Source: SouthGobi Resources Ltd.                       Date: 16 December, 2010

Mr. Alexander Molyneux, President and CEO of SouthGobi Resources Ltd., has said that the company has signed a coal supply agreement with North Asia Energy Group Limited (NAEG) for the sale of 450,000 tons of coal in 2011 and another for 500,000 tons of coal in 2011 with a large international company. NAEG is a venture between North Asia Resources Holdings Limited and China Railway Mongolia Investment LLC, which is a member of China Railway Group Limited, a significant Chinese state owned enterprise involved in railway construction and management. Importantly, CRG is a shareholder and involved in management of the new Chinese railway line from Linhe to Ceke. Ceke, approximately 45 km south of SouthGobi’s

Ovoot Tolgoi coal mine in southern Mongolia, is a major Chinese coal distribution terminal with rail connections to key coal markets in China.

Pricing for the coal in both contracts will be determined by mutual agreement in advance of each quarter. “We welcome NAEG and the large international company as new customers,” said Mr. Molyneux. “These agreements are consistent with our plan to continue to increase the sales volume of SouthGobi’s coal and broaden our customer base”

SouthGobi, which began mining coal in 2008, sold 1.3 million tons of coal in 2009. The company is on track to sell approximately 2.5 million tons in 2010.