Summit 1

1. ASIA PACIFIC INVESTMENT ADVISORY GROUP
ISSUES and
SOLUTIONS for NATURAL
RESOURCES INVESTMENT
IN MONGOLIA
2015April
IDENTIFY EVALUATE DEFINE EXECUTE OPERATE
BCM Summit
2016Apr

2. APIAG is an independent investment banking firm providing financial advisory services, including merger and acquisition and capital
raising assistance, exclusively to clients in the energy and natural resources sector.
Strategic Technical Commercial M&A and divestment
Sector and Country reviews
Strategic assessment of Corporate and
BU plans for private and listed
companies
Privitization of government-owned mining
companies
Development and restructuring of
national mining laws
• Development of corporate, operating,
engineering, and human resource
policies, procedures, and organizational
structures
Advisory to mining and business
associations
Leadership and review of conceptual,
scoping, pre-feasibility and feasibility
studies
Planning and monitoring of mineral
exploration programs
Evaluations and consulting for:
• Resource and reserve reports
• Mine plans, including equipment
selection
• Metallurgical and mineral processing
flow sheets and equipment selection
• Chemical facilities
• Environmental and sustainability
program
Optimization reviews for productivity
improvements and cost reductions
Risk assessments, including political,
financial, and technical
Strategy formulation for negotiation of
contractual agreements, such as
mergers, acquisitions, and mineral sales
contracts
Business and financial cash flow
modelling
Market surveys for mineral products
Expert witness testimony for technical
and commercial issues
Independent and owners’ engineer
services
Valuations of mineral properties,
reserves, mines, mineral processing
facilities, and chemical plants
Due diligence reviews in support of
financings, investment decisions,
acquisitions, dispositions, and mergers
Preparation of technical documents
required for listings on the various
global stock exchanges
Statement of Qualifications APIAG Pte. Ltd
O;ffice 06-00, Singapore Land Tower
50 Raffles Place
Singapore, 048623
Managing Partner
and
C.E.O.
David Rohanna
Energy Fuels Industrial Minerals
Metallurgical Coals Diamonds
Iron Ore Rare Earths
Steelmaking Oil and conventional gas
Base Metals Unconventional gas
Precious Metals CTL and CTG
Minor Metals Experience covers all continents

3. 2015April
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4. 2015April
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“…a careful owner, before buying shares,
should visit the mine, and carefully examine
the nature of the vein, as it is very important
that he be on his guard to avoid being victim
of dishonest sellers of shares seeking to
defraud him”
“De Re Metallica”-Georgius Agricola, 1556

5. 2015April
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Exploring the Investment Criteria
Is it about the investor’s risk
appetite or all about relationships?

6. 2015April
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“Never have people been more the
masters of their environment. Yet
never has a people felt more deceived
and disappointed. For never has a
people expected so much more than
the world could offer.”
Daniel Boorstin, The Image (1961)

7. 2015April
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In brief, lower growth means less room for error
Deflation, Divergence and Deleveraging
Reflation, Realignment and Re-levering

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Four Issues Which are Driving the
Current Global Investment Paradigm

9. 2015April
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I. Return to Fundamentals
u Geology and Resources
u Grade
u Exploitation and Beneficiation
u OPEX

10. 2015April
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I. Return to Fundamentals
u Margins
u CAPEX
u Infrastructure
u Management

11. 2015April
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Key Omissions and Misrepresentations
Ø Nearology
Ø Stage-gating
Ø Risk analysis
Ø Benchmarking

12. 2015April
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“Of all those expensive and uncertain
projects, however, which bring bankruptcy
upon the greater part of the people who
engage in them, there is none perhaps more
perfectly ruinous than mining and the search
after new … mines … Projects of mining,
instead of replacing the capital employed in
them, …. commonly absorb both capital and
profit.”
“The Wealth of Nations”, Adam Smith, 1776

13. 2015April
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II. Productivity Declines
u Embedding effective management-
operating systems at mines;
u Prioritizing operational excellence;
u Focusing on technology.

14. 2015April
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III. KEYS TO SUCCESS
u Stability
u Innovation
u Partnering
u Patience and stamina

15. 2015April
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CHALLENGES FOR INVESTORS
Ø Up front cost of capital investment
Ø Difficulty of discovery processes
Ø Increased lead time to advance
Ø Increased global competition

16. 2015April
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IV. Disruptive Technologies
u Base Metal Substitution
u Batteries & Energy Storage
u Fuel Cells
u Solar and Silver
u Unconventional Oil & Gas

17. 2015April
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“We shall not cease from exploration,
and the end of all our exploring will be
to arrive where we started and know
the place for the first time.”
T.S. Elliot

18. 2015April
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POTENTIAL SOLUTIONS
“KEY TOPICS”

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The COURAGE to INVEST
v Establish attractive environment
v Probability it will be both the
driver and accelerator of growth

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The CONVICTION to CHANGE
v STABILITY
v INSTITUTIONAL STRENGTH
v GOVERNANCE
v TRANSPARENCY
v RULE OF LAW

21. 2015April
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CAUTIONARY TALE
u THE IMMUTABLE PRINCIPLES OF RESOURCES
u DISREGARDING STAGE-GATING
u IMPACTS OF CHINESE LOWER GROWTH
u IMPORTANCE OF INFRASTRUCTURE

22. 2015April
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REBUILDING
u POSITIVE RE-ENGAGEMENT & DIALOGUE
u RECOGNITION AND CORRECTION
u PROACTIVE AND CO-OPERATIVE ENVIRONMENT

23. 2015April
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ATTENUATING THE IMPACT
u BUILD A VISION TO THE FUTURE
u LESSEN DIRECT GOVERNMENT INTERFERENCE
u RE-THINK OF PRIOR ECONOMIC MODELS
u IMPROVE COMMUNICATIONS
u IMPROVE LEGAL STRUCTURE AND FRAMEWORK

24. 2015April
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CLOSING THOUGHTS

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26. 2015April
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27. 2015April
LOST OPPORTUNITY COST
Lost
Opportunity
Cost
Consumption
Production
Explicit Costs Implicit Costs
Non-monetary
Evaluation
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28. 2015April
RISK ASSESSMENT
Engage
Stakeholders
Risk
Characterization
Options
Definition
Option
Selection
Actions
Strategy
Stewardship
and
Achievement
Stage 1: Risk based review of options
Stage 2: Specific Stakeholder input &
feasibility assessment
Stage 3: Refined set of options
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29. 2015April
“PLAN FOR SUCCESS”
Current Situation Goal Implementation Measure
Assessment
Baseline
Components
Specifics
Evaluate
u Situational Analysis/SWOT
u Options Study
u Major Issues
u Align with
Capabilities
u Major Goals
u Specific
Objectives
u Values & Guiding
Principles
u Action Plans
u Initiatives/Projects
u Performance Mgt
u Review Progress/
Corrective Actions
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30. 2015April
THANK YOU FOR YOUR
KIND ATTENTION
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