SouthGobi Resources Announces the Successful Completion of the Previously Announced Private Placements and Payment of the Installment of Cash Interest Due on the CIC Convertible Debenture

HONG KONG, CHINA--(Marketwired - Dec 3, 2014) - SouthGobi Resources Ltd. (TSX:SGQ)(HKSE:1878) ("SouthGobi" or the "Company") announces the completion of the private placements for the issue of new Common Shares for gross proceeds of US$9.0 million. In addition, on December 3, 2014 the Company paid the November 2014 cash interest installment due on the secured convertible debenture held by a wholly owned indirect subsidiary of China Investment Corporation ("CIC").

Private Placements

The Company has successfully completed the private placements, as announced on December 1, 2014, with independent investors through Yue Xiu Securities Co. Ltd. The total gross proceeds from the private placements are US$9.0 million (US$8.9 million net after fees) through the issue of 24,360,773 Common Shares at CAD$0.42 per share.

The proceeds from the private placements have paid in full the November 2014 installment of the cash interest due on the CIC convertible debenture with the balance providing additional working capital.

The private placements have increased the total number of Common Shares in the Company to 218,751,008.

China Investment Corporation Interest payment

On December 3, 2014 the Company paid US$8.1 million in respect of the November 2014 cash interest installment due on the secured convertible debenture held by a wholly owned indirect subsidiary of CIC. The Company has now fulfilled all interest obligations due under the convertible debenture for November 2014.

Current financial position

At December 3, 2014, the Company has cash of US$4.9 million. The Company has received the funds raised from the private placements and on December 3, 2014 paid in full the November 2014 installment of the cash interest due on the CIC convertible debenture.

The Company continues to seek additional financing to fund its operations and meet its objectives.

About SouthGobi

SouthGobi is listed on the Toronto and Hong Kong stock exchanges, in which Turquoise Hill Resources Ltd. ("Turquoise Hill"), also publicly listed in Toronto and New York, has a 47.9% shareholding. Turquoise Hill took management control of SouthGobi in September 2012 and made changes to the board and senior management. Rio Tinto has a majority shareholding in Turquoise Hill.

SouthGobi is focused on exploration and development of its metallurgical and thermal coal deposits in Mongolia's South Gobi Region. It has a 100% shareholding in SouthGobi Sands LLC, Mongolian registered company that holds the mining and exploration licences in Mongolia and operates the flagship Ovoot Tolgoi coal mine. Ovoot Tolgoi produces and sells coal to customers in China.