SGQ.V · 2022-05-25 12:00:00

Voluntary Announcement Business Update

Corporate Updates

May 25, 2022

VOLUNTARY ANNOUNCEMENT

BUSINESS UPDATE

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

“Company”) announces that the purpose of this announcement is to inform the Company’s

shareholders (“Shareholders”) and potential investors of the latest business update made

further to its announcement dated November 2, 2021 (the “Announcement”).

The Company is pleased to announce that, on May 25, 2022, the Ceke Port of Entry re-opened

for coal export on a trial basis, with a limited number of trucks permitted to cross the border

during the trial period . The Company has been proactively adjusting its sales strategy to

accommodate the situational changes and explore opportunities to expand its sales. As of

today, t he Company anticipates that its existing coal inventories are sufficient to satisfy

expected sales demand for a period of at least 4 months following the resumption of coal

exports to China.

Although the export of coal from Mongolia to China resumes as of the date hereof, there can

be no guarantee that the Company will be able to continue exporting coal to China, or the

border crossings would not be the subject of additional closure as a result of COVID-19 or any

variants thereof in the future. The C ompany anticipates that its revenue, liquidity and

profitability will continue to be adversely impacted until such time as the coal exports into China

are allowed to resume at normal levels.

The Company will continue to closely monitor the situation at the Ceke Port of Entry, including

the number of trucks that are permitted to cross the border and the impact on the operations

and financials of the Company; and will from time to time review the most suitable time for the

full resumption of its mining operation. Further updates will be provided in due course as and

when appropriate.

Shareholders of the Company and potential investors are advised to exercise caution

when dealing in the shares of the Company.

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

Office: +852 2156 1438 (Hong Kong)

+1 604 762 6783 (Canada)

Website: www.southgobi.com