Southgobi Announces Update ON Payment Obligation Under June 2020 Deferral Agreement and Business Update
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September 14, 2020
SOUTHGOBI ANNOUNCES UPDATE ON PAYMENT
OBLIGATION UNDER JUNE 2020 DEFERRAL AGREEMENT
AND BUSINESS UPDATE
VANCOUVER – SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) (“SouthGobi” or the
“Company”) announces that reference is made to the announcement of the Company dated
June 19, 2020 (the “ Announcement”). Capitalized terms used herein, unless otherwise
defined, shall have the same meaning as those defined in the Announcement.
UPDATE ON PAYMENT OBLIGATION UNDER JUNE 2020 DEFERRAL AGREEMENT
As of the date of this announcement, the Company has not repaid the 2020 June Deferral
Amount and related deferral fees totaling approximately US$75.2 million which became due
and payable to Land Breeze II S.à.r.l. (“Land Breeze”), a wholly-owned subsidiary of a major
shareholder of the Company, on September 14, 2020 under the 2020 June Deferral
Agreement. Consequently, the Company is in default under the 2020 June Deferral Agreement
and the related convertible debenture between the Company and Land Breeze. The Company
is in discussions with Land Breeze for a deferral of the June 2020 Deferral Amount and related
deferral fees. There can be no assurance, however, that a deferral agreement will be reached
either at all or on favourable terms. The Company will make further announcement(s) with
respect to these discussions as and when appropriate.
BUSINESS UPDATE
The Company has resumed the mining operation since August 2, 2020 and produced
approximately 0.2 million tonne of coal in August 2020. The Company’s sales volume in
August 2020 was approximately 0.3 million tonne.
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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 discussions with Land Breeze regarding a deferral of the June 2020 Deferral Amount
and related deferral fees. 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
deferral of the unpaid June 2020 Deferral Amounts and related deferral fees and other similar
factors that may cause actual results to differ materially from what the Company currently
expects. Actual results may vary from the forward-looking statements. Readers are cautioned
not to place un due 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 th ose in such forward -looking
statements is contained in the Company’s filings with Canadian securities regulatory
authorities and the website of the Hong Kong regulatory filings and disclosures of listed issuer
information. These can be found under the Comp any’s profile on SEDAR and HKEXnews
respectively, at www.sedar.com and www.hkexnews.hk.
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