RE: Mongolia3 Apr 2021 23:01
Mongolian mine is seeking a London listing via a reverse takeover of Arkle Resources, according to the Irish gold and zinc explorer founded by the serial entrepreneur John Teeling.
The Undur Tsakhir mine, located in Tayshir Soum in the Gobi-Altai province of Mongolia, and which is being explored by the Sod Gazar surveying company, produces the metal molybdenum, which is used for steel alloys.
“They are looking for an AIM listing in London using one of our vehicles," John Teeling, Arkle's chairman and the leading shareholder of a string of metals and energy companies, told bne IntelliNews in an interview. “We could probably introduce them to some potential investors and we might give them some credibility to a listing in London if they come through one of our vehicles."
Teeling and his team steer clear of copper and nickel – where the capex of companies can be in the billions – and focus on more specialised raw materials such as molybdenum. The potential value of the deal is estimated at $45 mn. Undur Tsakhir’s main market is China, whose border is located about 400 kilometres away.
“China has a voracious appetite for raw materials and I think they make 50% of the world’s steel and you need molybdenum for steel,” said Teeling. “That’s the obvious market but it’s in the early stages yet and we would want to negotiate customer contracts.”
China has a huge appetite for molybdenum, a metal also known as moly, which look like lead and is used mainly to make steel stronger and more resistant to high temperatures. Zhongxi Mining operates one of China’s largest moly mines in Inner Mongolia, the Chinese autonomous province which borders Mongolia. Although China is one of the primary producers of moly, with more than 200 molybdenum mines located in the Huludao Region, administrative problems have decreased yields and ballooning domestic demand for the metal have led the country to impose an export duty tax and import more supply.
Mongolia is a miner’s dream come true. The country boasts almost 1,000 mineral deposit sites that contain stores of coal, copper, gold, silver, iron, wolfram, moly, and fluorspar, to name a few. These minerals, base and precious metals are necessary for the production process of anything from energy to construction to mobile phones and transportation.
Teeling, who is seeking more information before committing to the deal, is mindful of the problems that Rio Tinto has faced in Mongolia. The rising cost of its vast Oyu Tolgoi copper mine’s there played a role in bringing down both Mongolia's previous prime minister and Rio's last chief executive.
Arkle has been approached through an intermediary. According to Sod Gazar, it currently has no plans for a listing of the mine.
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