Mr. Ruibin Xu reports

SOUTHGOBI ANNOUNCES UPDATE ON MONGOLIA TAX AUDIT

Reference is 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, March 28, 2025, and May 6, 2025, in relation to the Mongolian tax audit.

On June 9, 2025, the company's wholly owned subsidiary in Mongolia, Southgobi Sands LLC (SGS), obtained a copy of a judgment dated May 27, 2025, issued by the Appellate Court for Administrative in Ulaanbaatar, Mongolia. As per the appellate court judgment, the appellate court upheld the court order issued by the judge of the Administrative Court of First Instance in Mongolia on April 15, 2025. As a result, the claim brought by certain Mongolian Tax Authority officials against the Tax Dispute Resolution Council (TDRC) in an attempt to dispute or overturn the previous decision made by the TDRC regarding the reassessment result has been dismissed and rejected. According to applicable Mongolian law, the appellate court judgment shall be final and is not subject to further appeal.

As of the date of this announcement, the reassessment result remains legally valid and effective. The company expects no further dispute regarding the reassessment result and will only make further announcement(s) as and when there is new development regarding this matter.

About SouthGobi Resources Ltd.

SouthGobi 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 the South Gobi region of Mongolia. SouthGobi produces and sells coal to customers in China.