Update on Delay in Publication of 2019 Audited Annual Results and Despatch of 2019 Annual Report
July 24 2020 - 11:03AM
SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878)
(“
SouthGobi” or the “
Company”)
announces that reference is made to the announcement of the Company
dated June 30, 2020 (the “
June 30th Announcement”)
in relation to the delay in publication of the 2019 Audited Annual
Results and the despatch of the 2019 Annual Report. Unless
otherwise stated herein, capitalized terms used herein shall have
the same meanings as that ascribed to them in the June 30th
Announcement.
As disclosed in the June 30th Announcement, the
Company has been in discussions with its key creditors in relation
to settlement plans, which the Company intends to rely on as
alternative audit evidence to address the going concern issues
raised by the Auditors. The Company has obtained verbal commitments
from certain key creditors, each of which has agreed to sign a
settlement agreement with the Company on or before July 27, 2020.
As of the date hereof, the Company remains in discussions with the
other key creditors that the Company has not yet reached an
agreement with. As a result of the delays in reaching settlement
agreements with the key creditors, the Company is unable to publish
the 2019 Audited Annual Results and the 2019 Annual Report on or
prior to the previously disclosed filing date of July 24, 2020.
The Company continues to work closely with the
Auditors and to provide them with audit evidence to support the
going concern assumptions for the Company’s 2019 Financial
Statements. However, as a result of the Government of Mongolia’s
decision on July 10, 2020 to further extend travel restrictions on
foreign travel into Mongolia until the end of July 2020, the
Company’s ability to prepare and provide audit evidence to the
Auditors in a timely manner has been, and continues to be,
adversely impacted. The Company is discussing with one of its major
shareholders and looking for potential avenues of support for the
Company which could serve as sufficient evidence to support the
Company’s going concern assumptions in the event that the Company
is unable to sign a settlement agreement with each of these key
creditors.
Assuming that: (i) the Company will be able to
reach written settlement agreements with each of the key creditors
that has provided a verbal commitment to do so on or before July
30, 2020; and (ii) the Company and the aforementioned major
shareholder are able to agree on an avenue of support that is
acceptable to the Auditors, the Company expects that the Auditors
will be able to finalize the remainder of the audit work, complete
its internal sign-off procedure and render an unmodified opinion on
the 2019 Financial Statements within two weeks, in which case the
Company would be in a position to issue its 2019 Audited Annual
Results and 2019 Annual Report by August 14, 2020. However, there
can be no assurances that the aforementioned settlement agreements
will be executed by the key creditors on a timely basis or at all,
the Company and the major shareholder will be able to arrive at
mutually acceptable support arrangement or any of the foregoing
will be sufficient audit evidence to permit the Auditor to render
an unmodified opinion on the 2019 Financial Statements.
The Company will make further announcement(s) in
relation to the publication of the 2019 Audited Annual Results and
the despatch of the 2019 Annual Report, as and when
appropriate.
SHAREHOLDERS AND POTENTIAL INVESTORS OF
THE COMPANY SHOULD EXERCISE CAUTION WHEN THEY DEAL OR CONTEMPLATE
DEALING IN THE COMPANY’S SHARES OR OTHER SECURITIES OF THE
COMPANY.
If there is any inconsistency or discrepancy
between the English version and the Chinese version, the English
version shall prevail.
About SouthGobiSouthGobi,
listed on the Toronto and Hong Kong stock exchanges, owns and
operates its flagship Ovoot Tolgoi coal mine in Mongolia.
SouthGobi produces and sells coal to customers in China.
FORWARD-LOOKING
STATEMENTS
Certain information included in this press
release that is not current or historical factual information
constitutes forward-looking statements or information within the
meaning of applicable securities laws (collectively,
“forward-looking statements”), including information about the
execution of settlement agreements with certain key creditor on or
before July 30, 2020, the expectation that the Company will be
unable to publish the 2019 Audited Annual Results and the 2019
Annual Report on or prior to. July 24, 2020 and discussions between
the Company and one of its major shareholders in relation to
potential avenues of support for the Company. Forward-looking
statements are frequently characterized by words such as “plan”,
“expect”, “project”, “intend”, “believe”, “anticipate”, "could",
"should", "seek", "likely", "estimate" and other similar words or
statements that certain events or conditions “may” or “will” occur.
Forward-looking statements are based on certain factors and
assumptions including, among other things, settlement agreements
being executed by the Company’s key creditors on a timely basis,
the Company and its major shareholder arriving at a mutually
acceptable support arrangement, the actions and measures taken by
the Company will be sufficient audit evidence to permit the Auditor
to render an unmodified opinion on the 2019 Financial Statements
and other similar factors that may cause actual results to differ
materially from what the Company currently expects. Actual results
may vary from the forward-looking statements. Readers are cautioned
not to place undue importance on forward-looking statements, which
speaks only as of the date of this disclosure, and not to rely upon
this information as of any other date. While the Company may elect
to, it is under no obligation and does not undertake to, update or
revise any forward-looking statements, whether as a result of new
information, further events or otherwise at any particular time,
except as required by law. Additional information concerning
factors that may cause actual results to materially differ from
those in such forward-looking statements is contained in the
Company’s filings with Canadian securities regulatory authorities
and can be found under the Company’s profile on SEDAR at
www.sedar.com.
Contact:
Investor Relations
Office: +852 2156 1438 (Hong Kong)
+1 604 762 6783 (Canada)
Email: info@southgobi.com
Website: www.southgobi.com
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