Baruun Naran

Baruun Naran Coal Project

Location

The Baruun Naran Coal Project (BN) is situated within the Umnugovi Aimag (or province), 490 km south of Ulaanbataar in the South Gobi desert of Mongolia. It is approximately 180 km in a straight line to the Chinese border. The provincial capital of Dalandzadgad (pop. ~10,000) is located 90 km to the west of BN.

Location of QGX’s Baruun Naran Coal Project in southern Mongolia

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Baruun Naran - A Short History

The Baruun Naran deposit was first discovered and investigated by a Soviet-Mongolian team exploring the adjacent up-dip Tavan Tolgoi deposit in the mid 1980s. Initial investigations in the 1990’s (21 vertical drill holes) confirmed the occurrence of an in-situ metallurgical- and thermal-grade resource. However the Tavan Tolgoi deposit was favored, and the Baruun Naran deposit was largely ignored for the next decade.

In 2002 QGX attained 100% ownership of the exploration Licence (#4326) for a large area (95,268 hectares) which covered the Baruun Naran coal deposit.  QGX’s initial investigations within Licence #4326x were for porphyry-based ore deposits and other metalliferous targets.  Some lower grade mineral deposits were discovered on the lease, however, it was the later discovery of information pertaining to the emplacement of a significant coal deposit within Licence #4326, which sparked QGX’s interest.

QGX decided to investigate the coal deposit’s economic potential, and in early 2005 planned an exploration programme to identify and to delineate the coal resource.  The large-scale exploration programme began in earnest in April 2005, and continues today.

Baruun Naran Licence #4326 (and adjacent Tavan Tolgoi Licences)
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Property Ownership, and Licensing in Mongolia

Exploration Licence #4326 is held 100% by QGX Mongolia Ltd. QGX acquired the licence on April 24, 2002.

Currently in Mongolia exploration licences are awarded for an initial nine years, and can be extended for three years, as a pre-mining concession, after which time they must be converted to a mining licence. The holder of an exploration licence has an exclusive right to obtain a mining licence for any part of their exploration licence once the terms and conditions of the Minerals Law have been fulfilled.

Exploration Licence #4326 abuts the adjacent Tavan Tolgoi licence areas on its north-eastern boundaries. A number of international coal mining companies, are involved in negotiations with the Mongolian government on building a large coal mine at Tavan Tolgoi.

Baruun Naran Coal Project – drilling rig in Spring 2005
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