| Baruunbaayan Uranium Project Mongolia |
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Mongolian Exploration and Expropriation Update Solomon conducted an extensive surface exploration and diamond drilling program during 2007 and 2008 in the Cretaceous Ooshin Govi Basin of south-central Mongolia to follow up Soviet-era airborne spectrometer anomalies in a favourable geological environment for rollfront uranium mineralization. In total 31 diamond drill holes totalling 6457.95 meters were completed on this project at a cost of approximately $US 2,500,000. The Solomon tenures, known as the Baruunbayan Property, are located approximately 650 kilometers south of Ulaanbaatar and 135 kilometers north of the Chinese border. Re-registration of Uranium Exploration Licences:
On July 16th, 2009, the Mongolian Parliament passed new legislation to regulate the exploration, exploitation and development of uranium and other radioactive materials. The new law came into effect on August 15th, 2009. The Nuclear Energy Law gave the Mongolian government the right to take ownership without payment of not less than 51% of the shares of a project or joint venture if the uranium mineralization was discovered by state funded exploration, and not less than 34% if state funding was not used to find the mineralization The law gives the State Administrative Authority the responsibility to implement and enforce state policy on the exploration and development of deposits of radioactive minerals and nuclear energy, including the power to grant, suspend or revoke any licences granted pursuant to the Nuclear Energy Law. The Nuclear Energy Law mandates that licences be obtained to conduct exploration for and production of radioactive minerals. To obtain an exploration licence an applicant must conduct its activities in a transparent manner, have the financial resources to support exploration and reclamation, conduct responsible programs, and have demonstrated mining experience. Exploration licences will only be issued to applicants that meet the conditions set out in the Nuclear Energy Law, and agree to accept the state ownership of the required percentage of shares. The Mongolian Parliament also passed enabling legislation regarding the re-registration of existing exploration and mining licences. Existing licence holders must apply to the State Administrative Authority by Nov. 15th, 2009 and comply with all of the conditions and requirements set out in the Nuclear Energy Law, including acceptance of the state's 51% 34% share participation in the licence holder. Any licences that are not reregistered as required by the November 15th deadline will automatically be suspended. Solomon applied for re-registration for its most prospective tenure and on November 12th, 2009 the re-registration of Exploration Licence 12745X under the Nuclear Energy Law was authorized and the licence granted. A number of companies were not granted re-registration of their exploration licences, having failed to meet the Mongolian requirements for exploration and development expertise. This acknowledgement that Solomon meets the new criteria further strengthens our prospects for a speedy resolution of our expropriation action. Expropriation Lawsuit:
The appeal period has now expired from the Mongolian Supreme Court decision which found that the Mongolian Cadastral Office had improperly dealt with various Solomon licence applications (see Solomon News Release dated December 21st, 2009) and that there has been no appeal of that decision filed by either the Cadastral Office or proponent Cogegobi LLC. This landmark decision of the Mongolian Supreme Court was an important step in our attempt to have the expropriation of our licences resolved as well as compelling the Cadastral Office to issue licences that have been gazetted and for which Solomon has already paid. Our Mongolian lawyers continue working to have the disputed licences transferred to Solomon but there are no immediate prospects of resolution. Solomon filed a Statement of Claim in the Administrative Court of Mongolia on January 22nd, 2009 seeking injunctive relief from:
On October 10th, 2009 Judge S. Munkhjargal ruled that the Mongolian Cadastral office clearly violated the rights of Solomon in not dealing with the various licence applications according to law. Judge Munkhjargal ruled that the various orders issued by the Cadastral Office and MRPAM attempting to cancel Solomon’s licence applications and restore those of Cogegobi were illegal. Munkhjargal ordered MRPAM (now called the Mineral Resource Authority of Mongolia) and the Cadastral Office to settle the applications of Solomon Resources Mongolia and Cogegobi in accordance with Mongolian law. Solomon filed an appeal with the Supreme Court of Mongolia on October 30th, 2009 seeking clarification of certain aspects of the lower court ruling and seeking greater clarity in the procedural order given to the Cadastral Office. In the written decision of the Mongolian Supreme Court dated November 24th, 2009 received by Solomon on December 15th, 2009 Justices Puntsag, Sumya and Tungalag affirmed the ruling of the lower court and found that the manner in which the Mongolian Cadastral Office handled the various licence applications was improper and further clarified the process to be followed by the Cadastral Office in issuing the disputed exploration licences in accordance with Mongolian law.
An appeal period from the Supreme Court ruling expired January 14th, 2010. Solomon continues to seek potential joint venture partners in respect of its Mongolian tenures.
Table I. Solomon Resources 2008 Baruunbayan Drill Data
Solomon’s President Randy Rogers at the site of DDH-BB-11 in Mongolia.
Mongolian field crews examine drill core from the 2008 exploration program |
