SouthGobi Resources Limited
TSX : SGQ
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SEHK : 1878

SouthGobi Resources Limited

May 19, 2009 08:30 ET

SouthGobi Energy Resources and Glencore International AG Sign Marketing Agreement for SouthGobi's Mamahak Coal Project

Start set on initial 30,000-tonne trial shipment of high fluidity metallurgical coking coal from East Kalimantan mine

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 19, 2009) - Alexander Molyneux, President of SouthGobi Energy Resources Ltd. (TSX VENTURE:SGQ), and Gene Wusaty, Chief Operating Officer, announced today that an agreement has been signed with Glencore International AG to provide SouthGobi with coking coal marketing expertise and river barging/vessel loading logistical services for SouthGobi's Mamahak coal project in East Kalimantan, Indonesia.

"We have developed Mamahak to a point that we are now ready to introduce our high-quality coking coal to the Asian markets," Mr. Wusaty said. "Our agreement with Glencore is a major milestone in the development of this project."

With the coal marketing agreement now in place, SouthGobi plans to extract and ship an initial 30,000-tonne trial shipment prior to the end of the second quarter of 2009 for delivery to various Asian customers for testing. The coal will be trucked on a recently completed 34-kilometre haul road to a new barge-loading facility on the Mahakam River.

Glencore International is one of the world's largest suppliers of a wide range of commodities and raw materials to industrial consumers. Glencore, through its subsidiaries, is a market leader in the marketing of coal to the world's industrial consumers. The agreement with Glencore gives them exclusive marketing involvement for the company's coking coal sales for a two-year period which is subject to a review in 12 months.

SouthGobi, through its wholly owned subsidiary Pt. Multi Mamahak Batubara (MMB), has commenced the development of surface coal deposits in four concessions covering 22,968 hectares, at the Mamahak Project. SouthGobi has an 85% working interest in the project. The company was authorized to begin mining on the MCM concession under a location permit issued last January.

Gene Wusaty, SouthGobi Energy's Chief Operating Officer, a qualified person as defined by National Instrument (NI) 43-101, supervised the preparation of the technical information in this release. A NI 43-101 technical report on the Mamahak coal project was filed on March 26, 2009, and is available at www.sedar.com.

Ivanhoe Mines (TSX:IVN)(NYSE:IVN)(NASDAQ:IVN) is SouthGobi Energy Resources' largest shareholder, currently owning, directly and indirectly, approximately 80% the issued and outstanding shares.

About SouthGobi Energy Resources

SouthGobi Energy Resources is focused on exploration and development of its Permian-age metallurgical and thermal coal deposits in Mongolia's South Gobi Region and its Eocene-age metallurgical and thermal coal deposits in East Kalimantan, Indonesia. The company's flag-ship coal mine, Ovoot Tolgoi, is selling coal to customers in China. The company plans to supply a wide range of coal products and electricity to markets in Asia. The company also is investigating the implementation of clean-coal technologies in the development of coal power-generating capacity to benefit all of its stakeholders.

Forward-Looking Statements: This document includes forward-looking statements. Forward-looking statements include, but are not limited to, statements concerning the ongoing exploration and development of the Mamahak Coal Project in Indonesia, expected product coal quality of the trial shipment, plans to extract and ship a 30,000 tonne trial coal shipment in the second quarter 2009, the company's future ability to supply coal markets in Asia, and other statements that are not historical facts. When used in this document, the words such as "could", "plan", "estimate", "expect", "intend", "may", "potential", "should", and similar expressions are forward-looking statements. Although SouthGobi Energy Resources believes that the expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements are disclosed under the heading "Risk Factors" in SouthGobi Energy's Management's Discussion and Analysis of Financial Condition and Results of Operations for the year end Dec. 31, 2008, which is available at www.sedar.com.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • SouthGobi Energy Resources Ltd.
    Steven Feldman
    Investors
    1 604 681-6799
    or
    SouthGobi Energy Resources Ltd.
    Bob Williamson
    Media
    1 604 681-6799
    www.southgobi.com