Mr. Ruibin Xu reports

SOUTHGOBI ANNOUNCES PROPOSED SETTLEMENT OF CLASS ACTION LAWSUIT

SouthGobi Resources Ltd. has referenced the announcements of the company dated Jan. 8, 2014, Nov. 9, 2015, May 31, 2016, and Sept. 22, 2017, in relation to the class action lawsuit in Canada.

The company announces that it has reached an agreement in principle to a settlement of the class action lawsuit filed against the company in the Superior Court of Ontario in relation to the company's restatement of certain financial statements previously disclosed in the company's public filings (the restatement), subject to the finalization of a definitive settlement agreement, notice of the settlement to the class plaintiff members and court approval.

As previously disclosed in the company's public filings, in January, 2014, Siskinds LLP, a Canadian law firm, filed the class action against the company, certain of its former senior officers and directors, and its former auditor, in the Ontario court in relation to the restatement. As required by law, leave of the court under the Ontario Securities Act and certification of the action as a class proceeding under the Ontario Class Proceedings Act were granted to the class plaintiffs by the court.

Counsel for the class plaintiffs and the company have: (i) completed document production and oral examinations for discovery; (ii) exchanged expert reports on liability and damages; and (iii) designed a mediation process and finalized, with the participation of the relevant company's insurers, the mediation under the guidance of former Chief Justice of Ontario, George Strathy, which mediation was held and completed on Aug. 11, 2025.

As a result of the mediation, the class plaintiffs and the company conditionally settled the class action for $6.8-million, including all liability, class counsel fees, notice and administrative costs, fees, and costs and expenses related to the litigation. The settlement payments are the obligation of the company's insurers as of January, 2014.

The settlement is conditional upon, amongst other things, the approval of a judge of the Ontario court by way of motion brought to the court, notice of the settlement being provided to the class plaintiffs and finalization of a definitive settlement agreement. The motion is expected to be presented to the court by the class plaintiffs, with the support of the company, on or before Dec. 31, 2025. The settlement, if approved and made effective, is within the company's insured limits. Accordingly, the company has determined that a provision for this matter is not required on its financial statements.

The company cannot provide any assurance that the settlement will obtain the necessary approvals and satisfy the conditions and requirements necessary for it to become final. The company continues to believe that it has a strong defence on the merits. The company will issue further announcement(s) to update shareholders and potential investors regarding material developments as and when necessary.

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.