South Gobi to Sell its Tsagaan Tolgoi Deposit by June 1st, 2012

SouthGobi Resources Ltd.(TSX:SGQ) announced that it will sell its Tsagaan Tolgoi thermal coal property to Modun Resources Limited. The Company expects $30 million in total for the sale. They expect to complete the transaction by June 1, 2012.

As quoted in the press release:

Under the transaction, SouthGobi expects to receive US$30 million of total consideration, comprising US$7.5 million up-front in cash, US$12.5 million up-front in Modun shares and deferred consideration of an additional US$10.0 million also payable in Modun shares.

SouthGobi, President, Alexander Molyneux, said:

This sale will allow SouthGobi to focus on further developing our Ovoot Khural basin holdings, including our flagship Ovoot Tolgoi Complex and the nearby Soumber Deposit, while retaining an indirect exposure to Tsagaan Tolgoi through our shareholding in Modun.

Click here to read the SouthGobi Resources Ltd. (TSX:SGQ) press release