Welcome!

News Feed Item

SouthGobi Resources Announces Select Second Quarter 2014 Operating Results

HONG KONG, CHINA -- (Marketwired) -- 07/10/14 -- SouthGobi Resources Ltd. (TSX: SGQ)(HKSE: 1878) (the "Company" or "SouthGobi") today announced select second quarter 2014 operating results. All figures are in U.S. Dollars unless otherwise stated.

Select Operating Results

The Company's select operating results for the three months ended June 30, 2014, including comparative periods, are summarized in the table below:



                                  ------------------------------------------
                                              Three months ended
                                  ------------------------------------------
                                          30-Jun        31-Mar        30-Jun
                                            2014          2014          2013
----------------------------------------------------------------------------
Raw coal production (millions of
 tonnes)                                    0.55          0.64          0.17

Sales volumes (millions of tonnes)
  Premium semi-soft coking coal                -             -          0.21
  Standard semi-soft coking coal            0.40          0.29             -
  Thermal coal                              0.51          0.10          0.11
  Total                                     0.91          0.39          0.32
----------------------------------------------------------------------------

The Company continues to operate under difficult market conditions. Coal prices in China declined further in the second quarter compared to the first quarter of 2014 as a result of strong seaborne and domestic supply. The decline in coal prices has been partially offset by the increase in the Company's volumes in the second quarter compared to the seasonally slow first quarter.

In June 2014, following a review of operations in response to current market conditions, the Company reduced its production and placed approximately half of its workforce in furlough. This furlough is anticipated to remain in place until the end of July subject to market conditions. Contracted sales volumes are expected to be met from the combination of the existing coal stockpile and reduced production volumes.

On June 26, 2014, the Ovoot Tolgoi mine site region experienced torrential rain and flooding which temporarily interrupted mining operations. The impact on the Company's operations is not expected to be material.

Other Information

Cash Position and Liquidity

The Company's cash position and liquidity as at June 30, 2014, including comparative periods, is summarized in the table below. Amounts are presented in millions of U.S. Dollars.



                            ------------------------------------------------
                                                 As at
                            ------------------------------------------------
                                  30-Jun      31-Mar      31-Dec      30-Jun
                                    2014        2014        2013        2013
----------------------------------------------------------------------------
Cash                         $       8.8 $       9.9 $      21.8 $      19.2
----------------------------------------------------------------------------

The changes in the Company's cash position in periods noted above are inclusive of cash interest paid on the China Investment Corporation ("CIC") convertible debenture in the amount of $7.9 million in the second quarter of 2014, $8.1 million in the fourth quarter of 2013, and nil in the second quarter of 2013. The next cash interest payment on the CIC convertible debenture of approximately $8 million is due on November 19, 2014.

On May 25, 2014, the Company announced it obtained a $10 million revolving credit facility from Turquoise Hill Resources Ltd. ("Turquoise Hill") to meet its short term working capital requirements with a maturity date of August 30, 2014. The terms and conditions of this facility were filed on SEDAR (www.sedar.com) on June 2, 2014. As at June 30, 2014, the Company had drawn down $3.8 million under this facility.

The Company continues to actively seek additional sources of financing to continue operating and meet its objectives, which includes increasing the level of prepaid coal sales. As at 30 June, the balance of customer prepayments for future coal deliveries amounted to $10.9 million including the receipt of $6.5 million received on June 30, 2014.

As at July 10, 2014, the Company had cash of $7.3 million and the amount drawn down under the Turquoise Hill loan facility remained at $3.8 million.

Sale of Tsagaan Tolgoi Deposit

The Company has completed the sale of Tsagaan Tolgoi Deposit in the second quarter of 2014 for an amount of $2 million. The net proceed generated for the Company after taxes and costs was $1.3 million.

Tax Investigation Case

The trial date for the tax investigation case against SouthGobi Sands LLC and three of its former employees as detailed in the Company's June 24 announcement has been deferred until August 25, 2014.

Outlook

Coal production in the second half of 2014 will be paced to meet contracted sales volumes.

The Company continues to experience negative impacts on its margins and liquidity and there can be no assurance that the Company will have sufficient funding for the balance of 2014 to be able to continue as a going concern, as more fully detailed in its Management's Discussion and Analysis for the quarter ended March 31, 2014, available on SEDAR at www.sedar.com, and, in particular, section 5 "Liquidity and Capital Resources" and section 11 "Risk Factors" thereof. Therefore the Company is actively seeking additional sources of financing to continue operating and meet its objectives. The Company remains focused on minimizing uncommitted capital expenditures while preserving its growth options.

About SouthGobi

SouthGobi is listed on the Toronto and Hong Kong stock exchanges, in which Turquoise Hill Resources Ltd. ("Turquoise Hill"), also publicly listed in Toronto and New York, has a 56% shareholding. Turquoise Hill took management control of SouthGobi in September 2012 and made changes to the board and senior management. Rio Tinto has a majority shareholding in Turquoise Hill.

SouthGobi is focused on exploration and development of its metallurgical and thermal coal deposits in Mongolia's South Gobi Region. It has a 100% shareholding in SouthGobi Sands LLC, the Mongolian registered company that holds the mining and exploration licenses in Mongolia and operates the flagship Ovoot Tolgoi coal mine. Ovoot Tolgoi produces and sells coal to customers in China.

