ULAANBAATAR, MONGOLIA, Oct 08, 2008 (MARKET WIRE via COMTEX) -- Gene Wusaty, Chief Operating Officer, Coal Division of SouthGobi Energy Resources Ltd. , announced today that the company has discovered a new coal formation 10 kilometres southeast of the company's producing Ovoot Tolgoi coal mine. The new coal discovery is approximately 33 kilometres (approximately 20 miles) north of the China-Mongolia border.
The new coal occurrence was discovered through field reconnaissance work. Two trenches approximately three metres deep have been excavated and multiple seams have been uncovered with up to 15 metres of apparent thickness. To date, the coal field has been defined over a strike length of approximately 1,800 metres.
Based on the successful trenching results, a drilling program has commenced. Initial results have identified multiple coal seams up to 18 metres in apparent thickness. The intent of this initial drill program is to determine the coal structure as well as coal quality. Coal quality results are pending.
"This additional discovery of coal in close proximity to our operating mine, Ovoot Tolgoi, significantly enhances the scope of our coal development potential," Mr. Wusaty said. "The discovery is particularly important due to its close proximity to the Chinese border."
SouthGobi Energy Resources recently commenced coal deliveries from its Ovoot Tolgoi Mine to customers in China.
Gene Wusaty, SouthGobi Energy's Chief Operating Officer, Coal Division, a qualified person as defined by National Instrument 43-101, supervised the preparation of the technical information in this release.