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Market: TSX
Sector: General Mining
EPIC: SGQ
Latest Price: 7.06  (-0.56% Descending)
52-week High: 16.56
52-week Low: 5.85
Market Cap: 1,291.63M
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SouthGobi Resources
www.southgobi.com

SouthGobi Resources is a premium coal production and development company, with strategically located coal assets - closest coal to China -focused on exploration and development of its Permian-age metallurgical and thermal coal deposits in Mongolia's South Gobi Region to supply a wide range of coal products to markets in Asia.

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SouthGobi Energy reaches production target ahead of schedule and below budget

8th Dec 2008, 12:00 am by Andre Lamberti
SouthGobi Energy reaches production target ahead of schedule and below budget

TSX Venture-listed SouthGobi Energy Resources Ltd said the Ovoot Tolgoi mine in southern Mongolia has produced its first 1 million tonnes of coal ahead of schedule and below budget.


Ovoot Tolgoi surpassed its budgeted production for 2008 of 1 million tonnes of coal as of November 29 2008, and is on track to produce 1,100,000 tonnes this year. The actual site cash cost of production at the Ovoot Tolgoi mine through October 31 2008 was approximately US$8.20 per tonne of coal produced, 32 percent under budget.


The Ulaanbaatar office overhead costs through the same period were approximately US$3.20 per tonne of coal mined, 27 percent under budget.  The Ovoot Tolgoi development capital cost of approximately US$42 million for the project also is on target.


Coal shipments commenced September 22 2008, part of two one-year 2008 contracts for 700,000 tonnes of a 6,300 kcal thermal coal product. The forecast for 2009 coal production is approximately 2.9 million tonnes. Discussions have started with customers on 2009 coal sales. All tonnages are expected to be sold into western Inner Mongolia and Gansu Province in China.


Construction continues on three major infrastructure projects to support the Ovoot Tolgoi mine - a workshop/warehouse complex, an administration facility/accommodation camp and concreting the Ovoot Tolgoi airport runway.


The 2008 exploration program which is concluding shortly, concentrated on delineating coal resources on the new Sumber Project, where near-surface seams of high-quality coking and thermal coal was discovered. SouthGobi plans to have a National Instrument 43-101 compliant resource estimate and classification report in the first half of 2009.


Significant exploration also was carried out on the Ovoot Tolgoi underground project, focused on delineating coal resources to the standards prescribed by National Instrument 43-101, which is expected to be completed in the first half of 2009. Exploration also was carried out on the coal fields to the east and west of Ovoot Tolgoi. In addition, drilling work continued on greenfields exploration targets and the Tavan Tolgoi and Tsagaan Tolgoi areas.

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