Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited (the "Hong Kong Stock Exchange") take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

SOUTHGOBI RESOURCES LTD.

南戈壁資源有限公司*

(A company continued under the laws of British Columbia, Canada with limited liability)

(Hong Kong Stock Code: 1878) (Toronto Stock Code: SGQ)

Update on interest payment obligations to CIC

This announcement is made by SouthGobi Resources Ltd. (the "Company") pursuant to Rule 13.09(2)(a) of the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange (the "Listing Rules") and the Inside Information Provisions (as defined under the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

Pursuant to the convertible debenture between China Investment Corporation ("CIC") and the Company signed in November 2009 (the "Convertible Debenture") and the deferral agreement between CIC and the Company executed on June 12, 2017 (the "June 2017 Deferral Agreement"), the total cash interest payments and associated fees which were due and payable to CIC on November 19, 2017 amounted to US$17.8 million ("November 2017 Cash Interest Payable"). Pursuant to the Convertible Debenture, the Company is also obliged to issue US$4.0 million worth of PIK interest shares to CIC on November 19, 2017 ("November 2017 PIK Interest Payable").

* For identification purposes only

As of the date of this announcement, the Company has neither paid the November 2017 Cash Interest Payable nor issued the PIK interest shares to CIC within the cure period provided for in the Convertible Debenture or agreed upon a repayment plan for such amounts with CIC. Accordingly the principal amount outstanding and all accrued and unpaid interest and other amounts owing under the Convertible Debenture and the June 2017 Deferral Agreement would immediately become due and payable in the event that CIC provides notice to the Company.

The Company is in discussions with CIC for a repayment plan for the November 2017 Cash Interest Payable and November 2017 PIK Interest Payable. While the Company believes that an agreement will be reached, there is no assurance that an agreement will be concluded on terms favourable to the Company or at all. In such event, the value of the Company's common shares could be materially and negatively affected. As a result, shareholders of the Company and potential investors are advised to exercise caution when dealing in securities of the Company.

The Company will provide further updates of the status of the interest payment obligations as appropriate.

By order of the Board

SouthGobi Resources Ltd. Sun Mao

Interim Independent Lead Director

Vancouver, November 22, 2017

As at the date of this announcement, the Executive Directors of the Company are Messrs. Aminbuhe and Mr. Yulan Guo; the Independent Non-executive Directors are Messrs. Yingbin Ian He, Zhu Liu and Mao Sun and Ms. Jin Lan Quan; and the Non-executive Director is Mr. Wen Yao.

November 22, 2017

Update on interest payment obligations to CIC VANCOUVER - SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) ("SouthGobi" or the "Company") announces today that pursuant to the convertible debenture between China Investment Corporation ("CIC") and the Company signed in November 2009 (the "Convertible Debenture") and the deferral agreement between CIC and the Company executed on June 12, 2017 (the "June 2017 Deferral Agreement"), the total cash interest payments and associated fees which were due and payable to CIC on November 19, 2017 amounted to US$17.8 million ("November 2017 Cash Interest Payable"). Pursuant to the Convertible Debenture, the Company is also obliged to issue US$4.0 million worth of PIK interest shares to CIC on November 19, 2017 ("November 2017 PIK Interest Payable").

As of the date of this announcement, the Company has neither paid the November 2017 Cash Interest Payable nor issued the PIK interest shares to CIC within the cure period provided for in the Convertible Debenture or agreed upon a repayment plan for such amounts with CIC. Accordingly the principal amount outstanding and all accrued and unpaid interest and other amounts owing under the Convertible Debenture and the June 2017 Deferral Agreement would immediately become due and payable in the event that CIC provides notice to the Company.

The Company is in discussions with CIC for a repayment plan for the November 2017 Cash Interest Payable and November 2017 PIK Interest Payable. While the Company believes that an agreement will be reached, there is no assurance that an agreement will be concluded on terms favourable to the Company or at all. In such event, the value of the Company's common shares could be materially and negatively affected. As a result, shareholders of the Company and potential investors are advised to exercise caution when dealing in securities of the Company.

The Company will provide further updates of the status of the interest payment obligations as appropriate.

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

Kino Fu

Office: +852 2156 7030

Email: kino.fu@southgobi.com

Website: www.southgobi.com

SouthGobi Resources Ltd. published this content on 23 November 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 23 November 2017 04:36:04 UTC.

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