Since 2007, MEC has entered into various acquisitions of concessions for resources. We have a aggregate concession areas of approximately 330,000 hectares for coal, ferrous and non-ferrous metal resources in Western Mongolia at Khushuut, Darvi, Gants Mod, Olon Bulag, Gobi-Altai and Bayan-Olgiy.

Western Mongolia

In 2007, MEC explored 600 hectares of the coal mine areas (out of the 330,000 hectares of concession areas in Western Mongolia for coal, ferrous and non-ferrous metal resources). The area is called Khushuut in Khovd Province, Western Mongolia.

The exploration work was done by a Chinese exploration company, Team 129 of the China National Administration of Coal Geology. Around 52,000 metres of drilling was done and 460 million tonnes of coal resources were demonstrated. Within the explored area, following further analytical work, 149 million tonnes of JORC compliant resources have been demonstrated. These are substantially coking coal resources.

The drilling work was supervised by John T Boyd Company. Further analytical work so far over this area has shown around 149 million tonnes of JORC in-place resources demonstrated.

In 2009, MEC has substantially completed the foundation works, from Khushuut to Xinjiang, PRC, the "Khushuut Road" for RMB866 million. This will assist MEC to commence 3 million tonnes per annum mining operation scheduled and eventually building up to such production.

As of October 2008, MEC selected Leighton LLC as international mining contractor for the Khushuut coal project. Leighton LLC will prepare a detailed mine plan for an initial 3 million tonnes raw coal (2 million tonnes saleable) per annum operation. It will also work with MEC on pre-mining matters to prepare for production commencement of the Khushuut Project.

In September 2009, Baosteel Bayi visited the site of our Khushuut coking coal mine via the Khushuut Road. This visit led to around 200 tonnes of bulk samples of coal being transported from the Khushuut site to the customers through the Yarant/ Takeshenken border into Xinjiang, PRC. The local customs at Xinjiang made special arrangement for this historical first delivery of coal from Mongolia to Xinjiang through this border.

In January 2010, MEC entered a long term coal supply agreement with Baosteel Bayi for supplying a minimum of at least 9.6 to 10 million tonnes coking coal through years 2010 to 2020 with upside from a desired purchase of accelerated and further productions.

MEC will explore for further prospects in Khushuut and nearby areas, including Darvi, Khovd Province and Gants Mod and other areas of prospects.

Xinjiang, PRC

MEC has acquired 19% of a wholly foreign-owned Xinjiang corporation with business scope to invest in coal, copper and iron resources and through which is working towards the setting up of joint ventures with two Chinese geological bureaus for coal resources.