Mr. Ruibin Xu reports

SOUTHGOBI ANNOUNCES UPDATE ON MONGOLIA TAX AUDIT

Reference is made to the news releases of SouthGobi Resources Ltd., dated July 31, 2023, Aug. 18, 2023, Feb. 26, 2024, May 22, 2024, June 12, 2024, and Jan. 20, 2025, in relation to the Mongolia tax audit.

As disclosed in the news release of the company dated Jan. 20, 2025, the company's wholly owned subsidiary in Mongolia, SouthGobi Sands LLC (SGS), received a resolution from the Tax Dispute Resolution Council (TDRC) on Jan. 10, 2025, in relation to the tax audit. As set forth in this resolution, the TDRC has determined to reduce the reassessed amount of the tax penalty against SGS from approximately $80.0-million (U.S.) to $26.5-million (U.S.). According to 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.

After careful consideration and consultation with the company's independent tax consultant in Mongolia, the company has determined not to pursue a further appeal of the revised reassessment result with the Administrative Court within the appeal period. As a result, the revised reassessment result will impact the company's financial statements for the year ended Dec. 31, 2024.

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, 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.

We seek Safe Harbor.