SouthGobi secures RMB 235m loan for Mongolian operations

SouthGobi Resources Ltd. has secured a RMB235,000,000 loan for its Mongolian operating subsidiary, Southgobi Sands LLC, from Khan Bank JSC. The loan, dated October 7, 2025, has an 18-month term and carries an annual interest rate of 10% on the outstanding principal, with an additional 20% interest in case of default. Fees include a 0.5% loan service fee and a 0.5% amendment fee, both capped at RMB7,500.

The loan will be disbursed upon satisfaction of customary conditions, including collateral registration. Repayments will be interest-only for the first 12 months, followed by principal amortization in months 13 to 18. Proceeds are earmarked for Southgobi Sands LLC's working capital, operating expenses, taxes, and settlement of accounts payable.

The loan is secured by first-ranking pledges over Southgobi Sands LLC's immovable properties, land-use rights, and movable and intangible assets, including a mining licence and exploration data. JD Zhixing Fund L.P. has agreed to waive its prior rights over these assets and its right to claim against the company and Southgobi Sands LLC for breaches related to previous agreements, facilitating Southgobi Sands LLC in obtaining this loan.