SouthGobi Energy Sells its Mamahak Coal Project to Kangaroo Resources Ltd.

Vancouver-based SouthGobi Energy Resources Ltd. announced that the company has entered into an agreement to divest its effective 85% interest in the Mamahak coal project in Indonesia to Kangaroo Resources Ltd. of Australia for US$1 million in cash and 50 million shares of Kangaroo. As a result of this transaction, SouthGobi will hold approximately 6.7% of outstanding shares in Kangaroo, which will be subject to a 12-month lock-up period. Kangaroo has seven coal projects in the East Kalimantan region of Indonesia. SouthGobi Energy Resources is focused on exploration and development of its Permian-age metallurgical and thermal coal deposits in Mongolia’s South Gobi Region. The company’s flagship coal mine, Ovoot Tolgoi, is producing and selling coal to customers in China.