Breaking

U.S. Natural Gas Futures Drop Below $3 for First Time Since 2012
Tweet TWEET

SouthGobi Updates on Mongolian Independent Anti-Corruption Agency Investigation and Receipt of a Pre-Mining Agreement

SouthGobi Updates on Mongolian Independent Anti-Corruption Agency Investigation 
and Receipt of a Pre-Mining Agreement 
HONG KONG, CHINA -- (Marketwire) -- 02/07/13 -- SouthGobi Resources
Ltd. (TSX:SGQ)(HKSE:1878) ("SouthGobi" or the "Company") notes recent
public statements and Mongolian media reports referencing SouthGobi's
wholly owned subsidiary, SouthGobi Sands LLC ("SGS"), in connection
with the recent trial and conviction of the former Chairman and the
former director of the Geology, Mining and Cadastral Department of
the Mineral Resources Authority of Mongolia ("MRAM"), and others. The
Company also wishes to update recent developments in relation to the
current investigation being conducted by the Mongolian Independent
Authority Against Corruption (the "IAAC") and the Company's receipt
of a Pre-Mining Agreement ("PMA").  
While neither the Company nor SGS has been provided with a copy of
the decision in the above-noted MRAM criminal case, various sources
have reported details of the verdict. A number of these reports
suggest the court referred to two matters specifically involving SGS;
firstly, an alleged failure to meet the minimum expenditure
requirements required under Mongolian mining law in relation to four
exploration licenses (including License 9442X), and secondly, an
alleged impropriety in the transfer of a fifth license (License
5261X) to a third party in March 2010 in violation of Mongolian
anti-corruption laws. 
Of the first four licenses, Licenses 5259X, 5277X and 12388X lapsed
between November 2009 and December 2011. Only License 9442X is a
current license held by SGS. This license does not contain any of
SouthGobi's resources or reserves. The license does not relate to the
Company's Ovoot Tolgoi mine and the Company does not consider it to
be material to its business.  
The IAAC has informed SGS that orders placing administrative
restrictions on certain of its Mongolian assets, including local bank
accounts, have been imposed in connection with its continuing
investigation. While the orders restrict the use of in-country funds
pending the outcome of the investigation, they are not expected to
have any material impact on the Company's activities. SouthGobi is
reviewing the legal process under which the orders were imposed and
intends to take all necessary steps to protect its ability to
continue to conduct its business activities in the ordinary course. 
Neither SouthGobi nor any of its employees have been charged with any
wrongdoing. SouthGobi is investigating the issues that have been
raised and continues to cooperate with the Mongolian government
agencies, including the IAAC, in their ongoing investigations. 
In other developments, the Company notes that a PMA for License 9443X
was approved and signed by SGS and MRAM on 18 January 2013. License
9443X is an area which complements SouthGobi's existing mining
license for the Soumber Deposit. The Company now intends to proceed
through the mining license application process in respect of License
9443X. 
In addition to the PMA, SGS holds four exploration licenses,
including license 9442X, that are currently subject to valid PMA
applications with MRAM. 
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", "likely" 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, 2011 which is available at www.sedar.com. 
Contacts:
SouthGobi Sands LLC (Mongolia)
Altanbagana Bayarsaikhan
+976 9910 7589
Altanbagana.Bayarsaikhan@southgobi.com
www.southgobi.com 
Brunswick Group (Hong Kong)
Joseph Lo
+852 9850 5033 
Brunswick Group (Hong Kong)
Venus Mak
+852 9681 8994
southgobi@brunswickgroup.com
 
 
Press spacebar to pause and continue. Press esc to stop.