South Gobi Resources Ltd. – Company update, update on 2021 audited annual results release and 2021 annual filings and release of first quarter 2022 financial results

VANCOUVERSouth Gobi Resources Ltd. (TSX: SGQ, HK: 1878) (“SouthGobi” or the “Company”) announces that reference is made to announcements of the Company dated March 11, March 24, March 28, March 30, March, 31st, April 14, April 29, May 17, May 18, May 24and May 25, 2022 with respect to, among other things, the delay in the publication of the 2021 audited annual results and the delay in the 2021 annual filings (the “Announcements”).

Unless otherwise specified herein, capitalized terms used in this Announcement shall have the same respective meanings as defined in the Announcements.

BI-WEEKLY FAULT STATUS REPORT

The Company provides this bi-weekly report on the status of defaults with respect to the management cease trade order dated April 1, 2022 (“MCTO”) granted by the British Columbia Securities Commission (“BCSC”) pursuant to National Policy 12-203 – Cease Trade orders for Continuous Disclosure Failures (“NP 12-203”). With the grant of the MCTO, the Company has up to May 30, 2022, being the expiry date of the MCTO, for filing the 2021 annual filings. The Company is required to file default status reports every two weeks in accordance with NP 12-203 until the filing default of the 2021 annual documents be corrected. Pursuant to the MCTO, the Chief Executive Officer and Chief Financial Officer of the Company are not authorized to trade in securities of the Company unless and until the Company files the 2021 annual documents. While the MCTO is in effect, the shareholders of the Company will continue to be able to trade the common shares of the Company on the TSX and the HKEx.

UPDATE ON THE PUBLICATION OF 2021 AUDITED ANNUAL RESULTS AND 2021 ANNUAL FILING

As noted in the announcements, the Company has made concerted efforts to obtain an unmodified audit opinion on the 2021 financial statements prior to May 30, 2022, being the expiry date of the OCTM, and to address the business continuity issues raised by the auditors. Given the efforts made and the interim progress, the Company has resolved the going concern issue and expects to obtain an unmodified opinion from the auditors on the 2021 financial statements on May 30, 2022. As such, the Company anticipates that it will be able to file the 2021 annual documents on May 30, 2022.

As indicated in the announcement of May 18, 2022at the meeting of the Board of Directors scheduled for May 30, 2022the Board will review and approve the release of the 2021 audited annual results. The Company expects these results to be released on May 30, 2022.

PUBLICATION OF Q1 2022 FINANCIAL RESULTS

As indicated in the announcements, the deadline for filing the company’s first quarter 2022 financial results for the quarter ended March 31, 2022 (“First Quarter 2022 Financial Results”) is May 15, 2022 as required by applicable Canadian securities laws. However, the Company cannot release its first quarter 2022 financial results until it first publishes its 2021 annual filings. In accordance with the terms of the MCTO, the Company is required to file its first quarter financial results. quarter of 2022 within five business days of the filing of the 2021 annual documents. As indicated in the announcement of the May 24, 2022at the meeting of the Board of Directors scheduled for June 6, 2022the Board will review and approve the release of the first quarter 2022 financial results. The Company expects these results to be released on June 6, 2022.

Unless and until the Company files the 2021 Annual Filings, shareholders and potential investors of the Company are urged to exercise extreme caution when trading in securities of the Company.

Except as disclosed herein, the Company confirms that since May 17, 2022: (i) there has been no material change in the information contained in the announcement of the May 17, 2022 which has not been generally disclosed; (ii) there has been no failure by the Company to carry out its stated intentions with respect to satisfying the provisions of the Alternative Disclosure Guidelines under NP 12-203; (iii) there has been no other default specified or anticipated under IG 12-203 relating to the Company and (iv) there is no other material information relating to the affairs of the Company that is not has not been generally disclosed.

Shareholders of the Company and potential investors are urged to exercise caution when trading in securities of the Company.

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 exchanges, owns and operates its flagship Ovoot Tolgoi coal mine in Mongolia. It also holds the operating licenses for its other metallurgical and thermal coal deposits in the South Gobi region in Mongolia. SouthGobi produces and sells charcoal to customers of China.

Contact:

Tel: +852 2156 1438

Email: [email protected]

Web: 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 the expected filing date of the 2021 Annual Filings and First Quarter 2022 Financial Results. Forward-looking statements are often characterized by words such as “plan”, “expect”, “project”, “intend”, “believe”, “anticipate”, “could”, “should”, “seek”, “likely”, “estimate” and other similar words or statements indicating that certain events or conditions “may” or “will” occur. Forward-looking statements are based on certain factors and assumptions, including, among other things, the Company’s ability to complete and file 2021 annual filings and first quarter 2022 financial results on the expected filing dates and other similar factors. that can lead to real results. differ materially from what the Company currently expects. Actual results may differ from forward-looking statements. Readers are cautioned not to place undue importance on forward-looking statements, which speak only as of the date of this disclosure, and not to rely on such information as of any other date. Although the Company may choose to do so, it is under no obligation and does not undertake to update or revise any forward-looking statements, whether as a result of new information, other events or otherwise any time, except as required by law.

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