SouthGobi Resources Announces an Update on the CITIC Merchant Private Placement Agreement, the TSX Delisting Review and the CIC Convertible Debenture Interest Payment Due Date

HONG KONG, CHINA--(Marketwired - Jul 23, 2015) - SouthGobi Resources Ltd. (TSX:SGQ)(HK:1878) ("SouthGobi" or the "Company") today announces an update on the CITIC Merchant private placement agreement, the TSX delisting review and the CIC Convertible Debenture interest payment due date. All figures are in U.S. Dollars unless otherwise stated.

CITIC Merchant private placement agreement

As announced on July 14, 2015 the Company agreed to an extension of the closing date of the private placement agreement between the Company and CITIC Merchant Co., Limited ("CITIC Merchant") until July 20, 2015. The conditions precedent to the agreement have not been fulfilled and CITIC Merchant has informed the Company that it will not be subscribing for shares in the Company pursuant to the signed private placement agreement. The expected gross proceeds from the placement to CITIC Merchant were to have been US$28.7 million, as set out in the Company's announcement of June 29, 2015 and available on SEDAR at www.sedar.com.

The Company is in ongoing discussions with CITIC Merchant with regard to a private placement, and also continues to actively seek additional sources of financing to continue operating and meet its objectives. These possible sources of funding include, but are not limited to, coal offtake agreements, an interim loan and a revolving loan as described in more detail in the Company's announcement dated June 22, 2015 and available on SEDAR at www.sedar.com and further potential equity placements.

TSX delisting review

The Toronto Stock Exchange ("TSX") has advised the Company it has granted an extension of the delisting review. A meeting of the Listings Committee of TSX is scheduled to be held on July 27, 2015 and their decision is expected no later than July 29, 2015 (Toronto time). For additional detail, refer to the section Liquidity and Capital Resources under the heading TSX Financial Hardship Exemption Application and Status of Listing on the TSX in the MD&A issued on May 11, 2015 and available on SEDAR at www.sedar.com.

CIC Convertible Debenture

As announced by the Company on May 20, 2015, the Company obtained a deferral to July 22, 2015 of the May 2015 cash interest payment of approximately $7.9 million due on its China Investment Corporation ("CIC") Convertible Debenture. In accordance with the terms of the deferral and the CIC Convertible Debenture the payment date is subject to a three day cure period which expires on July 27, 2015.

In all other respects, the provisions of the CIC Convertible Debenture remain in full force and effect and the deferral of the May interest payment by CIC is without prejudice to CIC's right to pursue any of its remedies at any time if an event of default occurs pursuant to the continuing terms of the CIC Convertible Debenture. In the event the Company fails to pay the May 2015 cash interest installment within the cure period which expires on July 27, 2015, this would result in an event of default under the CIC Convertible Debenture and CIC would have the right to declare the full principal and accrued interest owing thereunder immediately due and payable, which could result in voluntary or involuntary proceedings involving the Company (such as bankruptcy) as discussed under the heading Risk Factors in the MD&A issued on March 30, 2015 and available on SEDAR at www.sedar.com.

The Company is currently in active discussions with CIC for its continued support of the Company.

Novel Sunrise

The Company notes the announcement by Novel Sunrise Investments Limited ("Novel Sunrise"), the largest shareholder of the Company, on July 20, 2015 which reported that China Cinda (HK) Investments Management Company Limited ("Cinda"), a wholly-owned subsidiary of China Cinda Asset Management Corporation Limited, acquired ownership and control of all of the outstanding voting (ordinary) shares of Novel Sunrise through Hope Rosy Limited, a wholly-owned subsidiary of Cinda. Further information is available on SEDAR at www.sedar.com.

About SouthGobi

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

Contact

Media Relations
Altanbagana Bayarsaikhan
Office: +976 70070710
altanbagana.bayarsaikhan@southgobi.com