Forward-Looking Statements: This document includes forward-looking statements. Forward-looking statements include, but are not limited to: the Company's expectations of sufficient liquidity and capital resources to meets its ongoing obligations and future contractual commitments, including the Company's ability to secure additional funding; the possibility of the CIC convertible debenture and all accrued and unpaid interest becoming immediately due; the continued pressure on the coal prices in China, and the related impact on the Company's margins and liquidity; the Company's expectation that its royalty per tonne calculated under the new "flexible tariff" royalty regime will decrease compared to the prior reference price royalty regime; and other statements that are not historical facts. When used in this document, the words such as "plan", "estimate", "expect", "intend", "may", and similar expressions are forward-looking statements. Although SouthGobi believes that the expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements are disclosed under the heading "Risk Factors" in SouthGobi's Management's Discussion and Analysis for the year ended December 31, 2013 which is available at www.sedar.com.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Providing the needed data for application development and testing is a huge headache for most organizations. The problems are often the same across companies - speed, quality, cost, and control. Provisioning data can take days or weeks, every time a refresh is required. Using dummy data leads to quality problems. Creating physical copies of large data sets and sending them to distributed teams of developers eats up expensive storage and bandwidth resources. And, all of these copies proliferating...
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm. In his Day 3 Keynote at 20th Cloud Expo, Chris Brown, a Solutions Marketing Manager at Nutanix, will explore t...
DevOps has often been described in terms of CAMS: Culture, Automation, Measuring, Sharing. While we’ve seen a lot of focus on the “A” and even on the “M”, there are very few examples of why the “C" is equally important in the DevOps equation. In her session at @DevOps Summit, Lori MacVittie, of F5 Networks, explored HTTP/1 and HTTP/2 along with Microservices to illustrate why a collaborative culture between Dev, Ops, and the Network is critical to ensuring success.
Interoute has announced the integration of its Global Cloud Infrastructure platform with Rancher Labs’ container management platform, Rancher. This approach enables enterprises to accelerate their digital transformation and infrastructure investments. Matthew Finnie, Interoute CTO commented “Enterprises developing and building apps in the cloud and those on a path to Digital Transformation need Digital ICT Infrastructure that allows them to build, test and deploy faster than ever before. The int...
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
SYS-CON Events announced today that Conference Guru has been named “Media Sponsor” of SYS-CON's 20th International Cloud Expo, which will take place on June 6–8, 2017, at the Javits Center in New York City, NY. A valuable conference experience generates new contacts, sales leads, potential strategic partners and potential investors; helps gather competitive intelligence and even provides inspiration for new products and services. Conference Guru works with conference organizers to pass great dea...
SYS-CON Events announced today that Technologic Systems Inc., an embedded systems solutions company, will exhibit at SYS-CON's @ThingsExpo, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Technologic Systems is an embedded systems company with headquarters in Fountain Hills, Arizona. They have been in business for 32 years, helping more than 8,000 OEM customers and building over a hundred COTS products that have never been discontinued. Technologic Systems’ pr...
SYS-CON Events announced today that CA Technologies has been named “Platinum Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY, and the 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. CA Technologies helps customers succeed in a future where every business – from apparel to energy – is being rewritten by software. From ...
With major technology companies and startups seriously embracing Cloud strategies, now is the perfect time to attend @CloudExpo | @ThingsExpo, June 6-8, 2017, at the Javits Center in New York City, NY and October 31 - November 2, 2017, Santa Clara Convention Center, CA. Learn what is going on, contribute to the discussions, and ensure that your enterprise is on the right path to Digital Transformation.
Deep learning has been very successful in social sciences and specially areas where there is a lot of data. Trading is another field that can be viewed as social science with a lot of data. With the advent of Deep Learning and Big Data technologies for efficient computation, we are finally able to use the same methods in investment management as we would in face recognition or in making chat-bots. In his session at 20th Cloud Expo, Gaurav Chakravorty, co-founder and Head of Strategy Development ...
SYS-CON Events announced today that Telecom Reseller has been named “Media Sponsor” of SYS-CON's 20th International Cloud Expo, which will take place on June 6–8, 2017, at the Javits Center in New York City, NY. Telecom Reseller reports on Unified Communications, UCaaS, BPaaS for enterprise and SMBs. They report extensively on both customer premises based solutions such as IP-PBX as well as cloud based and hosted platforms.
What if you could build a web application that could support true web-scale traffic without having to ever provision or manage a single server? Sounds magical, and it is! In his session at 20th Cloud Expo, Chris Munns, Senior Developer Advocate for Serverless Applications at Amazon Web Services, will show how to build a serverless website that scales automatically using services like AWS Lambda, Amazon API Gateway, and Amazon S3. We will review several frameworks that can help you build serverle...
SYS-CON Events announced today that Loom Systems will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Founded in 2015, Loom Systems delivers an advanced AI solution to predict and prevent problems in the digital business. Loom stands alone in the industry as an AI analysis platform requiring no prior math knowledge from operators, leveraging the existing staff to succeed in the digital era. With offices in S...
SYS-CON Events announced today that Interoute, owner-operator of one of Europe's largest networks and a global cloud services platform, has been named “Bronze Sponsor” of SYS-CON's 20th Cloud Expo, which will take place on June 6-8, 2017 at the Javits Center in New York, New York. Interoute is the owner-operator of one of Europe's largest networks and a global cloud services platform which encompasses 12 data centers, 14 virtual data centers and 31 colocation centers, with connections to 195 add...
SYS-CON Events announced today that T-Mobile will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. As America's Un-carrier, T-Mobile US, Inc., is redefining the way consumers and businesses buy wireless services through leading product and service innovation. The Company's advanced nationwide 4G LTE network delivers outstanding wireless experiences to 67.4 million customers who are unwilling to compromise on ...