Shivee Energy integrated energy complex

...As far as the production of energy, “Shivee Energy” proj-ect is being implemented. First, we need to build 4 to 5 power plants to ensure the supply of energy over the next 10 years. By doing so, we will be capable of fully supplying domestic energy demands in the next 10 to 15 years.

In the long run, once our energy supply exceeds domestic demand, we intend to export the excess energy. Under this requirement, we will continue to utilize our thermal coal. We have an abundant amount of natural resources, which are in high global demand and we have the opportunity to utilize and process those resources efficiently...

Prime Minister of Mongolia, Erdenebat Jargaltulga

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100-day report of the Government of Mongolia27.10.2016


Project Profile2016


Summary

Introduction

About Us

Project Overview

Location

Exploration History Resource Data

Mining Licenses

Project Description

Regulatory Environment

Feasibility Study

Contact

Contents

* Any information mentioned in this com-pany profile contains no conflict of interest and is intended for internal introductory purposes only. All data and information regarding operations are in the research stages and may change depending on the market conditions.

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Summary

Resources:Renewable energy (wind, solar) Coal-1,303.1 Mt and Coal bed methane (CBM)

Feasibility Study:Pre-feasibility Study- Completed in April, 2016 Feasibility Study- Expected to be completed in November, 2016 by State Grid Corporation of China

Our aim:Our project aim is to build integrated eco-friendly and economical coal and renewable energy based power plant to supply energy to both domestic and Chinese market as well as Northeast Asia

Project Developer: Erdenes Shivee Energy LLCShareholders:

Erdenes Mongol, LLC & Aq Sora, LLC

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Ulaanbaatar

Russia

China

Mongolia

Legend

ESE project Transmission line

Northeast Asia interconnection

Coal mine Wind power plant

Solar power plant

Japan

South Korea

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Introduction

Mongolia has enormous resources in terms of its mineral reserves and renewable energy such as wind and solar. Oyu Tolgoi (OT), in the South Gobi region of the country, is the world’s largest undeveloped cop-per-gold project and the reserve value of the asset is greater than the en-tire current GDP level of Mongolia. The government has signed an histor-ic agreement with Ivanhoe mines and Rio Tinto for the development of this project. Next biggest project is Tavan Tolgoi (TT) mine, which is the biggest coal operation in Mongolia. The government is now in process of selecting the strategic investment partner to take over the management of Mongolian state-owned firm in charge of TT coal deposit.

It is estimated that the total coal resource of Mongolia is about 175 billion tons. As of today, there are 300 coal deposits within 15 coal basins in Mongolia. In addition to the coal resources, 12 active renewable energy projects including 5 wind energy and 7 solar energy projects now ac-complishing the research phase and ready to be implemented. Three of them are planned to be implemented in the area of Choir and Dornogobi region nearby Shivee-Ovoo, where our company plans to implement the Shivee Energy Complex Project of Energy Export.

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Renewable Energy Projects in Mongolia

Enormous amount of mineral reserves and renewable energy source in Shivee Energy project area

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Shivee energy project area

Shivee Energy integrated energy complex 7

“15% of total installed capacity will be renewable energy”


About Us

Erdenes Shivee Energy, LLC is established as a state and privatejoint Mongolian company in accordance with an agreement betweenErdenes Mongol, LLC and Aq Sora, LLC on March 4, 2016.Erdenes Shivee Energy, LLC was established to provide 1.2 billiontons of productive capacity resource to the Shivee Energy ComplexProject of Energy Export based on strategical deposit, Shivee-Ovoo.50 percent of the company is currently owned by Erdenes Mongol,LLC, a stated owned enterprise and the other 50 percent is ownedby Aq Sora, LLC, a private entitiy that owns shares of Shine Shivee,LLC. The establishment of Erdenes Shivee Energy, LLC is basedon the Cabinet discussion no. 64 dated on November 16, 2015 tosupport the complex project to build a large scale ultra-high voltagepower plant, cross-border transmission lines and coal mine near thestrategical coal deposit, Shivee Ovoo.

On October 26, 2015, “Shivee Energy Complex Project of Energy Export” project unit was established under the Ministry of Energy of Mongolia and Erdenes Mongol, LLC by the Government Resolution no. 422. The main goal of the Project Unit is to provide the preparatory work of the Feasibilityt Study for renewable energy power plant, thermal power plant, transmission line, water supply and coal mine as well as to ensure project implementation.

