SouthGobi Resources has received three pre-mining agreements (PMAs) relating to three mineral exploration licences. The PMAs granted by the Mineral Resources Authority of Mongolia (MRAM) relate to the Zag Suuj coal deposit and certain areas associated with the Soumber coal deposit, and will enable SouthGobi to progress to the mining licence application process.
The PMAs relate to three mineral exploration licences held by the company’s wholly-owned Mongolian subsidiary SouthGobi Sands LLC. The three PMAs were issued by MRAM following due process by the Mongolian authorities in accordance with the Minerals Law of Mongolia and other applicable laws and regulations.
One licence relates to certain areas associated with the Soumber deposit outside the existing mining licence and the PMA previously granted on January 18, 2013.
The three PMAs, together with the PMA granted on January 18, 2013, were the subject of applications originally made in 2011. On July 11, 2012, SouthGobi announced that SGQ Coal Investment, a wholly-owned subsidiary of SouthGobi Resources that owns 100% of SouthGobi Sands LLC, filed a Notice of Investment Dispute on the Government of Mongolia pursuant to the Bilateral Investment Treaty between Singapore and Mongolia.
SouthGobi is pleased that the grant of the three PMAs, together with the PMA granted on January 18, 2013, has been achieved without the need to commence arbitration or conciliation pursuant to the Notice of Investment Dispute. Accordingly, SouthGobi has withdrawn the Notice of Investment Dispute in recognition that this dispute has been resolved to the benefit of all key stakeholders.
SouthGobi is listed on the Toronto and Hong Kong stock exchanges, in which Turquoise Hill Resources, also publicly listed in Toronto and New York, has a 58% shareholding. Turquoise Hill took management control of SouthGobi in September 2012 and made changes to the board and senior management. Rio Tinto has a majority shareholding in Turquoise Hill.
SouthGobi is focused on exploration and development of its metallurgical and thermal coal deposits in Mongolia’s South Gobi Region. It has a 100% shareholding in SouthGobi Sands LLC, the Mongolian registered company that holds the mining and exploration licences in Mongolia and operates the flagship Ovoot Tolgoi coal mine, which produces and sells coal to customers in China.