GOLD RUSH TO MONGOLIA

Tsolmon Shar

Since gold prices have risen, many investors have been seeking investment opportunities elsewhere within the mining sector.

China National Gold Group Corp (CNGG), the country's second largest gold producer, was in talks to buy several gold mines overseas. The group¡¯s target investment destinations include Mongolia, Russian, North America, Australia and Africa.

CNGG prefers low risk and mature projects in terms of foreign investment. The capital operation manager Wu Zhanming said in China Daily interview: ¡°We are only interested in operating mines, and will not get involved in grassroots risk exploration projects.¡±

According to the China Daily News, CNGG added 92.4 tons of new resources to its 1,200 tons of gold reserves in 2009, entrenching its position as the Chinese largest gold reserves holder. It produced 123.19 tons of gold last year, up 37 percent from 2008. CNGG prefers to increase even more its gold reserves and output in 2010.

The company will mainly focus on gold mining to take advantage of rising gold prices. In the meantime, it will tap into mining other metals, including copper, silver and zinc, as a hedge against the risk of gold price fluctuations.

Mongolia is one of few countries in the world which has a rich of mineral resources. Currently, over 6,000 mineral showings/deposits of 80 different minerals are known in Mongolia (including coal, copper, gold, iron ore, tungsten, molybdenum, phosphate, uranium, and oil). With such large scales of minerals and discoveries of the world¡¯s largest Oyu Tolgoi copper/gold deposit, Mongolia is the top destination of foreign investors. At the end of March 2009, some 5,221 exploration and mining licenses had been issued covering a total area of approximately 48 million hectares of land (32% of the total land of Mongolia).



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