SouthGobi Announces Update On Mongolia Tax Audit

VANCOUVER, May 6, 2025 - 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 ("LatestCourt 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 ("ProposedCase") 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 the 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 Company 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.

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.

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.

SOURCE: SouthGobi Resources Ltd.