SouthGobi Resources Updates on Mongolia Tax Audit

SouthGobi Resources Ltd. has announced a development regarding a tax audit in Mongolia. The company's subsidiary, Southgobi Sands LLC, received a notice from the Administrative Court in Ulaanbaatar on March 19, 2025. This involves a proceeding initiated by officials of the Mongolian Tax Authority against the Tax Dispute Resolution Council. The dispute seeks to challenge a decision that reduced a tax penalty against Southgobi Sands from approximately US$80 million to US$26.5 million.

SouthGobi is not a party in the litigation. Their consultants note that such proceedings by tax officials are rare. The duration and outcome of the court matter remain uncertain. As of now, the initial reassessment result stands valid. SouthGobi plans to monitor developments and inform shareholders and investors appropriately.