SouthGobi Announces Discloseable Transaction with Tangshan Shenzhou

SouthGobi Resources Ltd. (TSX-V:SGQ)(HK:1878) has disclosed a new Build-Operate-Transfer (BOT) agreement involving its wholly-owned subsidiary, Southgobi Sands LLC (SGS), and Tangshan Shenzhou Manufacturing Group Co., Ltd. This agreement aims to construct and manage a new dry coal separation system at SouthGobi's Ovoot Tolgoi Mine in Mongolia.

The BOT Agreement assigns Tangshan Shenzhou responsibility for the construction, operation, and quality management of the dry coal separation system, including key equipment and related facilities. The total consideration for this project is approximately RMB79.0 million, or USD$10.9 million. The BOT Agreement is effective from July 15, 2024, until October 1, 2029.

Both parties have conducted thorough assessments to determine the project terms, ensuring the agreement aligns with SouthGobi's business direction. Tangshan Shenzhou, an experienced company in dry coal processing, will handle engineering, construction, and operational aspects. The project is expected to enhance SouthGobi's coal processing capacity and efficiency, ultimately benefiting its market share and local community influence.