Strategy

Lotus Resources' strategy is to build a portfolio of mining and exploration properties in Mongolia that will generate early cash flow from production. The portfolio will cover a range of minerals, including gold, base metals and industrial minerals, for which in the opinion of the Directors there is strong current and forecast future demand.

The mining properties of interest to the Company will have some or all of the following characteristics:

• Potential to improve efficiency and productivity.
• Potential to maximize the recovery and utilization of existing resources.
• Potential to add to existing resources through further exploration.

In pursuing this strategy Lotus Resources intends to capitalize on the current low cost base of the mining industry in Mongolia. In particular the Company will, as far as possible, use local expertise and technology and employ Western expertise or technology only where it can demonstrably add value.

The current focus of the Company’s activities is to build an integrated fluorspar business that will encompass exploration, mining, processing and trading of both metallurgical and acid grade fluorspar. In the opinion of the Directors this business has the potential to generate cash flows in the short to medium term in return for a relatively modest level of investment.