HONG KONG, CHINA, Jun 28, 2010 (MARKETWIRE via COMTEX) -- Alexander Molyneux, President and CEO of SouthGobi Resources Ltd. /quotes/comstock/11t!e:sgq (CA:SGQ 12.65, +0.15, +1.20percents) (SEHK: 1878), announced today 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 usd25 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.
About SouthGobi Resources
SouthGobi Resources is focused on exploration and development of its Permian-age metallurgical and thermal coal deposits in Mongolia"s South Gobi Region. The company"s flagship coal mine, Ovoot Tolgoi, is producing and selling coal to customers in China. The company plans to supply a wide range of coal products to markets in Asia.
Forward-Looking Statements: This document includes forward-looking statements. Forward-looking statements include, but are not limited to, plans to supply a wide range of coal products to markets in Asia; and other statements that are not historical facts. When used in this document, the words such as "plan," "estimate," "expect," "intend," "may," and similar expressions are forward-looking statements. Although SouthGobi believes that the expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements are disclosed under the heading "Risk Factors" in SouthGobi"s Management Discussion and Analysis of Financial Condition and Results of Operations for the year ended Dec. 31, 2009, and quarter ended March 31, 2010 which are available at www.sedar.com.