Due

to the predominantly flat topography, gently dipping seams (less than 25°) and an estimated average stripping ratio of around 3:1, SRK considers that the Kashaat coal deposit is suitable for open cut mining. Early indications are that the coal appears to have qualities of low to medium energy, medium total moisture, medium ash and medium sulphur. The coal is considered suitable for the thermal market.

During its September 2008 site visit, SRK was supplied with exploration data obtained by Polo from a 28 hole program on its Kashaat project. The program, completed in three months using two Universal drill rigs, comprised five diamond drill holes and 23 open percussion holes with a total of 3,245m drilled. The 28 drillholes were drilled on a 400m x 400m pattern over the 133ha license area. Coal was intersected in all 28 drill holes and occurs as a flat multilayered seam.

SRK has been engaged to complete a resource statement for the deposit in accordance with internationally recognised standards. This work is currently underway. Once completed, Polo intends to submit the resource statement to the Mongolian Government and seek to progress the Exploration License to a Mining License for the Kashaat project.