Andrew Racz
Director of Research
300 East 54 Street, Suite 26C
New York, NY 10022
Phone: (212) 319-6949
Fax: (212) 753-1944

The Mongolian Wakeup Call

November 16, 2007

"The Mongolian Wakeup Call"

For Mongolian more than perhaps to any other emerging nation, this is the 21st century.

The facts are as follows. Mongolia, which is the sixth largest country in the world and has a gross national product of less than $2 billion and a small population of 2 million people. This little country which can be historically described “a far away county about which we know nothing” can plunge into international interest and international significance.

The time has granted Mongolians a place in the world history. Mongolia is becoming an important country in what is called the Commodity Boom. It has been stated that in the last six years, the commodity index of the world has gone up fivefold and some experts project that this upward trend will continue - commodities of cooper, iron ore, nickel, and molybdenum are raising.

What does the world know about Mongolia? For centuries, it was occupied either by the Russians or the Chinese. The movies show that in 1941, Mongolian troops on horseback liberated Moscow. It was a cold winter. Historically, over a thousand years ago, both the Finnish and the Hungarians left Mongolia.

Mongolia has a sister nation in Europe, namely my country, Hungary. The friendship has preserved a historical thousand years and today, I am told that in Budapest in the best university called Eötvös Loránt has a faculty, the Inner Asia with Mongolia being the most important part.

This historical tie has not only survived because of heritage. Actually, in the last century, both Mongolia and Hungary badly suffered from foreign occupation. Today, after 1990, Mongolia and Hungary still do business with Russia, but we should never forget those foreign forces that shaped the fate and our daily life not so long ago. This is why our unique relationship is a valuable, historical tie between a faraway country and a former satellite of Eastern Europe, Hungary. This historical relationship may become handy in the political and commercial world in the current decade.

Let’s be blunt. Mongolia was oppressed by the Russians, and we were oppressed by the Russians. Russia has never been a friend of Mongolia, and Russia, while a business partner today, has never been a true equal friend of Hungary. In the 21st century, you will be doing business with Russia; we will be doing business with Russia. But let us never forget that great powers, great forces will not be generous either to Mongolia or to Hungary.

There is a saying, which is I presume international, that mathematicians only talk to mathematicians; that Prime Ministers only talk to Prime Ministers, and chess masters only talk to chess masters. Mongolia and Hungary speak the same political language.

An unexpected development in Mongolia is now brings your country to the limelight. The discovery of the largest copper and gold mine in the history of mankind is in Mongolia. In order to develop and bring to production this mine, negations have been conducted between Mongolia, the cabinet, the parliament, and the Mongolian National Mining Association with basically two western companies - Rio Tinto and Ivanhoe. Rio Tinto is the world’s second largest mining company, owns ten percent of Ivanhoe, and has option to buy another thirty percent.

The negotiations have gone for a long time. Meanwhile, world events are putting Mongolia into a historic and complicated position.

At the moment, global investors are carefully watching what happens in the so-called Oyu Tolgoi investment agreement. Their official position is that after five years of negotiation, the Mongolian cabinet approved the agreement, but it is now stored in parliament.

Let me now explain what I see behind the facts. The Rio Tinto/Ivanhoe consortium has so far spent close to a $1 billion on the project. It is difficult to keep them going without an agreement about production as the have to cover all the expenditures from their own resources. No bank would lend against a hypothetical program.

There is a question mark among the international investors as far as the future of Oyu Tolgoi and in fact the future for other companies in the mining industry in Mongolia.

In the 21st century, the major steps in mining and in the history of many countries is decided by money. The gross national product of Mongolia is $2 billion. Even with the potential resources of Oyu Tolgoi which is 71 billion ounce of copper and 31.3 million ounce of gold represent a total value between $60 billion to $100 billion. And the projected production of 1.6 million ounce of copper at $4.00 would represent $6 billion. And the production of 900,000 ounce of gold a year at $1,000 per ounce price would represent a billion.

