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SouthGobi Resources commences construction of coal-handling facility at its Ovoot Tolgoi Mine in southern Mongolia

Tuesday, June 29th, 2010

Alexander Molyneux, President and CEO of SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878), announce that the company has commenced construction of a coal-handling facility (“CHF”) at its producing Ovoot Tolgoi coal mine in southern Mongolia.
The CHF will allow SouthGobi to add value to its coal by removing ash, or waste rock, and enable the blending of coal from different seams to create higher-value products.
“This coal-handling facility will enable us to provide customers with coal that has a lower ash content and a more consistent quality,” said Mr. Molyneux. “SouthGobi will be one of the first coal producers in Mongolia to conduct value-adding processing in country. Operation of the new facility will create approximately 25 new jobs.”
Facility to be operational in early 2011
The new CHF, to cost approximately US$25 million, will be constructed between the Sunrise and Sunset open pits at the Ovoot Tolgoi mine.
The facility will include a 300-tonne-capacity dump hopper, which will receive run-of-mine coal from both pits and feed a coal rotary breaker that will size coal to a maximum of 50 millimeters and reject oversize ash. A radial stacker will facilitate loading of the sized coal into customers’ trucks for delivery across the Mongolia-China border.
Key long-lead-time equipment has been ordered and SouthGobi has begun excavation and site preparation for the CHF. The facility is planned to be operational in early 2011.
Once commissioned, it is intended that the CHF will operate on one 12-hour shift per day, six days per week. Annual capacity will be up to six million tonnes of coal on a one shift per day basis, and operating hours can be extended as mining capacity increases.
(Ref 1381)

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