SouthGobi Resources Ltd. announced that on April 22, 2026, its wholly-owned Mongolian subsidiary, Southgobi Sands LLC (SGS), entered into a Build-Transfer (BT) agreement with Tangshan Shenzhou Machinery Group Co., Ltd. Under this agreement, Tangshan Shenzhou will be responsible for constructing a new dry coal processing system at the company's Ovoot Tolgoi coal mine in Mongolia. The scope of work includes the assembly of key equipment such as the ZM600 Mineral Efficient Separator and the IDS-2000 Intelligent Dry Separator, collectively referred to as the dry coal processing system. This new system will operate independently from the company's existing dry processing plant. Tangshan Shenzhou will also be responsible for constructing all related facilities for the system. Upon meeting the handover conditions, Tangshan Shenzhou must transfer ownership of the dry coal processing system and related intellectual property rights to SGS as per the BT agreement. SGS retains the right to supervise and inspect the construction progress and safety management conducted by Tangshan Shenzhou. The total consideration payable by SGS under the BT agreement is approximately RMB 53.8 million (equivalent to approximately USD 7.8 million). The BT agreement is effective from April 22, 2026, until SGS has made full payment of the consideration, which is expected to be on or around April 22, 2031. SouthGobi is a comprehensive coal mining, development, and trading company. SGS is a wholly-owned subsidiary incorporated under Mongolian law and is primarily engaged in coal mining, development, and mineral exploration in Mongolia. The BT agreement falls within the scope of the company's primary coal mining business. As SouthGobi's total coal production in Mongolia increases, the volume of coal requiring processing before export to the Chinese market has also risen. Consequently, the dry coal processing system will facilitate the processing of this coal for export and sale to China, thereby expanding the company's market share and increasing its revenue and profitability. The BT agreement is significant for enhancing the company's influence in the local community and improving its overall mining capacity, aligning with its development strategy. The operation of the BT agreement will enable the company to leverage its management and technical personnel resources to enhance coal processing efficiency, improve product quality, and optimize production line performance, thus boosting its competitiveness and sustainable development capabilities. However, the company cautions that it cannot guarantee or be certain that revenue or profit growth will be achieved, as actual results may differ materially from expectations. The realization of the anticipated benefits of the BT agreement is subject to various risks and uncertainties, including but not limited to market conditions, regulatory developments, and the costs and expenses associated with the construction, trial production, and ongoing operation of the dry coal processing system.