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Turquoise Hill Agrees to Limited Deferral of Repayment of All Amounts Due by SouthGobi Under the Shareholder Loan Facility

HONG KONG, CHINA -- (Marketwired) -- 09/01/14 -- SouthGobi Resources Ltd. (TSX:SGQ)(HKSE:1878) ("SouthGobi" or the "Company") today announced that subject to certain conditions and limitations, its majority shareholder, Turquoise Hill Resources Ltd. ("Turquoise Hill"), will continue to support the Company by deferring payment and repayment of all amounts due by SouthGobi under the $10 million revolving credit facility (the "Facility") provided to the Company as initially announced on May 25, 2014.

As of August 29, 2014 the Company has drawn down US$3.8 million under the Facility and has a cash balance of US$9.0 million (including US$1.5 million of restricted cash referred to in the Company's Management's Discussion and Analysis for the quarter ended June 30, 2014, available on SEDAR at www.sedar.com, section 6 "Regulatory Issues and Contingencies"). The Company is not eligible to draw down any further amounts under the Facility.

Turquoise Hill has confirmed that subject to certain conditions and limitations, it agrees to grant deferral of payment and repayment of all amounts and obligations owing by SouthGobi under the Facility and it will not enforce its rights under the Facility to demand such payment and repayment upon the maturity date of August 30, 2014. This deferral of payment and repayment is granted to SouthGobi without prejudice to Turquoise Hill's right and ability to assert and re-assert at any point in time to demand payment and repayment of all amounts owing to Turquoise Hill under the Facility.

In addition, Turquoise Hill has also confirmed that in the event the transaction contemplated under the Sale and Purchase Agreement between Turquoise Hill and National United Resources Holdings Limited as announced on July 30, 2014 (the "SPA") shall have been completed by November 30, 2014 strictly in accordance with the terms and conditions of the SPA, Turquoise Hill would agree to defer repayment of amounts and obligations due by SouthGobi under the Facility as follows:


i.  US$1.9 million in principal and all interest that has accrued on and
    under the Facility up to and including December 31, 2014 shall become
    due and payable on December 31, 2014; and 

ii. US$1.9 million in principal and all interest that has accrued on and
    under the Facility from January 1, 2015 up to and including March 31,
    2015 shall become due and payable on March 31, 2015. 

The Company anticipates that coal prices in China will remain under pressure through the end of 2014, which will continue to impact the Company's margins and liquidity and there can be no assurance that the Company will have sufficient funding for the balance of 2014 to be able to continue as a going concern. Therefore the Company is actively seeking additional sources of financing including coal prepayment as a potential funding solution in order to continue operating and meet its objectives, while continuing to be focused on minimizing uncommitted capital expenditures.

About SouthGobi

SouthGobi is listed on the Toronto and Hong Kong stock exchanges, in which Turquoise Hill, also publicly listed in Toronto and New York, has a 56% shareholding. Turquoise Hill took management control of SouthGobi in September 2012 and made changes to the board and senior management. Rio Tinto has a majority shareholding in Turquoise Hill.

SouthGobi 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, the Mongolian registered company that holds the mining and exploration licenses in Mongolia and operates the flagship Ovoot Tolgoi coal mine. Ovoot Tolgoi produces and sells coal to customers in China.

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