In the year 2007, due to major mining discovery, I know Mongolia is bursting on the world scene. It can provide four to five billion dollars worth of copper, gold, uranium just as a time when there is a commodity shortage, where prices of commodities could increase manifold, and gold can play an important role as a new currency in our monetary unstable world.

In five years, people will say when it comes to Mongolia - the important Mongolia.
Actually, $5 billion GNP for a population of 2 million is $25,000 per annum. Higher than Russia or China. Potential capital surplus of $2 billion per annum is higher than the USA. Money to develop the infrastructure, there is a place for Hilton, Wal-Mart, and Apple Computer.

In the face of a promising future, there is a stumbling block of the so-called investment agreement negotiated and approved by the government of Prime Mister Enkhbold and being favorably reviewed by the incoming Prime Minister of Sanj Bayar. The agreement is the result of five years’ intense negotiation which would provide the capital and the expertise and the marketing of the Mongolian copper and gold. It is also called the Oyu Tolgoi mining agreement.

As Mongolia steps into the 21st century, it should enter the century that is government by commercial contracts. In a turbulent world which has Iraq, Iran, Pakistan, the stability is not brought by armament, but contract. Mongolian prosperity, independence, and future, rests in the written contracts signed by recognized international companies. Unfortunately, at least for the last century, neither Mongolia nor many small countries had the opportunity signed on the dotted line.

For the small nation of Mongolia, $5 billion is a very big sum of money. It has now occupied the minds of politicians how to divide this money up, what agreement to make, and unfortunately, we reached the worst possible scenario to have no agreement.

Meanwhile, in contrast to a $5 billion production and the mining value of let’s say 75 billion value, the numbers are meaningful, but not so meaningful.

Rather than saying the word not so meaningful, there are other big numbers who rule this world. There are investment companies in Australia that manage $5,000 billion. In the United States Fidelity manages $1.5 trillion. The surplus reserves of China consists of $1.25 trillion which China wants to invest in other avenues other than U.S. Treasury Bills. The Russians probably have $250 billion surplus reserves; Dubai and Qatar, over $500 billion total surplus reserves.

The world is so big that when the largest brokerage company in the world, Meryll Lynch, loses $8.4 billion, the security analysts point out that it is “manageable”. In other words, the largest loss in MER’s history is bigger than the one year potential total production of Mongolian mining once it is full swing let’s say three or four years from now.

These huge forces suddenly envelope Mongolia. The second largest mining company Rio Tinto is being offered something like $165 billion by the largest mining in the world, BHP, in Australia. The total value of the companies will be $360 billion, substantially bigger than the ownership of the Mongolian Oyu Tolgoi.

The Mongolian cabinet and the parliament, the small number of people just over 2 million in Mongolia, with your current gross national product which is less than $2 billion. Meanwhile, one company alone may control $360 billion market value, and indirectly would own all the productions rights of your copper and gold venture being in Mongolia.

Furthermore, we have learned the last few days that the China Development Bank has under one percent stake in Rio Tinto. That number by now could have increased to two percent. It can go to up to ten percent. Ten percent of $165 billion is $16.5 billion in fact probably the largest stockholder and probably the largest voice in developing Mongolian reserves.

I am not suggesting there is anything sinister. I am only trying to point out when one fifth of the world’s copper productions between BHP and perhaps Mongolia is at stake, do you have a free voice?

Actually, you have. Actually, there is a way to protect yourself.

The western world, in fact technically the whole world since 1991 when Mongolia got liberated, is based on commercial contracts. The contracts are made by sovereign companies, sovereign nations, and it’s very difficult to break.

I am pointing out the following: there is a tremendous monetary turmoil in the world which engulfs mining. The current takeover effort of BHP and Rio Tinto is already encouraging Chinese companies to go abroad and buy mining assets. As a hypothetical example, the bid for Rio is $143 billion. A combination of Chinese mining companies can certainly raise $200 billion. At that time, Rio, that owns 40 percent of the Oyu Tolgoi mining complex would be directed by the Chinese.

