It is reported that Mongolian Government is holding a series of detailed and complex talks with officials of several foreign companies interested in investing in Tavan Tolgoi coal project. The Mongolian decision will be announced only after various commercial aspects of their respective proposals are weighed, and geopolitical considerations are reviewed. Every bid will have some plus points and also some which may not appear very attractive. Their intrinsic merit has to be judged, as also their comparative appeal. This is no easy task, and the final decision will not please everybody, inside or outside Mongolia.

RIO TINTO

Personal Credential Letter

14201 Ulaanbaatar

Government House

Sukhbaatar Square 6

Date: 27.07.2009

Dear Honorable Parliamentarian____________________________,

Lotus Resources has announced that it has made its first sales of fluorspar from the Dai Uul project owned by Lotus Dai Uul LLC. The fluorspar is being sold to customers in Russia. The revenue from this activity is expected to more than cover the current costs incurred by the Dai Uul Joint Venture.

Briefing newsmen on the progress of the talks on Oyutolgoi Mineral and Energy minister D.Zorigt said on Wednesday that it is too early to report anything “but the situation is not easy”. Parliament has refused to annul the 68 percent windfall profits tax and has also withdrawn VAT refund benefits. It has also insisted on 34 percent ownersip for Mongolia.

The working group set up by the Government and Ivanhoe Mines have been meeting every day since Monday to reach an agreement on investing in the Oyutolgoi project. Both sides have been tightlipped about how things are going and no immediate breakthrough is expected.