Capital Markets Working Group; Andrew Stewart, Chief Executive Officer at Xanadu Mines

1. BCM Capital Markets
Working Group
May 28, 2014
100 days sprint

2. Where we are
• Parliament Resolution
May 9, 2014: 26 items
1. Improve foreign
currency flow,
prevention from financial
and economic risks
2. Improve business and
investment environment,
private sector
development
3. Development policy,
development loans,
financing
4. State property
management
• Government Action Plan
OWNER 100: 0ver 70
items
1. Support to businesses
2. Mining industry related
3. Construction, industry,
infrastructure related
4. Regional development
5. Facilitating FDI
6. Fiscal policies
7. Other

3. Modus Operanda
• Council 30 members,
20 private sector
• Formal meetings twice
a week: Tue & Thu
• Press conference every
Monday
• 100 days is not the end
of the story
• We are not paid…
• Open to all suggestions,
should be actionable,
result oriented
• Meetings with investors,
key players
• Monday BCM general
session only reinforces
the importance of CM
and financial sector
• Think outside of the
box!

4. Proposals received so far on FDI
• PR
– Government PR abroad
with major financial and
business media
– Give Invest Mongolia a
budget to reach out to
investors and attend 20+
investor conferences a
year
– Organize Investor
Conference here in
Mongolia
– Have a roadshow with
officials where they visit
every major financial hub
to meet with investors
• Stability
– Long Term Philosophy -
Governments need to set
policies (tax) that will be in
place for a long period of
time.
– Mining & Infrastructure
FDI
– -Resolve Gatsuurt and
others license related
issues and conflicts
– Railway gauge

5. Proposals received so far on FDI
• Rule of Law
– Stop holding people in
Mongolia without charges.
– Elimination/Crack Down of
Corruption
– Foreign Ownership Rules -
To the extent there are
restrictions on foreign
ownership in certain
industries, a plan should be
developed to reduce or
eliminate these.
– Investor grievance
mechanism
– Improve the Regulatory
Process
• Taxation
– Stop playing with overseas
tax rates and have Mongolia
sign bi-lateral tax
agreements with major
investor countries like the
US and Canada at zero tax
rate or similar low rates like
Singapore at 5%.
• Free trade zones, off shore
zones
• Introduce investor visa
regime

6. Proposals received so far on CM
• Establish investment
funds, speed up
implementation of the law
• Increase transparency of
Government bond
spending
• Expand operations of the
DBM, to support
investments
• Privatization of SOEs,
including MSE, CSD
• Appoint professional
management for MSE,
FRC
• Draft and approve private
pensions fund law
• Allow Social insurance
fund to make investments
into CM
• Targeted work in
improving credit rating of
Mongolia
• Follow Swiss banking
model - confidentiality

7. Template
№
Зовлон/Шалтгаан
ҮНДЭСЛЭЛ
Problems/Reason
JUSTIFICATION
Юу хийх?
АРГА ХЭМЖЭЭ
What to do?
ACTIVITIES
Зорилго
ҮР ДҮН
Goal
RESULTS
Хэн хийх?
ЭЗЭН
Who should do?
RESPONSIBLE
PERSON
Хэзээ хийх?
ХУГАЦАА
When to do?
TIMING
Зардал
ТӨСӨВ
Expenses
BUDGET

8. Your fresh ideas
• We cannot and do not replace politicians
but
• It might be a window to get decisions
made
• 100 days will pass anyways, but we can
do at least 1 thing to make an impact