SouthGobi Resources Limited
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SouthGobi Resources Limited

February 25, 2008 08:30 ET

SouthGobi Energy Resources Receives 43-101 Resource Report for Tsagaan Tolgoi Coal Project, Southern Mongolia-a Potential Power Source for the Oyu Tolgoi Copper/Gold Project

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 25, 2008) - Peter Meredith, Chief Executive Officer of SouthGobi Energy Resources Ltd. (TSX VENTURE:SGQ) and Gene Wusaty, Chief Operating Officer, are pleased to announce today that the company has received an initial independent National Instrument 43-101 compliant resource estimate for its Tsagaan Tolgoi coal project in southern Mongolia. The project contains initial measured plus indicated coal resources of 36.4 million tonnes, with an additional inferred coal resource of approximately nine million tonnes.

Tsagaan Tolgoi or "White Hill" is SouthGobi Energy Resources' second coal deposit in southern Mongolia to have a NI 43-101 resource estimate. The company's primary mine development project - Ovoot Tolgoi - is located 415 kilometres to the south west of Tsagaan Tolgoi. Tsagaan Tolgoi is in the Omnigovi Aimag approximately 570 kilometres south of the nation's capital of Ulaanbaatar and 113 kilometres southeast of the provincial capital of Dalanzagad.

The exploration work supporting the Tsagaan Tolgoi resource estimate has successfully achieved its limited objective of identifying sufficient quality and quantity (approximately 25 million tonnes) of coal resources to support power generation for the large scale Oyu Tolgoi copper/gold project, 115 kilometres distant, that is being developed by Ivanhoe Mines Ltd. Further exploration planned for 2008 is aimed at establishing the full extent of the coal resource at Tsagaan Tolgoi.

The independent estimates were prepared by Norwest Corporation, of Salt Lake City, USA. The Tsagaan Tolgoi resource estimates were prepared in conformance with Canadian Institute of Mining (CIM) Standards and the requirements set out in Canada's National Instrument 43-101, and were based on drilling activities through the end of 2006. A NI 43-101 technical report is expected to be filed within 30 days.



Table 1: Tsagaan Tolgoi In-Place Coal Resources Summary (to 150m Depth)

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Resource ASTM Coal Measured Indicated Inferred
Area Rank (million tonnes) (million tonnes) (million tonnes)
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Tsagaan Tolgoi hvBb and 23.4 13.0 9.0
hvCb
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Total 36.4 9.0
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1. Resource estimates were obtained from a geologic model developed using
MineSight® software developed by Mintec Inc. Volumes of coal present
were estimated from modeled surfaces derived from the borehole
intercepts and trench data. A bulk density of 1.6g/cm3 was applied for
tonnage estimations for all seams. This was based on applying a weight-
averaged ash value for the deposit to a matrix of comparable density
values, as specified in GSC Paper 88-21.
2. The resources presented represent those areas suitable for surface
extraction down to a maximum vertical depth limit of 150 metres from
surface. The resource area of interest covers an area of approximately
2.5 kilometres.


Coal at Tsagaan Tolgoi is found in a steeply dipping sedimentary basin approximately 4 by 20 kilometres in size located on two contiguous exploration licences covering an area of 8,820 hectares. The coal rank is high volatile B and C bituminous. Eight main coal seams with multiple subseams have been found at Tsagaan Tolgoi. Apparent thicknesses vary from 1.2 metres up to 24.7 metres. To date, 86 reverse circulation and rotary holes as well as 28 core holes have been drilled on the property. Additional resource potential exists along strike and at depth.

Data Verification

All data collection was performed according to guidelines established by Norwest. Norwest geologists under the direction of the Qualified Person were responsible for administration of data collection procedures and were responsible for reviewing and verification of all data. Norwest has maintained control of all data collection throughout the exploration program.

Richard D. Tifft, Geologist with Norwest Corporation and a Qualified Person as defined by NI 43-101, has reviewed the data underlying the resource estimate and approved the technical and scientific information pertaining to Tsagaan Tolgoi contained in this release.

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 to supply a wide range of coal products and electricity to markets in Mongolia and China. The company is investigating the implementation of clean-coal technologies in the development of coal power-generating capacity to benefit all of its stakeholders.

The company's metals division is focused on the exploration and development of its copper and gold projects in Mongolia and Indonesia.

Forward-Looking Statements: This document includes forward-looking statements. Forward-looking statements include, but are not limited to, the potential to identify additional resources at Tsagaan Tolgoi, the timing to file a Technical Report on Tsagaan Tolgoi, 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 believe 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 three months ended September 30, 2007, and its Annual Information Form dated August 27, 2007 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. - Investors
    Steven Feldman
    (604) 681-6799
    or
    SouthGobi Energy Resources Ltd. - Media
    Bob Williamson
    (604) 681-6799
    Website: www.southgobi.com