Mining: SouthGobi announces agreement to sell its thermal coal Tsagaan Tolgoi Deposit for US$30 million

HONG KONG – SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) announced today an agreement to sell its thermal coal property, the Tsagaan Tolgoi Deposit to Modun Resources Limited (ASX: MOU) (“Modun”).

SouthGobi intends to facilitate the sale of Tsagaan Tolgoi through the transfer of a wholly-owned subsidiary holding one mining license (15041A) and one exploration license (7262X) pertaining to thatdeposit.

Under the transaction, SouthGobi expects to receive US$30 million of total consideration, comprising US$7.5 million up-front in cash, US$12.5 million up-front in Modun shares and deferred consideration
of an additional US$10.0 million also payable in Modun shares. As a result, SouthGobi will have a significant shareholding in Modun and it will have the right to nominate one director to the board of
Modun subject to SouthGobi holding an equity interest in excess of 14.9%. The transaction is subject to certain terms and conditions and is expected to be completed by June 1, 2012.

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