10,000m drill program & road haulage, page-7

Hi Guys

It is possible but to what extent is the question? the reason the company is so focused on the rail line is it eliminates the bottlenecks that come with road train shipping. Mongolia currently transports and sells 16mtpa of coal and will be looking at over 50mtpa in the next 5 years. They have problems at the current export rate let alone 50mtpa. Infastructure will improve by then but costs and problems still remain. For example with the boarder crossings delays are frequent and incurred costs are high ($6-9 a ton to get accross the boarder).

Say if AKM where to build there own roads it would allow them to transport more coal on their own arterial roads but once they get to the sliding restrictions apply and the same problems crop up. Can they secure the capasity on existing lines? I am unsure on what the restrictions for raod trains are on public roads but hopefully AKM can build a connection to the current road being built by the government and transport to the sliding.

Either way they need access to this rail line in each scenario so the company must believe it is not an issue if they plan to build a 15mtpa line to connect with the Erdenet line. Anyway we will have to wait and see what the quaterly says. GL to all holders

GB