Overview

SouthGobi Resources Ltd. (TSE:SGQ, HONG KONG:1878) is a coal production and exploration company based in Vancouver, Canada. The company is focused on exploration and development of its Permian-age metallurgical and thermal coal deposits in Mongolia’s SouthGobi Region in order to supply a wide range of coal products to markets in Asia. Mongolia is becoming a major source of coking coal supply to China.

The company’s flagship coal mine, Ovoot Tolgoi, is selling coal to customers in China – the largest consumer of coal in the world. Ovoot Tolgoi is located in southern Mongolia, approximately 40 kilometres north of the Mongolia/China border.

Investment Highlights

• Projects are strategically located close to China;
• Substantial resources and reserves;
• Produce premium quality coals;
• Low-cost structure due to favourable geographic and geological conditions;
• Strong financial profile after the financings in late 2009 and early 2010;
• Established production with strong growth potential through future expansion of existing mine capacity and development of the company’s priority assets;
• Experienced management team with strong skills in mining, exploration and marketing

Chief Properties

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Ovoot Tolgoi

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The company’s flagship coal mine markets coal to customers in China, which is the largest consumer of coal in the world. The mine is located in southern Mongolia, approximately 40 kilometres north of the Mongolia/China border.

SouthGobi owns three significant coal projects in Mongolia: a producing mine, the Ovoot Tolgoi Mine; and two development projects, the Soumber Deposit and the Ovoot Tolgoi Underground Deposit. In addition, SouthGobi holds mineral exploration licences in Mongolia.

SouthGobi has positioned itself for the forecasted increase demand for coal with a pipeline of unique exploration and development projects in strategic locations that will help to provide for future growth and expansion.

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Objectives

The company continues to focus its efforts on mining, development and exploration of coking and coal products in Mongolia for supply of quality products to customers in China. As the company looks forward through the remainder of 2011 and into 2012, the company is encouraged by the overall long-term demand for its products. The company is making progress with its sales and marketing efforts, continuing to focus on efficiency and prudent financial management, and intends to manage production levels to meet anticipated demand for the company’s products.

The company’s objectives for 2011 remain unchanged from the year ended Dec. 31, 2010, and are as follows:

• Grow Ovoot Tolgoi mine — the additional capacity of the new mining fleets should support growth in coal availability and sales for 2012 over 2011;
• Continue to develop regional infrastructure — the company’s immediate priority centres on improving roads in the area around the Ovoot Tolgoi mine. SouthGobi is part of a consortium awarded the tender to construct a paved highway from Ovoot Tolgoi to the Mongolia-China border. The consortium intends to imminently commence construction of the highway that is expected upon completion to have a carrying capacity in excess of 20 million tonnes of coal per year;
• Advancing the Soumber deposit — SouthGobi intends to further define the deposit with continued exploration work while also substantially advancing the feasibility and planning for a mine at Soumber;
• Value-adding/upgrading coal — the company is close to commissioning a dry coal-handling facility at the Ovoot Tolgoi mine and has contracted Ejin Jinda to undertake wet washing for some coals close to the Mongolia-China border;
• Exploration — exploration will take place to further define the company’s existing deposits;

Operations — continuing to focus on production safety, environmental protection, operational excellence and community relations

Management

Alexander Molyneux - President and Chief Executive Officer, Director

Mr. Molyneux joined the Company as President in April 2009. In October 2009 he was given the additional responsibilities of Chief Executive Officer and appointed as a Director. Mr. Molyneux is based in Hong Kong, and was most recently Managing Director, Head of Metals & Mining Investment Banking, Asia Pacific, with Citigroup. Mr. Molyneux has spent approximately 10 years providing advice and investment-banking services to mining,metals and industrial corporations. He joined Citigroup from UBS in early-2007 as Head of Metals & Mining Investment Banking.

Mr. Molyneux has been working with Asia-based clients since 2002. He advised on many significant merger and acquisition transactions in the metals and mining sector. Mr. Molyneux received his Bachelor degree in Economics from Monash University in Australia

Matthew O’Kane- Chief Financial Officer

Mr.O’Kane joined the company in January, 2011. He has spent 16 years in finance roles within the manufacturing industry. During this time he worked for Ford Motor Company both in Australia and in the United States.

Prior to joining South Gobi he spent four years as the Finance Director, and an Executive Director of Volvo Car Australia Pty Ltd, a fully owned subsidiary of Volvo Car Corporation, Sweden. He holds a Bachelor degree in Business( Economics and Finance) and an MBA from the Royal Melbourne Institute of Technology, and is a qualified CPA.

Curtis Church- Chief Operating Officer

Mr. Church has been the vice-president, mining operations, since October, 2010, and was previously general manager of the Ovoot Tolgoi coal mine in southern Mongolia for more than two years.

Mr. Church has more than 16 years experience in the mineral resources industry, including more than six years of experience working at various mining operations in Mongolia.