Tuesday, September 23, 2008

SouthGobi Energy Resources Begins Deliveries of Coal From Its Ovoot Tolgoi Mine in Mongolia to Customers in China

Production to date tops 470,000 tonnes of coal


CEKE, CHINA, Sep 23, 2008 -- Peter Meredith, Chief Executive Officer of SouthGobi Energy Resources Ltd. and Gene Wusaty, Chief Operating Officer, Coal Division, announced today that the company has commenced deliveries of thermal coal from the Ovoot Tolgoi mine, in southern Mongolia, to customers in China.

"This is a major milestone in the evolution of SouthGobi Energy Resources as a competitive Mongolian coal producer," Mr. Wusaty said. "With the initial market-link in China now established, we can concentrate on increasing our coal production and diversifying our product and customer base."

Three coal products have been established for export from the Ovoot Tolgoi mine - thermal coal, premium thermal coal and metallurgical coal. Coal trucks were loaded at the Ovoot Tolgoi mine site and crossed the border into China on Monday, September 22, 2008. This initial coal shipment is part of a one-year contract, with 2008 tonnage set at 300,000 tonnes loaded at the Ovoot Tolgoi mine gate. A second sales contract also is in place, for an additional 2008 tonnage set at 400,000 tonnes (See website for delivery photos).

Southgobi sands LLC (SGS), a wholly-owned Mongolian subsidiary of SouthGobi Energy
Resources, has opened two offices in China - one in Beijing and the other in Ceke, at the China-Mongolia border - to help facilitate the coal exports to China.

The Ovoot Tolgoi coal mine is approximately 45 kilometres north of the Mongolia-China border. The mine is operating 24 hours a day, with four production crews. The workforce has increased to 206 employees, including 198 Mongolian nationals. Production at Ovoot Tolgoi to September 17th, 2008, was 471,215 tonnes of coal.

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