Today, the company’s headquarters is located at Monnis tower, 13th floor, Chinggis avenue-15, 1st khoroo, Sukhbaatar district, Ulaan-baatar-14240, Mongolia. The headquarter office is responsible for providing legal, accounting, administrative, engineering and geolog-ical services, international and local procurement, liaison with regu-latory authorities, logistics, translation, accounting, and coordination of local and international suppliers and contractors.

Aq Sora

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Project Overview

The Company intends to utilize its coal resources to build the Shivee Energy Complex Project of Energy Export, which will become the first energy export based project for Mongolia. The complex project will be an important initiative for Mongolia, where the country’s energy sector is underdeveloped. By bring-ing a new idea of combining renewable energy with coal-based energy in Mongolia, this project will significantly improve the Mongolian economy and the energy sector.

By building a global scale power plant in Mongolia and exporting the produced energy, our company will commence a new era in the Mongolian energy sector. Furthermore, we will build an en-vironmentally friendly wind farm and solar energy station within the complex project using the abundant amount of renewable energy resource of Mongolia. In addition to the project, there is potential for the company to utilize economic value of CBM prior to coal mining. This opportunity shall be researched and studied thoroughly upon funding.

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...Exporting the produced energy... The beginning of a new era in the Mongolian energy sector

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Location

Exploration History

The project is located in the Shivee Ovoo strategic coal deposit area in Shivee-Gobi and Sumber soum of Gobi-Sumber province, Mongolia, as shown in Figure-2. The project location lies 260 km to the southeast of Ulaanbaatar, the capital city of Mongolia, 20 km to the southeast of Choir City the provincial capital and 5 km to the northeast of Shivee-Gobi soum.

From 1986-1988, a huge scale of complex and supplementary geological exploration work that provides resources evaluation of Shivee-Ovoo coal deposit. As a result of the exploration coal resources within Shine Us area was discovered as defined category of Measured and Indicated resources.

Preliminary exploration covering remained part of the deposit Oekhii Tsagaan and Nogoon Toirom was carried out during 2007-2010. In 2011-2012, detailed exploration work performed relating to the result of the preliminary exploration and coal resources approved by Mongolian Mineral Resources Professional Council in 2015.

Project location

Trans Mongolian Railway

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260km


Resource Data

Resource clarification and calculation report for License no. 13311A, 13312A, 13313A was discussed and approved during the Mongolian Mineral Resources Professional Council meeting on April 14, 2015.

Resource clarification and calculation report for License no. 20423A, 20421A, 20419A was discussed and approved during the Mongolian Mineral Resource Professional Council meeting on August 21, 2015.

Approved resource report results are summarized as follows:

• Measured /A/, 24.41 Mt • Indicated /B/, 654.72 Mt • Inferred /C/, 612.10 Mt • A+B+C, 1,291.44 Mt • Prognosis resource /P/, t 423.95 Mt

Further exploration is necessary for a complete research of the coal deposit and increase the approved geological resource of the License no. 20421A. In the case of License no. 20421A, further exploration is being planned in order to bring P type resource to B, C type resource. In the case of Nogoon Toirom deposit no. 2, further exploration of 65 drill holes of 22,710 meters of drilling is required.

In the case of Oekhii Tsagaan deposit, further exploration of 11 drill holes of 3,710 meters of drilling is required. The above mentioned ex-ploration will require about 9.1 billion MNT to execute. By transferring the speculated P type resource to B, C type resource:

• Geological resource may increase by up to 70-80% • Productive capacity resource may increase by up to 50-60% • NPV of the deposit may increase by up to 50-60%

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30 yearsShivee-1Nogoon toirom-2 31.Dec.201520419A 549.41

License No. Area

Shine Us

Shine Us

Talbai-1

Talbai-2

07.Feb.2008 30 years

30 years

30 years

30 years

30 years

27.Feb.2008

27.Feb.2008Shine Us

Oekhii Tsagaan

Nogoon toirom-2

Talbai-3

Shiveegobi

Shiveegobi-1 31.Dec.2015

31.Dec.2015

Deposit Name Area name Granted Date

Duration

13311A

13312A

13313A

20423A

20421A

Total

Mining Licences

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2,781.20

1,238.11

269.73

7,862.7

5,447.2

18,148.35


Project Description

The goal of Shivee Energy Complex Project of Energy Export is to build a large scale coal fired power plant in Mongolia and supply the produced energy to domestic market and export into People’s Republic of China via transmission lines. The complex project consists of 3 main compo-nents. First, a coal mine with the capacity to extract 20 million tons of coal per year. Second, a power plant with an installed capacity of 5,280 MW. Third, renewable power plants with an installed capacity of 15 per-cent of the installed capacity of coal fired power plants. Lastly, transmis-sion line with the capability to transmit 4,600 MW ±660 kV UHV.

