SouthGobi establishes high-quality, semi-soft coking coal at its E. Kalimantan coal project

Vancouver-based mining firm SouthGobi Energy announced Monday that it has received ?encouraging? geological and analytical results from its 2008 drilling program at the Mamahak Coal Project in West Kutai regency, East Kalimantan.

Eleven drill core samples from the concession seams have been received and approximately 75 seam samples are pending. The results received the plan to market the joint venture's coal as a semi-soft coking coal, which commands a premium market price, the company said.

SouthGobi Energy has commenced the development of a "green fields" surface coal deposit in four concessions covering 26,065 hectares in East Kalimantan, through its participation in the Mamahak Joint Venture. The company currently owns 56% of the Mamahak Coal Project and has provisions to acquire full ownership of the project.

It commenced an integrated exploration and development program at Mamahak in March of this year. The 2008 drilling program has identified direct-shipping, semi-soft coking coal amenable to surface mining.

?While further drilling is ongoing, work to date just on the 4,996-hectare portion within the concession supports the company's objective of developing an open-pit mining operation. The intent of the drilling program is to determine down-dip continuity, thickness variations, coal quality and structure,? the company said.

?The close proximity of the Mahakam River, within 26 kilometres of the concession, and the primary coal-barging route in the region, has established this area as the priority location for initial project development. Future exploration still is required on the remaining three concession areas to fully assess the ultimate potential for the entire project.?.

The company added that a total of 60 of the planned 112 exploration holes on the concession development area now have been completed in the E1 and E2 resource blocks. Drilling and geophysical logging has identified four to 13 separate seam intersections in which coal thickness is in excess of 0.4 metres. These seams aggregate to between 2.25 metres and 8.33 metres of total mineable coal. (alex/denny)

MCM Concession: results from 11 drill-core samples
	TM (ARB) %	IM (ADB) %	Ash (ADB) %	VM (ADB) %	Fixed Carbon (ADB) %	Sulphur (ADB) %	CM (ADB) kCal/kg	CV (DAF) kCal/kg	FSI (CSN)
Range (low)	2.97	1.73	2.1	37.3	47.0	0.66	7188	8204	3.5
Range (high)	9.70	2.53	12.7	44.10	51.9	2.00	8261	8605	5.0
Mean Average	5.28	2.08	6.70	40.97	50.03	1.08	7683	8445	4.5

Initial Field Outcrop Coal Quality Sample Results
	IM (ADB) %	Ash (ADB) %	VM (ADB) %	Fixed Carbon (ADB) %	Sulphur (ADB) %	CV (ADB) kCal/kg	FSI (CSN)
No. of Samples	11	9	11	11	10	11	6
Range (low)	1.4	1.9	35.9	42.1	0.54	6642	1.5
Range (high)	4.4	10.0	42.4	54.2	1.32	8098	6.5
Mean Average	2.5	5.4	39.5	45.9	0.88	7414	4.5
Note: TM ? Total Moisture; CV ? Calorific Value; CSN ? Crucible Swelling Index; IM ? Inherent Moisture; VM ? Volatile Matter; ADB ? Air Dry Basis; DAF ? Dry Ash Free; FSI ? Free Swelling Index ARB ? As Received Basis