SouthGobi Resources Ltd. said its wholly owned Mongolian subsidiary, Southgobi Sands LLC, has been issued an approximately US$7.1 million tax penalty following a review of financial information between 2022 and 2023. The company announced the matter on November 6, 2026.
Southgobi Sands received the official notice on October 23, 2026. It was issued by the General Department of Taxation of the Mongolian Tax Administration after what the authority described as a comprehensive periodic tax audit.
The penalty relates to transfer pricing, unpaid tax payables, corporate income tax and immovable property tax.
Mongolian tax law provides 30-days from receipt of the notice to submit an administrative complaint to the Tax Dispute Resolution Council. SouthGobi Resources said its management has decided to accept the notice’s results and will not pursue an appeal or file an administrative complaint.
As at the date of the announcement, Southgobi Sands had engaged an independent tax consultant in Mongolia to provide advice and support concerning the audit.
SouthGobi Resources said the notice and penalty do not appear to have any other material adverse effect on the company, apart from the matters described in the announcement. It advised shareholders and potential investors to exercise caution when dealing in its shares.
The company said it would issue further announcements about any material developments as and when appropriate.
SouthGobi Resources is listed on the Hong Kong Stock Exchange and the TSX Venture Exchange under TSX-V:SGQ and HK:1878. The company owns and operates the Ovoot Tolgoi coal mine in Mongolia, holds mining licences for other metallurgical and thermal coal deposits in the South Gobi region, and sells coal to customers in China.
SouthGobi Resources Ltd. announced that its wholly owned Mongolian subsidiary, Southgobi Sands LLC, received a notice from the General Department of Taxation of the Mongolian Tax Administration following a comprehensive periodic tax audit. The notice imposes a tax penalty against Southgobi Sands LLC.
SouthGobi Resources Ltd. made the announcement on November 6, 2026. The announcement concerns a tax audit of Southgobi Sands LLC's financial information between 2022 and 2023.
Southgobi Sands LLC received the official notice on October 23, 2026. The notice was issued by the General Department of Taxation of the Mongolian Tax Administration.
The tax audit covered Southgobi Sands LLC's financial information between 2022 and 2023. The Mongolian Tax Administration described it as a comprehensive periodic tax audit.
The Mongolian Tax Administration is imposing a tax penalty against Southgobi Sands LLC in the amount of approximately US$7.1 million. The penalty relates to transfer pricing, unpaid tax payables, corporate income tax and immovable property tax.
Under Mongolian tax law, Southgobi Sands LLC has a period of 30-days from the date of receipt of the notice to file an administrative complaint with the Tax Dispute Resolution Council. SouthGobi Resources Ltd.'s management has decided to accept the results of the notice and will not pursue an appeal or file an administrative complaint.
SouthGobi Resources Ltd.'s management has decided to accept the results of the notice. The company will not pursue an appeal or file an administrative complaint.
Southgobi Sands LLC has engaged an independent tax consultant in Mongolia to provide tax advice and support in relation to the tax audit. This engagement was in place as of the date of the announcement.
SouthGobi Resources Ltd. said that, save as mentioned in the announcement, the notice and the tax penalty do not appear to have any other material adverse effect on the company. The company also advised shareholders and potential investors to exercise caution when dealing in its shares.
SouthGobi Resources Ltd. owns and operates its flagship Ovoot Tolgoi coal mine in Mongolia. It also holds mining licences for other metallurgical and thermal coal deposits in Mongolia's South Gobi region and produces and sells coal to customers in China.
SouthGobi Resources Ltd. is listed on the Hong Kong Stock Exchange and the TSX Venture Exchange. The announcement identifies its listings as TSX-V:SGQ and HK:1878.
SouthGobi Resources Ltd. said it will make further announcement(s) to keep shareholders and potential investors informed of any material development as and when appropriate. The company has also decided not to pursue an appeal or file an administrative complaint against the notice.