SouthGobi Resources Ltd. disclosed that four of its Mongolian mining licenses, including those covering the Ovoot Tolgoi Mine and the Soumber Deposit, are designated Mineral Deposits of Strategic Importance by the Mongolian government. The company’s legal counsel has advised that under the Law on Mineral Resources of Mongolia, legal persons holding such licenses are subject to ownership restrictions, limiting any single entity (or associated group) from holding over 34% of the total outstanding shares. If breached, the Mongolian government may appoint a representative to manage the relevant entity.

The company noted there is uncertainty regarding how these legal provisions would be interpreted for a publicly listed entity. As of the announcement date, the single largest shareholder of SouthGobi Resources holds roughly 28.87% of its outstanding shares, below the 34% threshold. The company further revealed that it is in continued discussions with a plenipotentiary representative of the Mongolian government concerning state ownership interests, with the aim of achieving a constructive outcome. It affirmed a commitment to cooperate fully with the authorities and to protect its legal rights over its mineral assets.

SouthGobi Resources indicated that it will monitor any developments to clarify how the law’s ownership provisions may affect publicly listed companies. The market will be informed of material developments if necessary, and shareholders and potential investors are advised to exercise caution when trading the company’s shares.