Today Mongolian government is negotiating with the Ivanhoe-Rio Tinto corporate partnership.

If Rio is bough by the Chinese, Mongolia would be negotiating with the Chinese.

I don’t want to insinuate which is better for Mongolia.

As far as my personal preference is - stay commercial. Sign a commercial agreement which obviously carries the spirit of political independence.

I was told that yesterday the American Ambassador, The Right Honorable Ravdan Bold, to Mongolia in Washington left for Mongolia to speed up the confirmation of the new Prime Minister and expedite one of the commodity world’s most important commercial contracts in the world, which is also the most important contract between Mongolia and Western Corporation.

If so, then in Mongolian’s modern history, it is

Chapter One


Information contained herein is based on data obtained from recognized statistical services, issuers reports or communications or other sources believed to be reliable. However, such information has not been verified by us and we do not make any representation to its accuracy or completeness. Any statement non-factual in nature constitutes only current opinions which are subject to change. BERAL INC. or their officers, directors, analysts or employees may have positions in the securities or commodities referred to herein, and may as principal or agent buy and sell such securities or commodities. An employee, analyst, officer or a director of BERAL INC. may serve as a director for companies mentioned in this report. Neither the information nor any comment expressed shall constitute an offer to sell or a solicitation of an offer to buy any securities or commodities mentioned herein. There may be instances when fundamental, technical and competitive opinions may not be in concert. This firm may from time to time perform investment banking or other services for or which investment banking or other businesses from any company mentioned in this report.



