SouthGobi Resources Announces Start of Construction on New Paved Coal Highway to Mongolia-China Border

HONG KONG, CHINA--(Marketwire - June 19, 2012) - SouthGobi Resources Ltd. (TSX:SGQ)(HKSE:1878) announced today that construction has commenced on a new paved coal highway to the Mongolia-China border. A ribbon-cutting ceremony was held June 16, 2012 to commemorate the start of construction.

On August 2, 2011, the State Property Committee of Mongolia awarded the tender to construct a paved highway from the Ovoot Tolgoi Complex to the Shivee Khuren Border Crossing to consortium partners NTB LLC and SouthGobi Sands LLC, a wholly-owned subsidiary of SouthGobi Resources (together referred to as "RDCC"). On October 26, 2011, RDCC signed the concession agreement with the State Property Committee of Mongolia. RDCC now has concluded a 15 year build, operate and transfer agreement under the Mongolian Law on Concessions. The paved highway will have an intended carrying capacity upon completion in excess of 20 million tonnes of coal per year.

"The new paved coal highway will significantly increase the safety of coal transportation to the border, reduce dust, and improve efficiency and capacity of coal transportation," said Alexander Molyneux, President and CEO.

About SouthGobi Resources

SouthGobi Resources is focused on exploration and development of its Permian-age metallurgical and thermal coal deposits in Mongolia's South Gobi Region. The company's flagship coal mine, Ovoot Tolgoi, is producing and selling coal to customers in China. The company plans to supply a wide range of coal products to markets in Asia.

Forward-Looking Statements: This document includes forward-looking statements. Forward-looking statements include, but are not limited to, the ability of the coal highway to increase safety of coal transportation to the border; reduce dust; and improve efficiency and capacity of coal transportation, 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 quarter ended March 31, 2012 which is available at www.sedar.com.