Source: SouthGobi Resources                         Date: 10 February, 2011

SouthGobi Resources Ltd. has completed its first "direct delivery" coal sale from its Ovoot Tolgoi coal mine in southern Mongolia to Risun Mining Co. All previous coal sales by SouthGobi were "mine-gate" sales, in which customers took delivery and ownership of the coal at the Ovoot Tolgoi mine site and made their own arrangements to transport the coal to China.

The initial delivery to Risun was the first delivery under a 500,000-ton, 2011 sales contract. Using a logistics service provider, SouthGobi transported coal to a customs bonded yard at Ceke, China, approximately 50 km south of the mine. Ceke is a major Chinese coal distribution terminal with rail connections to key coal markets in China. Risun then undertook its own logistics from there, with the coal destined for use in coke-making.

"This coal delivery is significant because it establishes that SouthGobi can offer customers coal inside China at the Ceke rail terminal as an alternative to mine-gate collection," said Mr. Alexander Molyneux. "We're also delighted to welcome Risun as a new customer."