Bunker Hunt Article
Posted October 27, 2014

Lamb Realty.
Posted October 15, 2014

Chiquita Brands International
Posted August 20, 2014

Emerson Radio
Posted August 24, 2014

Evercore Partners Inc.
Posted August 5, 2014

Moelis & Co.
Posted July 22, 2014

Torchlight Energy Resources, Inc.
Posted May 21, 2014

Andrew Racz
Posted May 19, 2014

Royal Nickel Corporation
Posted May 02, 2014

Recorded Interview Robert Schermer, CEO
Posted March 15, 2014

Cowen Group, Inc.
Posted March 5, 2014

Pacific Booker Minerals Inc.
Posted February 4, 2014

Sandstorm Gold Ltd
Posted January 24, 2014

Global X Gold Explorer ETF
Posted January 16, 2014

Bring Back Mr. Giuliani
Posted December 24, 2013

Gold Reserve Inc.
Posted October 15, 2013

Premier Diagnostics Health Services Inc.
Posted September 25, 2013

Almaden Minerals
Posted September 3, 2013

Electric Cars In New York City
Posted August 27, 2013

The World Without Gold
Posted July 2, 2013

Remembering Mr. Churchill
Posted June 10, 2013

Financial Transactions in the Digital Age
Posted May 15, 2013

Senator Chester Crandell ( R ) Arizona
Posted May 7, 2013

Explor Resources Exs V
Posted April 14, 2013

The Gathering Storm
Posted April 9, 2013

Vietnam - West of Hong Kong
Posted March 11, 2013

Vietnam – In Peace!
Posted February 26, 2013

Wisdomtree Investments Inc
Posted January 28, 2013

Explor Resources Inc.
Posted November 28, 2012

Oremex Silver Inc.
Posted September 18, 2012

Alphamin Resources Corp.
Posted July 26, 2012

Harvest Natural Resources
Posted July 20, 2012

The Man Who Was Created by Gold
Posted July 06, 2012

Recorded Interview With Zach Erdem, President
Posted June 20, 2012

Nortec Minerals Corp.
Posted May 01, 2012

The Fundamentals of Chesapeake Gold Corporation
Posted April 16, 2012

Jourdan Resources Inc. (JOR.V)
Posted March 20, 2012

Posted February 27, 2012

Gold Index Bonds - To Avoid the Money Traps
Posted February 2, 2012

Monarch Casino & Resort, Inc.
Posted February 01, 2012

QMC Quantum Minerals
Posted january 19, 2012

African Metals Corp.
Posted December 21, 2011

The Crisis That Almost Wasn’t
Posted December 7, 2011

Posted November 18, 2011

The Crisis That Almost Wasn't
Posted November 15, 2011

Ocean Power Technologies, Inc
Posted October 19, 2011

The Mongolian Economic Miracle
Posted October 12, 2011

H. Hunt
The Son of Bunker Hunt
Posted August 24,2011

Sandstorm Gold
Posted August 15, 2011

"Silver At $200
Posted July 29, 2011

"First Majestic Silver Corp
 Posted July 26, 2011

"Interview with Brian Kirwin,
American Bonanza Gold Corp"

Posted July 21, 2011

"Interview with Ian Foreman
Yale Resources Ltd."

Posted June 16,2011

"Interview with Brandon Mckee
Callinan Mines
By Andrew Racz "

Posted June 1, 2011

"Andrew Thompson Interview Soltoro Ltd."
Posted May 15, 2011

"Great Panther Silver Limited"
Posted March 29, 2011

"The 21st Century's Marshall Plan"
Posted March 17, 2011

"Interview With
Houston Hunt"

Posted February 23, 2011

"Esperanza Resources Corp."
Posted February 23, 2011 

"Douglas Lake Minerals"
Posted January 11, 2011 

"Do not bet against Casablanca"
Posted December 10, 2010 

Posted December 8, 2010 

"Full Circle"
Posted November 19, 2010 

Posted November 8, 2010 

SilverCrest Mines, Inc.
Posted October 26, 2010

Cache Exploration, Inc.
Posted October 22, 2010 

Silvore Fox Minerals Corp.
Posted September 29, 2010 

Almaden Minerals, Ltd.
Posted August 16, 2010 

"The Path Of A Hungarian Immigrant"
Posted August 12, 2010 

"Interview With
Mark Hazout -
Silver Dragon Resources

Posted June 24, 2010

"Who Owns Whom At The Final Tally"
Posted June 15, 2010 

"The World Needs
Bunker Hunt.

Posted May 24, 2010 

"Arafura Resources "
Posted April 15, 2010 

"MF Holdings LTD"
Posted April 7, 2010 

"Quest Uranium Corporation"
Posted April 5, 2010 

"Lynas Corporation, LTD"
Posted March 19, 2010 

"Rare Element Resources LTD"
Posted February 9, 2010 

"Mexco Energy Corporation"
Posted January 4, 2010 

"Claude Resources"
Posted December 16, 2009

"The Silver Spirit"
Posted November 25, 2009 

"... from Casablanca to Monte Carlo."
Posted November 20, 2009 

"Sutter Gold Mining, Inc."
Posted November 16, 2009 

"Whose Friends Are They Anyway?"
Posted November 4, 2009

"U.S. Energy Corporation"
Posted October 28, 2009 

"Harris & Harris"
Posted October 13, 2009

"They Made A Difference"
Posted September 30, 2009 

"Bridge Bancorp, Inc"
Posted September 22, 2009 

"Entree Gold - September 2009"
Posted September 3, 2009 

"Who Lost Mongolia"
Posted August 16, 2009 

"Mongolian Prime Minister Sanj Bayar -
A politician of the 21st century"

Posted July 16, 2009 

"Romios Gold"
Posted July 7, 2009 

"The Grand Alliance"
Posted July 6, 2009 

"Sandstorm Resources, Inc."
Posted June 22, 2009 

"Ireland, Inc."
Posted June 16, 2009 

"The Brave New World! - Gold at $1000"
Posted June 5, 2009 

"Claude Resources, Inc."
Posted May 28, 2009 

"Bullion Management Group"
Posted May 11, 2009

"Golden Hope Mines, Inc. - Retraction"
Posted May 4, 2009 

"Silvercrest Mines, Inc."
Posted April 1, 2009 

"Silver Dragon Resources"
Posted February 27, 2009

"In Gold We Trust"
Posted February 26, 2009

"Entree Gold: An Unusual Asset Accumulation"
Posted February 20, 2009 

"The Ultimate Colorful Fate of Edmond Safra, Bernie Madoff, and Governor Bill Richardson"
Posted January 12, 2009

