The right instrument for the right project

Mongolia’s private sector faces high interest rates, short financing tenors and strict collateral requirements (ADB, Private Sector Development Plan 2025–2028). Underdeveloped capital markets and enforcement concerns can also complicate financing (US Department of State, 2025 Investment Climate Statement).

Our response is to prepare the project for the capital it can realistically support. A structure that suits an operating mine may be unsuitable for exploration, and an attractive instrument cannot compensate for missing rights or unreliable technical evidence.

• Equity and joint ventures: For projects needing risk capital and aligned ownership. Agree governance, dilution, decision rights and exit provisions.
• Earn-in arrangements: Link participation to defined expenditure and technical or development milestones. Specify evidence, vesting and default terms.
• Project debt and production-linked lending: Assess where forecast cash flow, security and repayment capacity can support borrowing. Stress-test delays and adverse prices.
• Equipment and vendor finance: Match eligible plant or fleet investment to its useful life and repayment capacity. Include deposits, maintenance, imports and lender rights.
• Offtake and prepayment: Assess financing linked to a credible buyer and future deliveries. Product quality, pricing, quantity and delivery obligations must be realistic.
• Royalties and streaming: Consider capital against defined revenue or production-linked rights. Assess the lifetime cost, security and effect on future financing.
• Insurance-wrapped bonds: Assess debt securities with a specifically negotiated financial guarantee or insurance protection, where a qualified provider is willing to underwrite.
• Tokenized instruments: Assess digitally represented shares, debt or contractual participation rights. Legal rights, investor eligibility and transfer controls remain fundamental.
• Development and export-credit finance: Review eligibility where the project, sponsor, procurement and environmental standards fit an institution’s mandate.

These are instruments we evaluate, not financing offers or commitments. The eventual structure may combine several instruments or may require further project preparation before funding is realistic.

Financial-guarantee insurance can be designed to cover specified principal and interest payment obligations; it is distinct from a guarantee of market value, as illustrated by bond-insurance disclosures in the US municipal market (Assured Guaranty, explanation of bond insurance). A Mongolian project bond would require its own issuer structure, legal analysis, underwriting and policy terms.

For a suitable project, SXI can assess whether an insurance wrap could strengthen the credit proposition and make the risk allocation clearer to potential investors. This route is conditional on the availability, affordability and enforceability of the proposed protection.

• Start with the project: Review cash flow, offtake, permits, debt capacity and security before seeking insurance.
• Define exactly what is covered: Identify the insured obligations, beneficiaries, amount, tenor, currency, exclusions, deductibles, waiting periods and claims procedure.
• Assess the provider: Examine financial strength, jurisdiction, claims-paying ability and any conditions that could invalidate or limit cover.
• Align the documents: Match bond terms, policy language, trustee arrangements, security, reporting and payment priorities.
• Test the remaining risk: Consider uninsured events, delayed recovery, market-price changes, illiquidity and insurer failure.

Political-risk insurance is not interchangeable with a full financial guarantee; the risks and eligible transactions covered depend on the relevant product and contract (MIGA, guarantee and insurance information). References to these providers explain concepts only and do not indicate a relationship, available cover or endorsement of SXI.

Tokenization is a way to represent and administer an underlying instrument; it is not a separate source of repayment. Shares, debt or a participation interest in a stream-holding vehicle may be assessed for digital issuance where legally supportable.

The design should make investor rights easier to understand and administer. It must not imply unrestricted trading, guaranteed liquidity or rights that the legal documents do not confer.

• Asset and rights: Ownership, licences, permits, disputes, encumbrances and any required state participation.
• Technical evidence: Resource confidence, metallurgy, recovery, construction readiness and realistic production.
• Commercial case: Offtake, buyers, logistics, pricing, operating costs and working capital.
• Investor protections: Governance, use-of-funds controls, reporting, security and enforcement arrangements.
• Legal route: Issuer jurisdiction, offering restrictions, tax, AML/KYC, custody and investor eligibility.
• Downside resilience: Delays, lower prices, cost increases, production shortfalls and changes in market access.

We begin with non-confidential information and agree any mandate separately. No token, bond, policy or other instrument should be marketed as approved or funded before the relevant commitments and permissions exist.