The licenced area is located in the South Gobi coal basin, in close proximity to the Zag Suuj deposit of South Gobi Resources Ltd, 60km east of Guildford’s producing Baruun Noyon Uul (BNU) coking coal mine.

The 21.05 square kilometre licence has been granted for a term of three years. Following the three-year term, a further three years can be granted in stages, up to 12 years, following approval by MRAM.

The South Gobi licence XV-018111 is located in the Bayandalai province, in the southwest corner of the Umnogovi Aimag region of southern Mongolia, approximately 130km west of the Provincial capital, Dalanzadgad.

The city is accessible by a sealed road and a regular aircraft service from the Mongolian capital, Ulaanbaatar.

The exploration licence is accessible by unsealed roads, which also connect the area to the BNU mine infrastructure. The licence land is 140km away from the border crossing Shivee Khuren/Ceke in China, which is the main distribution centre for BNU coal.

The exploration licence will be part of the company’s South Gobi project, comprising nine licences – seven of which are exploration and two are mining licences.

The licence is strategically located approximately 60km east of the company’s BNU mine and 140km east of the Nariin Sukhait area, which includes South Gobi Resources’ Ovoot Tolgoi mine and the MAK mine – both of which produce and export coking and thermal coal to customers in China.

The licence will share the current BNU and other South Gobi project infrastructure.

A rail line currently used by the company is located to the south of the new licence and has been constructed from the border crossing of Shivee Khuren/Ceke to the Chinese industrial centres.