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Doshin Coal Project

The Doshin Coal Project is located in the mid-west part of the Sayshand Province of Mongolia known as the Erdenetsogt Basin. The exploration licence covers a total of 16,594 ha. Polo Mongolia has entered into an option purchase agreement for the acquisition of the licence with Uguumur Alt LLC. Polo Mongolia has been given a due diligence period of three months for drill assessment, geophysics and review of previous results and has until 30 May 2008 to acquire the licence, at which time a final cash payment of $3 million will be due.

The Doshin project area is situated around 3 km southeast of the nearest town, Altanshiree City. It is around 405 km southeast of Ulaanbaatar and around 300 km north of the Chinese border. The nearest Mongolian railway is around 75 km to the west of the licence area.

A detailed exploration drilling programme was conducted within the northern part of the Doshin project area. A total of 31 shallow boreholes (1,880 m drilled) were drilled by the previous owner of the concession and a further five shallow boreholes (260 m drilled) were completed from the current exploration programme undertaken by Polo Mongolia.

The coal seams in the Doshin project area are shallow dipping (less than 5 degrees) and subcrop near the surface. The area consists of three main seams, with thickness ranging from 1 to 12.6 m. The upper two seams appear to be lenticular and therefore are not consistent across the deposit. The third seam is consistent throughout the project area but also varies in thickness.

Based on the regional geology interpretation, the coal bearing formation of Doshin extends throughout and beyond the Doshin licence. The seams predominantly comprise of dull coal and are considered suitable for the thermal market.

Based on the drilling data within the Doshin project area acquired by Polo Mongolia in 2006, it was found that:

  • 40% to 65% of the total seam interval contains coal. Therefore, total potential coal production is approximately 50% of total resource estimate; and
  • the shallowest coal occurs at around 40 m depth from the surface, and therefore is considered suitable for open cut extraction.

The nature of the coal appears to be a high ash, low to medium energy coal. Polo Mongolia plans to undertake further drilling to provide sufficient detail for a prefeasibility study.

Operations

Mongolia:
  - Coal Projects

    ▪ Doshin
    ▪ Altanshiree
    ▪ Khashaat
    ▪ Ereen
    ▪ Union
  - Uranium
Projects
   
Dornogovi
    ▪ Dornod
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