Duluth Metals Ltd DULMF

RE: Mongolian Underground Mine

[marpincan]

Just a few facts on the Mongolian deposit - the risks with the Mongolian deposit known as Olyu Tolgoi being developed by TRQ which is 51% controlled by Rio Tinto are political in nature and related to the corruption in Mongolia and greed of the government in Mongolia. The current government worse in this respect than passed governments. Rio Tinto and Ivanhoe mines spent over 2 years negotiating and agreement with the GOM which gives Mongolia 71% of the money coming out of the mine. The GOM is still not happy and Tinto has stated that they will not start production till they have a resolution with the GOM. Tinto and TRQ ave spent over 6 billion building this mine and production is scheduled to begin in June  of this year. Although I expect that Rio Tinto will eventually be successful, there is a lot of risk in investing in this Mongolian deposit. I have owned shares since 2008 and so follow the situation closely. The ore body is richer and larger than DM's (copper gold with precious metals credits) but this has to be weighed against the sizable political risk.

   With DM's deposit located in Minnesota, you are not dealing with much political risk other than some environmental risk due to the greens and the Obama administration. You are also much earlier in the game as DM is a number of years from starting to build a mine. The deposit is also a very large world class deposit with good grades and barring a total collapse in metal prices will be developed.

Bottom line is that they are both huge world class deposits but you have a lot more political risk in Mongolia.