Mongolian Mining Corporation (MMC), a prominent player in the coking coal sector, marked a significant milestone by successfully completing the first gold pour at its Bayan Khundii gold mine located in Mongolia. This development signals the company’s strategic expansion beyond its traditional coal operations.
The Bayan Khundii mine is projected to produce approximately 85,000 ounces of gold annually. With established reserves estimated at 513,700 ounces, and an average grade of four grams per tonne, the mine stands as a substantial contributor to Mongolia’s mining landscape.
To bolster its economic contributions, MMC plans to sell the gold extracted from this mine at spot prices directly to Mongolia’s Central Bank. This initiative is aimed at enhancing the country’s foreign reserves and promoting economic stability.
As a part of its vision for growth, MMC has invested $40 million for a 50% equity interest in Erdene Mongol (EM) under a Strategic Alliance and Investment Agreement, which will be effective from January 25, 2024. Within a remarkable span of just 22 months, the company has turned the previously undeveloped site into a fully operational mine, with plans to reach full production capacity by late 2025.
MMC is well recognized for its operations at its Ukhaa Khudag and Baruun Naran coal mines, which are open-pit sites located in the Umnugobi aimag. Since its inception in 2009, the company has evolved into a significant exporter of washed coal and in 2010 became the first Mongolian business to be listed on the Hong Kong Stock Exchange.
In a pivotal move in 2023, MMC and Erdene Resource Development solidified their collaboration with formal agreements aimed at progressing the Bayan Khundii gold project. This partnership includes a structured investment plan consisting of three stages to secure a half stake in EM, which is a wholly owned subsidiary of Erdene.
Expressing pride in this recent achievement, MMC CEO Battsengel Gotov emphasized the dedication and hard work of the employees and contractors involved in the project. He acknowledged their integral role in successfully transitioning Bayan Khundii into a fully functioning gold mine.
Gotov also reiterated the company’s commitment to diversifying its business portfolio, focusing on sustainable growth and long-term value creation. As the company moves forward, it intends to work closely with its strategic partner to enhance exploration efforts aimed at extending the mine’s life and uncovering additional resources in line with their Strategic Alliance Agreement.
