VANCOUVER, BRITISH COLUMBIA -- (MARKET WIRE) -- 06/26/07 -- Peter Meredith, CEO of SouthGobi Energy Resources Ltd. (TSX VENTURE: SGQ), is pleased to announce that the company has retained George Klinowski, a professional mining engineer with international experience in design, construction and management of underground coal projects, to lead SouthGobi's design of a safe, low-cost underground coal mining operation that can supplement the planned surface-mine production at the Ovoot Tolgoi coal project in southern Mongolia.

SouthGobi's planning for the potential development of the underground coal seams at Ovoot Tolgoi has been prompted by the increased demand for high-quality metallurgical and thermal coal by buyers in northern China.

"Ovoot Tolgoi's main coal seam exhibits promising coking quality characteristics at depth and, given the coal thicknesses intersected by drilling to date, we believe that the project has excellent potential to produce coal from both open pit and underground mining operations," said Gene Wusaty, SouthGobi's Chief Operating Officer, Coal Division. "Mr. Klinowski's appointment allows us to aggressively pursue drilling and engineering studies with a view to delineating additional resources that may be amenable to extraction by underground methods."

SouthGobi has engaged Norwest Corporation of Salt Lake City, Utah, to assist with the design and engineering of the proposed underground mining operation at Ovoot Tolgoi.

SouthGobi Energy Resources Issues Stock Options

SouthGobi Energy Resources has granted a total of 1,735,000 incentive stock options, subject to all necessary regulatory approvals, to certain directors, officers and employees of the company, exercisable at a price of $6.00 per share. The options vest over a period of two years and expire on June 22, 2012. The options were granted in accordance with the company's Employees' and Directors' Equity Incentive Plan.

About SouthGobi Energy Resources

SouthGobi Energy Resources is focused on exploration and development of its Permian-age metallurgical and thermal coal deposits in Mongolia's South Gobi Region to supply a wide range of coal products and electricity to markets in Mongolia and China. The company is investigating the implementation of clean coal technologies in the development of a coal generating power plant to benefit all of its stakeholders. As the company increases its resource base, SouthGobi Energy Resources plans to pursue the potential application of Coal-to-Liquids (CTL) technology to convert a portion of its resources into low-sulphur diesel, gasoline and naphtha.

Forward-Looking Statements: This document includes forward-looking statements. Forward-looking statements include, but are not limited to, statements concerning the company's plans to develop and supply various coal products and electrical energy to markets in Mongolia and China, and other statements that are not historical facts. When used in this document, the words such as "could", "plan", "estimate", "expect", "intend", "may", "potential", "should", and similar expressions are forward-looking statements. Although SouthGobi Energy Resources believe that the expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements are disclosed under the heading "Risk Factors" in South Gobi Energy's Management's Discussion and Analysis of Financial Condition and Results of Operations for the three months ended March 31, 2007, which is available at www.sedar.com.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy or this release.

Contacts:
SouthGobi Energy Resources Ltd.
Steven Feldman
Investors
(604) 681-6799

SouthGobi Energy Resources Ltd.
Bob Williamson
Media
(604) 681-6799
Website: www.southgobi.com