SouthGobi Resources Ltd. (TSX:SGQ – News; SEHK:1878 – News) announced today that it
has completed its first “direct delivery” coal sale from its Ovoot
Tolgoi coal mine in southern Mongolia to Risun Mining Co. Ltd.
(“Risun”).

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 tonne,
2011 sales contract. Using a logistics service provider, SouthGobi transported
coal to a customs bonded yard at Ceke, China, approximately 50 kilometres south
of SouthGobi”s Ovoot Tolgoi coal mine. Ceke is a major Chinese coal
distribution terminal with rail connections to key coal markets in China. Risun
then undertakes 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. Molyneux. “We”re also
delighted to welcome Risun as a new customer, which has annual coal requirements.”