South Gobi (01878) completed the issuance of physical interest shares under convertible bonds

According to Zhitong Finance App, South Gobi (01878) issued an announcement that it has issued a total of 73,497,622 common shares (“physical interest shares”) to Xingyue Haohan International Trade Co., Ltd. (the “grantor”), accounting for about 19.83% of the number of common shares issued and in circulation after the issuance of physical interest shares was completed to meet the physical interest payment requirements. The number of shares in kind interest that can be issued is determined based on a volume-weighted average trading price of approximately CAD 0.3272 (equivalent to $0.2313) per common share for the 50 days up to the issue date.

In-kind interest shares are issued to the transferee pursuant to a transfer agreement. According to the transfer agreement, JD Zhixing Fund L.P. transferred the right to receive interest in kind on the transferred goods to the transferee. The amount of $2 million of transferred physical interest has not been settled, and according to the terms of convertible bonds and certain related deferred agreements, the transferee may, at its discretion, require the Company to settle the remaining transferred physical interest by issuing common shares. The amount issued is equal to the remaining transferred physical interest divided by the 50-day trading volume weighted average price of common shares up to the date the transferee made the relevant request.