SouthGobi Announces the Dismissal of the Money Laundering Accusations and the Transfer of the Tax Investigation Case Back to the Court of Justice in Mongolia

HONG KONG, CHINA--(Marketwired - Jan 7, 2015) - SouthGobi Resources Ltd. (TSX:SGQ)(HKSE:1878) (the "Company") announced today that the Capital City Prosecutor in Mongolia had dismissed the accusations of alleged money laundering against the Company's three (3) former employees and transferred the tax investigation case back to Court.

As previously detailed by the Company in its Management Discussion and Analysis ("MD&A") for the three months ended September 30, 2014 which is available at www.sedar.com, the Company has been subject to investigations by the State Investigations Agency ("SIA") into allegations against the Company and some of its former employees regarding possible breaches of Mongolia's money laundering and taxation laws.

A report issued by the experts appointed by the SIA on June 30, 2013 and again in January 2014 had recommended that the alleged accusations of money laundering against the Company's three (3) former employees be withdrawn.

The Company has been notified that on December 30, 2014, the Capital City Prosecutor had decided to dismiss the allegations of money laundering.

The Company announced on November 10, 2014 that the Mongolian investigation authority issued a resolution to order a re-investigation into alleged violations of Mongolian taxation law. The Company has been informed that the re-investigation was completed and the case transferred back to the Second District Criminal Court of Justice on December 31, 2014.

President and CEO, Mr. Enkh-Amgalan Sengee has said "We welcome the decision to dismiss the accusations of money laundering. We will continue to cooperate as required with the relevant authorities concerning the case of alleged violations of Mongolian tax law which has been brought back to Court."

The Company, including its Mongolian subsidiary SouthGobi Sands LLC, prepares its financial statements in compliance with IFRS, and has lodged all its tax returns in the required format under Mongolian tax law. During the investigative period, which has been ongoing since May 2012, the Company devoted considerable internal resources in reviewing and responding to the allegations raised through the investigations by the relevant authorities. The Company views these accusations as unfounded. It disputes these accusations and the procedures and conclusions of the investigations that led to these accusations and will vigorously defend itself against these charges.

About SouthGobi

SouthGobi is listed on the Toronto and Hong Kong stock exchanges, in which Turquoise Hill Resources Ltd. ("Turquoise Hill"), also publicly listed in Toronto and New York, has a 47.9% shareholding. Turquoise Hill took management control of SouthGobi in September 2012 and made changes to the board and senior management. Rio Tinto has a majority shareholding in Turquoise Hill.

SouthGobi is focused on exploration and development of its metallurgical and thermal coal deposits in Mongolia's South Gobi Region. It has a 100% shareholding in SouthGobi Sands LLC, Mongolian registered company that holds the mining and exploration licences in Mongolia and operates the flagship Ovoot Tolgoi coal mine. Ovoot Tolgoi produces and sells coal to customers in China.