SouthGobi provides details for settlement approval

Executive Summary

• SouthGobi Resources Ltd. announces the Ontario Superior Court approval of a $6.8-million settlement to resolve a class action lawsuit related to the restatement of its financial statements.
• The settlement covers all liability, class counsel fees, and administrative costs, with the full amount paid by the company’s insurers, meaning no financial provision is required on the company's balance sheet.
• The settlement is subject to a 30-day appeal period expiring on January 2, 2026; the company maintains it has a strong defense and the settlement is not an admission of liability.

Key Details

• Settlement Amount: $6.8 million USD (or CAD, unspecified in text but implied local currency context) covering all liability, class counsel fees, notice, administrative costs, and litigation expenses.
• Payment Source: The settlement payments are the sole obligation of the company's insurers and have already been paid by insurers to the solicitors representing the class plaintiffs.
• Court Approval: Approved by Justice Morgan of the Superior Court of Justice of Ontario on December 3, 2025.
• Finality Condition: The settlement becomes final upon the expiration of a 30-day appeal period, which ends on January 2, 2026.
• Legal History:
  • Class action filed in January 2014 by Siskinds LLP regarding financial statement restatements.
  • Originally named former senior officers, directors, and former auditor.
  • Action against former auditor settled on the eve of the leave motion.
  • Leave motion decision (Nov 2015) dismissed claims against officers/directors but allowed action against the company.
  • Ontario Court of Appeal dismissed company's appeal (Sept 2017) but granted leave for plaintiffs to proceed against former officers/directors.
  • Supreme Court of Canada leave to appeal dismissed (June 2018).
  • Consent certification order (Dec 2018) withdrew claims against former officers/directors, leaving the company as the sole defendant.
• Mediation: Concluded on August 11, 2025, under the guidance of former Chief Justice George Strathy, with participation from insurers.
• Financial Impact: No provision required on financial statements as the settlement is within insured limits.
• Company Stance: SouthGobi continues to believe it has a strong defense on the merits; the settlement is not an admission of responsibility or liability.

Notable Quotes

• "The settlement is based on the mutual consideration that, should the litigation proceedings continue, the costs incurred may exceed the amount of the settlement agreed upon between both parties through negotiation. Therefore, the settlement is reached for economic benefits."
• "The company continues to believe that it has a strong defence on the merits of the said action and the settlement shall not be construed in any way as the company's admission of responsibility and liability to the said action."