Source: Mongolia Energy Corporation                       Date: 09 June, 2011

Mongolia Energy Corporation has issued a statement to shareholders and potential investors that based on the unaudited management accounts of the Group for the year ended March 31, it is expected that the Group may record further loss for the year as compared with the audited loss for the corresponding period in 2010. Based on information currently available, the expected further loss of the Group was mainly accounting loss attributable to certain non-cash expense items:

(i)            the increase in staff costs due to the recognition of share-based payments arising from share options granted to certain employees and directors of the Group;

(ii)           the increase in finance costs in association with convertible notes issued by the Company calculated at effective interest rate; and

(iii)          the recognition of fair value loss from held-for-trading investments.

The Group’s principal project, the Khushuut Coking Coal Mine, is still under trial production stage and did not contribute to the revenue of the Group for the year ended March 31. This profit warning announcement is only based on the preliminary review on the management accounts of the Group, which has not been confirmed nor audited by the Company’s independent auditor.