Southgobi Announces Update ON Mongolia Tax Audit
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March 26, 2025
SOUTHGOBI ANNOUNCES
UPDATE ON MONGOLIA TAX AUDIT
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
July 31, 2023, August 18, 2023, February 26, 2024, May 22, 2024, June 12, 2024, January
20, 2025 and February 13, 2025 (the “Announcements”) in relation to the Mongolia tax audit.
Unless otherwise specified, capitalised terms used herein shall have the same meanings as
those defined in the Announcements.
On March 19, 2025, the Company’s wholly owned subsidiary in Mongolia, Southgobi Sands
LLC (“SGS”), received a notice from the Administrative Court in Ulaanbaatar, Mongolia (the
“Administrative Court”) requesting SGS provide supplemental information and cooperate
with a Court proceeding brought by certain officers (“ MTA Officials”) of the Mongolian Tax
Authority (“ MTA”), as plaintiff, against the Tax Dispute Resolution Council (“ TDRC”), as
defendant. Upon further enquiry, the Company obtained a copy of an order dated March 7,
2025 issued by the Administrative Court (the “Court Order”) regarding the commencement of
Court proceedings brought by the MTA Officials. The Court Order suggests that the MTA
Officials are attempting to dispute or overturn the previous decision made by the TDRC
regarding the Re -assessment Result, in which the TDRC concl uded that the tax penalty
against SGS be reduced from approximately US$80.0 million to US$26.5 million.
The Company is not a party to the aforementioned Court proceeding. According to the
preliminary advice of the Company’s independent tax consultant and legal advisers in
Mongolia, Court proceedings initiated by individual members of the MTA against the TDRC
rarely occurs. Based on the information available to the Company as of the date hereof, the
Company is unable to ascertain the time required to conclude, and the likely outcome of, such
Court proceeding and its impact to the Company. As of the date of this announcement, the
Re-assessment Result remains legally valid. The Company will monitor the progress of the
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Court proceeding and will make further an nouncement(s) in order to keep its shareholders
and potential investors informed as and when appropriate.
Shareholders and potential investors of the Company are advised to exercise caution
when dealing in the shares of the Company.
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.