Peter Meredith, Chief Executive Officer of SouthGobi Energy Resources Ltd. and Gene Wusaty, Chief Operating Officer, announced today that a Location Permit (ljen Lokasi) has been issued by the local Government, which allows the company to commence surface coal mining of the SW deposit on the MCM concession at the Mamahak Coal Project in East Kalimantan, Indonesia.

“The timing of the approval allows for SouthGobi to prepare for the start of coal mining operations in the first quarter 2009,” said Mr. Wusaty. “With results from our recent bulk sample confirming high-fluidity metallurgical coking coal, we plan to introduce this coal to selected Asian Steel Mills for testing.”

Other project developments include:

- Construction activity at the Mamahak Project site is focused on the completion of a 30 kilometre haul road from the SW deposit to the barge port on the Mahakam River. Construction is in progress on the installation of a river barge loading terminal capable of loading 600 tonnes per hour which will be located at Long Habung on the Mahakam River.

- SMG Consultants is drafting a report defining coal resources according to National Instrument 43-101 standards incorporating technical information from 218 drill holes completed at Mamahak.

- A new bulk sample of coal from the E Block is currently being taken. Further drilling and sampling at both the SW and E Blocks to extend resources along the strike of both deposits also is progressing.

- Drill crews have been mobilized to the BKL concession area (Northwest of the initial mining area) to commence drilling of targets identified by a new reconnaissance mapping report.

SouthGobi recently increased its working interest in the Mamahak Joint Venture from 56% to 85% and has provisions in the joint venture agreement to increase its working interest to 100%. The Mamahak Coal Project is ideally located to supply the Japanese, Korean, Indian and Chinese coastal markets and complements SouthGobi’s established operating coal mine, Ovoot Tolgoi in southern Mongolia.

Gene Wusaty, SouthGobi Energy’s Chief Operating Officer, a qualified person as defined by National Instrument 43-101, supervised the preparation of the technical information in this release.

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