Mongolian Mining acquisition of 50% of Erdene Mongol

Davis Polk is advising Mongolian Mining Corporation (MMC) on its investment in Erdene Mongol LLC, in the form of convertible notes and shares representing 50% of Erdene Mongol’s share capital, for an aggregate consideration of $40 million. In connection with the investment, MMC and Erdene Mongol’s parent company, Erdene Resource Development Corp. (ERD), have entered into a strategic alliance agreement and Erdene Mongol has agreed to pay 5% of its net smelter returns on the sale of products exceeding its first 400,000 ounces of gold to ERD following the final closing of the investment.

MMC is listed on the Hong Kong Stock Exchange and is the largest producer and exporter of high-quality washed hard coking coal in Mongolia.

Erdene Mongol is a Mongolian limited liability company and is principally engaged in the exploration of gold and other precious metals.

ERD is a Canada-based resource company listed on the Toronto Stock Exchange and the Mongolian Stock Exchange and is focused on the acquisition, exploration and development of precious and base metals in Mongolia.

The Davis Polk corporate team includes partner Gerhard Radtke, counsel Sam Kelso and Vanessa Chan and registered foreign lawyers Rebecca Yang and Stephanie Mak. All members of the Davis Polk team are based in the Hong Kong office.