From the delguur (small market) in Bayanzurkh Tovchoo (east gate of the city), head SW a half mi through the little ger district to small tunnel under the RR. Proceed directly south towards the mountain for another 3/4 mi on the ST towards the road to the observatory. It is about 200' climb from the Tovcho to the road.
Once you link up with the road, take a left and go about 0.6mi. Take a right and start the real climb up to the observatory. It is 1.1 mi, 600' in elevation and 4 switchbacks. On the 4th and final switchback (just below the observatory) you can find a little ST off to the right. It is a total of 800' elevation in 3 mi from the Tovcho to this final switchback.
This little ST is a really just a cattle trail, but it proceeds south about a mile through the larch forest and down to the bottom of the valley behind the ski resort. This valley is called Waterfall Valley (Khurkhreegiin Am) and the creek in the bottom is called Waterfall Creek (Khurkhree Gol). Before they built the ski resort at the front end of this valley, you could enter the valley directly from the bottom. Now you have to enter from this little trail off the fourth switchback.
The descent into the valley is moderately technical and fun and contours with the slope perfectly. It lacks flow but is still fun. At the bottom cross the little creek wherever you can, and you will find a nice ST on the otherside. Follow the trail up the valley to the end. Return the way you came. From the observatory though, you don't have to take the road back down. I recommend that you follow the fence line of the ski resort back down the mountain. It is very steep, but it is more interesting than the road. It's a FAST fun ride back down the mountain.