Mongolia Tax Audit

HONG KONG, HK / ACCESS Newswire / November 6, 2026 / SouthGobi Resources Ltd. (TSX-V:SGQ)(HK:1878) ("SouthGobi" or the "Company") advises its shareholders and potential investors that this announcement is made by the Company pursuant to Rule 13.09(2)(a) of the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange and the Inside Information Provisions under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) regarding a tax audit in Mongolia.

The Company's wholly owned subsidiary in Mongolia, Southgobi Sands LLC ("SGS"), received an official notice (the "Notice") issued by the General Department of Taxation of the Mongolian Tax Administration ("MTA") on October 23, 2026. The Notice advised that the MTA has recently completed a comprehensive periodic tax audit (the "Tax Audit") on the financial information of SGS between 2022 and 2023. As a result of the Tax Audit, the MTA is imposing a tax penalty against SGS in the amount of approximately US$7.1 million, in relation to transfer pricing, unpaid tax payables, corporate income tax and immovable property tax. Under Mongolian tax law, the Company has a period of 30-days from the date of receipt of the Notice to file an administrative complaint with the Tax Dispute Resolution Council.

As at the date of this announcement, SGS has engaged an independent tax consultant in Mongolia to provide tax advice and support to the Company in relation to the Tax Audit. Following consultation and evaluation, the Company's management has decided to accept the results of the Notice and will not pursue an appeal or file an administrative complaint. Save as mentioned above, the Notice and the tax penalty do not appear to have any other material adverse effect on the Company. The Company will make further announcement(s) to keep its shareholders and potential investors informed of any material development as and when appropriate.

Shareholders and potential investors of the Company are advised to exercise caution when dealing in the shares of the Company.

By order of the Board

SouthGobi Resources Ltd.

Yingbin Ian He
Lead Director

Hong Kong: November 6, 2026

As at the date of this announcement, the executive directors of the Company are Mr. Ruibin Xu, Ms.Chonglin Zhu and Mr. Chen Shen; the independent non-executive directors of the Company are Mr.Yingbin Ian He, Ms. Jin Lan Quan and Mr. Fan Keung Vic Choi; and the non-executive directors of the Company are Mr. Zhu Gao and Mr. Zaixiang Wen.

About SouthGobi

SouthGobi, listed on the Hong Kong Stock Exchange and the TSX Venture Exchange, owns and operates its flagship Ovoot Tolgoi coal mine in Mongolia. It also holds the mining licences of its other metallurgical and thermal coal deposits in South Gobi region of Mongolia. SouthGobi produces and sells coal to customers in China.

Contact:

Investor Relations
Email: info@southgobi.com

Mr. Ruibin Xu
Chief Executive Officer
Office: +852 2156 1438 (Hong Kong)
Website: www.southgobi.com

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE: SouthGobi Resources Ltd.