BERAL, INC.  
Andrew G. Racz  
Director of Research  
300 East 54 Street, Suite 26C  
New York, New York 10022  
Telephone: (212) 319-6949  
Fax: (212) 753-1944  

 E-mail: mlikar@aol.com   

January 8, 2008

The advanced marketing technologies of the international stock exchanges, the modern ideas of financing derivates of the snow covered assets of mines is now a reality. It converts the future gold production into recognized financial instruments and cash.

The Mongolian government, the Mongolian Parliament are the willing victims of an unnecessary dilemma.

Mongolia is a very rich country. Mongolia’s future is bright. The political campaign that is being waged today designed for the merits of the current and future generation of Mongolia can be resolved by ordinary mathematics by application of advanced investment techniques. These solutions are the proper application of the vast progress the international stock markets have made and the modern financing techniques which are available to every country in the universe. A rich country like Mongolia could be the Number One Customer.

Let us now concentrate on the beginning!

This is how the arithmetic and market procedure will work. Mongolia would receive a nett of 500,000,000 shares. If the value of each share of Mongolia’s is $10 a share, 650 million shares are valued at $6.5 billion.

Simultaneously, the Ivanhoe Group will receive the same shares.

The million shares which were sold at $10 would be listed on one of the recognized stock markets.

If after two years the shares would receive $10 value gold, which means that gold is at $1,000, the shares would be at parity. However, gold can fluctuate and the original shares while exchanged for 1,000 ounces of gold would then be freely tradable and become optioned or script on the remaining shares of the entire company.

This warrant would be extremely speculative and volatile. The owners of those shares in two, three, or four years’ time may receive enormous return, a very big return, on their values.

After two years, the 100,000,000 (x) shares that are sold for $10 can be exchanged/redeemed for 1 ounce of gold in value.

If the price of gold is over $1,000, investors will receive a “gold script”; a new share exercisable at $1,000 in gold.

The script is listed, tradable. Like the British War Loan – it is nonredeemable.

Let us now look at the benefits to Mongolia of this structure.

The stock (MGG) would be then listed as the world’s Number One gold company. Very big reserves, easy production, very strong backing, and if all the political doubts are eliminated, the stock would get the highest evaluation of any gold company in the world.

Let us carry this argument further. Let us go into 2010 or 2011 when full production is underway. The gold that is produces and sold goes into Mongolia Gold. If every year a million ounces of gold is sold for a billion dollars, the billion dollars can fully or partially dividend out to the stockholders. Mongolia is the largest stockholder. In other words, out of a billion dollar new production, the company can take let’s say $300 million out of dividend annually.

Let us now compare two charts, the old chart – the 20th century chart – and the 21st century chart. The year, let’s say, is 2015 and we assume that the production is at the million ounces a year, the price of gold is $1,500, and that Mongolia at least would take 30% of its yearly income out as dividend.

Let us carry the argument even further. It is possible that in the year 2015 the price of gold will be $2,000. IT is possible that if 21 million ounces is discovered, it will be 40 million ounces discovered. Let us now look at Mongolia’s wealth after its original $5 billion valuation stock becomes $15 billion. The picture is realistic and practical and certainly beneficial 15 years later, not only the current generation but the future generation.

The argument can now go even further. With the cash reserves and production of Mongolia Gold in trusted hands led by Rio Tinto, Inc. it is not a passive ownership but an active ownership. The operating management would be able to build an international mining company, an international gold company, an international conglomerate, and become one of the world’s most powerful companies, such as Anglo American was for almost a century, such as Rio Tinto and BHP is in 2008. It is a company itself which can alone supply Mongolia with the new monetary reserves to build the future for the future generation.

The argument is not over. Mongolia has copper and it has 6.4 billion ounces of copper. The same argument as we made with Mongolia Gold can be applied to Mongolia Copper.

I don’t see that I am considered an overly optimistic visionary if I point out that Mongolia not only has gold and copper, it has uranium, it has molybdenum. The emergence of Mongolia Gold would be a very positive factor for the Mongolian stock market, and a whole series of companies will be formed, with joint ownership or partial ownership, which would make the Mongolian stock market lively and the country even richer.

Let me quote the famous words of John F. Kennedy: Let us begin.

My message to my Mongolian friends and the message to all parties concerned is that there is a time when instead of protected negotiations and bickering, we apply our intelligent common sense and construct a picture which is fruitful for people who live today on this planet and can be extremely fruitful for the future generation. Let us go back to history. Negotiate or settle? Was Munich necessary? Actually, the biggest danger of a 21st Century Versailles – an armistice not a peace treaty. A Mongolian version of Versailles can obliterate the Mongolian miracle.

The two go together. To create a picture which sacrifices the current generation for the future never existed in history. We can do both but we have to utilize the tools of the 21st century.

Obviously, the 21st century is different. Today 7 billion people work. Today gold is valuable and is going to be much more valuable, because gold is one of the key monetary reserves and currency with which we finance international trade.

All people participate in this long discussion. I have to analyze the techniques, the methods of the 21st century. The 21st century says that we rely on the people’s attitude toward work. We rely on the people’s attitude toward decency, but at the same time we use the marketing tools and the mathematics of the 21st century so that our century will be called the Century of Progress, instead of unfortunately my generation has learned, a Century of Warfare.

Let me quote President Kennedy again:

Andrew Racz