Delay IN Publication of 2021 Audited Annual Results and Update Regarding Management Cease Trade Order Application
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NATDOCS\62122031\V-2
March 27, 2022
DELAY IN PUBLICATION OF 2021 AUDITED ANNUAL
RESULTS AND UPDATE REGARDING MANAGEMENT
CEASE TRADE ORDER APPLICATION
VANCOUVER – SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) (“ SouthGobi” or the
“Company”) wishes to provide the Company’s shareholders and potential investors with an
update in relation to the delay in publication of 2021 Audited Annual Results, and its
application for a Management Cease Trade Order (the “MCTO”) made to the British Columbia
Securities Commission (“BCSC”), the Company’s principal securities regulator in Canada.
Reference is made to the announcements of the Company dated March 11 and March 24,
2022 (the “Announcements”). Unless otherwise defined herein, capitalized terms used in this
announcement shall have the same respective meanings as defined in the Announcements.
DELAY IN PUBLICATION OF 2021 AUDITED ANNUAL RESULTS AND DELAY IN
ANNUAL FILINGS
As disclosed in the Announcements, the Company has been advised by its Auditors that they
will be unable to render an unmodified opinion on the 2021 Financial Statements prior to the
filing deadline of March 31, 2022 (the “Annual Filing Deadline”), as they have not been able
to obtain sufficient evidence to support management’s going concern assumptions. As a result,
it is anticipated that the Company will not be able to publish the 2021 Audited Annual Results
prior to the Annual Filing Deadline. Furthermore, the Company will not be able to file the 2021
Annual Filings prior to the Annual Filing Deadline as required under applicable Canadian
securities laws. Accordingly, subsequent to the Annual Filing Deadline, the Company will be
in default of its continuo us disclosure obligations under applicable Canadian securities laws
and placed on the defaulting issuers list of the BCSC.
APPLICATION OF MANAGEMENT CEASE TRADE ORDER
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On March 17, 2022, the Company made an application to the BCSC under National Policy 12-
203 of the Canadian Securities Administrators (“ NP 12 -203”) requesting that a MCTO be
granted in respect of the late filing of the 2021 Annual Filings. As of the date hereof, the BCSC
has not issued a decision in respect of the Company’s MCTO applicatio n. There is no
guarantee that a MCTO will be granted.
If a MCTO is granted, the Company will attempt to obtain and provide to the Auditors sufficient
evidence to support management’s going concern assumptions, and will attempt to obtain an
unmodified opinion from the Auditors on the 2021 Financial Statements prior to the expiry of
the MCTO. While the MCTO is in effect, the Company’s Chief Executive Officer and Chief
Financial Officer will be and, subject to the BCSC’s discretion, the Company’s other directors,
senior officers and insiders may be restricted from trading in the Company’s securities. The
Company will be required to comply with the provisions of the alternative information
guidelines as set out in NP 12 -203 for so long as the MCTO remains in e ffect, including the
issuance of bi-weekly default status reports by way of press releases. If a MCTO is granted,
the MCTO would not affect the ability of investors who are not directors, officers and insiders
to trade in the securities of the Company on t he Toronto Stock Exchange (“ TSX”) and the
Hong Kong Stock Exchange (“HKEx”).
However, if a MCTO is not granted, it is anticipated that the BCSC will issue a general “failure
to file” cease trade order (“CTO”) shortly after the Annual Filing Deadline prohibiting the trading
by any person of any securities of the Company in Canada, including trades in the Company’s
common shares made through the TSX. As a result of CTO, the Company anticipates that
the trading in the Company’s common shares will be halted on the TSX, and the trading in the
common shares of the Company on the HKEx will also be suspended until such time as the
CTO is lifted and trading resumes on the TSX.
If a CTO is issued, the CTO will remain in place until such time as the 2021 Annual Filings are
filed by the Company. The issuance of a CTO would have a significant adverse impact on the
liquidity of the Company’s common shares and shareholders may suffer a significant decline
or total loss in value of its investment in the Company’s common shares as a result.
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PUBLICATION OF 2021 UNAUDITED ANNUAL RESULTS
As disclosed in the Announcements, the Company will publish the 2021 Unaudited Annual
Results on March 30, 2022, in order to ensure the Company’s shareholders and potential
investors are informed of the Company’s latest business operation and financial position.
The Company will make further announcements with respect to (i) the status of the 2021
Annual Filings; (ii) the date of board meeting to consider and approve the 2021 Audited Annual
Results; (iii) the date of the release of the 2021 Audited Annual Results; and (iv) any material
information as and when appropriate.
If there is any inconsistency or discrepancy between the English version and the Chinese
version, the English version shall prevail.
Shareholders of the Company and potential investors are advised to exercise caution
when dealing in the securities of the Company.
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.
Contact:
Investor Relations
Office: +852 2156 1438 (Hong Kong)
+1 604 762 6783 (Canada)
Email: [email protected]
Website: www.southgobi.com
Forward-Looking Statements
Certain information included in this press release that is not current or historical factual
information constitutes forward -looking statements or information within the meaning of
applicable securities laws (collectively, “forward -looking statements”), in cluding information
regarding that the Auditors will not be able to render an unmodified opinion on the 2021
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Financials Statements prior to the Annual Filing Deadline, the Company will not be able to file
the 2021 Annual Filings prior to the applicable filing deadlines, the Company’s application for
a MCTO with the BCSC, the BCSC will issue a CTO if a MCTO is not granted, the TSX will
halt trading in the Company’s common shares if a CTO is issued and the HKEx will suspend
trading in the Company’s common sha res if trading is halted on the TSX. Forward -looking
statements are frequently characterized by words such as “plan”, “expect”, “project”, “intend”,
“believe”, “anticipate”, "could", "should", "seek", "likely", "estimate" and other similar words or
statements that certain events or conditions “may” or “will” occur. Forward-looking statements
are based on certain factors and assumptions including, among other things, the decision of
the BCSC to grant a MCTO and the ability of the Company to obtain and provid e to the
Auditors sufficient evidence to support management’s going concern assumptions. Actual
results may vary from the forward -looking statements. Readers are cautioned not to place
undue importance on forward -looking statements, which speaks only as of the date of this
disclosure, and not to rely upon this information as of any other date. While the Company may
elect to, it is under no obligation and does not undertake to, update or revise any forward -
looking statements, whether as a result of new information, further events or otherwise at any
particular time, except as required by law. Additional information concerning factors that may
cause actual results to materially differ from those in such forward -looking statements is
contained in the Company’s filings with Canadian securities regulatory authorities and can be
found under the Company’s profile on SEDAR at www.sedar.com.