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Monday, December 1, 2014

SouthGobi, facing default, raises $9 million through placement, (TSE: SGQ.TO)

SouthGobi Resources Ltd , a Canadian coal miner with operations in Mongolia, said it had raised about $9 million through a private placement of shares.The company, hurt by weak coal prices, warned in March that a delay in securing additional financing could result in a default of $250 million debentures held by China Investment Corp (CIC).The proceeds from the private placement of about 24.4 million shares will be used to pay the November 2014 installment of the cash interest due on the CIC convertible debenture, the company said.SouthGobi said on Nov. 20 it would delay the CIC interest payment, which is due on Nov. 19, until Dec. 1 as it continued to seek additional funding.

Shares of SGQ traded higher by 3.77% or $0.02/share to $0.55. In the past year, the shares have traded as low as $0.46 and as high as $1.05. On average, 12771 shares of SGQ.TO exchange hands on a given day and today's volume is recorded at 980.