Update On Mongolia Tax Audit

VANCOUVER, BC / ACCESSWIRE / August 18, 2023 / SouthGobi Resources Ltd. (TSX-V:SGQ)(HK:1878) ("SouthGobi" or the "Company") announces that reference is made to the announcement of the Company dated July 31, 2023 (the "Announcement") in relation to the Mongolia tax audit.

As previously disclosed in the Company's Announcement, on July 18, 2023, the Company's wholly owned subsidiary in Mongolia, SouthGobi Sands LLC ("SGS"), received a notice (the "Notice") from the Mongolian Tax Authority (the "MTA") relating to a periodic tax audit on certain SGS's financial information between 2017 and 2020 (the "Audit"). The MTA notified SGS that they are imposing a tax penalty against SGS in the amount of approximately US$75.0 million as a result of the Audit. According to Mongolian law, SGS has a 30-day period from the date of receiving the Notice to file an appeal regarding the Audit.

As at the date of this announcement, SGS has engaged an independent tax consultant in Mongolia to provide tax advice and support to the Company in relation to the Audit. On August 17, 2023, SGS filed an appeal letter in relation to the Audit with the MTA in accordance with the Mongolian laws. 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

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.

SOURCE: SouthGobi Resources Ltd.