Source: Montsame                 Date: 03 June, 2011

The Government last week instructed the Minister of Finance to prepare an agreement to receive from Oyu Tolgoi LLC in advance a part of the royalty and excise tax the company would be liable to pay once it begins extraction and sales operations. The agreement will come into effect next year and the amount paid will be adjusted against the taxes as and when they are due. The move will also reduce the interest on the Mongolian Government bonds held by Ivanhoe Mines Mongolia Inc to 1.59% from 3%. The company bought the bonds in October 2009 with the USD100 million it was to pay as the first installment of the advance payment as stipulated in the investment agreement. The company will thus month pay USD100 million as the third installment.