VANCOUVER, BC / ACCESSWIRE / January 31, 2023 / SouthGobi Resources Ltd. (TSX:SGQ)(HK:1878) ("SouthGobi" or the "Company") This announcement is made by the Company pursuant to Rule 13.09 of the Rules Governing the Listing of Securities ("Listing Rules") on the Hong Kong Stock Exchange, paragraphs 3.20 and 3.42 of the Guidance Letter HKEX-GL-112-22 ("Guidance Letter") 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 April 21, 2022, July 29, 2022 ("July 29 Announcement"), September 15, 2022, November 23, 2022, and December 30, 2022 (Hong Kong time) in respect of the Delisting from the TSX and the NEX Listing Application following which the Company will become primary listed on the Hong Kong Stock Exchange (collectively, "Announcements"). Unless otherwise specified, capitalized terms used in the Announcements shall have the same meanings when used herein.

1. MIGRATION EXCHANGE NOTICE

1.1 Introduction

The Board wishes to inform the market that on January 20, 2023 (Hong Kong time), the Company received a written notice from the Hong Kong Stock Exchange ("Migration Exchange Notice") of its decision that the majority of trading in the Company's Shares has migrated to the Hong Kong Stock Exchange's markets ("Migration") on a permanent basis as more than 55% of the Company's total worldwide trading volume took place on such markets over the most recent financial year under Note 1 to Listing Rule 19C.13. Approximately 89.6% of the total worldwide trading volume, by dollar value, of the Shares over the Company's financial year ended 31 December 2022, took place on the Hong Kong Stock Exchange's markets.

1.2 Migration Grace Period

Note 2 to the Listing Rule 19C.13 provides the Company with a grace period of 12 months to comply with the applicable Listing Rules ("Migration Grace Period"). The Migration Grace Period will end at midnight on the first anniversary of the date of Migration Exchange Notice ("Migration Exchange Notice Date"). The Hong Kong Stock Exchange will regard the Company as having dual primary (rather than secondary) listing status on the Hong Kong Stock Exchange upon the expiry ("Expiry") of the Migration Grace Period, i.e., January 20, 2024 (Hong Kong time).

For the avoidance of doubt, the Migration Grace Period is conditional on the continued primary listing of the Company on the Recognised Stock Exchange of its primary listing (i.e., the TSX). If this condition is not fulfilled, the Company will be regarded as having delisted from its primary listing on the Recognised Stock Exchange for the purpose of Listing Rule 19C.13A and become primary listed on the Hong Kong Stock Exchange. Consequently, Listing Rules 19C.11, 19C.11A, 19C.11B, and 19C.11C (as applicable) will no longer apply to the Company. As disclosed in the Announcements, the Company is preparing for the voluntary delisting from the TSX and subsequent listing of its Shares on the NEX division of the TSX-V through the NEX Listing Application, which will constitute a delisting from its Recognised Stock Exchange of primary listing (i.e., the TSX) upon the Effective Date. Please refer to the Announcements and the section headed "2. Update on Listing Application in Canada" in this announcement for further details and the latest status of the Delisting and the NEX Listing Application. Therefore, upon the Expiry (in respect of the Migration) or the Effective Date (in respect of the Delisting), whichever is earlier, the Company shall fully comply with the Listing Rules requirements applicable to a primary listed issuer, unless otherwise being exempted or waived by the Hong Kong Stock Exchange.

The Company acknowledged that it shall provide the Hong Kong Stock Exchange with an updated report, on a monthly basis, on its progress towards compliance with the Listing Rules which will apply to the Company at the end of the Migration Grace Period. The Company also acknowledged that it shall publish an announcement upon Expiry, stating the end of the Migration Grace Period, together with the details required under paragraph 3.21 of the Guidance Letter.

