Southgobi Announces the Issuance of Cease Trade Order BY British Columbia Securities Commission of Canada

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June 21, 2020

SOUTHGOBI ANNOUNCES THE ISSUANCE OF CEASE

TRADE ORDER BY BRITISH COLUMBIA SECURITIES

COMMISSION OF CANADA

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

“Company”) announces that the British Columbia Securities Commission has issued a

general “failure to file” cease trade order (“ CTO”) on June 19, 2020 (Vancouver time), to

prohibit the trading by any person of any securities of the Company in Canada. Trading in the

Company’s common shares on the TSX has been halted as a result of the CTO.

Reference is made to the announcement of the Company dated June 11, 2020

(“Announcement”). Unless the context otherwise requires, capitalized terms use d herein

shall have the same meanings as those defined in the Announcement

The CTO was issued as of result the Company’s failure to file its the 2019 Annual Filings and

its 2020 Interim Filings by the filing deadline of June 15, 2020. The CTO will remain in place

until such time as the 2019 Annual Filings and 2020 Interim Filings are filed by the Company.

Trading in the Company’s common shares on the TSX will remain halted for so long as the

CTO remains in effect. There is no assurance that the Company wil l be able to remedy its

filing default and have the CTO lifted in a timely manner or at all. Shareholders of the Company

may suffer a significant decline or total loss in value of its investment in the Company’s

common shares as a result.

Under the terms of the convertible debenture (the “ Convertible Debenture”) between the

Company and its substantial shareholder China Investment Corporation (“CIC”), it is an event

of default if the Company’s common shares are suspended from trading on the TSX for more

than a period of five trading days and CIC may declare the amounts owing under the

Convertible Debenture and related deferral agreements immediately due and payable and

may take steps to enforce payment thereof.

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The Company will continue to take steps to address the going concern issues raised by the

external auditors and explore available options to attempt to obtain an unmodified opinion on

the 2019 Financial Statements. The Company will make further announcements with respect

to the status of the 2019 Annual Filings as and when appropriate.

SHAREHOLDERS OF THE COMPANY AND POTENTIAL INVESTORS ARE ADVISED TO

EXERCISE CAUTION WHEN DEALING IN THE SECURITIES OF THE COMPANY.

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