representing an approximately 486% year-on-year increase from USD10.3 million. The strong financial performance was primarily attributable to MMC’s significant mining production and sales volume expansion, and the rise in average selling price during the period. The gross profit margin remained at a healthy 41% (2009: 42%), while the net profit margin was approximately 22% for the year, as compared with approximately 15% in 2009. In view of the major infrastructure, production and acquisition projects committed or being planned by the Company, the Board decided not to pay any dividend for the year despite the record earnings and large cash balances.

Mr. J. Odjargal, Chairman of MMC, said, “I’m delighted to report that in 2010, we delivered more than we promised. With our clear and far-reaching vision of developing ourselves into one of the leading mining companies in the region, we set ambitious yet progressive targets guided by a disciplined strategy to ramp up production and build infrastructure to support our expansion. Besides exceeding our production target for 2010 and increasing our annual coal production by 114%, all our infrastructure construction is on track. These achievements, in tandem with robust macroeconomic fundamentals, have supported us in capturing rising market demand and attaining strong revenue and profit growth in 2010.”

During the period under review, the company sold approximately 3.9 million tons of coal products at a weighted average selling price of USD70.8 per ton, representing an approximately 46% year-on-year increase. Approximately 62% of these products were sold to end-users and MMC’s exports for the year were approximately 24% of Mongolia’s total exports of coal products (2009: 19%).

Dr. G. Battsengel Gotov, CEO of MMC, says, “Looking ahead, we will continue to ramp up our coal mine production as planned while optimizing existing resources and reserves. We expect a further improvement in our profit margin by benefiting from higher pricing of washed coal, reduction in transportation cost and economies of scale in our operations.”