SouthGobi Issues Payment-in-Kind Interest Shares

SouthGobi Resources Ltd. has announced the issuance of Common Shares as a form of payment-in-kind (PIK) interest. This move comes after Od Sar Trading Co. Limited exercised its right to receive a US$17 million PIK Interest payment via shares. As a result, SouthGobi will issue 73,497,622 Common Shares, constituting approximately 19.83% of the total shares post-issuance. The share value was determined based on a 50-day average price of CAD$0.3272 per share.

This transaction follows an agreement between Od Sar and JD Zhixing Fund L.P., the original holder of SouthGobi's US$250 million Convertible Debenture from 2009. Investors are advised to approach the company's shares with caution amid these developments.