SouthGobi Resources : Announcements and Notices - Southgobi Provides Update on Status of Chairman and Chief Executive Officer

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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)

This announcement is made by SouthGobi Resources Ltd. ("SouthGobi" or the "Company") pursuant to Rule 13.09 of the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange and the Inside Information Provisions under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

The Company announces that on November 16, 2017, it learned that Mr. Aminbuhe, the Chairman and Chief Executive Officer of the Company, was arrested on October 11, 2017 and is being detained at Rizhao City Detention Center in China as a suspect in a fraudulent loan case.

The Board of Directors (the "Board") has formed a special committee (the "Special Committee") of independent non-executive directors, comprised of Mr. Mao Sun, Ms. Jin Lan Quan and Mr. Yingbin Ian He, to initiate a formal internal investigation into the charges against Mr. Aminbuhe and the connection, if any, between those charges and the Company and his conduct as Chairman and Chief Executive Officer of the Company, which will include engaging external advisors to assist in the investigation. The Special Committee will report to the Board from time

* For identification purposes only

to time with respect to the results and status of its investigation and the potential impact of these matters, if any, on the business and affairs of the Company.

As announced on November 13, 2017, Mr. Aminbuhe is currently on leave from the Company and that Mr. Bing Wang is acting as the Interim Chief Executive Officer in his absence. During this interim period, the Company will continue to carry on its business in the normal course, relying on the depth and experience of its management team and the Board.

The Board will continue to closely monitor this situation and will provide further information with respect this matter as and when appropriate.

By order of the Board

Interim Independent Lead Director

Vancouver, November 17, 2017

As at the date of this announcement, the Executive Directors of the Company are Messrs. Aminbuhe and Yulan Guo; the Independent Non-executive Directors are Messrs. Yingbin Ian He, Zhu Liu and Mao Sun and Ms. Jin Lan Quan; and the Non-executive Director is Mr. Wen Yao.

November 17, 2017

The Board of Directors (the "Board") has formed a special committee (the "Special Committee") of independent non-executive directors, comprised of Mr. Mao Sun, Ms. Jin Lan Quan and Mr. Yingbin Ian He, to initiate a formal internal investigation into the charges against Mr. Aminbuhe and the connection, if any, between those charges and the Company and his conduct as Chairman and Chief Executive Officer of the Company, which will include engaging external advisors to assist in the investigation. The Special Committee will report to the Board from time to time with respect to the results and status of its investigation and the potential impact of these matters, if any, on the business and affairs of the Company.

As announced on November 13, 2017, Mr. Aminbuhe is currently on leave from the Company and that Mr. Bing Wang is acting as the Interim Chief Executive Officer in his absence. During this interim period, the Company will continue to carry on its business in the normal course, relying on the depth and experience of its management team and the Board.

The Board will continue to closely monitor this situation and will provide further information with respect this matter as and when appropriate.

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.

Kino Fu

Office: +852 2156 7030

Email: kino.fu@southgobi.com