"Silvermex Resources, LTD"
Posted December 13, 2008 

"Prime Minister of Mongolia"
Posted December 11, 2008 

"US Gold Corporation"
Posted December 1, 2008 

"Rubicon Minerals"
Posted November 5, 2008 

"Gold Coins & The Money Game"
Posted October 29, 2008 

"Gold and the Chinese Millennium"
Posted October 20, 2008

"JNR Resources, Inc."
Posted September 30, 2008

"Three Immigrants In Front Of The Court"
Posted September 24, 2008 

Walter J. Hickel Interview"

Posted September 11, 2008

"The Alaskan Queen"
Posted September 9, 2008 

"Evercore Partners, Inc."
Posted September 3, 2008 

"Stalin In The
White House"

Posted September 2, 2008 

"Cal-Maine Foods Inc."
Posted August 4, 2008 

"The Mongolian Revolution"
Posted July 10, 2008 

"Mongolian Newsletter, First Edition"
Posted July 2, 2008 

"Goldsource Mines, Inc."
Posted July 1, 2008

"The Douglas Lake Story In The Age Of Fear"
Posted June 25, 2008 

"Mongolia: The 10th Richest Country in the World"
Posted June 10, 2008 

"North American Gem, Inc."
Posted June 5, 2008 

"The Emergence of Tanzania"
Posted June 4, 2008

"Tanzania - An Up & Coming Mineral & Agricultural Producer In Africa"
Posted June 2, 2008

"Western Potash Corp.

Posted May 12, 2008 

"Judy Garland &
The Subprime Crisis"

Posted April 29, 2008 

"Altek Power Corp."
Posted April 27, 2008 

"Letter to Prime Minister of Mongolia"
Posted April 24, 2008 

"The Mongolian Manifesto"
Posted April 4, 2008 

"Prime Minister Sanj Bayar of Mongolia Receives The Nobel Peace Prize"
Posted March 17, 2008 

"Olympus Pacific Minerals, Inc."
Posted February 28, 2008 

"Tanzania Gold - Douglas Lake Minerals - Harp Sangha"
Posted February 21, 2008

"Warren Buffett Receives A Call From Franklin Roosevelt"
Posted February 19, 2008

"Gold At 2000!!"
Posted February 14, 2008

"Entrée Gold, Inc"
Posted February 11, 2008

"The Unexpected
Mongolian Dilemma"

Posted February 2, 2008 

"Mongolian Gold"
Posted January 8, 2008

"Sir, Do Not Abdicate"
Posted December 27, 2007

"No More Munich -
The Mongolian Version of 1938"

Posted December 11, 2007

"Watergate Saved Nixon's Life"
Posted November 28, 2007

"The Mongolian Wakeup Call"
Posted November 16, 2007 

"Sanj Bayar -
The Prime Minister of Mongolia"

Posted November 15, 2007 

"Stalin & Chavez"
Posted November 9, 2007 

"Tagish Lake Gold Corp."
Posted November 1, 2007 

"Gold Indexed Bonds"
Posted October 11, 2007

"Jasper Mining Corporation"
Posted September 27, 2007

"Ghengis Kahn Returns"
Posted September 27, 2007

"Interview with Professor William Pfaffenberger - Torch River Resources"
Posted September 22, 2007 

"Interview with
Jim Davis - President of Leeward Capital Corporation"

Posted September 4, 2007 

"Interview with
David Hjerpe - Newmac Resources, Inc."

