Discover Mongolia – 2012

International Mining Investor’s Forum

August 31st, 2012

Ulaanbaatar

Introducing Modern Business Practices into

Legacy Mongolian Mining Companies

Legal Disclaimer This Presentation is confidential and may not be reproduced or distributed in any jurisdiction except with the prior express written consent of FG2 Advisors, LLC (“FG2”). The Presentation is for informational purposes only, and is intended only for those recipients to whom it is delivered by FG2. By accepting this Presentation, the recipient agrees that it will not, and it will cause its directors, partners, officers, employees and representatives to not, divulge any such information to any other party.

Nothing herein should be considered a recommendation by FG2 of any security, assets or investment. In preparing this Presentation, FG2 has relied upon and assumed the accuracy and completeness of all information available from public sources or which was provided to or reviewed by it. FG2 has no obligation to update or keep current the information contained herein. FG2 does not make any representation or warranty as to the accuracy or completeness of the information contained herein. This Presentation shall not constitute an offer to sell or a solicitation of an offer to purchase any securities, investment product, or investment advisory services described herein. Any offering will be made only by means of a private placement memorandum or other appropriate materials (the “Offering Documents”) that will contain detailed information about any investment to be offered. The terms of any investment described herein are subject to change. Any Fund and any interests therein have not been and will not be registered, guaranteed, approved or disapproved under or by the securities laws of the United States or any other jurisdiction nor by the U.S. Securities and Exchange Commission or any other government agency or authority.

Certain statements and information in this Presentation constitute “forward-looking statements” and forward-looking information that is not purely historical in nature. Such information may include, among other things, projections, forecasts or estimates of cash flows, yields or returns, scenario analyses and proposed or expected portfolio composition. When used in this Presentation, the words “anticipate,” “believe,” “estimate,” “expect,” and similar expressions are generally intended to identify forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of a Fund to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. All forward-looking statements in this Presentation speak only as of the date hereof. FG2 expressly disclaims any obligation to disseminate any updates to any forward-looking statement contained herein to reflect any change in its expectation with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

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Legal Disclaimer -- Continued There are special considerations associated with international investing, including the risk of currency fluctuations and

political and economic events. Investing in emerging markets may involve greater risk and volatility than investing in

more developed countries. Due to their narrow focus, sector-based investments typically exhibit greater volatility.

Investors should be aware that hedge funds often engage in leverage, short-selling, arbitrage, hedging, derivatives, and

other speculative investment practices that may increase investment loss. Hedge funds can be highly illiquid, are not

required to provide periodic pricing or valuation information to investors, and often charge high fees that can erode

performance. Additionally, they may involve complex tax structures and delays in distributing tax information. While

hedge funds may appear similar to mutual funds, they are not necessarily subject to the same regulatory requirements

as mutual funds.

Past performance is no guarantee of future results.

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Legal Disclaimer -- Continued No warranties

As FG2 Advisors, LLC (“Firebird”), nor any entity affiliated with Firebird, is NOT an investment fund for the purposes of

the Securities Markets Law of Mongolia and it makes no representations or warranties in relation to this presentation or

the information and materials provided on this presentation.

Without prejudice to the generality of the foregoing paragraph, Firebird does not warrant that the information on this

presentation is complete, true, accurate or non-misleading. Nothing on this presentation constitutes, or is meant to

constitute, advice of any kind. If you require advice in relation to any legal or financial matter you should consult an

appropriate professional.

This overview is for informational purposes and is not an offer to sell or a solicitation of an offer to buy any securities

and may not be relied upon in connection with the purchase or sale of any security as described herein. Nothing herein

should be considered a recommendation by Firebird of any security, assets or investment.

Firebird will not be liable to you in relation to the contents of, or use of, or otherwise in connection with, this

presentation.

Reasonableness

By using this presentation, you agree that the exclusions and limitations of liability set out in this presentation disclaimer

are reasonable.

If you do not think they are reasonable, you must not use this presentation.

