SouthGobi Resources Limited
TSX : SGQ
SEHK : 1878

SouthGobi Resources Limited

January 25, 2011 09:02 ET

SouthGobi Resources Completes Initial Delivery to Risun Mining

500,000 Tonne China Delivery Contract a First for SouthGobi

HONG KONG, CHINA--(Marketwire - Jan. 25, 2011) - SouthGobi Resources Ltd. (TSX:SGQ)(SEHK:1878) announced today that it has completed its first "direct delivery" coal sale from its Ovoot Tolgoi coal mine in southern Mongolia to Risun Mining Co. Ltd. ("Risun").

All previous coal sales by SouthGobi were "mine-gate" sales, in which customers took delivery and ownership of the coal at the Ovoot Tolgoi mine site and made their own arrangements to transport the coal to China.

The initial delivery to Risun was the first delivery under a 500,000 tonne, 2011 sales contract. Using a logistics service provider, SouthGobi transported coal to a customs bonded yard at Ceke, China, approximately 50 kilometres south of SouthGobi's Ovoot Tolgoi coal mine. Ceke is a major Chinese coal distribution terminal with rail connections to key coal markets in China. Risun then undertakes its own logistics from there, with the coal destined for use in coke-making.

"This coal delivery is significant because it establishes that SouthGobi can offer customers coal inside China at the Ceke rail terminal as an alternative to mine-gate collection," said Mr. Molyneux. "We're also delighted to welcome Risun as a new customer, which has annual coal requirements."

About SouthGobi Resources

SouthGobi Resources is focused on exploration and development of its Permian-age metallurgical and thermal coal deposits in Mongolia's South Gobi Region. The company's flagship coal mine, Ovoot Tolgoi, is producing and selling coal to customers in China. The company plans to supply a wide range of coal products to markets in Asia.

Forward-Looking Statements: This document includes forward-looking statements. Forward-looking statements include, but are not limited to, plans to supply a wide range of coal products to markets in Asia; and other statements that are not historical facts. When used in this document, the words such as "plan," "estimate," "expect," "intend," "may," and similar expressions are forward-looking statements. Although SouthGobi 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's Management Discussion and Analysis of Financial Condition and Results of Operations for the year ended Dec. 31, 2009, and quarter ended September 30, 2010 which are available at www.sedar.com.

Contact Information

  • SouthGobi Resources Limited
    Matthew O'Kane
    Vice President Commercial Operations (Hong Kong)
    +852 2156 7012
    or
    SouthGobi Resources Limited
    Steven Feldman
    Investor Relations Manager (Vancouver)
    +1 604 331 9813
    www.southgobi.com