Mr. Ruibin Xu reports

SOUTHGOBI ANNOUNCES UPDATE ON MONGOLIA TAX AUDIT

On Jan. 10, 2025, SouthGobi Resources Ltd.'s wholly owned subsidiary in Mongolia, Southgobi Sands LLC (SGS), received a resolution from Mongolia's Tax Dispute Resolution Council (TDRC), in response to the appeal letter sent by SGS to the TDRC on June 12, 2024, relating to the reassessment result of the periodic tax audit as disclosed in previous announcements. As set forth in the resolution, the TDRC has determined to reduce the reassessed amount of tax penalty against SGS from approximately $80-million (U.S.) to $26.5-million (U.S.). In accordance with the applicable Mongolian laws, SGS is entitled to file an appeal to the administrative court regarding the revised reassessment result within a 30-day period from the date of receiving the resolution. The company's management is currently reviewing the resolution with its independent tax consultant in Mongolia to assess whether further action should be taken.

The company wishes to inform its shareholders and potential investors that the revised reassessment result does not impact the group's financial statements unless and until the appeal result is final and conclusive. The company will make further announcement(s) to keep its shareholders and potential investors informed of any progress as and when appropriate.

Shareholders and potential investors of the company are advised to exercise caution when dealing in the shares of the company.

About SouthGobi Resources Ltd.

SouthGobi 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.