SouthGobi Announces Connected Transaction Involving Amendment of Convertible Debenture

VANCOUVER, BC / ACCESSWIRE / May 13, 2024 / SouthGobi Resources Ltd. (TSX-V:SGQ)(HK:1878) ("SouthGobi" or the "Company", together with its subsidiaries, the "Group")announces that, on May 13, 2024, it has entered into an amendment agreement (the "Convertible Debenture Amendment") with JD Zhixing Fund L.P. ("JDZF"), the registered holder of the Company's US$250 million Convertible Debenture issued on November 19, 2009 (the "Convertible Debenture") and the Company's largest shareholder, to amend certain terms of the Convertible Debenture.

This announcement is made by the Company pursuant to Rule 13.09(2) and Chapter 14A of the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange (the "Hong Kong Listing Rules") and the Inside Information Provisions under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

Convertible Debenture Amendment

Pursuant to the Convertible Debenture Amendment, the Company may, by resolution of the board of directors of the Company (the "Board"), at any time and from time to time prepay, without penalty, the whole or any part of the principal amount outstanding under the Convertible Debenture, together with accrued cash interest and PIK interest thereon to the date of prepayment, provided that:

the Company has, not later than three (3) business days prior to the proposed prepayment date, delivered to JDZF an irrevocable written notice, signed by an independent director of the Company and setting out the terms of the prepayment;

the amount of such prepayment reduces the then outstanding principal amount under the Convertible Debenture by an amount that is (I) not less than US$500,000 and (II) if in excess of US$500,000, an integral multiple of US$500,000; and

the proposed prepayment date falls on a business day.

The Company is not providing any additional form of consideration to JDZF in connection with the Convertible Debenture Amendment. Aside from the aforementioned amendments, the existing terms of the Convertible Debenture continue in full force and effect and unchanged.

The effectiveness of the Convertible Debenture Amendment is subject to the Company providing notice to, and obtaining acceptance (if required) from the TSX Venture Exchange ("TSX-V") and the Hong Kong Stock Exchange, as well as requisite approval from disinterested shareholders of the Company in accordance with the requirements of applicable securities laws.