Cameron McRae, President and CEO of Oyu Tolgoi LLC

1. Cameron McRae
President & CEO
OYU TOLGOI:
PARTNERSHIP BREEDS SUCCESS
DISCOVER MONGOLIA 2012

2. 2БҮХ ЭРХ ХУУЛИАР ХАМГААЛАГДСАН © 2012, ОЮУ ТОЛГОЙ ХХК
COPYRIGHT © 2012 OYU TOLGOI , ALL RIGHTS RESERVED
RAPID PROGRESS –
STRONG PARTNERSHIP EQUALS SUCCESS

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COPYRIGHT © 2012 OYU TOLGOI , ALL RIGHTS RESERVED
THE REWARDS OF PARTNERSHIP –
BEHIND EVERY NUMBER A HUMAN STORY
• 575m USD spent on an international standard
airport, road to Gashuun Sukhait, a 90km water
pipeline and 220kv power line to China –
Country-wide benefits
• 125m USD for education and training, including
three training and vocational centres - 3300 benefit
• 23m USD spent for social, cultural and economic
development of Umnugobi aimag -
52,000 benefit across the Umnogobi
• 1.3b USD spent with Mongolian suppliers in 2011 -
over 1,000 companies and their employees benefit
• 700m USD to be paid to Government prior to the
completion of the project construction phase 1 –
Country-wide benefits

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COPYRIGHT © 2012 OYU TOLGOI , ALL RIGHTS RESERVED
* Source: IDOP Technical Report Assumptions
In 2020, 80 per cent of wealth will
come from underground
Open Pit
184kT Cu
Underground
628kT Cu
A PARTNERSHIP FOR
FUTURE PROSPERITY
Ready to go Yet to come

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COPYRIGHT © 2012 OYU TOLGOI , ALL RIGHTS RESERVED
• Established Government obligations:
• Clear legal framework
• Stable tax environment (but no tax holiday)
• 30 year term, with right to negotiate to go to
50% after that point
• Established Investor obligations on:
• National workforce targets
• Infrastructure and Regional Development
• Education and training
• Environmental stewardship
• Procurement and national supplier
development
THE INVESTMENT AGREEMENT –
THE FOUNDATION OF A STABLE PARTNERSHIP

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COPYRIGHT © 2012 OYU TOLGOI , ALL RIGHTS RESERVED
-15
-10
-5
0
5
10
15
2001 2006 2011 2016 2021 2026
Actual Forward
Cumulative cash to
Government of Mongolia
Important: Includes DIRECT payments from Oyu Tolgoi to Government
of Mongolia only. Excludes all indirect cashflow to Government
(e.g. taxes paid by Oyu Tolgoi’s employees and suppliers)
Cumulative cash to
international investors
Investors take more than
two decades to break even
Outcomes presented are based upon assumptions released publicly in Ivanhoe Mines’ March 2012 IDOP Technical Report, and assuming a 10% cost of funding. While
there will inevitably be variation from these specific outcomes given differences between IDOP Technical Report price, volume and cost assumptions and future reality,
the broad picture will not change.
STABILITY MEANS MONGOLIA
BENEFITS FIRST, MOST & RISK-FREE

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Source: Mongolia
The fiscal regime for mining—a way forward, IMF 2010.
Confirmed by Oyu Tolgoi modelling
Government of MongoliaInternational investors
*Based on IMF 55-71 per cent projection + cost
of funding + multiplier effect
STABILITYANDPARTNERSHIPTHATPAYS–
THEGOVERNMENTGETS55-71%PLUS*

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COPYRIGHT © 2012 OYU TOLGOI , ALL RIGHTS RESERVED
Source: Bloomberg
500
700
900
1,100
1,300
1,500
1,700
1,900
Feb-10
Mar-10
Apr-10
May-10
Jun-10
Jul-10
Aug-10
Sep-10
Oct-10
Nov-10
Dec-10
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
Jan-12
Feb-12
Mar-12
Apr-12
May-12
2
3
1
1
2
3
Silk Road Mongolia Index /SILKMN/
OT Investment
Agreement finalized with
its partners to develop
the project
TT agreement
uncertainty
OT Investment
Agreement – Parliament
attempted renegotiation
Amendments to the FDI
law
4
4
Investment Agreement
reaffirmed
A STABLE AND SAFE ENVIRONMENT IS ESSENTIAL
FOR MONGOLIA TO CONTINUE TO BENEFIT FROM
OYU TOLGOI, AND FROM FDI

9. 9БҮХ ЭРХ ХУУЛИАР ХАМГААЛАГДСАН © 2012, ОЮУ ТОЛГОЙ ХХК
COPYRIGHT © 2012 OYU TOLGOI , ALL RIGHTS RESERVED
Business
• Pay its fair share
• Grow the economy
• Develop talent
• Share international experience
• Use skills to benefit Mongolia
Government
• Guarantee fair returns for the
people of Mongolia
• Create platform for the next
wave of investment
• Direct revenues from mineral
wealth wisely
Business and Government each have clear roles and responsibilities
REALISING A PROSPEROUS FUTURE –
SUCCESS THROUGH PARTNERSHIP

10. THANK YOU
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