Southgobi Announces Update ON Mongolia Tax Audit

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February 13, 2025

SOUTHGOBI ANNOUNCES UPDATE ON

MONGOLIA TAX AUDIT

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

“Company”) Reference is made to the announcements of the Company dated July 31, 2023,

August 18, 2023, February 26, 2024, May 22, 2024, June 12, 2024 and January 20, 2025 (the

“Announcements”) in relation to the Mongolia tax audit. Unless otherwise specified,

capitalised terms used herein shall have the same meanings as tho se defined in the

Announcements.

As disclosed in the announcement of the Company dated January 20, 2025, the Company’s

wholly owned subsidiary in Mongolia, Southgobi Sands LLC (“ SGS”), received a resolution

(“Resolution”) from the Tax Dispute Resolution Council (“TDRC") on January 10, 2025 in

relation to the Tax Audit. As set forth in this Resolution, the TDRC has determined to reduce

the re-assessed amount of the tax penalty against SGS from approximately US$80.0 million

to US$ 26.5 million (the “ Revised Re-assessment Result ”). According to the applicable

Mongolian laws, SGS is entitled to file an appeal to the Administrative Court regarding the

Revised Re-assessment Result within a 30 -day period from the date of receiving the

Resolution (the “Appeal Period”).

After careful consideration and consultation with the Company’s independent tax consultant

in Mongolia, the Company has determined not to pursue a further appeal of the Revised Re-

assessment Result with the Administrative Court within the Appeal Period . As a result, the

Revised Re-assessment Result will impact the Company’s financial statements for the year

ended December 31, 2024.

Shareholders and potential investors of the Company are advised to exercise caution

when dealing in the shares of the Company.

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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

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.

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”), including information

about the impact of the Revised Re-assessment Result on the Company’s financial statements

for the year ended December 31, 2024 and the potential of the Company coming to an

agreement with the Mongolian Tax Authori ty over a repayment plan for the outstanding

amount of the Revised Re -assessment Result. 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 with the Mongolian Tax Authority over a repayment plan for the outstanding amount

of the Revised Re-assessment Result and other similar factors that may cause actual results

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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 only 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 Company’s filings with

Canadian securities regulatory authorities and can be found under the Company’s profile on

SEDAR+ at www.sedarplus.ca.