GEORGETOWN, Cayman Islands, July 10, 2026 /CNW/ – JD Zhixing Fund L.P. (the “Fund“) entered into an assignment agreement (the “Assignment Agreement“) with Od Sar Trading Co., Limited (the “Assignee“) whereby the Fund assigned (the “Assignment“) to the Assignee US$19,000,000 of PIK Interest (as defined below) which has accrued and was payable to the Fund under the a secured convertible debenture (the “Convertible Debenture“) representing an aggregate principal amount owing by SouthGobi Resources Ltd. (the “Issuer“) of US$250,000,000 to the Fund.
The Assignment took place through a private arrangement that occurred outside of Canada and did not take place through the facilities of any stock exchange or any other marketplace.
Pursuant to the terms of the Convertible Debenture, the Issuer shall pay to the Fund interest on the outstanding principal amount payable of the Convertible Debenture in Common Shares at a rate per annum of one and six-tenths (1.6%) percent (“PIK Interest“) and the Issuer will make PIK Interest payments by issuance of that number of Common Shares equal to the quotient obtained by dividing such amount of PIK Interest by the 50-day volume weight average price (the “VWAP“) of the Common Shares including trading on all stock exchanges on which the Common Shares are listed during the 50 consecutive trading days preceding such date expressed in Canadian dollars with non-Canadian currencies converted at the Bank of Canada noon rates on the date of the calculation.
Immediately before the Assignment, PIK Interest in the amount of US$33,100,000 has been accrued and is payable to the Fund under the Convertible Debenture and certain related deferral agreements (the “Deferral Agreements“) between, inter alia, the Issuer and the Fund. The latest of the Deferral Agreement provided that payment of the accrued PIK Interest is deferred to August 31, 2027, except for US$25,100,000 thereof as the respective Deferral Agreements covering the US$25,100,000 contained language to permit the holder to request payment on demand after their respective original due dates. The Fund would be entitled to receive Common Shares exceeding 2% of the issued and outstanding Common Shares of the Issuer. The US$19,000,000 PIK Interest being assigned to the Assignee is part of the US$25,100,000 PIK Interest that allows the holder to request payment on demand.
Immediately prior to the Assignment, the Fund held 85,714,194 Common Shares, representing 28.85% of the issued and outstanding Common Shares, without giving effect to any conversion of any convertible securities of the Issuer, including the Convertible Debenture.
Immediately following the Assignment, the Fund continued to hold 85,714,194 Common Shares, representing 28.85% of the issued and outstanding Common Shares, without giving effect to any conversion of any convertible securities of the Issuer, including the Convertible Debenture.
Assuming the conversion of the entire principal amount of the Convertible Debenture into Common Shares at a conversion price of CAD$8.88 per share, using the Bank of Canada July 9, 2026 exchange rate of one (1) United States dollar to 1.4169 Canadian dollars, the Fund would receive 39,890,203 Common Shares upon conversion of the Convertible Debenture
Following the Assignment, the Fund will continue to hold US$14,100,000 of accrued PIK Interest; US$8,000,000 of such PIK Interest will be payable on August 31, 2027; the Fund may demand payment of US$4,000,000 of such PIK Interest after November 19, 2026; and the Fund may demand payment of US$2,100,000 of such PIK Interest at anytime.
Assuming that the Fund demands payment on July 9, 2026 of the US$2,100,000 PIK Interest that the Fund may demand payment at anytime, assuming the VWAP of the Common Shares of US$0.244, using the Bank of Canada July 9, 2026 conversion rate of one (1) United States dollar to 1.4169 Canadian dollars, the Fund would receive an additional 8,598,236 Common Shares.
The total of 134,202,633 Common Shares that are owned by or are issuable to the Fund will represent 38.84% of the issued and outstanding Common Shares of the Issuer, on a partially diluted basis.
In the future, the Fund will evaluate its investment from time to time and may, based on such evaluation, market conditions and other circumstances, increase or decrease its ownership of securities in the Issuer through market transactions, private agreements or otherwise.
About the Fund
The Fund is an exempted limited partnership formed under the laws of the Cayman Islands. The Fund’s general partner is JD Dingxing Limited, a corporate formed under the laws of the Cayman Islands. The Fund’s limited partner is Inner Mongolia Tianyu Trading Limited, a corporation formed under the laws of Hong Kong. The address for the Fund is 4th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman KY1-1002, George Town, Cayman Islands.
Forward-Looking Statements
This press release may contain forward looking information within the meaning of applicable securities legislation, which reflects the Fund’s current expectations regarding future events. Forward looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the Fund’s control, which could cause actual results and events to differ materially from those that are disclosed in or implied by such forward looking information. The Fund does not undertake any obligation to update such forward looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.
For further information or to obtain a copy of the early warning reports, please contact: Zhu Chonglin, 5-2-603 District F, YiLin Haibowan District, Wuhai, Inner Mongolia, China, Email: 635181983@qq.com
SOURCE JD Zhixing Fund LP