Southgobi Announces Proposed Settlement of Class Action Lawsuit

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August 13, 2025

SOUTHGOBI ANNOUNCES PROPOSED SETTLEMENT OF

CLASS ACTION LAWSUIT

VANCOUVER – SouthGobi Resources Ltd. (TSX-V: SGQ, HK: 1878) (“SouthGobi” or the

“Company”) announces that reference is made to the announcements of the Company dated

January 8, 2014, November 9, 2015, May 31, 2016 and September 22, 2017 (the

“Announcements”) in relation to the class action lawsuit in Canada.

The Company announces that it has reached an agreement in principle to a settlement (the

“Settlement”) of the class action lawsuit (the “ Class Action”) filed against the Company in

the Superior Court of Ontario (the “Court”) in relation to the Company’s restatement of certain

financial statements previously disclosed in the Company’s public fillings (the “Restatement”),

subject to the finalization of a definitive settlement agreement, notice of the Settlement to the

class plaintiff members and Court approval.

As previously disclosed in the Company’s public filings, i n January 2 014, Siskinds LLP, a

Canadian law firm, filed the Class Action against the Company, certain of its former senior

officers and directors, and its former auditor (the “ Former Auditor”), in the Ontario Court in

relation to the Restatement. As required by law, leave of the Court under the Ontario

Securities Act (“Leave Motion”) and certification of the action as a class proceeding under the

Ontario Class Proceedings Act (the “Certification Motion”) were granted to the class plaintiffs

(the “Class Plaintiffs”) by the Court.

Counsel for the Class Plaintiffs and the Company have: (i) completed document production

and oral examinations for discovery; (ii) exchanged expert reports on liability and damages;

and (iii) designed a mediation process and finalized, with the participation of the relevant

Company’s insurers, the mediation under the guidance of former Chief Justice of Ontario,

George Strathy, which mediation was held and completed on August 11, 2025 (th e

“Mediation”).

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As a result of the Mediation, the Class Plaintiffs and the Company conditionally settled the

Class Action for Cdn$6.8 million, including all liability, class counsel fees, notice and

administrative costs, fees, and costs and expenses rela ted to the litigation (collectively, the

“Settlement Payments”). The Settlement Payments are the obligation of the Company’s

insurers as of January 2014.

The Settlement is conditional upon , amongst other things, the approval of a judge of the

Ontario Court by way of motion brought to the Court (the “ Motion”), notice of the Settlement

being provided to the Class Plaintiffs and finalization of a definitive settlement agreement. The

Motion is expected to be presented to the Court by the Class Plaintiffs, with the support of the

Company, on or before December 31, 2025. The Settlement, if approved and made effective,

is within the Company’s insured limits. Accordingly, the Company has determined that a

provision for this matter is not required on its financial statements.

The Company cannot provide any assurance that the Settlement will obtain the necessary

approvals and satisfy the conditions and requirements necessary for it to become final. The

Company continues to believe that it has a stro ng defence on the merits. The Company will

issue further announcement(s) to update shareholders and potential investors regarding

material developments as and when necessary.

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]

Mr. Ruibin Xu

Chief Executive Officer

Office: +1 604 762 6783 (Canada)

+852 2156 1438 (Hong Kong)

Website: www.southgobi.com

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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.