Ann: Settlement of Mamahak Coking Coal Project in, page-13

re: Ann: Settlement of Mamahak Coking Coal Pr... Jonsey,

Mamahak is a hard mining operation. I doubt whether KRL will ever come out and say they are looking at doing 1.5 mtpa but be a lot more conservative and aim for a target of around 500,000 tpa.

Reasons are for what I can see Mamahak is very narrow seams thus the mining has to be done with smaller equipment. Thus the higher mining costs and lower margins. I have yet to do a full analysis of the costs but will be working on that over the next couple of weeks. I have to go off South Gobi's reports until KRL put out any technical announcements but I presume that KRL will be getting their head around the project from now on as well.

I agree with you a NPV of $670 million is very high and is probably why KRL only paid $11 million for it. I still believe that the NPV will be around $80 to 100 million. But this could be a lot higher if they over achieve. Time will tell.