Southgobi Announces Update ON Mongolia Tax Audit

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May 6, 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, February 13, 2025, March 26, 2025 and March 28, 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 April 25, 2025, the Company’s wholly owned subsidiary in Mongolia, Southgobi Sands LLC

(“SGS”), obtained a copy of an order dated April 15, 2025 (“Latest Court Order”) issued by

the Administrative Court of First Instance in Ulaanbaatar, Mongolia (the “ Administrative

Court of First Instance”) refusing to accept the claim brought by certain MTA Officials against

the TDRC (“Proposed Case”) in an attempt to dispute or overturn the previous decision made

by the TDRC regarding the Re-assessment Result, in which the TDRC concluded that the tax

penalty against SGS be reduced from approximately US$80.0 million to US$26.5 million.

According to t he Latest Court Order, the Proposed Case has been dismissed by the

Administrative Court of First Instance. According to applicable Mongolian laws, the plaintiff is

entitled to file an appeal to the appellate court , and the Company understands that the MTA

Officials, as plaintiff in the Proposed Case, has filed an appeal as at the date of this

announcement.

As of the date of this announcement, the Re -assessment Result remains legally valid and in

effect. The Compa ny will continue to monitor the status of the above and will make further

announcement(s) in order to keep its shareholders and potential investors informed as and

when appropriate.

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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.