INVESTOR PRESENTATION

TSX: SGQ HKEx: 1878

OCTOBER 2010

2

Disclaimer

Forward-looking statements

This presentation includes certain “forward-looking statements.” All statements, other than statements of historical fact, are forward-looking statements that involve various risks and uncertainties. There can be no assurances that such statements will prove accurate, and actual results and future events could differ materially from those anticipated in such statements. Such information contained herein represents management’s best judgment as of the date hereof based on information currently available. The company does not assume the obligation to update any forward-looking statement.

Qualified Persons

The technical information in this presentation is derived from SouthGobi’s news releases, each of which has been reviewed by one or more qualified persons (QPs), as defined by NI 43-101. Copies of the releases naming the QPs are available at Sedar or www.southgobi.com.

1 COMPANY SNAPSHOT

4

Company snapshotCapitalization and shareholders

Share price performance (last 12 months)Capitalization summary

Share price (at October 4, 2010) C$10.65

C$ per US$1 1.02

Share price US$10.44

Shares outstanding 184.2m

Market capitalization US$1,923m

Cash* (at June 30, 2010) US$744m

Convertible debt (at June 30, 2010) US$250m

Enterprise value US$1,429m

* Cash includes money market investments

Key shareholders

� On an “as converted” basis assuming full conversion of the CIC debenture, Ivanhoe will remain as the majority shareholder with approx. 50.3% ownership, followed by CIC with approx. 23.8% ownership and the balance of 25.9% being the public float (total shares outstanding: approx. 209.3m)

Total shares outstanding = 184.2m

57.2% - 105.3m shares 29.5% - 54.3m shares

Other Public Float

13.3% - 24.6m shares

5

Company snapshotExtracting full value from the Ovoot Khural Basin

� Permian-age coal bearing basin only 40 km from China

� Coal identified over 150 km strike length

� Land equivalent to prime hard coking coal region of Bowen Basin in Australia (largest seaborne coking coal exporting region today)

� Rail infrastructure and coal loader constructed by Chinese to access

Importance of the Ovoot Khural BasinOur Assets

Mongolia

China

� Substantially covered by SouthGobi’s exclusive mining and exploration licences

� 89% of SouthGobi's resources located there

� Operating infrastructure in place

SouthGobi’s leadership in the Ovoot Khural Basin

2 CORE INVESTMENT HIGHLIGHTS

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Core investment highlights

Strategically located – closest coal to China

Substantial and growing resources

Premium quality coals

Highly competitive cost structure

In production with strong growth potential

1

2

3

4

5

8

Western Inner Mongolia

Gansu

Hami, Xinjiang(619 km to Jiayuguan)

Ovoot Tolgoi Mine (492 km to Jiayuguan)

Strategically located – closest coal to ChinaNearest coal production base to major coal consumin g markets

Source: Shanxi Fenwei Energy Consulting

Average Selling Price (US$)

Coal type 2009 Actual YTD 2010

Premium coal 27 – 32 40 – 47

Thermal coal 20 – 24 25

Distribution of coal resources in China

1

New rail completed to access Ovoot Khural

Existing Railway

Coal Seam Basin

Provincial Boundary

National Boundary

Legend

0 160 km

Source: Shanxi Fenwei Energy Consulting

Strategies to increase relative ASPs

� Benefit of improved transportation links

� Elimination of third-party trading margin

� Processing coal for enhanced product mix

*

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Substantial and growing resourcesTrack record increasing resources – finding cost US$ 0.16 / tonne

Historical resource growth track recordSummary of resources by mine and deposit

307.6

171.0

13.0

98.036.4

21.4

78.8

9.0

55.5

20.5

0

100

200

300

400

500

Ovoot TolgoiMine

Ovoot TolgoiUnderground

Deposit

SoumberDeposit

TsagaanTolgoi

Deposit

Total

Res

ourc

e (M

t)

Inferred

Measured & Indicated

Ovoot Tolgoi Complex

Ovoot Khural Basin

Ovoot Tolgoi Mine resource incorporates 114.1Mt of Proven and

Probable Reserves

166.0202.4 221.3

307.6

65.8

74.871.0

98.0

0

100

200

300

400

2005 2006 2007 2008 2009

Res

ourc

e (M

t)

Inferred

Measured & Indicated

Note:SouthGobi’s resources are prepared in accordance with the Canadian NI 43-101 resource estimation standard – the table above summarizes those resources disclosed publicly in individual NI 43-101 compliant tables

� Total exploration costs of approximately US$63.9m from Jan 2005 to Dec 2009

� Equates to US$0.16/tonne resources discovered

2

184.0 99.3 76.9 45.4 405.6

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� Drilling for 2010 commenced post-winter in March

� Approximately US$8.1m spent as at end of June (target c. US$20m total for 2010)

� 64,050m3 of trenching already undertaken

� Over 64,000 meters of drilling done

� Drilling commenced in fields surrounding Soumber and at SW target (6km south-west of Ovoot Tolgoi)