1.3 Compliance with and Waivers from the Listing Rules

Upon Expiry, it is expected that the Company will be able to comply with all the relevant Listing Rules applicable to a dual primary listed issuer, including the Listing Rules on which the Existing Waivers (as disclosed in the section headed "1.4 Impact of Migration and the Way Forward" in this announcement) apply, which are nonetheless expected to be withdrawn or will no longer be applicable upon Expiry, unless otherwise separately waived or exempted by the Hong Kong Stock Exchange.

The Company intends that, save as the Company's waiver applications on "two-way" voting under Listing Rule 13.38 and on certain continuing connected transaction requirements under Listing Rules 14A.36 and 14A.53 in respect of the continuing connected transactions pursuant to the Amended and Restated Cooperation Agreement entered into originally with CIC (through Fullbloom) and later with the Fund following the Completion, as detailed in the July 29 Announcement ("Waiver Applications"), it has taken and will take all reasonable and prudent steps to comply with all the relevant Listing Rules applicable to the Company following Expiry or the Effective date, whichever is earlier, by making all necessary Arrangements to effectuate the Migration or the Delisting, as obliged by the applicable Listing Rules requirements. For further details of the Arrangements and the Waiver Applications, please refer to the July 29 Announcement. The Hong Kong Stock Exchange may or may not grant such waivers pursuant to the Waiver Applications.

Pursuant to Note 3 to the Listing Rule 19C.13, any continuing transaction of the Company in place as at the Migration Exchange Notice Date will continue to be exempted from the applicable rules set out in Listing Rule 19C.11 for a period of three years from the Migration Exchange Notice Date. However, if such transaction is subsequently amended or renewed before the expiry of the aforementioned three-year period, the Company must comply with the relevant requirements under the rules at such time. For the avoidance of doubt, this exemption does not apply to any other circumstances unless otherwise stated in the Listing Rules. Additionally, in the event of the Delisting, such exemption will no longer apply to the Company upon the Effective Date.

1.4 Impact of Migration and the Way Forward

The Company is continuously assessing the legal, financial, and operational impact of the Migration to the Company. As of the date of this announcement, the Company believes the Migration will not bring about any material impact to Shareholders and potential investors trading on the Hong Kong Stock Exchange.

The Migration Exchange Notice states that the stock marker "S" in the Company's stock short name will be dis-applied only when the Company is able to fully comply with all the relevant Listing Rules applicable to a dual primary listed issuer. The stock marker "S" continues to apply until Expiry, provided that the Company is in compliance with all the relevant Listing Rules applicable to a dual primary listed issuer. In the event the Company is unable to implement all necessary changes to its corporate and organisational structure in order to comply with the corporate governance requirements in the Listing Rules and/ or put in place an internal control system to enable itself to fully comply with an applicable Listing Rule (and, if applicable, where no waiver has been granted by the Hong Kong Stock Exchange) upon Expiry, the stock marker "S" shall remain in the Company's stock short name and can only be removed after all rectification measures have been carried out and the Company is fully compliant with all applicable Listing Rules. The Company will also disclose details of such breaches of the Listing Rules, the progress of the rectification, and the amount of time needed for full compliance with the specific Listing Rules. The Hong Kong Stock Exchange may also consider pursuing disciplinary actions in respect of any non-compliance with the relevant Listing Rules.

In addition, in the event that the Company is unable to fully comply with an applicable Listing Rules upon Expiry (save for any continuing transaction that will continue to be exempted pursuant to Note 3 to Listing Rule 19C.13), the Hong Kong Stock Exchange may, on a case by case basis, exercise its discretion to extend the grace period, suspend trading of the Shares or impose other measures as it considers necessary for the protection of the investors and the maintenance of an orderly market. If any extended grace period has been granted under a time-relief waiver, the Company shall publish an announcement upon the grant and the expiry of such extended grace period, informing the Shareholders and the investors of the status of compliance.

