ANNUAL%20REPORT%202015%20eng

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Appendix I Criteria Commentary Revenue factors • The derivation of, or assumptions made regarding revenue factors including head grade, metal or commodity price(s) exchange rates, transportation and treatment charges, penalties, net smelter returns, etc. • The derivation of assumptions made of metal or commodity price(s), for the principal metals, minerals and co-products. • Shanxi Fenwei Energy Consulting Co Ltd (“Shanxi Fenwei”) completed an independent market study for UHG products and identified principal coking and thermal coal markets in Mongolia and China. • Based on the Shanxi Fenwei study and MMC’s assessment of the current market prices for hard coking coal, semi soft coking coal, middlings coal product (6,300 kcal/kg nar) and thermal coal product (6,300 kcal/kg nar), long term (2021 – 2025) real prices of USD$78/t, USD$56/t, USD$18/t and USD$18/t respectively have been assessed and used in the study. Market assessment • The demand, supply and stock situation for the particular commodity, consumption trends and factors likely to affect supply and demand into the future. • A customer and competitor analysis along with the identification of likely market windows for the product. • Price and volume forecasts and the basis for these forecasts. • For industrial minerals the customer specification, testing and acceptance requirements prior to a supply contract. • Shanxi Fenwei completed an independent market study for UHG and identified principal coking and thermal coal markets in Mongolia and China. Economic • The inputs to the economic analysis to produce the net present value (NPV) in the study, the source and confidence of these economic inputs including estimated inflation, discount rate, etc. • NPV ranges and sensitivity to variations in the significant assumptions and inputs. Price and volume forecasts and the basis for these forecasts. • The inputs to the economic analysis of UHG are the project derived capital and operating cost estimates outlined above. The source of the inputs is real and the confidence satisfactory. The economic modelling is in real terms and a range of discount factors between 8% and 12% have been used in assessing NPV. Annual Report 2015 209
Appendix I Criteria Commentary • The NPV results produced from the economic modelling using a range of discount factors, as outlined above, have generated positive NPVs indicating the viability of the UHG mine. • The NPV has been assessed for variations of ±10% and ±20% in revenue. The results indicate that the project is not robust and that project value becomes stressed with decreases in the base coal sales prices. Social • The status of agreements with key stakeholders and matters leading to social licence to operate. • All key stakeholder agreements are in place providing a social license to operate. Other • To the extent relevant, the impact of the following on the project and/or on the estimation and classification of the Ore Reserves: • Any identified material naturally occurring risks. • The status of material legal agreements and marketing arrangements. • The status of governmental agreements and approvals critical to the viability of the project, such as mineral tenement status, and government and statutory approvals. There must be reasonable grounds to expect that all necessary Government approvals will be received within the timeframes anticipated in the Pre-Feasibility or Feasibility study. Highlight and discuss the materiality of any unresolved matter that is dependent on a third party on which extraction of the reserve is contingent. • All material legal agreements, marketing agreements and government agreements are in place to allow the UHG mine to successfully operate. As expansion proceeds it is reasonably expected any modifications to existing agreements or additional agreements that may be required can be obtained in a timely manner. 210 Annual Report 2015
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(Incorporated in the Cayman Islands
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Company Profile Mongolian Mining Co
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Corporate Information BOARD OF DIRE
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Directors and Senior Management BOA
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Directors and Senior Management Gan
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Directors and Senior Management Une
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Directors and Senior Management SEN
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Group Structure 14 Annual Report 20
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Chairman’s Statement I believe th
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Management Discussion and Analysis
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Sustainability Report OUR APPROACH
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Sustainability Report Fair operatin
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Sustainability Report Figure 3. HR
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Sustainability Report The Company
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Sustainability Report In September
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Sustainability Report Figure 5. LTI
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Sustainability Report Biodiversity
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Sustainability Report In 2015, appr
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Sustainability Report There are num
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Sustainability Report OUR COMMUNITY
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Sustainability Report We receive gr
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Sustainability Report As part of th
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Sustainability Report Procurement W
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Corporate Governance Report BOARD O
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Corporate Governance Report Continu
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Corporate Governance Report Remuner
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Corporate Governance Report The Cor
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Corporate Governance Report SHAREHO
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Directors’ Report The Directors s
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Directors’ Report Risk Management
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Directors’ Report FINANCIAL STATE
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Directors’ Report DIRECTORS’ SE
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Directors’ Report DIRECTORS’ AN
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Directors’ Report The basis of el
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Directors’ Report Details of the
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Directors’ Report RIGHTS TO PURCH
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Directors’ Report ER pledged its
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Directors’ Report At the time of
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Independent Auditor’s Report OPIN
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Consolidated Statement of Profit or
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Consolidated Statement of Financial
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Consolidated Cash Flow Statement Fo
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Notes to Consolidated Financial Sta
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Page 159 and 160: Notes to Consolidated Financial Sta
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ANNUAL%20REPORT%202015%20eng

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