SouthGobi Resources Ltd. Announced that
construction has commenced on a new paved coal highway to the Mongolia-China
border. A ribbon-cutting ceremony was held June 16, 2012 to commemorate the
start of construction.

On August 2, 2012, the State
Property Committee of Mongolia awarded the tender to construct a paved highway
from the Ovoot Tolgoi complex to the Shivee Khuren border crossing to consortium
partners NTB LLC and SouthGobi Sands LLC, wholly-owned subsidiary of SouthGobi
Resources (together referred to as “RDCC”). On October 26, 2011, RDCC signed
the concession agreement with the State Property Committee of Mongolia. RDCC
now has concluded a 15 year build, operate and transfer agreement under the
Mongolian Law on Concessions. The paved highway will have an intended carrying
capacity upon completion in excess of 20 million tonnes of coal per year.

“The new paved coal highway
significantly increase the safety of coal transportation to the border, reduce
dust, and improve efficiency and capacity of coal transportation” said
Alexander Molyneux, President and CEO.

Source: MarketWire