ASPIRE MINING'S OVOOT ON THE EXPRESS LINE WITH RAIL FUNDING EOI'S IN MONGOLIA

Ulaanbaatar /MONTSAME/ Aspire Mining’s (ASX: AKM) Ovoot Coking Coal Project could take a major step forward after it received several non-binding Expressions of Interest totalling US$1.3 billion for financing of the key Northern Rail Line in Mongolia, reported Friday on proactiveinvestors.com website. Binding rail funding and grant of a rail concession would unlock the riches of the Ovoot project, which has coal quality comparable with the best in the world. The US$1.3 billion in EOIs meets the capital expenditure estimate highlighted in the Rail Pre-Feasibility Study completed by SMEC International in April 2013. This is interesting given that a follow-up report in September 2013 had identified potential capital expenditure savings by taking a more direct route further to the south for the proposed rail line. The EOIs were sourced by Aspire from a number of financial institutions and the Noble Group as part of its ongoing discussions with the Government of Mongolia in relation to the grant of a rail concession. While the EOIs are non-binding, they indicate a broad interest to fund the Northern Rail Line and the company intends to commence definitive financing negotiations immediately upon the grant of a rail concession. Northern Rail Line The proposed multi-use Northern Rail Line is a key requirement for commercialising the Ovoot project in the Khuvsgul province in northern Mongolia. It is the focus of Northern Railways LLC, Aspire’s Mongolian infrastructure subsidiary which seeks to extend the Trans-Mongolian Railway from its current terminus at Erdenet through to Ovoot. The Northern Rail Line will be multiuse, providing an alternative, cheaper and environmentally friendly transport solution for agricultural products, general freight, bulk materials and passengers. Besides serving the Ovoot project, the Northern Rail Line will assist the sustainable long term growth of local industry and the economy through the creation of jobs, resource and small-medium business development, and export opportunities. Aspire had in April 2013 received a Rail Pre-Feasibility Study Revision from SMEC International confirming that it could save US$200 million on the Northern Rail Line to US$1.3 billion by taking a more direct route further to the south. It also highlighted the potential for further capital expenditure cost savings by de-rating haulage capacity from 22 million tonnes per annum to an initial starting capacity of between 10Mtpa and 12Mtpa. A follow-up report in September confirmed the viability of the project from an engineering and railway operational aspect. This also noted that some minor changes to the alignment would eliminate major river crossings and the associated bridges while taking the more direct southern route would allow Aspire to take advantage of widespread sources of ballast. Ovoot Coking Coal Project Ovoot has a Probable Ore Reserve of 255 million tonnes Run of Mine. It has Open Pit Resources of 253.1 million tonnes and underground resources of 27.9Mt. Aspire has significantly progressed the project in recent months through: - Signing port access agreements to penetrate the lucrative European markets and expanding its access to North Asian markets; - Identifying a low capital development for the project by using contractors wherever possible for a 5 million tonne per annum initial project, reducing initial capital costs to US$144 million from the original US$459 million for a 6Mtpa Stage 1 plan; - Financing support with the receipt of non-binding letters of intent from Deutsche Bank and BHF Bank to provide US$40 million and US$50 million respectively in Export Credit Agency backed loans; - A US$20 million working capital facility made available to the company from Noble Group; - Interest from potential customers to acquire Ovoot Project coking coal; and - Studies confirming Ovoot Coking Coal has superior blend carrying capacity and can be blended with coal from the Government owned Tavan Tolgoi mine in southern Mongolia to upgrade the latter’s coking coal properties. Ovoot continues to draw interest - late last year, another two non-binding Memoranda of Understanding were signed with large Russian buyers for up to 1.3 million tonnes per annum of coking coal. This brought the total coking coal under supply agreements to 6.9Mtpa, well above the 5Mtpa capacity under its low capital development option. Interest followed recent negotiations between Mongolia, Russia and China to fund and construct upgrades to road, rail and pipeline infrastructure within Mongolia, creating a significant transit corridor between Russia and China. Proposed changes include upgrading capacity along the Trans-Mongolian Railway to 100Mtpa. Analysis There is strong momentum building for Aspire Mining’s Ovoot Coking Coal Project with the US$1.3 billion in non-binding Expressions of Interest representing a massive step towards progressing the Northern Rail Line that would link the project with the existing Trans-Mongolian Railway. Ovoot has coal that ranks amongst the best in the world. This includes a superior blend carrying capacity that can add significant value to Tavan Tolgoi’s low and non-coking coals. Coupled with the increased recognition from this week’s recognition as a key supplier of raw materials to the Mongolian Government owned Sainshand Park and confirmation that power is easily available to the project under its non-binding Letter of Intent with the coal-fired Zavkhan Power Plant, Aspire is clearly running at full steam for Ovoot. Binding rail funding and grant of a rail concession would unlock the economic riches and returns of Ovoot and send the Aspire Mining valuation sky-bound. The EOI's are value accretive as they are with a number of financial institutions and the Noble Group. With the new momentum is opportunity and we see potential share price upside to $0.07 - $0.075.