SouthGobi receives mining license for Soumber deposit

SouthGobi Resources announced today that the Mineral Resource Authority of Mongolia (MRAM) has issued mining license MV-016869 to its wholly-owned Mongolian operating subsidiary SouthGobi Sands LLC. The new license pertains to the resource previously disclosed by the Company under NI 43-101 standards as the Soumber Deposit.

The Soumber Deposit is approximately 20 kilometres east of SouthGobi’s flagship Ovoot Tolgoi Mine. An independent NI 43-101 resource estimate for Soumber was prepared in January, 2011 by Minarco-MineConsult (“MMC”). MMC estimated 61.4 million tonnes of measured and indicated resources and 65.8 million tonnes of inferred resources. The coal resources are classified as bituminous coal and the rank ranges from low-volatile bituminous coal to medium-volatile bituminous coal, based on ASTM standard D388. Calorific values range between 5,000 kilocalories per kilogram to 7,800 kilocalories per kilogram. Coal quality data suggest that there is good potential to produce a blend or washed coking coal product from shallow (low stripping ratio) sources. Details of the assumptions and parameters used to calculate these coal resources and coal quality estimates are set out in the Technical Report entitled “Coal Geology and Resources – Soumber Deposit, Mongolia” dated March 28, 2011 and available at www.sedar.com and on the company’s website (www.southgobi.com).

The new 10,992.92 hectare mining license is granted for an initial term of 30 years with an option for two 20-year extensions.

“With the granting of the Soumber mining license, we can immediately finalize plans for mine development at Soumber,” said Alexander Molyneux, President and CEO. “Soumber will likely have an integrated coal processing facility and will require around two years of development for first clean coal production.”

SouthGobi plans to complete a Pre-Feasibility Study on Soumber and include the inaugural reserve report when it updates resources and reserves during 2012.

Dave Bartel, P.Eng, the company’s Vice President Investor Relations and External Affairs and a “qualified person” as defined in National Instrument 43-101 has reviewed and approved the technical information contained in this news release.

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.

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