SouthGobi Resources has made allocations under private placements as announced on June 22 with CITIC Merchant Co Ltd and Swiss Life Gestion Privee as investors for the issue of new common shares in the company. The investors have agreed to subscribe for 55 million new shares for aggregate gross proceeds of up to approximately US$31.6 million.

CITIC Merchant will receive 50 million shares for gross proceeds to SouthGobi of US$28.7 million and Swiss Life will receive five million shares for $2.9 million.
CITIC Merchant is the merchant banking arm of the CITIC Group and is principally engaged in the provision of strategic advisory services and financing solutions for the state-owned and private enterprises in diversified sectors, in particular, healthcare, energy and resources sectors.

Swiss Life GP is the asset management company of the SwissLife Banque Privee in France, a European private bank under Swiss Life Group which is one of Europe’s leading comprehensive life insurance, pensions and financial solutions providers.

Proceeds from the private placements will be applied towards SouthGobi’s working capital to meet its current obligations and to fund its operations in the coming months.

The new common shares represent in the aggregate an approximate 19% equity interest in the company following completion of the issuance.

SouthGobi, listed on the Toronto and Hong Kong stock exchanges, 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, a Mongolian registered company that holds the mining and exploration licences in Mongolia and operates the flagship Ovoot Tolgoi coal mine.

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