Southgobi Announces Filing of Ni 43-101 Technical Reports FOR Ovoot Tolgoi Coal MINE and Soumber Coal Project
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December 2, 2024
SOUTHGOBI ANNOUNCES FILING OF NI 43-101 TECHNICAL
REPORTS FOR OVOOT TOLGOI COAL MINE
AND SOUMBER COAL PROJECT
VANCOUVER – SouthGobi Resources Ltd. (TSX-V: SGQ, HK: 1878) (“SouthGobi” or the “Company”) is
pleased to announce the filing of new independent technical reports, each prepared by BAW Mineral Partners
Limited (“ BAW”), in accordance with the requirements of National Instrument 43 -101 – Standards of
Disclosure for Mineral Projects (“NI 43-101”) under applicable Canadian securities laws in respect of its Ovoot
Tolgoi Coal Mine and its Soumber Coal Project.
The Ovoot Tolgoi technical report is entitled “NI 43-101 Technical Report – Ovoot Tolgoi Coal Mine, South
Gobi Province, Mongolia” with an effective date of December 31, 2023 and dated December 2, 2024 (the
“Ovoot Tolgoi Technical Report”). The Soumber technical report is entitled “NI 43- 101 Technical Report –
Soumber Coal Project, Sout h Gobi Province, Mongolia” with an effective date of December 31, 2023 and
dated December 2, 2024 (the “ Soumber Technical Report,” and together with the Ovoot Tolgoi Technical
Report, the “Technical Reports”).
The primary objectives of the Technical Repor ts are to provide updated estimates of mineral resources
(“Resources”) and mineral reserves (“ Reserves”), as such terms are defined under NI 43 -101, for each of
the Ovoot Tolgoi Coal Mine and the Soumber Coal Project. The Company is pleased to present its first
Resource estimates for the B Field Prospect at the Ovoot Tolgoi Coal Mine, as further discussed below, and
its first Reserve estimates for the Soumber Coal Project.
Selected summary information from the Technical Reports is presented below. Readers are cautioned that
the summary information set out in this press release is subject to important qualifications, assumptions, and
exclusions, all of which are detailed in the Technical Reports. To fully understand the summary information
set out below, the Technical Reports should be read in their entirety, and are available under the Company’s
profile on SEDAR+ at www.sedarplus.com and on the Company’s website at www.southgobi.com.
OVOOT TOLGOI TECHNICAL REPORT
Background
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The Ovoot Tolgoi Mine is the Company’s flagship asset, and is comprised of the Sunrise Pit, Sunset Pit, B
Field Prospect, and C Field Prospect. The Ovoot Tolgoi Coal Mine is situated in the southwestern corner of
the Umnugobi Aimag (South Gobi Province) of Mongolia, within the adminis trative territory of Gurvantes
Soum. It is located approximately 320 km southwest of the provincial capital, Dalanzadgad, and
approximately 45 km north of the Mongolia-China border at the Ceke border crossing. Ceke, located on the
Chinese side of the Shiveekhuren Border Crossing, is a major coal distribution terminal with rail connections
to key coal markets in China, and serves as the primary distribution center for coal produced from the Ovoot
Tolgoi Mine.
The Company commenced mining at the Ovoot Tolgoi Mine in 2008. The Company sells a portion of its coal
at the mine-gate to Chinese customers, while the remaining coal inventory is transported to China and sold
through its Chinese subsidiaries at the stockyards in Ceke or certain designated locations in China as
requested by customers. Saleable products from the Ovoot Tolgoi Mine primarily consist of SouthGobi
standard and SouthGobi premium semi -soft coking coal products. Some higher ash content product is
processed and sold as semi -soft coking coal produ ct while some of the unwashed products are sold as a
thermal coal product when the market allows.
Highlights
Highlights of the updated Ovoot Tolgoi Technical Report include:
Measured and Indicated Resources for the Sunrise Pit increased by approximately 9.8% from 121.70
million tonnes (Mt) as of December 31, 2016 to 133.60 Mt as of December 31, 2023.
Measured and Indicated Resources for the Sunset Pit decreased by approximately 3.2% from 180.50 Mt
as of December 31, 2016 to 174.71 Mt as of December 31, 2023.
Measured and Indicated Resources for the B Field Prospect is 14.29 Mt as of December 31, 2023.
Reserve Estimate
The following is a table summarizing the Reserves of the Ovoot Tolgoi Coal Mine as of December 31, 2023,
for the Sunrise Pit and the Sunset Pit.
