Update ON Delay IN Publication of 2019 Audited Annual Results and Despatch of 2019 Annual Report
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July 24, 2020
UPDATE ON DELAY IN PUBLICATION OF
2019 AUDITED ANNUAL RESULTS AND
DESPATCH OF 2019 ANNUAL REPORT
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 30, 2020 (the “June 30th Announcement”) in relation to the delay in publication of the
2019 Audited Annual Results and the despatch of the 2019 Annual Report. Unless otherwise
stated herein, capitalized terms used herein shall have the same meanings as that ascribed
to them in the June 30th Announcement.
As disclosed in the June 30 th Announcement, the Company has been in discussions with its
key credito rs in relation to settlement plans, which the Company intends to rely on as
alternative audit evidence to address the going concern issues raised by the Auditors. The
Company has obtained verbal commitments from certain key creditors, each of which has
agreed to sign a settlement agreement with the Company on or before July 27, 2020. As of
the date hereof, the Company remains in discussions with the other key creditors that the
Company has not yet reached an agreement with. As a result of the delays in reac hing
settlement agreements with the key creditors, the Company is unable to publish the 2019
Audited Annual Results and the 2019 Annual Report on or prior to the previously disclosed
filing date of July 24, 2020.
The Company continues to work closely with the Auditors and to provide them with audit
evidence to support the going concern assumptions for the Company’s 2019 Financial
Statements. However, as a result of the Government of Mongolia’s decision on July 10, 2020
to further extend travel restrictions on foreign travel into Mongolia until the end of July 2020,
the Company’s ability to prepare and provide audit evidence to the Auditors in a timely manner
has been, and continues to be, adversely impacted.
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The Company is discussing with one of its major shareholders and looking for potential
avenues of support for the Company which could serve as sufficient evidence to support the
Company’s going concern assumptions in the event that the Company is unable to sign a
settlement agreement with each of these key creditors.
Assuming that: (i) the Company will be able to reach written settlement agreements with each
of the key creditors that has provided a verbal commitment to do so on or before July 30, 2020;
and (ii) the Company and the aforementioned major shareholder are a ble to agree on an
avenue of support that is acceptable to the Auditors, the Company expects that the Auditors
will be able to finalize the remainder of the audit work, complete its internal sign-off procedure
and render an unmodified opinion on the 2019 F inancial Statements within two weeks, in
which case the Company would be in a position to issue its 2019 Audited Annual Results and
2019 Annual Report by August 14, 2020. However, there can be no assurances that the
aforementioned settlement agreements will be executed by the key creditors on a timely basis
or at all, the Company and the major shareholder will be able to arrive at mutually acceptable
support arrangement or any of the foregoing will be sufficient audit evidence to permit the
Auditor to render an unmodified opinion on the 2019 Financial Statements.
The Company will make further announcement(s) in relation to the publication of the 2019
Audited Annual Results and the despatch of the 2019 Annual Report, as and when appropriate.
SHAREHOLDERS A ND POTENTIAL INVESTORS OF THE COMPANY SHOULD
EXERCISE CAUTION WHEN THEY DEAL OR CONTEMPLATE DEALING IN THE
COMPANY’S SHARES OR OTHER SECURITIES OF THE COMPANY.
If there is any inconsistency or discrepancy between the English version and the Chinese
version, the English version shall prevail.
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.
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Contact:
Investor Relations
Office: +852 2156 1438 (Hong Kong)
+1 604 762 6783 (Canada)
Email: [email protected]
Website: www.southgobi.com
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 execution of settlement agreements with cert ain key creditor on or before July 30,
2020, the expectation that the Company will be unable to publish the 2019 Audited Annual
Results and the 2019 Annual Report on or prior to. July 24, 2020 and discussions between
the Company and one of its major shareholders in relation to potential avenues of support for
the Company. 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, settlement agreements being executed by the Company’s key
creditors on a timely basis, the Company and its major shareholder arriving at a mutually
acceptable support arrangement, the actions and measures taken by the Company will be
sufficient audit evidence to permit the Auditor to render an unmodified opinion on the 2019
Financial Statements 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 undue import ance 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 f orward-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.sedar.com.