Ms. Galina Rogova reports

SOUTHGOBI RESOURCES ADVISES ALLOCATION UNDER PRIVATE PLACEMENTS ANNOUNCED ON JUNE 22, 2015

SouthGobi Resources Ltd. has made allocations under private placements as announced on June 22, 2015, with CITIC Merchant Co. Ltd. and Swiss Life Gestion Privee as investors for the issue of new common shares in the company. The investors have agreed to subscribe for 55 million new common shares, for total gross proceeds of up to approximately $31.6-million (U.S.), in the amounts shown in the accompanying table.

                                           New common shares                    
                                            as percentage of                    
                                                   company's                    
                                          outstanding common                    
                                                      shares                    
                       Number of new           following the      Gross proceeds,
                       common shares      private placements      U.S.$ millions

                                                                            
CITIC Merchant            50,000,000                      17%               28.7
Swiss Life GP              5,000,000                       2%                2.9
Total                     55,000,000                      19%               31.6

CITIC Merchant is the merchant banking arm of the CITIC Group and is principally engaged in the provision of strategic advisory services and financing solutions for state-owned and private enterprises in diversified sectors, in particular the health care, energy and resource sectors. Swiss Life GP is the asset management company of the SwissLife Banque Privee in France, a European private bank under Swiss Life Group, which is one of Europe's leading comprehensive life insurance, pension and financial solution providers.

The proceeds from the private placements will be applied toward the company's working capital to meet the company's current obligations and to finance its operations in the coming months. Please refer to the company's announcement of June 22, 2015, available on SEDAR, for more details on these private placements in the context of the company's overall financing plan.

The placing price is 71 cents per share, which represents a discount of approximately 20 per cent to the five-day volume-weighted average price of the common shares on the Toronto Stock Exchange at June 19, 2015. The placing price was determined with reference to the prevailing market price of the common shares and was negotiated on an arm's-length basis between the company and the investors.

The new common shares represent, in total, an approximately 19-per-cent equity interest in the company following completion of the issuance. The new common shares will be subject to resale restrictions for four months and one day after the closing date of the placing, unless permitted under applicable securities legislation.

The closing of the private placements and related transactions is subject to necessary approvals to issue the new common shares, including by the TSX and the Stock Exchange of Hong Kong Ltd., and in the case of CITIC Merchant is subject to completion of due diligence and the approval of its board. Additionally, after closing of its private placement, CITIC Merchant will be entitled to nominate one director for appointment or election, from time to time, to the board of directors of the company for so long as it and its affiliates beneficially own directly or indirectly 10 per cent or more of the outstanding common shares of the company.