December 24/3, 2018 SouthGobi Announces Update on Status of CIC Convertible Debenture

R E S O U R C E S

December 24/3, 2018

SouthGobi Announces Update on Status of CIC Convertible Debenture

VANCOUVER – SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) (“SouthGobi” or the

“Company”) announces that the Company is in default under the convertible debenture

between China Investment Corporation (“CIC”) and the Company signed in November 2009

(the “Convertible Debenture”) as a result of the Company having now been suspended from

trading on the Toronto Stock Exchange (“TSX”), halted from trading on the Hong Kong Stock

Exchange (the “SEHK”), for a period of more than 5 trading days since December 17, 2018.

Trading on the TSX will remain suspended until clarification regarding the business and

affairs of the Company is announced and trading on the SEHK will remain halted pending the

publication of an insider information announcement.

Pursuant to the terms of the Convertible Debenture, CIC may, at its discretion, provide notice

to the Company and declare all principal, interest and other amounts owing under the

Convertible Debenture immediately due and payable, and take steps to enforce payment

thereof, which would have a material adverse effect on the business and operations of the

Company and the value of the Company’s common shares could be materially and negatively

affected.

The Company and CIC are having active and close discussion on the issues related to the

Convertible Debenture and the deferral agreement executed on June 12, 2017. As of today,

the Company has not received any such notice from CIC to demand any payments nor

declare any outstanding balances immediately due and payable, as a result of the above

mentioned trading suspension and trading halt and other event(s) of default.

The Company will provide further updates of the status of this matter as appropriate.

ABOUT SOUTHGOBI

SouthGobi, listed on the Toronto and Hong Kong stock exchanges, owns and operates its

flagship Ovoot Tolgoi coal mine in Mongolia. It also holds the mining licences of its other

metallurgical and thermal coal deposits in South Gobi Region of Mongolia. SouthGobi

produces and sells coal to customers in China.

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Contact:

Investor Relations

Kino Fu

Hong Kong: +852 2156 7030

Vancouver: 604-762-6783

Email: [email protected]

Website: www.southgobi.com

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