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Mongolia: Dawn of the Great Mineral Rush

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Firebird – Pioneering investor in Mongolia

• Firebird began accumulating shares on the Mongolian Stock Exchange

(“MSE”) in 2006

• Firebird used the 2008 – 2010 financial crisis as a means of consolidating its

ownership positions

• Firebird launched 3 dedicated Mongolian private equity funds, raising $140

million in additional capital

• Acquired controlling stakes in three JSCs listed on the MSC and 12 private

Mongolian LLCs

• Awarded “Top Investor in Mongolia’s Capital Markets” in 2011 by joint

committee of the Mongolian Stock Exchange (“MSE”) and Financial

Regulatory Commission (“FRC”)

• James Passin awarded “Fund Manager of the Year” at the 2012 Mines and

Money Conference in Hong Kong primarily for the performance of Firebird

Mongolia Fund

Firebird’s Mongolian Infrastructure

• Six year track record as foreign institutional investor in Mongolia

• Board representation on twelve JSCs and board and executive positions in

numerous private companies

• Strategic relationship with CBM LLC, which acts as exclusive consultant to

Firebird group and has 51 employees

• Strong internal human resources with focus on business administration,

legal, geology accounting, and law

• Strong international network of financial market and mining professionals

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Firebird’s Mission

1. Holding largest possible quantity of Mongolian assets, including

minority stakes in MSE-listed companies

2. Acquiring controlling stakes in public and private Mongolian

companies

3. Restructuring portfolio companies through the introduction of

modern business practices and through the financing of capital

investments

4. Formulation of capital markets strategies to unlock latent value

and create coherent exit strategies

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Background to the Mining Game

• 2,441 valid exploration licenses issued by MRAM held by 1,286 companies

• 1,189 valid mining licenses issued by MRAM held by 787 companies

• Mining and exploration licenses cover 40% of the territory of Mongolia

• 78% of the licenses are controlled by Mongolian nationals or legal entities

• Many of the Mongolian owners lack capital and expertise to meet statutory legal and

regulatory obligations

• Most Mongolian companies not in shape to attractive international capital

• Many operating mining companies lack international standard feasibility studies and

do not have acceptable internal controls – de facto ninja miners

• JSCs represent takeover targets for foreign operators on the MSE

• LLCs can be acquired through privately negotiated transactions

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Case Study: Sharyn Gol JSC

• Leading producer of thermal coal

• Situated on rail spur to Trans-Mongolian Railroad

• High quality sub-bituminous coal suitable for export

• Founded in 1965

• State-owned enterprise until 2003 privatization on MSE

• Sharyn Gol’s operating and financial conditions deteriorated as a result of

unsustainable business practices

• Market cap declined to $8M in 2010

• Production collapsed from 2.5M tons to 400K tons

• Liquidity problems

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Sharyn Gol – Engineering a Turnaround

• Stabilized balance sheet – injected seed capital

• Inserting Western CFO

• Working with existing Mongolian management

• Installing financial software

• Safety review

• E&Y IFRS audit

• Recruitment of world class operating team

• JORC-standard drilling

• Engineering report

• Government approvals

• Capital raising

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Sharyn Gol - logging drill core – 2010 JORC

exploration program

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Case Study: Berkh Uul JSC

• Founded in 1954

• Former state-owned enterprise; privatized on the MSE in 2006

• Former major producer of fluorspar

– Fluorspar (CAF2) is a strategic mineral used in aluminum and steel

production is the ultimate precursor to all fluorine-based chemicals

• Underground mine producing from high grade veins

• Mine was abandoned by previous owners and production stopped;

previously one of the largest fluorspar producers in Mongolia

• Company was near insolvency

• Market capitalization of only $6 million in early 2011

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Berkh Uul – Engineering a Turnaound

• Stabilized balance sheet – injected seed capital

• Inserting Western CFO

• Working with existing Mongolian management

• Installing financial software

• Safety review

• E&Y IFRS audit

• Recruitment of world class operating team

• JORC-standard drilling

• Engineering report

• Government approvals

Berkh Uul – Rebuilding Delgerkhan

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Inspection of

abandoned shaft JORC-compliant drilling program

LRISE – THE END OF MONGOLIA?

• Law creates massive uncertainty for foreign investors

• Requires pre-approval for tiny transactions

• Prevents Mongolian business owners from raising capital in distressed situations

• Interferes with ability of companies with large foreign investors from raising capital to

pay Mongolian service providers

• Harms potential for the government to generate tax revenue from service providers to

foreign controlled mining companies

• Inconsistent with laws regulating the MSE and foreign laws regulating capital

issuances in major foreign stock exchanges

• Will destroy FDI and therefore Mongolia’s future if enforced

• Well-intentioned but should be amended to protect Mongolia’s future

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THANK YOU

FG2 Advisors LLC

152 W. 57th St., 24th Floor

New York, NY 10019 USA

Tel: (1) 212 698 9260

Fax: (1) 212 698 2666

www.fbird.com

Contact: Ellen D’Aleo, Client Services

Email: edaleo@fbird.com

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