� Additional drilling at Sunrise Pit area on Ovoot Tolgoi license

Exploration licences and locations with core target s for resource increases

Status on key exploration targets(Ovoot Khural Basin)

2 Substantial and growing resourcesExploration outlook

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Premium quality coalsCoking coal and an overall product mix superior to peers

Type Specification % Deposit

Coking

Coal

� 7,173 kcal/kg

� Ash: 7.9%

� CSN (FSI): 5.5

15%

Premium

Coal

� 6,369 kcal/kg

� Ash: 14.9%

� CSN (FSI): 3.0

41%

Thermal

Coal

� 5,360 kcal/kg

� Ash: 26.0%44%

3

Premium hard coking� Ro Max of 1.3 – 1.5%

� VM <19%

Ovo

ot T

olgo

i Min

e (r

aw)

Sou

mbe

r

Semi-soft coking coals

� Ovoot Tolgoi basic coal handling facility (construction commenced)

― US$25m estimated capex – completion early 2011

― Removes large lumpy ash and sizes coal to <50mm consistent product

― 6 million tonne per year capacity on single day shift basis (hours extendable)

― c. 90% processing yield

― Second stage to be considered after further testing

� Soumber wash plant (testing and design)

― US$80 million estimated capex

― Likely full flotation or alternative process

Upgrading raw coalsSimplified coal product qualities

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Ovo

ot T

olgo

i

0

20

40

60

80

100

0 10 20 30 40 50

Cumulative Production (million tonnes)

FO

B C

ash

Cos

ts (

US

$/to

nne)

Ovo

ot T

olgo

i

0

20

40

60

80

100

0 50 100 150 200 250 300 350 400 450 500

Cumulative Production (million tonnes)

FO

B C

ash

Cos

ts (

US

$/to

nne)

Highly competitive cost structureOvoot Tolgoi has globally competitive low direct mi ning cash costs

Low cost structure due to favourable geological con dition – open-pit, and thick coal seams resulting in low ratio of waste to coal (low “strip ping ratio”)

Ovoot Tolgoi’s position on 2010F estimated semi-soft/PCI coking coal mine cash costs curve

(FOB equivalent basis) (1)

Ovoot Tolgoi’s position on 2010F estimated thermal coal mine cash cost

curve (FOB equivalent basis) (1)

Notes:

1. Based on independent report prepared by AME Consulting Pty Limited. Ovoot Tolgoi cost adjusted FOB equivalent assuming rail transportation to Qinhuangdao port in China and excludes washing and processing costs. AME assesses global mine cash costs for each coal type and then places such mines from lowest cost to highest along the horizontal axis on a cumulative production basis

2. Based on December 31, 2009 Financial Statements for SouthGobi and Macquarie Research Equities report dated March 10, 2009 for others

0

50

100

150

200

250

300

OvootTolgoi

(open-pit)2009A

Typicalsmall

Chinesemine

TypicalShanxiSOE

Shenhua China Coal YanzhouD

irect

Min

ing

Cas

h C

osts

(R

MB

/tonn

e)

Direct mining cash costs for Ovoot Tolgoi vs. key Chinese coal companies (2)

4

13

Self imposed slow-down and suspension to deal with excess

inventories

Sunset pit realignment

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Fleet 1994 shovel

13m3

Ovoot Tolgoi coal and waste material mined (April 2 008 – September 2010)

In production with strong growth potentialSecond mining fleet now commissioned and more capac ity coming

Fleet 2996 shovel

34m3

Fleet 3996 shovel

34m3

Fleet 4996 shovel

34m3

3 STRATEGIES AND INVESTMENT PLANS

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Major strategies

Expanding production at Ovoot Tolgoi Mine1

Extract Full Value from Our Leading Position in the Ovoo t Khural Basin

Advancing regional coal projects – near-term emphasis on Soumber

2

Developing Ovoot Khural Basin infrastructure3

Enhancing value of our products 4

Exploration 5

Continuing focus on operational excellence 6

16

Investment plans

Growth investment plans 2011 - 2012 (US$m)

� Ovoot Tolgoi Mine 60

� Development of Soumber 135

� Coal handling facilities 160

� Regional transportation infrastructure 150

� Exploration 40

Appendix – Selected Photos

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Appendix Selected Photos

China – rail loading facility at Ceke borderMongolia – truck weighing bridge

Shivee Khuren-Ceke Mongolia-China border crossing China railway infrastructure only a few km from bor der

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Appendix Selected Photos (cont’d)

Mining operations Exposed seam at the Ovoot Tolgoi Mine

Terex MT 4400AC haul truck Paved runway at the Ovoot Tolgoi airport

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Appendix Selected Photos (cont’d)

Liebherr 994 shovel loading Terex haul truck

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Appendix Selected Photos (cont’d)

New Liebherr 996 shovel (34 m 3 bucket– 2.5x size of 994 shovel)