For the avoidance of doubt, notwithstanding the receipt of the Migration Exchange Notice, save as otherwise specified in the Guidance Letter, the Company will continue to be entitled to the Existing Waivers prior to Expiry (in respect of the Migration) or the Effective Date (in respect of the Delisting), whichever is earlier. Such Existing Waivers include, among others, the following specific waivers granted by the Hong Kong Stock Exchange, exemption and ruling granted by the SFC, on an individual basis:

For further details of the Existing Waivers, please refer to the July 29 Announcement. The Existing Waivers will be withdrawn upon Expiry (in respect of the Migration) or the Effective Date (in respect of the Delisting), whichever is earlier, and the Company is expected to fully comply with the relevant Listing Rules and provisions of the SFO accordingly. The Company has been observing the Codes as approved by the SFC (as amended from time to time) since June 2014 when the Takeovers and Mergers Panel issued a ruling that the Company should be considered a "public company in Hong Kong" within the meaning of the Codes. Please refer to the Panel Discussion published by the Takeovers and Mergers Panel on June 30, 2014, for further details.

2. UPDATE ON LISTING APPLICATION IN CANADA

2.1 Update on the Effective Date of Delisting

As disclosed in the Announcements, the Company's NEX Listing Application is subject to review (which involves, among other things, customary due diligence work) and approval from the NEX. The Company wishes to update its Shareholders and investors that as the Delisting shall be subject to obtaining approvals from the TSX and NEX in connection with NEX Listing Application, the anticipated Effective Date is thus postponed to the end of February 2023 instead of the end of January 2023.

The Company will provide further updates once further information is available. The Company's common shares will remain listed on the TSX while the NEX Listing Application is under review by the NEX.

There may exist specific uncertainties as to whether and when the Delisting will proceed. Shareholders who have any queries about the implications of the Delisting are advised to obtain appropriate professional advice. Shareholders and potential investors are advised to exercise caution when dealing in the securities of the Company.

The Company will closely monitor the development of the aforesaid matters and keep the Shareholders and potential investors informed of any material development in connection with the above matters by way of periodic announcements and/or further announcement(s) as and when appropriate.

This announcement is for information purposes only and does not constitute, or form part of, any invitation or offer to acquire, purchase or subscribe for any of our securities. Shareholders and potential investors should exercise caution when dealing in our securities.

If there is any inconsistency or discrepancy between the English version and the Chinese version, the English version shall prevail.

About SouthGobi

SouthGobi, listed on the Toronto and Hong Kong stock exchanges, 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

Office: +852 2156 1438 (Hong Kong)+1 604 762 6783 (Canada)Email: [email protected]Website: www.southgobi.com

Forward-Looking Statements

Certain information included in this press release that is not current or historical factual information constitutes forward-looking statements or information within the meaning of applicable securities laws (collectively, "forward-looking statements"), including information regarding including the Company's continued listing on the TSX while the NEX Application is under review by the NEX, the grant of waivers by the HKEX pursuant to the Waiver Applications, the ability of the Company to comply with all the relevant Listing Rules applicable to a dual primary listed issuer and the anticipated Effective Date of the listing of the Company's common shares on the NEX, respectively. Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "could", "should", "seek", "likely", "estimate" and other similar words or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on certain factors and assumptions including, among other things, the ability of the Company to satisfy the HKEX's primary listing requirements, the ability of the Company to satisfy the NEX's listing requirements and the NEX approving the Company's NEX Listing Application and other similar factors that may cause actual results to differ materially from what the Company currently expects. Actual results may vary from the forward-looking statements. Readers are cautioned not to place undue importance on forward-looking statements, which speaks only as of the date of this disclosure, and not to rely upon this information as of any other date. While the Company may elect to, it is under no obligation and does not undertake to, update or revise any forward-looking statements, whether as a result of new information, further events or otherwise at any particular time, except as required by law. Additional information concerning factors that may cause actual results to materially differ from those in such forward-looking statements is contained in the Company's filings with Canadian securities regulatory authorities and can be found under the Company's profile on SEDAR at www.sedar.com.

SOURCE: SouthGobi Resources Ltd.