The maiden resource is made up of 38.2Mt indicated and 24.9Mt inferred.

It underpins the potential start-up open cut mining opportunity of 1-2Mt per annum for the project.

Guildford said mining licence applications had been lodged for EL13780X and EL5262X and both were expected to be granted before the end of 2011.

Scoping studies are also being completed for the start-up operation and mining is targeted to commence by the end of the second quarter of 2012 in the north pit on EL13780X.

Drilling will continue on the other key tenements in the South Gobi project to define the JORC resource needed to underpin the conceptual central, west and east pit mine strategy for the project.

The South Gobi project area consists of five exploration licences located in the South Gobi Province (Umnigovi Aimag) of Mongolia.

The licences are situated approximately 1000km southwest of the Mongolian capital of Ulaanbaatar and approximately 60km from the Chinese border station of Ceke, where coal from Mongolia is transported through to China.

The project is also located approximately 50km east of Nariin Sukhait, which includes SouthGobi Resources’ Ovoot Tolgoi mine and the MAK mine, which currently produce and export coking and thermal coal to customers in China.

The SouthGobi mines produce in excess of 5Mtpa of high-volatile bituminous coals which are marketed as separate thermal and coking coal products.