SGQ.V · 2017-09-22 12:00:00

SouthGobi provides an update on the Ontario Class Action

Legal & Disputes

September 22, 2017

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

“Company”) announces the September 18, 2017 decision of the Ontario Court of Appeal, which

dismissed the Company’s appeal of the original Ontario lower court decision to permit the

plaintiff to commence and proceed with a class action (the “ Class Action ”) against the

Company claiming damages under the Ontario Securities Act in connection with the Company’s

restatement of certain financial statements previously disclosed in the Company’s public fillings

(the “Restatement”). Concurrently, the Ontario Court of Appeal allowed the plaintiff’s appeal of

the original Ontario lower court decision to dismiss the plaintiff’s leave motion against certain

of the Company’s former officers and directors and made an order granting leave for the plaintiff

to proceed against such former officers and directors of the Company in relation to the

Restatement. As a result, the plaintiff is now permitted to proceed with the Class Action against

both the Company and the former officers and directors of the Company.

The Company intends to seek leave to appeal to the Supreme Court of Canada. The Company

firmly believes that it has a strong defence and will continue to vigorously defend itself against

the Class Action through independent Canadian litigation counsel retained by the Company for

this purpose. The Company confirms that it carries Directors and Officers Liability Insurance

which is responsive to the Class Action as against both the Company and the former officers

and directors of the Company.

For more details in respect of the Class Action lawsuit, please refer to the Company’s

Management’s Discussion and Analysis for the quarter ended June 30, 2017, and, in particular,

the sub -section on “Class Action Lawsuit” of the “Regul atory Issues and Contingencies”

available on the SEDAR website at www.sedar.com and the website of the Hong Kong Stock

Exchange at 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. 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

Kino Fu

Office: +852 2156 7030

Website: www.southgobi.com