SouthGobi Resources Faces $7.1 Million Tax Penalty in Mongolia

SouthGobi Resources Ltd. has announced a tax penalty following a comprehensive audit by the Mongolian Tax Administration. The audit covered financial data from 2022 to 2023 of SouthGobi's subsidiary, Southgobi Sands LLC. This resulted in a penalty of approximately US$7.1 million. The charges relate to transfer pricing, unpaid taxes, corporate income tax, and immovable property tax.

The company has engaged an independent tax consultant in Mongolia for guidance. SouthGobi's management has decided to accept the penalty and will not appeal the decision. The penalty is not expected to have a significant negative impact on the company.

Shareholders are urged to exercise caution in dealing with the company's shares. SouthGobi will update on any substantial developments.