HONG KONG, CHINA–(Marketwired – May 18, 2016) – SouthGobi Resources Ltd. (TSX:SGQ)(HKSE:1878) (“SouthGobi” or the “Company”) notes recent Mongolian media reports in connection with a reported settlement of a US$16.5 million residual financial penalty against its wholly owned subsidiary, SouthGobi Sands LLC, arising out of a judgment of the Mongolian Second District Criminal Court of Justice in February 2015 (the “Tax Verdict”). While the Company has previously advised that it is seeking to resolve amicably the dispute giving rise to the Tax Verdict through negotiations with the Government of Mongolia (see the Company’s Management Discussion and Analysis for the quarter ended March 31, 2016 available on SEDAR at www.sedar.com and prior filings), the Company has not received any formal notice from the Government of Mongolia in relation to any settlement proposal. The Company will make a further announcement should there be meaningful development of the matter.

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 and exploration licences of its other metallurgical and thermal coal deposits in South Gobi Region of Mongolia. SouthGobi produces and sells coal to customers in China.