An anonymous director of Od Sar reports

EARLY WARNING NEWS RELEASE FOR OD SAR TRADING CO., LIMITED

SouthGobi Resources Ltd.'s secured convertible debenture issued on Nov. 19, 2009, was the subject of an assignment agreement and payment of the purchase price on July 9, 2026 (Pacific Time), being July 10, 2026, Hong Kong time. In it, the acquiror, Od Sar Trading Co., Ltd., paid JD Zhixing Fund L.P. $19-million (U.S.) of accrued payment-in-kind (PIK) interest payable under SouthGobi's secured convertible debenture, which has an outstanding principal amount of $250-million (U.S.). The assignment was completed through a private agreement outside Canada and not through the facilities of any stock exchange or other marketplace.

Under the terms of the convertible debenture, interest on the outstanding principal amount is payable in common shares of SouthGobi at a rate of 1.6 per cent per annum. The convertible debenture provides that PIK interest is satisfied by the issuance of such number of common shares as is determined by dividing the applicable PIK interest amount by the applicable 50-day volume weighted average price (VWAP) of the common shares as of the date of payment, calculated using trading on all stock exchanges on which the common shares are listed and converted into Canadian dollars in accordance with the terms of the convertible debenture.

The assigned PIK interest forms part of $25.1-million of accrued PIK interest under the convertible debenture and related deferral agreements that may be demanded for payment. Pursuant to the assignment agreement, Od Sar acquired all rights, title, benefits and privileges associated with the assigned PIK interest, including the right to receive the common shares issuable in respect thereof.

Od Sar believes that the assigned PIK interest constitutes an interest in securities of SouthGobi for purposes of National Instrument 62-103 because the assigned PIK interest carries with it the right to receive common shares upon demand for payment in accordance with the convertible debenture.

The applicable VWAP as of July 10, 2026, was approximately 32.72 cents per common share, equivalent to approximately 23.13 U.S. cents per common share using the applicable Bank of Canada exchange rate of one Canadian dollar to 70.69 U.S. cents. On that basis, the assigned PIK interest would entitle Od Sar to receive approximately 82,144,401 common shares.

Assuming 297,051,666 common shares outstanding immediately prior to issuance of such shares and no other changes to the issuer's capital structure, the issuance of 82,144,401 common shares to Od Sar would result in 379,196,067 common shares being issued and outstanding, and the common shares issuable to Od Sar would represent approximately 21.66 per cent of the then issued and outstanding common shares of SouthGobi on an undiluted basis.

Immediately prior to the assignment, Od Sar did not beneficially own or control any issued and outstanding common shares of SouthGobi. Immediately following the assignment, Od Sar continued not to beneficially own or control any issued and outstanding common shares of SouthGobi. However, following completion of the assignment, Od Sar acquired the assigned PIK interest and the right to receive the common shares issuable in respect thereof.

Od Sar acquired the assigned PIK interest for investment purposes and demanded payment of $17-million (U.S.) of the assigned PIK interest on July 12, 2026, Pacific Time. Subject to the terms of the convertible debenture and related agreements, Od Sar expects to receive 73,497,622 common shares in satisfaction of $17-million (U.S.) of the assigned PIK interest, representing approximately 19.83 per cent of the issued and outstanding common shares of SouthGobi on an undiluted basis. Following such issuance of common shares, Od Sar may evaluate its investment from time to time and may increase or decrease its interest in securities of SouthGobi through market transactions, private agreements or otherwise, including demanding further payment of the remaining balance of the assigned PIK interest.

An early warning report containing additional information regarding the foregoing matters will be filed by Od Sar under National Instrument 62-103 under SouthGobi's profile on SEDAR+. A copy of the early warning report may be obtained by contacting Od Sar at the address below.

Od Sar Trading Co., Ltd. is a company incorporated under the laws of Hong Kong.

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