VANCOUVER, CANADA -- Peter Meredith, CEO of SouthGobi Energy Resources Ltd. (SGQ: TSX-V) and Richard Gosse, Vice President Exploration, Metals Division, are pleased to provide a year end update on the company's metallic minerals division.
The Metallic Minerals division recently announced (see News Release December 17, 2007) the discovery of an encouraging low sulphidation epithermal gold and silver system in Java. The company also is pleased to report the discovery of a new porphyry copper-gold system on a second project in Indonesia where SouthGobi has a 90% fully participating interest. The exact location of these two projects is not being disclosed at present for competitive reasons.
The newly discovered porphyry mineralization consists of chalcopyrite, bornite and pyrite disseminated in a potassic altered hornblende diorite porphyry with quartz veinlet stockwork. The porphyry mineralization has been followed in outcrop for 380 metres while boulders of similarly mineralized rock found 500 metres away may indicate a second zone.
The Kaputusan copper-gold joint venture on Bacan Island optioned in 2006, is awaiting environmental approval to begin a second phase 3,500-metre diamond drill program.
The company also has identified seven other epithermal gold and porphyry copper-gold opportunities in Indonesia and is working with joint venture partners to expedite the acquisition of mineral licences.
SouthGobi holds 32 mineral exploration licences covering an aggregate area of approximately 610,000 hectares. The Khongor porphyry copper-gold deposit that was discovered by SouthGobi geologists in 2005 continues to be the company's key metal property in Mongolia. The setting, style and age of the mineralization is comparable to Ivanhoe's Oyu Tolgoi Project, which is located about 300 km east of Khongor.
The Khongor project extends over two contiguous exploration licences. Khongor North, until recently, was an exclusion area within the West Falcon Gobi Property, which was joint ventured with BHP Billiton. Khongor South is covered by an option agreement with Gallant Minerals whereby SouthGobi has the right to earn an 80% interest.
BHP Billiton has notified the company that it does not intend to exercise its option to acquire a 50% interest in the West Falcon Gobi property. As a result, the option agreement that the company entered into with BHP Billiton in June 2005, and amended in February 2006, has been terminated. BHP Billiton has therefore relinquished their back-in right to Khongor North. SouthGobi now retains a 100% interest in the West Falcon Gobi property including Khongor North.
A phase three 3,500-metre diamond drill program to follow up the near surface porphyry copper-gold intersections drilled at Khongor in 2005 and 2006 is planned to begin in early 2008.
Finally, regional exploration for Proterozoic shale-hosted gold in the Khuvsgul region using stream sediment geochemistry has identified nine contiguous catchments covering an area of approximately 70 sq. km. that are anomalous in gold and pathfinder elements.
Richard Gosse, Vice President Exploration, Metals Division, a qualified person as defined by National Instrument 43-101, supervised the preparation of the technical information in this release.
About SouthGobi Energy Resources
SouthGobi Energy Resources is focused on exploration and development of its Permian-age metallurgical and thermal coal deposits in Mongolia's South Gobi Region to supply a wide range of coal products and electricity to markets in Mongolia and China. The company is investigating the implementation of clean coal technologies in the development of coal generating power 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.
Information contacts: Investors: Steven Feldman/ Media: Bob Williamson: +1 604 681-6799
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
Forward-Looking Statements: This document includes forward-looking statements. Forwardlooking statements include, but are not limited to, statements concerning the company's plans to explore and develop various coal, copper and gold properties in Mongolia and Indonesia, and other statements that are not historical facts. When used in this document, the words such as "could, " "plan, " "estimate," "expect," "intend," "may," "potential," "should," and similar expressions are forward-looking statements. Although SouthGobi Energy Resources 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 Energy's Management's Discussion and Analysis of Financial Condition and Results of Operations for the three months ended September 30, 2007, which is available at www.sedar.com.