SouthGobi Announces Discloseable and Connected Transaction Deferral of Payment Obligation Under Prior Deferral Agreement

VANCOUVER, BC / ACCESSWIRE / April 30, 2024 / SouthGobi Resources Ltd. (TSX-V:SGQ)(HK:1878) ("SouthGobi" or the "Company") announces the deferral of payment obligation under prior deferral agreement.

Background

This announcement is made by SouthGobi Resources Ltd. (the "Company", together with its subsidiaries, the "Group") pursuant to Rule 13.09(2) and Chapters 14 and 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).

Reference is made to the announcements of the Company dated November 11, 2022, November 17, 2023 and January 19, 2024 (collectively, the "Announcements"). Unless otherwise specified, terms used in this announcement shall have the meaning as defined in the Announcements.

The Company announces deferral of payment obligations under a prior deferral agreement 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.

The April 2024 Deferral Agreement

The Company announces that, on April 30, 2024, the Company and its subsidiaries, namely SouthGobi Sands LLC and SGQ Coal Investment Pte. Ltd., entered into a new deferral agreement (the "April 2024 Deferral Agreement") with JDZF, pursuant to which JDZF agreed to grant the Company a deferral of the remaining US$1,100,000 of payment-in-kind interest which was payable on November 19, 2022 under the Convertible Debenture (the "November 2022 PIK Interest"), the payment of which was deferred under the November 2022 Deferral Agreement until November 19, 2023, as well as related deferral fees under the November 2022 Deferral Agreement (collectively, the "Deferred Amounts").

The principal terms of the April 2024 Deferral Agreement are as follows:

Effectiveness of the April 2024 Deferral Agreement

The effectiveness of the April 2024 Deferral Agreement is subject to the Company providing notice to, and obtaining acceptance (if required) from the TSX Venture Exchange ("TSX-V") and requisite approval from disinterested shareholders of the Company in accordance with the requirements of applicable Canadian securities laws, Rule 14.33 and Rule 14A.36 of the Hong Kong Listing Rules.