SouthGobi provides bi-weekly status report
VANCOUVER, British Columbia, May 29, 2020 (GLOBE NEWSWIRE) -- SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) (“SouthGobi” or the “Company”) provides this bi-weekly
default status report in relation to the management cease trade order dated May 15, 2020 (“MCTO”) granted by the British Columbia Securities Commission (“BCSC”)
pursuant to National Policy 12-203 - Cease Trade Orders for Continuous Disclosure Defaults ("NP 12-203").
As disclosed in its announcements dated May 12, 2020 and May 17, 2020, the Company was advised by its external auditors (the “Auditors”) that they were unable to render an unmodified opinion on the Company’s annual consolidated financial statements for the year ended December 31, 2019 (the “2019 Financial Statements”) prior to the filing deadline of May 14, 2020, as they have not obtained sufficient evidence to support management’s going concern assumptions due in part to the impact of the COVID-19 pandemic. As a result, the Company was not able to file: (i) the 2019 Financial Statements, the accompanying Management Discussion & Analysis and its 2019 Annual Information Form (collectively, the “2019 Annual Filings”) by the filing deadline of May 14, 2020; and (ii) its interim consolidated financial statements for the three month period ended March 31, 2020 and accompanying Management Discussion & Analysis (collectively, the “2020 Interim Filings”) by the filing deadline of May 15, 2020.
The Company continues to have discussions with the Auditors and to attempt to obtain and provide them sufficient evidence to support management’s going concern assumptions for the 2019 Financial Statements. The Company is also working to explore different alternatives in relation to the 2019 Financial Statements. However, the Company expects that it is unlikely that it will be able to file the 2019 Annual Filings and 2020 Interim Filings prior to the expiry of the MCTO (i.e. June 15, 2020).
If the 2019 Annual Filings and 2020 Interim Filings are not filed on or before June 15, 2020, it is anticipated that the BCSC will issue a general “failure to file” cease trade order (“CTO”) shortly after the expiry of the MCTO to prohibit the trading by any person of any securities of the Company, including trades in the Company’s common shares made through the TSX. The CTO will remain in place until such time as the 2019 Annual Filings and 2020 Interim Filings are filed by the Company. While the CTO is in effect, the TSX may elect to place the Company under remedial delisting review. If the Company is placed on remedial delisting review, there can be no assurances that the Company will be able to successfully demonstrate compliance with TSX listing requirements and maintain its listing on the TSX. The CTO or a delisting from the TSX will have a significant adverse impact on the liquidity of the Company’s common shares and shareholders of the Company may suffer a significant decline or total loss in value of its investment in the Company’s common shares as a result.