GOLD DEPOSITS THAT HERALD HOPE

Ts. Elbegsaikhan

The price of gold on the world market has repeatedly reached new historical highs, signaling a promising period for the gold industry. Amidst the global Covid pandemic in 2020, countries closed their borders, and international trade ground to a halt. During this uncertain period, characterized by indefinite curfews and economic instability, Mongolia’s economy became particularly fragile and vulnerable.

During the interruption of foreign trade and scarcity of domestic goods, the price of gold began to soar, presenting the Central Bank with a ‘golden’ opportunity to safeguard its foreign exchange reserves. In that year, revenue from gold exports surpassed that of copper, establishing gold as Mongolia’s second-largest commodity export after coal.

A total of 30.5 tons of gold were exported, marking a significant increase of 2.4 times compared to the previous year, 2019. During that period, the Mongolian Bank purchased 23.6 tons of gold, effectively utilizing the opportunity to its fullest extent. Presently, the price of gold is nearly 20% higher than it was four years ago, with expectations of further growth. The question remains: How will Mongolians leverage this opportunity?

In 2023, sales of gold to the Mongol Bank decreased to 17.9 tons, which is concerning considering the general upward trend in gold prices. This decline may be attributed to our country’s mining capacity. While over 100 gold deposits have been surveyed in Mongolia, only about 15 are deemed economically viable. Additionally, it’s worth noting that some of these deposits have been fully depleted. So, let’s take a look at the resources we have.
Boroo gold deposit

The Boroo gold deposit in Jargalant soum of Tuv aimag has been operating since 1997. With an estimated 10 million ounces of gold, the deposit is considered largely depleted. Over the years, ownership of the deposit has changed hands multiple times, with Steppe Gold LLC currently owning it.  

The Steppe Gold company is actively exploiting the primary gold deposit, ‘Altan Tsagaan Ovoo’  in Tsagaan-Ovoo soum of Dornod aimag. Steppe Gold acquired the special license for this mine, covering a total area of 5,492 hectares, in 2017. Construction commenced in 2018.

Production commenced in 2020, and the mine has been in continuous operation since then. The project is slated to run until 2036.

Gatsuurt gold deposit

This strategically significant deposit is situated just 45 km from the Boroo gold mine. While the exact reserve size remains undetermined, estimates suggest there are between 1 to 1.5 million ounces of gold. The previous owner of the Boroo gold deposit, Centerra Gold Company, made significant efforts to bring the deposit into economic circulation and reached an agreement with the government. However, the project was halted due to lack of support from Parliament.

Altan Nar gold deposit

The Altan Nar gold deposit in Airag soum, Dornogobi aimag, has been operational since 2016 and holds a total of 1.2 million ounces of gold reserves. Erdene Resource Development Company, a publicly listed entity on both the Toronto and Mongolian Stock Exchanges with extensive exploration experience in Mongolia, identified the deposit over a decade ago and conducted assessments to determine its gold reserves. They are currently exploiting the deposit.

Furthermore, several promising gold-bearing reserves have been discovered, earning them the name “Golden District of the Valley”’ owing to their close proximity. For instance, in 2019, a special permit was secured for the exploitation of the Bayan Khundii gold deposit, situated just 16 km from the ‘Altan Nar’ deposit. It is estimated that the Golden District harbors a combined total of 14 million ounces of gold reserves.

Khan Altai gold deposit

“The ‘Khan Altai Resource’ company holds the special permit for the deposit, situated in Yesunbulag soum of Gobi-Altai aimag. Presently, the deposit has been assessed to contain 86.73 tons of gold reserves. The company plans to execute the project in two phases, with the anticipated sales revenue from the first phase reaching $749 million.

Additionally, state-owned ‘Erdenes Mongolia’ LLC has recently ventured into the gold industry and identified several promising resources. According to the company, extensive research was conducted using state budget funds, leading to the discovery of minerals at the Khurentsav, Khalzan, Muhar Khar Tolgoi, and Dovjoot deposits. In 2022, it was reported that detailed exploration is required to determine the reserves of these deposits.