Legal proceedings involving a subsidiary of the Company
September 20, 2018
Legal proceedings involving a subsidiary of the Company
VANCOUVER – SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) (“SouthGobi” or the
“Company”) The Company announces that Inner Mongolia SouthGobi Energy Co., Ltd.
(“IMSGE”), a subsidiary of the Company, has received a court summons (the “ Summons”)
from the Ejinaqi People’s Court of Inner Mongolia Autonomous Region of China (the “Ejinaqi
Court”) dated September 13, 2018 in relation to a dispute over certain coal sales contracts
with Jiayuguan Xiyuan Trading Co., Ltd. (“Xiyuan”), a former customer of IMSGE.
According to the Summons, Xiyuan has applied to the Ejinaqi Court claiming that IMSGE
should repay a sum o f RMB 19.4 million (or approximately USD $2. 8 million) to Xiyuan,
comprised of RMB 19.1 million of coal prepayments and RMB 0.3 million of interest. Xiyuan
also claimed Ejinaqi Fulemeng Energy Industry Co., Ltd. for joint liability of the above sums
as it was alleged as an agent for IMSGE to receive coal prepayment and deliver coal on
behalf of IMSGE.
A court hearing has been scheduled on October 10, 2018 regarding this matter.
The Company firmly believes that it has a strong defense on the merits and will retain
independent Chinese litigation counsel to vigorously defend itself against these claims.
However, due to the inherent uncertainties of litigation, it is not possible to predict whether
IMSGE will be successful in defending itself in these proceedings.
The Company will provide further updates on 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.
Contact:
Investor Relations
Kino Fu
Hong Kong Office: +852 2156 7030
Vancouver Office: +1 604 762 6783
Email: [email protected]
Website: www.southgobi.com