Mongolian Mining Corporation (975:HK): Trading at 1% of Liquidation Value

Just a forgotten miner sitting on billions in value

I think Mongolian Mining Corp is worth $150 billion if interest rates stay low. That’s the cash the company will generate from now until the end of time. Even if I’m off by 50% — f*** it, that’s still way above where it’s trading today. If this company weren’t publicly traded and you wanted to buy the whole thing privately, you’d have to pay a hell of a lot more than the current market price. You don’t need to run a DCF when the gap’s this wide.

“The person that turns over the most rocks wins the game.” - Peter Lynch

No one’s talking about Mongolian Mining Corporation.
And that’s exactly why we should.

One advantage of buying highly cyclical businesses is that most people don’t like them. What difference does it make to me if earnings that average, say, $500 million a year, come in a lumpy fashion? In the grand scheme of things, why should I care, as long as it’s an excellent business?

While the world debates carbon targets and ESG scorecards, China keeps building blast furnaces and someone has to feed them. Just across the border, in the middle of the Gobi desert, sits one of the most strategically placed coal assets on Earth: Mongolian Mining Corporation (975:HK).

It’s a company few investors follow and I couldn’t find a single serious write-up. No analyst seems to cover it, at least none I could trace. It’s almost impossible to find any information beyond their own reports, which makes writing a proper deep dive unusually difficult… and equally exciting. Because if we’re right, we might be standing completely alone on this one.

Which means if this turns out great, we’ll look like geniuses — and if it doesn’t, well, at least no one will notice. 😄

Here’s how we’ll break it down:

• Investment Thesis

• Coal Quality and Operations

• Competitive Advantage

• What It`s Worth

• Capital Allocation

• Risks

• Am I Buying it

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Investment Thesis

Metallurgical coal isn’t everywhere — and it’s not going anywhere. High-quality deposits exist only in a few regions: Australia, the U.S., Canada, Russia, and Mongolia.

I haven’t found a single coal company in Canada that excites me. Australia has quality, but generally trades at higher multiples than its U.S. peers. Russia’s off the table. And Mongolia? I’ve always ignored it. Maybe that’s exactly where I should have started.

Mongolia holds enormous coal resources. Estimates reach about 150 billion tons in total metric tons. The country’s coal base is truly massive. However, more than two-thirds of it is thermal or lower-grade coal, while the premium metallurgical variety comes mainly from the Tavan Tolgoi area — the very region from which Mongolian Mining Corporation extracts its metallurgical coal.

Tavan Tolgoi area

Now, let’s look at the company itself.

Mongolian Mining Corporation is a predominantly metallurgical coal producer with one of the lowest cash costs and most strategic locations in the world and just 240 km from northern China’s largest steel centers. The company has recently diversified into gold and copper, but coal remains its core profit engine.

The stock is extremely cheap. It is trading at only 2–3× EV/EBITDA and around a 20% free cash flow yield. For comparison, Alpha Metallurgical (AMR), which produces similar-quality coal but at higher costs, trades near 13× EV/EBITDA. That’s a massive gap, driven mainly by geography and the complete lack of analyst coverage.

So how much is it actually worth?

Under IFRS accounting rules (specifically IFRS 6 and IAS 16), mining companies must record their reserves at cost — not at market value. That means the billions of dollars in untapped resources never appear on the balance sheet.

That’s where it gets really interesting — because once you see the full picture, you’ll realize the company is actually sitting on billions in free cash flow.

Let’s dive deep underground.