SouthGobi Announces Positive Profit Alert

VANCOUVER, May 05, 2021 - SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) ("SouthGobi" or the "Company") wishes to inform the shareholders of the Company and potential investors that, based on the Company's preliminary assessment of the unaudited management accounts of the Company for the quarter ended 31 March 2021 and the information currently available to the Company, it is expected that the Company would record a net profit at a range between USD 10 million and USD 14 million for the quarter ended 31 March 2021, as compared to a net loss of USD 9.2 million for the corresponding period in 2020. The expected increase in net profit is mainly attributed to the increase in coal prices and coal sales volume during the first quarter of 2021; and the finance income recorded as a result of the execution of the deferral agreement with China Investment Corporation ("CIC") in January 2021 regarding the modification of certain terms of the CIC Convertible Debenture.

As at the date of this announcement, the Company is still preparing and finalizing its quarterly results for the quarter ended 31 March 2021. The information contained in this announcement is based on the preliminary assessment of the information currently available to the Company and the unaudited management accounts, which have not been audited by the Company's auditors and is subject to further adjustments. Details of the Company's financial information and performance will be disclosed in the 2021 first quarter results announcement of the Company and is expected to be published on 14 May 2021.

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

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.