Posted August 27, 2007 

"The Age of Special "Corporate" Relationships"
Posted August 23, 2007

"Entrée Gold Inc."
Follow Up Report #1

Posted July 24, 2007

"Aldershot Resources Ltd."
Posted July 16, 2007 

"Portal Resources"
Posted June 12, 2007 

"Ghengis Kahn Was Hungarian"
Posted May 31, 2007

"Bayswater Uranium Corp."
Posted May 30, 2007 

"Brilliant Mining Corp."
Posted May 22, 2007

"Golden Valley Mines, Ltd"
Posted April 21, 2007

"Warren Buffett - Franklin Roosevelt"
Posted March 15, 2007

"Rubicon Minerals Corp."
Posted March 1, 2007

"Robert Friedland -
The Man of The Year"

Posted February 21, 2007

"Lexam Exploration, Inc."
Posted February 11, 2007

"My Father Died In Auschwitz"
Posted January 19, 2007

"WisdomTree Investments, Inc."
Posted December 26, 2006

"Entrée Gold Inc."
Posted December 13, 2006

"Aero Mechanical Services, Ltd"
Posted November 17, 2006

"This Year I"m Voting For Dick Nixon"
Posted November 7, 2006

"Global Options
Group, Inc."

Posted November 1, 2006

"The Arrival of the
Nickel Billionaires"

Posted October 18, 2006

"The Kennedy-Nixon debate revisited"
Posted October 4, 2006

"Brilliant Mining Corp."
Posted September 17, 2006

"A Matter of Reasonable Doubt"
Ken Lay - Enron

Posted August 30, 2006

"Silver Wheaton - SLW"
Posted August 28, 2006 

"Silver In The
Twenty-First Century"

Posted August 16, 2006

"The Age of Mediocrity"
Posted July 19, 2006

"Let There Be Sunshine"
Kirk Kerkorian

Posted July 12, 2006

"Oil & Gas
Energy Crisis Solution"

Posted July 3, 2006

"I Am An Immigrant!"
Posted June 7, 2006

"Northern Star
Mining Corp."

Posted May 19, 2006 

"Gateway Gold:
It"s A Gold Story"

Posted May 15, 2006

"Ken Lay's Legacy"
Posted May 8, 2006

"The Principal Guest Was Missing"
Posted April 25, 2006

"J.P. Morgan Offers Advice To Ken Lay"
Posted April 11, 2006

"Pocketful Of

Posted April 8, 2006 

"Midway Gold
Posted March 23, 2006 

"Harvest Gold"
Posted March 2, 2006 
"Sparton Resources"
Posted March 1, 2006 

"Interview with
Robert McEwen-
U.S. Gold Corporation
Posted February 22, 2006 

"A Tribute to
Rudy Giuliani
Posted February 15, 2006
"Your Money Is Not Yours"
-Enron & Martin Siegel, Esq.

Posted February 9, 2006

"Other People"s Money -Enron & Martin Siegel, Esq."
Posted January 28, 2006

"Northern Star Mining"
Posted January 16, 2006 
"Sonesta International Hotels Corporation"
Posted December 29, 2005 

"The Currency of Mass Destruction"
Posted December 5, 2005
"Bunker Hunt-Silver-China"
Posted November 28, 2005

"50 Relatives Worse Than Yours"
Posted November 14, 2005

"Then And Now"
Posted November 9, 2005 

"The Business of Hungary is Business!"
Posted October 31, 2005

"Mr. Prime Minister"
Posted October 13, 2005
"U.S. Gold Corp."
Posted September 29, 2005

Posted September 23, 2005

"Mr Clarke -
Call In The Boys"

Posted September 12, 2005
"A Letter To
President Bush"

Posted September 8, 2005

"Mr. Smith Goes To Hungary"
Posted September 1, 2005
"Orko Gold"
Posted August 18, 2005

 "Near Hit"
Posted August 16, 2005

"An African Queen"
Posted August 11, 2005

"1848 and Beyond"
Posted August 4, 2005



Andrew Racz. 300 East 54 Street, Suite 26C, New York, NY 10022
Phone: (212) 319-6949 Fax: (212) 753-1944. E-mail:

Copyright © 2011 Andrew Racz. All Rights Reserved.