“License transfer applications for 35 licenses need to be applied for again,” said D. Baterdene, project manager for Ivanhoe's coal division in Ulaanbaatar.

“The documents were submitted before the newly passed minerals law went into effect, therefore we now need to provide further documentation.”

In a company statement Saturday, Ivanhoe and Asia Gold officially extended the completion of the previously announced merger of their coal activities in Mongolia until November 1 of this year.

Ivanhoe and Asia Gold had previous set a September 29 target date for the transaction, which will see Asia Gold acquire Ivanhoe’s coal division through a proposed share exchange that will give Ivanhoe a 90 percent ownership stake in Asia Gold.

The long-delayed transfer of several licenses from Asia Gold to Ivanhoe Mines was approved by Mongolian government officials earlier this month, as only one necessary step in the process.

However now coal exploration licenses held by Ivanhoe Mines must be transferred into a new, wholly-owned Mongolian subsidiary of Ivanhoe’s that is yet to be named. Following government approval of the license transfers, control of the subsidiary will be transferred to Asia Gold.

The licenses cover Ivanhoe’s exploration and development properties in the Nariin Sukhait coal basin and at Tsagaan Tolgoi.

Under the ’97 Minerals Law, a decision from the government was required within 15 business days, a time that has been lowered to five under the new Minerals Law that went into effect on August 26.

Officials at the Mineral Resources and Petroleum Authority had no comment on the current status of applications by Ivanhoe or other companies to transfer licenses.

“I cannot and will not give out any information on these topics,” said T. Ganbold, head of legislation and cartography at the department of geology and mining’s cadastral office, the section responsible for license transfers.

D. Davaadorj, head of the mining and heavy industry department at the Ministry of Industry and Trade, commented that the delay was caused by Ivanhoe, failing to specify details.

Ivanhoe, which had previously said it hoped to be mining coal at Nariin Sukhait before the end of 2006, will have to apply for extraction licenses after the transfer of the exploration licenses are complete, a process that likely has pushed company’s production timelines back into 2007.

Previous studies by Ivanhoe projected potential first year production at 1 million tonnes of coal products, increasing to 4 million tonnes within the first five years of production, for export to China only 45 kilometers from the coal deposits.

Options for continuing the existing Chinese rail line into Mongolia to reach the mine, as well as improving roads to the border, are currently being discussed, according to an Ivanhoe report.

While coal reserves at Nariin Sukhait (approx. 160 million tons) pale in comparison to Tavan Tolgoi’s 6 billion tonnes, the Ministry of Industry and Trade has discussed informal plans for a coal-burning power plant at the mine as part of its plan to export power to China and add value within Mongolia.