Since the northeast part of the project site is rich in wind energy and southwest part of the project site is rich in solar energy, it is suitable to incorporate solar and wind power plants to the complex project and export renewable energy.

Currently, ESB Solar Energy, Ltd. obtained licenses to build 10 MW solar plant and Aydiner Global, Ltd. obtained licenses to build 50.4 MW wind power plant in the following areas in where our project is nearby in the region.

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Govisumber province

Cornerstone project for Global Energy Interconnection

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Regulatory Environment

The Mongolian Law on Energy was adopted in February, 2001 in order to regulate matters related to energy generation, transmission, distribution, and supply activities, construction of energy facilities and energy consumption through utilization of energy resources.

The Mongolian Law on Renewable Energy was adopted in January, 2007 to regulate genera-tion and supply of energy utilizing renewable energy sources.

The State Policy on Energy was announced in July, 2015 to promote and extend renewable energy development in Mongolia. The Policy shall be implemented in two stages /2015-2030/.

The State Policy on Energy is pursuing the following targets for renewable energy develop-ment in Mongolia:

• to increase the share of renewable energy in the total energy supply to 20% by 2020 and to 30% by 2030. • to create the legal and taxation environment for promoting investment in renew able energy Moreover, the Government of Mongolia supports renewable energy development by exempt-ing imported equipment and parts from customs duties and value-added taxes in 2016.

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Feasibility Study

Aq Sora

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Currently, State Grid Corporation of China, the world’s largest state owned utility company established in 2002 by the State Council of China is carrying out feasibility study of Shivee Energy Complex Project of Energy Export. State Grid Corporation of China pro-vides power to over 1.1 billion people in 26 provinces and covers 88% of China’s national ter-ritory. With an estimated total workforce of 1,800,000 and 330 billion USD in revenue, State Grid Corporation of China was ranked 2nd in the Fortune Global 500 in 2016. Furthermore, State Grid Corporation of China owns 40% of the Philippines’ power grid, 25% of Portugal’s power grid and 30% of Italy’s power grid.

On November 10, 2015 The Ministry of Energy of Mongolia and State Grid Corporation of Chi-na has signed an agreement to carry out the Feasibility Study for the Shivee Energy Com-plex Project of Energy Export. In accordance with the agreement, State Grid Corporation of China selected 3 different institutions in early 2016 through an international open tender to carry out the Feasibility Study for the Shivee Energy Complex Project of Energy Export. The 3 institutions are currently carrying out the Feasibility Study of the 3 main components of the complex project. ` `First, Shandong Electric Power Engineering Consulting Institute Corporation, Ltd is carrying out the Feasibility Study for the Power Plant and Transmission Line. Second, CCTEG Shen-yang Engineering Company is carrying out the Feasibility Study for the Coal mine. Lastly, the Inner Mongolia Water Resources and Hydropower Survey and Design Institute is carrying out the Feasibility Study for the Water supply of the complex project.

Another organization with a vested interest in the Shivee Energy Complex Project of Energy Export is the Global Energy Interconnection Development and Cooperation Organization (GEIDCO). GEIDCO is a non-governmental, non-profit international organization among will-ing firms, organizations and institutes dedicated to promoting sustainable development of energy worldwide. The main goal of GEIDCO is to promote the establishment of the Global Energy Interconnection system to meet the global demand for clean and green electricity. In order to establish a Global Energy Interconnection system, GEIDCO is looking to establish a regional power grid starting from Northeast Asia. Therefore, the Shivee Energy Complex Project of Energy Export has a great potential to supply energy not only to Mongolia and China but also to the Northeast Asian Power Grid and Global Energy Interconnection as well.


Address: Monnis tower, 13th floor, Chinggis avenue-15, 1st khoroo, Sukhbaatar district, Ulaanbaatar-14240, MongoliaWeb: www.erdenes-shivee-energy.com E-mail: [email protected]

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Shivee Energy integrated energy complex

Business

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