SouthGobi announces the deferral of CIC payment obligation
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March 11, 2020
SouthGobi announces the deferral of CIC payment
obligation
VANCOUVER – SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) (“SouthGobi” or the
“Company”) announces that the deferral of CIC payment obligation.
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 meanings as those defined in the Announcement. On March 10, 2020, the Company
and CIC have entered into an agreement (the “ 2020 March Deferral Agreement”) pursuant
to which CIC agreed to grant the Company a deferral of deferred cash interest and deferral
fees of $2.0 million (the “March 2020 Deferral Amount”) which is due and payable to CIC on
March 19, 2020 under the 2019 Deferral Agreement. The effectiveness of the 2020 March
Deferral Agreement and the respective obligations, covenants and agreements of each party
under the 2020 March Deferral Agreement are subject to the Company obtaining the requisite
acceptance thereof from TSX.
The terms of the March 2020 Deferral Agreement are substantially similar to the terms of the
February 2020 Deferral Agreement between the Company and CIC. The principal terms of the
March 2020 Deferral Agreement are as follows:
Payment of the March 2020 Deferral Agreement Amount will be deferred until June
20, 2020.
As consideration for the deferral of the March 2020 Deferral Amount, the Company
agreed to pay CI C a deferral fee equal to 6.4% per annum on the March 2020
Deferral Amount, commencing on March 19, 2020.
The Company agreed to provide CIC with monthly updates regarding its operational
and financial affairs.
The Company agreed to comply with all of its o bligations under the 2019 Deferral
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Agreement and the Amended and Restated Cooperation Agreement, as amended
by the 2020 February Deferral Agreement.
The Company and CIC agreed that nothing in the 2020 March Deferral Agreement
prejudices CIC’s rights to pursue any of its remedies at any time pursuant to the
2019 Deferral Agreement, Amended and Restated Cooperation Agreement and
February 2020 Deferral Agreement, respectively.
As previously disclosed in its announcement dated February 19, 2020, the Company
anticipates that a deferral will likely be required in respect of the monthly payments due and
payable in the period between April 2020 and June 2020 under the 2019 Deferral Agreement
and Amended and Restated Cooperation Agreement. The Company and CIC have agreed to
discuss in good faith a deferral of these payments on a monthly basis as they become due.
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 wit hin the meaning of
applicable securities laws (collectively, “forward -looking statements”), including information
about discussions with CIC regarding a deferral of certain payments under the 2019 Deferral
Agreement and Amended and Restated Cooperation Agreement. 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 Company’s ability to
successfully negotiate a revised repayment schedule in respect of certain payments under the
2019 Deferral Agreement and Amended and Restated Cooperation Agreement and T SX
accepting the Company’s notice application in respect of the March 2020 Deferral Agreement
and other similar factors that may cause actual results to differ materially from what th e
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 only as of the date of this disclosure, and not to rely upon this info rmation 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
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information concerning factors that may cause actual results to materially differ from those in
such forward -looking statements is contained in the Company’s filings with Canadian
securities regulatory authorities and can be found under the Company’s profile on SEDAR at
www.sedar.com.
If there is any inconsistency or discrepancy between the English version and the Chinese
version, the English version shall prevail.
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
Kino Fu
Office: +852 2156 7030 (Hong Kong)
+1 604 762 6783 (Canada)
Email: [email protected]
Website: www.southgobi.com