SGQ.V · 2017-06-12 12:00:00

Execution of new deferral agreement with CIC

Corporate Updates

June 12, 2017

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

“Company”) today announces the execution of a new deferral agreement ( the “June 2017

Deferral Agreement”) with China Investment Corporation (“CIC”) in relation to the repayment

of US$22.3 million of cash interest and associat ed costs originally due on May 19, 2017 ( the

“May 2017 Interest Payable”). The key terms of the June 2017 Deferral Agreement include

the below:

(i) the Company will repay on average US$2.2 million of cash interest and associated costs

monthly during the period from May 2017 to October 2017;

(ii) the Company will repay US $9.7 million of cash interest and associated costs on

November 19, 2017;

(iii) the Company will pay a deferral fee at a rate of 6.4% per annum as a consideration for

deferral; and

(iv) at any time before the May 2017 Interest Payable are fully repaid, the Company is

required to consult with and obtain written consent from CIC prior to effecting a

replacement or termination of either or both of its Chief Executive Officer and its Chief

Financial Officer; otherwise this will constitute an event of default for the convertible

debenture between CIC and the Company signed in November 2009. Such consent

shall not be unreasonably withheld to affect the exercise of fiduciary duties of the board

of directors 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

Kino Fu

Office: +852 2156 7030

Website: www.southgobi.com