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Lucky Strike Resources (LKY)

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07/18/11
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Overview of Corporate Strategy

Lucky Strike Resources (LKY 0.64 ↑0.00%) Ltd's growth strategy is to become a cash-flowing company through the transportation of coal from Mongolia into China for sustainable shareholder value and to leverage its exploration and development expertise to identify mineral properties that have the potential to generate significant shareholder value.
 

Competitive Edge

The Company has signed a Letter Agreement to explore the NKAK Coal properties covering an area of 8,736 hectares in southwest Mongolia, approximately 20 km north of the Baitag Chinese border and 3 km west of the Olonbulag coal deposits. Just south of the Chinese border in the Xinjiang province of China, there are three coal mines including Wotouquan, Balikun East and Sandaoling.

As part of the Letter Agreement, Representative will be carried out commercial efforts to secure and assign transportation contracts to the JV Company for the transportation of a minimum of one million tonnes of coal per annum ("tpy") from Mongolia to China within the first three years of operation.

The Representative's affiliate company holds a transportation licence and contract and has transported 500,000 tonnes of coking coal from Tavan Tolgoi to Tsagaan Had, a reloading station, through the Gashuun Suhait Mongolian-Chinese border to the final destination of Gants Mod in China.

The Company anticipates that these contracts may provide revenue while it carries out exploration on the properties and, if successful, would provide means to deliver the coal directly to the market. Mongolia exported 9 million tons of coal in 2010 according to Mongolian Golomt Bank's Mining Department with a forecast of 16 million tons in 2011 and to reach 45 million tons by 2016.

Mongolia's number one trading partner, China, is estimated to currently receive two-thirds of all Mongolia's exports. China is the world's largest consumer of resources. Mongolia directly north of China is in early stages of economic transformation subsequent to Mongolia's estimated undeveloped world class deposits valued at $1.484 trillion according the Mongolian Golomt Bank Valuation of January 2010. This fact creates a compelling growth scenario for Lucky Strike and its shareholders. It is a perfect and timely opportunity for the Company to accomplish its goals and reward its shareholders.

 

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