Mr. Paul Byrne reports

MONGOLIA GROWTH GROUP LTD. OCTOBER 2014 CEO COMMUNIQUE TO SHAREHOLDERS

Mongolia Growth Group Ltd. has released its October, 2014, shareholder letter.

Chief executive officer communique to shareholders

Dear shareholders,

Since our September update, we have been active on multiple fronts. In this month's communique, I would like to focus two key MGG strategic components, which cover the recurring revenue portfolio and value creation development sides of our business.

The real estate investment portfolio (assets owned and managed by MGG)

The realignment of our real estate portfolio for commercial property in the downtown area remains our primary objective. As such, of our 54 properties currently comprised of retail, office and residential holdings, we are currently selling our four remaining residential properties, to achieve our strategic objective of not owning any residential property in the future. In addition, as leases expire, we will continue to evaluate whether to renew with existing tenants or seek new tenants more suitable for updated leasing prices going forward. All financial proceeds from sales are being recycled into our downtown real estate developments, where management believes it can achieve the highest return on capital within our spectrum of available investments.

Real estate developments (assets developed and constructed by MGG for the portfolio)

Our central focus remains the company's largest and most complex project to date, the redevelopment of the Tuguldur Center in downtown. In our previous update, we highlighted the existing land and buildings that MGG purchased in February, 2014, and the architectural images of what is being built. In this update, we will present you with more detail of the construction progress and pictures.

Tuguldur Center development project

Summary

Our vision for Tuguldur Center is to create a permanent complex for mixed-use development. However, this permanent long-term development requires years of planning and preparation of a substantial master plan. Therefore, we are proceeding with a high-yielding interim development for the first five years, which will be undertaken in measured low-cost stages in order to maximize cash flows to the parent company. MGG will provide all financing and lead the development from start to finish.

The interim development stage 1

This stage consists of the redevelopment facing the Peace Avenue frontage. Master planning and design are complete. Stage 1 construction commenced in July, 2014, and was completed in mid-November, 2014. Stage 1 occupancy occurred during November, with some early partial handovers for major tenants, who need to commence interior fit-outs early. Stage 1 preleasing has progressed very well and we are now nearly fully leased, which will generate significant new revenue.

A summary progress note from the chief executive officer

The real estate investment portfolio

As our 54-property portfolio transitions to more investment-grade assets, we have begun establishing our investment management function to oversee the portfolio, which is replacing our current management function.

Real estate developments: major developments

Tuguldur Center

Construction has been under way since July, 2014, and was completed in mid-November, as scheduled. Tenant handover has now commenced and will continue through November.

Peace Tower

We are preparing to widen our business profile for potential joint venture partners related to our larger real estate developments in downtown. We have a land lot currently referred to as Peace Tower on Ulaanbaatar's busiest through-street (East-West), Peace Avenue, which is the next property asset for us to consider for development.

Small developments

These will be deferred until the major developments are well under way.

Leasing

Overall occupancy

The real estate portfolio is 97 per cent leased (non-inclusive of our land bank).

Retail

There are currently no vacancies in our retail properties.

Offices

A few spaces are available in two different buildings and these are currently being marketed.

Tuguldur leasing

Our leasing team did an extraordinary effort here with marketing stage 1 of Tuguldur Center and the team preleased 95 per cent in the first seven weeks of commencing leasing marketing.

This confirms the market demands this type of development in this location. The total number of tenants will be 55. The major tenants include:

• Khan Bank;
• Unitel Telecoms.

The major tenants will be granted early site handover in order to commence their interior fit-outs. The remaining tenants are taking occupancy throughout November, 2014.

Property sales

Properties overall

As per our strategy of having a real estate portfolio that is only commercial and downtown, we are gradually selling properties outside this strategy and will continue to do so in a timely fashion into 2015. In the future, MGG will not own any residential property for investment purposes.

Residential

We sold three residential properties in October, 2014.

We have four residential properties remaining in the portfolio that we will be selling.

Commercial (retail and office)

No transactions to report this month.

Land bank

We have reviewed our various landholdings and identified and prioritized which of those we wish to develop and devote resources to going forward.

In addition, we have identified those which we would like to sell over time, with a sales campaign to be prepared in the coming months.

Financial

The proceeds from our property sales are being recycled into the capital requirements of our downtown real estate developments. Tuguldur Center stage 1 new revenue will commence during November.

Corporate

Media relations and public relations

Another of our goals moving forward is to increase the awareness of MGG and raise our profile among key media influencers and investors and we are preparing a strategy and plan to do just that. We have already commenced and here are a few highlights and planned opportunities:

I appeared in a lengthy interview on the Money for Lunch Internet radio program on the popular blog Talk Radio Network.

I spoke at the Mongolian projects and investment summit, the world's largest Mongolian investment event over the last five years.

Arrangements are being made for an interview and podcast with Emerging Frontiers.

Organizational

To create more efficiency with high head count support functions such as security guards, we have reviewed various firms and we will now proceed to outsource our entire security function by early November, 2014. In March, 2014, we noted that we should consider in our overall strategy the possibility of being a third party services provider and charge fees in order to gain additional revenue for the company.

We have decided to put that item on hold for the time being, as our real estate developments are far more financially beneficial at present and our staff are better utilized in that direction.

Mongolian economic update

New Mongolian Prime Minister approved with vow to revive growth

On Nov. 6, 2014, the Mongolian Prime Minister Altankhuyag Norov stepped down in a non-confidence vote.

Bank of Mongolia announced that it has expanded its program to allow purchasing larger homes for borrowers in the countryside.

World Bank economic update

Mongolia 2014 GDP forecast lowered to 6.3 per cent from 9.5 per cent

The Tevshin Gobi power plant project shall invest over $1-billion (U.S.) into Mongolia.

Possible world-class oil shale field in Mongolia

Mongol Bank bought 9.5 tonnes of gold.

Head of the presidential office P. Tsagaan Thursday received a delegation led by James Harman, a chairman of the Anglo American Group in charge of business and development affairs.

Asian Development Bank (ADB) signed Oct. 17 a $40-million (U.S.) loan agreement with Khan Bank, one of the biggest banks in Mongolia, to provide better access to bank financing for the country's micro, small- and medium-sized enterprises.

Our business continues to progress very well, regardless of the slower economy. Please feel free to contact me on my e-mail if you would like to discuss any of the above further.

Sincerely,

Paul J. Byrne

Chief executive officer.

We seek Safe Harbor.