SouthGobi Announces Equipment Purchase Loan

HONG KONG, CHINA--(Marketwired - Aug. 31, 2017) - SouthGobi Resources Ltd. (TSX:SGQ)(HKSE:1878) ("SouthGobi" or the "Company") is pleased to announce that it entered into a loan agreement on July 6, 2017 and a supplementary loan agreement on August 31, 2017 with Beijing Jin Rui Tian Chen Asset Management Co Ltd. (the "Equipment Purchase Loan") for the purpose of financing the purchase of mining equipment to increase the production capacity of the Company.

The key terms of the Equipment Purchase Loan are set out below:

• Principal: RMB 69 million;
• Maturity: 12 months from drawdown;
• Interest rate: 12% per annum;
• Repayment: the Company shall repay the principal and accrued interests at maturity date; and
• Guarantee and security: the Company will provide a corporate guarantee to cover the principal and interest owed, and provide mining equipment with value no less than RMB 69 million as security.

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.