Gene Wusaty, a Chief Operating Officer, Coal Division of SouthGobi Energy Resources Ltd., has announced that the company has discovered a new coal formation 10 kilometers southeast of the company's producing Ovoot Tolgoi coal mine.

The new coal discovery is approximately 33 kilometers (approximately 20 miles) north of the China-Mongolia border.
The new coal occurrence was discovered through field reconnaissance work. Two trenches approximately three meters deep have been excavated and multiple seams have been uncovered with up to 15 meters of apparent thickness. To date, the coal field has been defined over a strike length of approximately 1,800 meters.
Based on the successful trenching results, a drilling program has commenced. Initial results have identified multiple coal seams up to 18 metres in apparent thickness. The intent of this initial drill program is to determine the coal structure as well as coal quality. Coal quality results are pending.
"This additional discovery of coal in close proximity to our operating mine, Ovoot Tolgoi, significantly enhances the scope of our coal development potential," Mr. Wusaty said. "The discovery is particularly important due to its close proximity to the Chinese border."
SouthGobi Energy Resources recently commenced coal deliveries from its Ovoot Tolgoi Mine to customers in China.
Gene Wusaty, SouthGobi Energy's Chief Operating Officer, Coal Division, a qualified person as defined by National Instrument 43-101, supervised the preparation of the technical information in this release.
SouthGobi Energy Resources is focused on exploration and development of its Permian-age metallurgical and thermal coal deposits in Mongolia's South Gobi Region and East Kalimantan, Indonesia. The company's flag-ship coal mine, Ovoot Tolgoi, is in production and operating on a 24-hour basis. The company plans to supply a wide range of coal products and electricity to markets in Asia. The company also is investigating the implementation of clean-coal technologies in the development of coal power-generating capacity to benefit all of its stakeholders. The company’s metals division is focused on the exploration and development of its copper and gold projects in Mongolia and Indonesia.

 

Source: Montsame

Oct 9, 2008