“The working group had been having preliminary discussions with representatives from Boroo Gold,” J.Ganbat, head of the revenue division of the budget policy department at the Ministry of Finance, who is member of the working group, told MonInfo Friday.

The law on complying with the new minerals law says any special extracting and exploration licenses valid under the previous legal framework have to be renewed within 5 months according to the new law articles starting from the date of the newly passed mineral law on July 8, 2006. However there is no judicial or legal basis which addresses that stability agreements need to be changed into investment agreements.

Both J.Ganbat and Igor Kovarsky, Vice President for Government affairs and Corporate Development of Boroo Gold, said that both parties had agreed not to disclose any of the information pertaining to the discussions being held between them.

Paul Korpi, Boroo Gold President said “There was no definitive or formal discussion held between Boroo gold and Government of Mongolia.”

“We’d be very much interested in concluding those discussions,” he added.

However government officials feel confident about the changes they are proposing.

“The working group is currently working on what is to be amended to the agreement,” Ganbat said.

J. Tsogtbaatar, Head of State Administration and management department and Secretary of the working group told MonInfo, ”The Government made proposals of amendments to the stability agreement, for instance: 50 percent income tax will be changed into 100 percent starting from January 1, 2006 and royalty tax is to be raised from 2.5 percent up to 5 percent.”

Boroo’s current agreement would have them pay 12.5 percent income tax starting in March 2007, rather than the standard 25 percent effective January 1, 2007.

Boroo officials have previously stated they would like to move forward with discussions pertaining to their next project, Gatsuurt, before serious amendments are made to their current agreement.

“Amendments are to be made only in case two parties agree,” said Kovarsky.