SouthGobi announces deferral of CIC payment obligations
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June 19, 2020
SouthGobi announces deferral of CIC payment obligations
VANCOUVER – SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) (“SouthGobi” or the
“Company”) announces that it has agreed to a deferral of the payment obligations which are
due and payable to CIC in June 2020.
Reference is made to the announcement of the Company dated February 19, 2020 (the
“Announcement”). Capitalized terms used herein, unless otherwise defined, shall have the
same meaning as those defined in the Announcement. On June 19, 2020, the Company and
CIC have entered into an agreement (the “ 2020 June Deferral Agreement ”) pursuant to
which CIC agreed to grant the Company a deferral of cash intere st and deferral fees of
approximately USD $74 million (the “2020 June Deferral Amount”) which is due and payable
to CIC in June 2020 under the deferral agreements between CIC and the Company signed in
April 2019 and during the period between February to Ma y 2020 (the “ Prior Deferral
Agreements”). The effectiveness of the 2020 June Deferral Agreement is subject to the
Company obtaining the requisite acceptance thereof from the Toronto Stock Exchange.
The terms of the 2020 June Deferral Agreement are substan tially similar to the terms of the
2020 February Deferral Agreement. The principal terms of the 2020 June Deferral Agreement
are as follows:
Payment of the 2020 June Deferral Amount will be deferred until September 14,
2020.
As consideration for the deferral of the 2020 June Deferral Amount, the Company
agreed to pay CIC a deferral fee equal to 6.4 % per annum on the 2020 June
Deferral Amounts.
The Company agreed to provide CIC with monthly updates regarding its operational
and financial affairs.
The Company agreed to comply with all of its obligations under the Prior Deferral
Agreements.
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The Company and CIC agreed that nothing in the 2020 June Deferral Agreement
prejudices CIC’s rights to pursue any of its remedies at any time pursuant to the
Prior Deferral Agreements.
The Company anticipates that it will not able to repay the 2020 June Deferral Amount in full
on or prior to September 14, 2020, the Company and CIC have agreed to discuss a repayment
schedule in relation to the unpaid portion of the 2020 June Deferral Amount as of September
14, 2020. There can be no assurance, however, that a favourable outcome will be reached
either at all or on favourable terms. The Company will make further announcements with
respect to these discussions as and when appropriate.
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
about discussions with CIC regarding a deferral of certain payments. 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 TSX
accepting the Company’s notice application in respect of the 2020 June Deferral Agreement,
the Company’s ability to successfully negotiate a repayment schedule in respect of the portion
of the June 2020 Deferral Amounts which is not repaid prior to September 14, 2020 and other
similar fa ctors that may cause actual results to differ materially from what the Company
currently expects. Actual results may vary from the forward-looking statements. Readers are
cautioned not to place undue importance on forward -looking statements, which speaks o nly
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 C ompany’s filings with Canadian securities regulatory
authorities and can be found under the Company’s profile on SEDAR at www.sedar.com.
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About SouthGobi
SouthGobi, listed on the Toronto and Hong Kong stock exchanges, owns and operates its
flagship Ovoot Tolgoi coal mine in 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