Southgobi Announces Inside Information Jd Zhixing Fund L.p. Assigns Payment-IN-Kind Interest Under Convertible Debenture
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July 12, 2026
SOUTHGOBI ANNOUNCES INSIDE INFORMATION
JD ZHIXING FUND L.P. ASSIGNS PAYMENT-IN-KIND
INTEREST UNDER CONVERTIBLE DEBENTURE
HONG KONG – SouthGobi Resources Ltd. (TSX-V: SGQ, HK: 1878) (“SouthGobi” or the
“Company”) announces that, as disclosed in the press release issued by JD Zhixing Fund L.P.
(“JDZF”) on July 10, 2026 in Canada, JDZF, being the registered holder of the Company’s
US$250 million Convertible Debenture issued on November 19, 2009 (the “ Convertible
Debenture”) and the Company’s largest shareholder, has entered into an assignment
agreement with Od Sar Trading Co. Limited (the “ Assignee”) pursuant to which JDZF has
assigned to the Assignee pursuant to the terms of the Convertible Debenture, the right to
receive US$19 million of payment -in-kind interest accrued and outstanding under the
Convertible Debenture and certain related deferral agreements (the “Assigned PIK Interest”).
The payment date of the Assigned PIK Interest was deferred until August 31, 2027 (the
“Deferral Date ”) pursuant to the terms of the deferral agreement dated March 23, 2026
between JDZF, the Company and certain of its subsidiaries, as discussed in the Company’s
press release issued on March 23, 2026 (the “ March 2026 Deferral Agreement ”). The
assignment of the Assigned PIK Interest does not have any impact on the Def erral Date nor
does it amend or result in a deviation of the terms of the March 2026 Deferral Agreement.
Pursuant to the terms of the Convertible Debenture and related deferral agreements, the
Assignee may, at its discretion, require the Company to sat isfy the Assigned PIK Interest by
issuing fully paid and non -assessable common shares of the Company (the “ Common
Shares”) in an amount equal to the Assigned PIK Interest divided by the 50 -day volume -
weighted average price (“VWAP”) of the Common Shares as of the requested payment date
of the Assigned PIK Interest.
The Company has been notified by the Assignee that the Assignee intends to convert the
Assigned PIK Interest into, and require the Company to issue, Common Shares in the near
future.
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Shareholders are cautioned that, the final number of Common Shares that the Company will
issue to satisfy the Assigned PIK Interest will depend on the prevailing 50 -day VWAP as of
the future payment date. For illustrative purposes, assuming a payment date as of the date
hereof and using the 50-day VWAP of CAD$0.327 per share and Bank of Canada Canadian
dollar to U.S. dollar daily average exchange rate of 0.7069, upon issuance of the Common
Shares in satisfaction of the Assigned PIK Interest, the Assignee would receive 82,140,266
Common Shares, representing 21.66% of the issued and outstanding Common Shares.
The Company will make a further announcement regarding the issuance of Common Shares
in satisfaction of the Assigned PIK Interest as and when appropriate.
Shareholders and potential investors of the Company should exercise caution when
dealing in the shares of the Company.
By order of the Board
SouthGobi Resources Ltd.
Yingbin Ian He
Lead Director
Hong Kong: July 13, 2026
As at the date of this announcement, the executive directors of the Company are Mr.
Ruibin Xu, Ms. Chonglin Zhu and Mr. Chen Shen; the independent non-executive
directors of the Company are Mr. Yingbin Ian He, Ms. Jin Lan Quan and Mr. Fan Keung
Vic Choi; and the non-executive directors of the Company are Mr. Zhu Gao and Mr.
Zaixiang Wen.
About SouthGobi
SouthGobi, listed on the Hong Kong Stock Exchange and the TSX Venture Exchange , 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
Email: [email protected]
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Mr. Ruibin Xu
Chief Executive Officer
Office: +852 2156 1438 (Hong Kong)
Website: www.southgobi.com
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is
defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy
or accuracy of this release.