Coalfield Proven (Mt) Probable (Mt) Total (Mt)
Sunrise Pit 27.90 11.69 39.59
Sunset Pit 41.56 1.12 42.68
Total 69.46 12.81 82.26
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Notes:
(1) Coal price adopted in the Reserve estimates is US $90/t.
(2) Reserves do not include any Inferred Resources.
(3) Totals may not add up due to rounding.
Resource Estimate
The following is a table summarizing the Resources of the Ovoot Tolgoi Coal Mine as of December 31, 2023,
divided into Surface and Underground Resources for the Sunrise Pit, the Sunset Pit, and the B Field Prospect.
Coalfield
Measured
(Mt)
Indicated
(Mt)
Measured +
Indicated
(Mt)
Inferred
(Mt)
Sunrise Pit Surface 54.98 42.96 97.94 37.90
Underground 10.46 25.20 35.66 49.19
Sunset Pit Surface 77.08 11.86 88.94 2.99
Underground 70.03 15.74 85.77 10.75
B Field Prospect Surface 2.48 7.96 10.44 21.48
Underground 0.00 3.85 3.85 3.89
Total 215.03 107.57 322.60 126.20
Notes:
(1) Resources are inclusive of Reserves.
(2) Resources that are not Reserves and may not demonstrate economic viability.
(3) Surface Resources are constrained to a depth of 300 m below surface.
(4) Underground Resources are constrained to a depth of 300 m - 500 m below surface.
(5) Totals may not add up due to rounding.
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Economic Analysis
For further information regarding the economic analysis and life of mine plan of the Ovoot Tolgoi Mine, please
refer to the full text of the Ovoot Tolgoi Technical Report.
SOUMBER TECHNICAL REPORT
Background
The Soumber Coal Project is located in the southwestern part of Umnugobi Aimag, within the Uvuljuu Uul
area of Gurvantes Soum. It is bordered by Dundogovi and Dornogovi Aimags to the northeast and southeast,
respectively, and by Uvurkhangai and Bayankhongor Aimags to the northwest and southwest, respectively.
It is located approximately 20 km e ast of the Ovoot Tolgoi Coal Mine and approximately 50 km north of the
Mongolia-China border at the Ceke border crossing. The Soumber Coal Project consists of four concessions:
Central Soumber, East Soumber, Biluut and Jargalant.
Highlights
Highlights of the updated Soumber Technical Report include:
• Proven and Probable Reserves for the Soumber Coal Project of 25.14 Mt in aggregate as of December
31, 2023.
• Measured and Indicated Resources for the Biluut concession increased by approximately 72.7% from
67.90 Mt as of January 10, 2013 to 117.24 Mt as of December 31, 2023.
• Measured and Indicated Resources for the Jargalant concession decreased by approximately 7.1%
from 25.70 Mt as of January 10, 2013 to 23.88 Mt as of December 31, 2023.
• Measured and Indicate d Resources for the East Soumber concession decreased by approximately
14.4% from 32.00 Mt as of January 10, 2013 to 27.40 Mt as of December 31, 2023.
Reserve Estimate
The following is a table summarizing the Reserves of the Soumber Coal Project as of December 31, 2023,
for the Biluut, Jargalant and East Soumber concessions.
Concession Proven (Mt) Probable (Mt) Total (Mt)
Biluut 16.62 2.39 19.02
Jargalant 1.52 1.36 2.89
East Soumber 2.99 0.24 3.24
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Total 21.14 4.00 25.14
Notes:
(1) Coal price adopted in the Reserve estimates is US $90/t.
(2) Reserves do not include any Inferred Resources.
(3) Totals may not add up due to rounding.
Resources Estimate
The following is a table summarizing the Resources of the Soumber Coal Project as of December 31, 2023,
divided into Surface and Underground Resources for the Biluut, Jargalant and East Soumber concessions.
Concession
Measured
(Mt)
Indicated
(Mt)
Measured +
Indicated
(Mt)
Inferred
(Mt)
Biluut Surface 61.99 33.17 95.16 8.67
Underground 3.40 18.68 22.08 16.07
Jargalant Surface 9.91 13.76 23.68 5.64
Underground 0.14 0.06 0.20 0.33
East Soumber Surface 15.19 10.48 25.67 1.68
Underground 0.20 1.53 1.73 1.53
Total 90.83 77.68 168.52 33.92
Notes:
(1) Resources are inclusive of Reserves.
(2) Resources that are not Reserves and may not demonstrate economic viability.
(3) Surface Resources are constrained to a depth of 300 m below surface.
