Mr. Ruibin Xu reports

SOUTHGOBI ANNOUNCES INSIDE INFORMATION JD ZHIXING FUND L.P. ASSIGNS PAYMENT-IN-KIND INTEREST UNDER CONVERTIBLE DEBENTURE

As disclosed in the press release issued by JD Zhixing Fund LP on July 10, 2026, in Canada, JDZF, being the registered holder of SouthGobi Resources Ltd.'s $250-million (U.S.) convertible debenture issued on Nov. 19, 2009, and the company's largest shareholder, has entered into an assignment agreement with Od Sar Trading Co. Ltd. (the assignee), pursuant to which JDZF has assigned to the assignee pursuant to the terms of the convertible debenture the right to receive $19-million (U.S.) of payment-in-kind interest accrued and outstanding under the convertible debenture and certain related deferral agreements. The payment date of the assigned PIK interest was deferred until Aug. 31, 2027, pursuant to the terms of the deferral agreement dated March 23, 2026, between JDZF, the company and certain of its subsidiaries, as discussed in the company's press release issued on March 23, 2026. The assignment of the assigned PIK interest does not have any impact on the deferral date nor does it amend or result in a deviation of the terms of the March, 2026, deferral agreement.

Pursuant to the terms of the convertible debenture and related deferral agreements, the assignee may, at its discretion, require the company to satisfy the assigned PIK interest by issuing fully paid and non-assessable common shares of the company in an amount equal to the assigned PIK interest divided by the 50-day volume-weighted average price of the common shares as of the requested payment date of the assigned PIK interest.

The company has been notified by the assignee that the assignee intends to convert the assigned PIK interest into, and require the company to issue, common shares in the near future.

Shareholders are cautioned that the final number of common shares that the company will issue to satisfy the assigned PIK interest will depend on the prevailing 50-day VWAP as of the future payment date. For illustrative purposes, assuming a payment date as of the date hereof and using the 50-day VWAP of 32.7 Canadian cents per share and Bank of Canada Canadian dollar to U.S. dollar daily average exchange rate of 0.7069, upon issuance of the common shares in satisfaction of the assigned PIK interest, the assignee would receive 82,140,266 common shares, representing 21.66 per cent of the issued and outstanding common shares.

The company will make a further announcement regarding the issuance of common shares in satisfaction of the assigned PIK interest as and when appropriate.

Shareholders and potential investors of the company should exercise caution when dealing in the shares of the company.

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