Source: SouthGobi Resources Ltd.    Date: May 19, 2010

SouthGobi Resources Ltd. has identified the following as highlights of its operational and financial results for the quarter ended March 31, 2010.

-- Total shipments were 426,000 tons.

-- Average realized selling price was USD36 per ton, approximately 24% higher than in Q1 2009.

-- Significant focus was put on realignment of Ovoot Tolgoi open-pit.

-- In January, SouthGobi completed a global equity offering of 27 million common shares at a price of CAD17.00 per share for gross proceeds of CAD459 million. The shares commenced trading on the Main Board of the Hong Kong Stock Exchange on January 29.

-- On March 29 the company completed the conversion of USD250 million of the USD500 million convertible debentures issued to China Investment Corporation (CIC) into 21,471,045 common shares of the company.  Following the conversion, CIC, through its indirect wholly owned subsidiary, owns approximately 13% of the company.

-- The company continues to ramp up production at the Ovoot Tolgoi mine, where additional equipment for the second mining fleet is being progressively commissioned. The company expects that the third mining fleet, already ordered, will be commissioned in late 2010. The initial design of a basic coal handling facility has been completed and engineering details for the major components are well advanced.

-- Drilling at the Soumber deposit re-commenced in March to expand and better define the resource. Preparatory work for a formal mining license application continues.

The company incurred a net loss for the three months ended March 31 of USD168.3 million compared to a net loss of USD10.0 million for the three months ended March 31, 2009. The increase in the loss is due primarily to the loss on partial conversion of the CIC convertible debenture, the interest expense on the CIC convertible debenture and the fair value change of the embedded derivatives in the CIC convertible debenture, which together contributed USD162.3 million.

Revenues increased to USD13.9 million in the first quarter of 2010 from USD3.5 million in the first quarter in 2009. The company incurred an operating loss from continuing operations for the three months ended March 31, 2010 of USD6.5 million compared to a USD6.6 million loss in the same period in 2009.

The company's total assets at March 31, 2010 were USD974.4 million, including USD723.4 million in cash, and long term liabilities were USD348.4 million.