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- 1. BEREN MINING COMPANY IPO:Summary Largest Initial Public Offering To Date on the Mongolian Stock Exchange 2012 Underwriter Member of Mongolian Stock Exchange “BDSEC” JSC 1
- 2. THE INITIAL PUBLIC OFFERING Name of security: Beren Mining Type of shares: Common Form of shares: Intangible Nominal value: 157.35MNT /0.11 USD/ Total number of shares: 1,740,813,320 Number of shares that can be retained by current shareholders: 1,218,569,324 Percentage of shares that can be retained by current shareholders: 70% Number of shares offered to public: 522,243,996 Percentage of shares offered to public: 30% The offer price: 250 MNT /0.18USD/ Total amount raising: 130,560,999,000 MNT /96,513,820 USD/ Placement in primary market: The shares will be mostly offered to institutional investors and other investors on the Mongolian Stock Exchange.
- 3. QUICK FACTS ABOUT THE COMPANY • INCORPORATED IN 2005 • MINING PERMTIS ON WORLD CLASS IRON ORE DEPOSITS 500 MILLION TONS; ARKHANGAI WIDE UP TO 1.3 BILLION TONS • MININING OPERATIONS SINCE 2007, EXPORTS TO CHINA •THE ONLY IRON ORE COMPANY IN MONGOLIA TO ADOPT COMPREHENSIVE WET PROCESSING TECHNOLOGY • THE SOLE MANUFACTURER OF INDUSTRY STANDARD IRON ORE FINES WITH 65% TFE IN MONGOLIA
- 4. PROJECT TO SUPPLY THE WORLD’S BIGGEST IRON ORE MARKET BEREN MINNIG COMPANY CHINA’S NORTHEASTERN STEEL INDUSTRY CURRENT MAJOR SUPPLY ROUTES
- 5. BEREN MINING COMPANY – CURRENT STATE Iron Ore Beneficiation Plant Beren Mining Iron Ore Mine Pit #2 Beren Mining Camp Site Beren Mining Iron Ore Mine Pit #1
- 6. BEREN MINING COMPANY • MANUFACTURING FLOWSHEET MAGNETIC MINING CRUSHING GRINDING CLASSIFICATION GRAVITATIONAL DEWATERING SEPARATION Fe 42% Fe 42% Fe 42% Fe 42% Fe 65% Fe 65% >200ìì 30ìì-3ìì 77ìê> 77ìê> 77ìê> 77ìê>
- 9. BEREN MINING COMPANY PRODUCTS
- 10. BEREN MINING PRODUCT EXPORT TO CHINA AND OTHER COUNTRIES - Integrated Steelmakers - Blast furnaces, Agglomeration & Sinter plants - Minimills & Direct reduction plants IRON ORE CONCENTRATE FINES ~65% TFE, S≤0.01, P≤0.1
- 11. Iron ore deposits in possession of Beren Mining LLC Resource Scale: Name of the amount 1:500,000 deposit Measured 11619 А Ulziit Iron ore deposit of 4,541,156 Tamiryn Gol Iron ore deposit of 9772А 11595А 21,218,300 Khadat Tolgoi Tsenkher Tamiryn Gol Iron ore deposit of 16,701,200 Ulziit Iron ore deposit of 42,180,000 Khadat tolgoi 10551А Tsenkher Total indicated 84,640,656 reserve - Beren Group LLC have 4 Iron ore deposits in Arkhangai Province. Total reserve of the 4 deposits are 84 million tons - Deposit operation period is 100 years -”Beren Mining” LLC holds 9513 hectare land with 9774X, and 6736 hectare land with 11472X exploration licenses in Tsenkher, Khotont and Tuvshruulekh soums of Arkhangai province. 11
- 12. BEREN MINING • CURRENT STATE - In operation since 2007 - Manufacturing capacity; 250,000 tons per year - The indicated iron ore reserves of the company is 84 million tons. The inferred resources is approximately 500 million. • THE PURPOSE OF THE IPO - Increase the capacity to 0.5 million tons per year - Increase the capacity of DRI plant to 300,000 tons per year
- 13. BEREN MINING VALUATION Value Of The IPO • Based only on the future cash-flow # Matter Value 500 thousand ton’s concentrator, 300 thousand ton’s direct reduced iron plant’s 1 $ 310,617,348.92 business value 2 Total number of shares 1,740,813,320.00 3 Per share to be allotted $ 0.18 • Resource value not included in the evaluation 84.64 million metric tons of INDICATED resources Possible 500 million tons of inferred resource When calculated from the 84.64 million tons, the resource evaluation as per commonly practiced routines amounts to over 800 million USD Prospective value: in excess of 1.1 billion USD 13
- 14. Revenue Appreciation Year 2012 2013 2014 2015 Iron ore beneficiation plant 250,000 202,500 300,000 500,000 Targeted capacity usage percentage, % 40% 41% 60% 100% Direct reduced iron plant 10,000 100,000 160,000 300,000 Targeted capacity usage percentage, % 3% 33% 53% 100% Commencing Construction of plants, trial Alignment, Construction of plant production with full period Production capacity By the end of year 2014, iron ore beneficiation plant will engage full capacity which is 500,000 tons annually. Furthermore, DRI plant located next to iron ore beneficiation plant will also emerge full capacity production at the same time. 14
- 15. Estimated Income Statement 2012 2013 2014 2015 1 Revenue 11,860,567.41 43,058,725.45 69,478,667.86 128,261,236.61 1.4 Net sales 4,355,736.96 15,885,177.24 24,681,280.18 44,842,722.13 2 COGS 7,504,830.45 27,173,548.21 44,797,387.68 83,418,514.48 3 Gross profit 6,205,832.05 11,411,158.32 17,088,559.41 30,768,791.57 4 Operational expenses 1,298,998.40 15,762,389.89 27,708,828.26 52,649,722.91 5 Operational income /loss/ 1,298,998.41 15,762,389.88 27,708,828.26 52,649,722.91 8 Surplus or deficit from ordinary activities 1,298,998.41 15,762,389.88 27,708,828.26 52,649,722.91 12 Income before tax/Loss/ 129,899.84 3,619,168.90 6,605,778.49 12,841,002.16 13 Income tax 1,169,098.56 12,143,220.98 21,103,049.77 39,808,720.75 14 Net income during balance report /Loss/ 15 EPS /loss/ ₵0.6 ₵0.7 ₵1.22 ₵2.29 7,669,870.77 7,669,870.77 7,669,870.77 7,669,870.77 16 Non-cash expenses (40,078,855.54) (50,397,572.11) (927,142.86) (927,142.86) 17 Main financing charges (31,239,886.21) (30,584,480.36) 27,845,777.69 46,551,448.66 20 Net cash flow 15
- 16. END THANK YOU Beren Group Ulaanbaatar, Mongolia Tel: +976 55151715 Email: contact@beren.mn Website: www.beren.mn 16