Mr. Ruibin Xu reports

SOUTHGOBI ANNOUNCES UPDATE ON MONGOLIA TAX AUDIT

Reference has been made to the announcements of SouthGobi Resources Ltd. dated July 31, 2023, Aug. 18, 2023, Feb. 26, 2024, May 22, 2024, June 12, 2024, Jan. 20, 2025, Feb. 13, 2025, March 26, 2025, and March 28, 2025, in relation to the Mongolian tax audit.

On April 25, 2025, the company's wholly owned subsidiary in Mongolia, Southgobi Sands LLC, obtained a copy of an order dated April 15, 2025, issued by the Administrative Court of First Instance in Ulan Bator, Mongolia, refusing to accept the claim brought by certain MTA officials against the TDRC (proposed case) in an attempt to dispute or overturn the previous decision made by the TDRC regarding the reassessment result, in which the TDRC concluded that the tax penalty against SGS be reduced from approximately $80.0-million (U.S.) to $26.5-million (U.S.). 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, have filed an appeal as at the date of this announcement.

As of the date of this announcement, the reassessment result remains legally valid and in effect. The company will continue to monitor the status of the above and will make one or more further announcements to keep its shareholders and potential investors informed as and when appropriate.

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.