SouthGobi Resources : Announcements and Notices - VOLUNTARY ANNOUNCEMENT - BUSINESS UPDATE

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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)

VOLUNTARY ANNOUNCEMENT

BUSINESS UPDATE

This voluntary announcement is made by SouthGobi Resources Ltd. (the "Company"). The purpose

of this announcement is to inform the Company's shareholders ("Shareholders") and potential investors of the latest business development of the Company.

In light of the resurgence of COVID-19 pandemic in Mongolia, there has been additional precautionary measures imposed by the Chinese authorities at the Ceke Port of Entry, including but not limited to, restricting the number of trucks for border crossing. This is expected to have an adverse effect on the volume of coal exports from Mongolia and may negatively impact the sales and cash flow of the Company. In order to preserve its working capital, the Company's management has adjusted its production to control the inventory level accordingly. As a result, the operating results of the Company for the second quarter of 2021 may be adversely affected.

Although the export of coal from Mongolia to China continues as of the date hereof, there can be no guarantee that the Company will be able to continue exporting coal to China, or that the border crossings would not be subject to closures as a result of COVID-19 or any variants thereof in the future. The Company will continue to closely monitor the development of the COVID-19 pandemic and the impact on coal exports to China. The Company will make further announcements as and when appropriate.

SHAREHOLDERS AND POTENTIAL INVESTORS OF THE COMPANY SHOULD EXERCISE CAUTION WHEN THEY DEAL OR CONTEMPLATE DEALING IN THE COMPANY'S SHARES OR OTHER SECURITIES OF THE COMPANY.

* For identification purposes only

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By order of the Board

SouthGobi Resources Ltd.

Mao Sun

Lead Director

Vancouver, June 6, 2021

Hong Kong, June 7, 2021

As at the date of this announcement, the executive director of the Company is Mr. Dalanguerban; the independent non-executive directors are Messrs. Yingbin Ian He, Mao Sun and Ms. Jin Lan Quan; and the non-executive directors are Messrs. Jianmin Bao, Zhiwei Chen, Ben Niu and Ms. Ka Lee Ku.

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