SouthGobi Resources faces tax audit in Mongolia, prepares revaluation

SouthGobi Resources Ltd., a coal mining company listed in Hong Kong and the TSX Venture Exchange, recently provided an update regarding its tax audit in Mongolia. The audit, which examines financial information between 2017 and 2020 of its Mongolian subsidiary SouthGobi Sands LLC (SGS), resulted in a tax penalty of USD 75 million. SGS challenged this audit in August 2023.

On February 8, 2024, the company received a decision from the Mongolian Tax Dispute Resolution Council (TDRC), ordering a suspension and reassessment of the audit by the Mongolian Tax Authority (MTA). A new assessment is scheduled to begin on March 7, 2024, with an estimated duration of 45 business days. SouthGobi management is currently evaluating the implications of this decision and plans to update its shareholders and potential investors on the progress in due course.

It is important to mention that any decision made by the MTA following this reassessment may be challenged in accordance with Mongolian laws, indicating that the resolution of the tax audit could take even longer. Shareholders and potential investors of SouthGobi are encouraged to exercise caution when trading in the company's shares.