(4) Underground Resources are constrained to a depth of 300 m - 500 m below surface.
(5) Totals may not add up due to rounding.
(6) The authors of the Soumber Technical Report have opted to not include a Resource estimate for the
Central Soumber concession in the Soumber Technical Report because the special protected area
status which prohibits mining activities within the Central Soumber concession remains effective until
December 3, 2025. The Soumber Technical Report states that Resources can be estimated and
classified in the future once the protected area status is resolved.
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QUALIFIED PERSONS
The technical information contained in this press release has been reviewed and approved by
Jaydee Ammugauan (MAIG) and Tao Xu (P. Eng), who are “qualified persons” and
“independent” of the Company, as such terms are defined under NI 43-101.
About SouthGobi
SouthGobi, listed on the Hong Kong Stock Exchange and the TSX Venture Exchange, owns
and operates its flagship Ovoot Tolgoi coal mine in Mongolia. It also holds the mining licences
of its other metallurgical and thermal coal deposits in South Gobi region of Mongolia.
SouthGobi produces and sells coal to customers in China.
Contact:
Investor Relations
Email: [email protected]
Mr. Ruibin Xu
Chief Executive Officer
Office: +1 604 762 6783 (Canada)
+852 2156 1438 (Hong Kong)
Website: www.southgobi.com
FORWARD LOOKING STATEMENTS
Except for statements of fact relating to SouthGobi and its subsidiaries, certain information
contained herein constitutes forward -looking statements within the meaning of applicable
securities laws (collectively referred to herein as “forward -looking statements”) and such
forward-looking statements are based on expectations, estimates, and projects as of the date
of this press release. Forward-looking statements are frequently characterized by words such
as “plan”, “expect”, “project”, “intend”, “believe”, “anticipate”, “could”, “should”, “seek”, “likely”,
“estimate” and other similar words or statements that certain events or conditions “may” or
“will” occur.
Forward-looking statements in this press release include, but are not limited to, statements
regarding the estimates of Reserves and Resources for the Ovoot Tolgoi Coal Mine and
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Soumber Coal Project and the realization of such estimates; estimated coal prices; statements
regarding the life of mine plan and the realization of such plan, and other statements that are
not historical facts.
The Company cautions the reader that forward -looking statements are necessarily based
upon a number of estimates and assumptions t hat, while considered reasonable by the
Company, are inherently subject to significant business, financial, operational, and other risks,
uncertainties, contingencies, and other factors, including those described below, which could
cause actual results, performance, or achievements of the Company to be materially different
from results, performance, or achievements expressed or implied by such forward -looking
statements and, as such, undue reliance must not be placed on them.
Forward-looking statements are also based on numerous material factors and assumptions,
including as described in this press release: the Company’s present and future business
strategies; operations performance within expected ranges; anticipated future production and
cash flows; local and global economic conditions and the environments in which the Company
will operate in the future; the price of coal; projected grades of coal; international exchange
rates; anticipated capital and operating costs; the availability and timing of governmental, and
other approvals for the construction of the Company’s projects.
Risks and uncertainties, including as described in this press release, include but are not limited
to: risks that the actual production or sales will be less than projected or exp ected; liabilities
inherent in coal mine production; mining and processing technical problems; inability to obtain
required mine licences, mine permits, and regulatory approvals or renewals required in
connection with the mining and processing of coal; risks that the Company’s coal preparation
plant will not operate at production capacity during the relevant period; unexpected changes
in coal quality and specification; variations in the coal mine or coal preparation plant recovery
rates; dependence on third party coal transportation systems; changes in commodity prices
and exchange rates; the effects of competition and pricing pressures in the coal market; the
oversupply of, or lack of demand for, coal; inability of management to secure coal sales or
third party purchase contracts; labour stoppages and severe weather conditions; the demand
for and availability of port and other transportation services; and management’s ability to
anticipate and manage the foregoing factors and risks. This list is not exhaustive of the factors
that may affect any of the Company’s forward - looking statements. Due to the risks and
uncertainties identified above and elsewhere in this press release, actual events may differ
materially from current expectations. The Company uses forward- looking statements because
it believes such statements provide useful information with respect to the currently expected
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future operations and financial performance of the Company, and cautions readers that the
information may not be appropriate for other purposes. Except as required by law, the
Company undertakes no obligation to update forward-looking statements if circumstances or
management’s estimates or opinions should change. The reader is cautioned not to place
undue reliance on the forward -looking statements, which speak only as of the date of this
press release; they should not rely upon this information as of any other date.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is
defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy
or accuracy of this release.