SouthGobi Resources Faces Uncertainty Over Mongolian Mining Regulations

SouthGobi Resources Ltd. announces potential impacts of the Law on Mineral Resources of Mongolia. Legal counsel advises on ownership rules for mining licenses designated as strategically important by the Mongolian government. Four of the company’s licenses, including those for Ovoot Tolgoi Mine and Soumber Deposit, fall under this category.

Article 5.7 restricts any legal entity from holding more than 34% of shares if they possess a strategically important mining license. Currently, no SouthGobi shareholder exceeds this threshold. Ambiguity exists in application for publicly-listed entities like SouthGobi.

The company is in continued discussions with Mongolian authorities to clarify state ownership interests in its subsidiary, SouthGobi Sands LLC. SouthGobi commits to cooperating and aims for a constructive agreement while monitoring legal developments.