Mr. Ruibin Xu reports

UPDATE ON PAYMENT OBLIGATIONS UNDER NOVEMBER 2022 DEFERRAL AGREEMENT

On Nov. 15, 2023, in accordance with the terms of the convertible debenture and the related deferral agreement dated Nov. 11, 2022, SouthGobi Resources Ltd. paid JD Zhixing Fund LP (JDZF), the company's substantial shareholder, the $7,065,753 (U.S.) of cash interest which is due and payable on Nov. 19, 2022, under the convertible debenture, the payment of which was deferred under the November, 2022, deferral agreement until Nov. 19, 2023.

Refer to the announcements of the company dated Nov. 11, 2022, Aug. 30, 2023, and Oct. 13, 2023, and the management proxy circular of the company dated July 20, 2023, in relation to the deferral agreements under the convertible debenture. Unless otherwise specified, terms used in this announcement shall have the meaning as defined in the announcements and the management proxy circular.

On Nov. 17, 2023, JDZF agreed to waive the company's payment obligations under the November, 2022, deferral agreement in relation to: (i) the remaining $1.1-million (U.S.) of payment-in-kind interest which was payable on Nov. 19, 2022, under the convertible debenture (the November, 2022, PIK interest), the payment of which was deferred under the November, 2022, deferral agreement until Nov. 19, 2023 (the waived PIK interest default), as well as the right to collect deferral fees in respect of the November, 2022, PIK interest under the November, 2022, deferral agreement for the period between Nov. 20, 2023, until Jan. 19, 2024 (both dates inclusive); and (ii) the management fees (the November, 2022, deferred management fees) which were payable on Nov. 15, 2022, Feb. 15, 2023, May 16, 2023, and Aug. 15, 2023, under the amended and restated co-operation agreement dated April 23, 2019 (the amended and restated co-operation agreement), the payments of which were deferred under the November, 2022, deferral agreement until Nov. 19, 2023 (the waived deferred management fees default and, together with the waived PIK interest default, the waived defaults). In order to allow the company to remedy the waived defaults, the waiver as it relates to the waived PIK interest default will be in effect up to and until Jan. 19, 2024 (or such other date as may be agreed upon by JDZF and the company in writing), and the waiver as it relates to the waived deferred management fees default will be in effect up to and until Aug. 31, 2024 (or such other date as may be agreed upon by JDZF and the company in writing).

If there is any inconsistency or discrepancy between the English and Chinese version, the English version shall prevail.

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.