SouthGobi Resources Announces Update to TSX Delisting Review and Financing Initiatives
HONG KONG, CHINA--(Marketwired - Oct. 5, 2015) - SouthGobi Resources Ltd. (TSX:SGQ)(HKSE:1878) (the "Company" or "SouthGobi") today announces confirmation of the extension to the Toronto Stock Exchange (the "TSX") delisting review until October 28, 2015.
As announced by the Company on August 30, 2015, a meeting of the Continued Listing Committee of TSX (the "Committee") was scheduled on September 28, 2015 (the "Meeting") and their decision was expected no later than September 30, 2015.
At the Meeting, the Company provided the Committee with a number of current financing initiatives that it is currently pursuing (and described in details below) and, on the basis of allowing the Company the ability to execute on such initiatives, the Committee confirmed that it is extending the date of its decision regarding the Company's listing status and whether the Company has met the listing requirements of the TSX until October 28, 2015.
Short-term Bridge Loan - the Company is in the process of finalizing a US$10 million bridge loan agreement with an Asian based private equity fund. The loan will be funded in two approximately equal tranches, with the first tranche expected to close by mid-October 2015 and the second tranche to close by the end of October 2015. The first tranche and second tranche will be repayable nine months after funding and six months after funding respectively.
Sales and Offtake Agreements - the Company is currently in the process of negotiating sales contracts for the fourth quarter of 2015. The Company expects sales will ramp up in the fourth quarter to meet the high seasonal demand of coal in the winter season in China.
Turquoise Hill Payment Deferral - the Company is currently in discussions with Turquoise Hill Resources Ltd. to further postpone the repayment of its shareholder loan and other payables, of which loan principal of US$1.9 million and interest accrued up to October 9, 2015 is due on October 9, 2015 and a further loan principal of US$1.9 million and interest accrued up to November 30, 2015 is due on November 30, 2015.
SouthGobi, listed on the Toronto and Hong Kong stock exchanges, is focused on exploration and development of its metallurgical and thermal coal deposits in Mongolia's South Gobi Region. It has a 100% shareholding in SouthGobi Sands LLC, a Mongolian registered company that holds the mining and exploration licences in Mongolia and operates the ﬂagship Ovoot Tolgoi coal mine. Ovoot Tolgoi produces and sells coal to customers in China.
Except for statements of fact relating to the Company, certain information contained herein constitutes forward-looking statements. Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the dates the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include any other statements that are not historical facts. Except as required by law, the Company undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements.
(October 5, 2015 - 7:32 AM EDT)
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