South Gobi Energy Resources
Monday, November 5th, 2007
Peter Meredith, CEO of SouthGobi Energy Resources Ltd. is pleased to announce the company has purchased a fleet of coal mining equipment for the development of an open-pit coal mine at its Ovoot Tolgoi Project in Mongolia. The company plans initial mine start up in the first quarter of 2008 and shipping coal from Ovoot Tolgoi in the third quarter of 2008.
The Ovoot Tolgoi work camp has been winterized and will service the mine during the preproduction phase. The engineering and design for a permanent camp, maintenance facilities and offices has been completed.
Ovoot Tolgoi is the companyâ€™s most advanced coal mine development project. It is located in the Omnigovi Aimag in southern Mongolia, next to the existing Mak/Qinhua coal mine, approximately 45 kilometres north of the Mongolia/China Border and the Ceke border crossing. Ceke, in the Peoples Republic of China, will be the main distribution centre for Ovoot Tolgoi coal and is home to a new automated coal-loading terminal and railway infrastructure.
The Ovoot Tolgoi coal mine development coincides with the rapid growth of global and, in particular, Chinese coal consumption. China is the worldâ€™s largest consumer of coal and is now, for the first time, a net importer of coal.
New Credit Facility
SouthGobi Energy Resources also announced that it has arranged a new credit facility with Ivanhoe Mines Ltd., which allows SouthGobi to obtain advances from Ivanhoe to an aggregate maximum of $32.5 million. The new credit facility is unsecured and is not convertible into equity. The facility will be used to fund certain operating, development and administrative expenditures.
For further information visit: www.southgobi.com