Business
SouthGobi Announces Second Quarter 2023 Unaudited Financial and Operating Results
HONG KONG, CHINA / ACCESSWIRE / August 14, 2023 / SouthGobi Resources Ltd. (Hong Kong Stock Exch...
About this update from Southgobi Resources Ltd.
[{"type":"text","content":"SouthGobi Announces Second Quarter 2023 Unaudited Financial and Operating ResultsHONG KONG, CHINA / ACCESSWIRE / August 14, 2023 / SouthGobi Resources Ltd. (Hong Kong Stock Exchange (\"HKEX\"): 1878, TSX Venture Exchange (\"TSX-V\"):SGQ) (the \"Company\" or \"SouthGobi\") today announces its financial and operating results for the three and six months ended June 30, 2023. All figures are in U.S. dollars (\"USD\") unless otherwise stated.Significant Events and HighlightsThe Company's significant events and highlights for the three months ended June 30, 2023 and the subsequent period to August 14, 2023 are as follows:Operating Results - In late 2022, the Company resumed its major mining operations, including coal mining, and the volume of coal production has gradually increased since then. The Company also resumed coal washing operations in April 2023. In response to the market demand, the Company has been mixing some higher ash content product with its semi-soft coking coal product and selling this mixed product to the market as processed coal.The Company experienced an increase in the average selling price of coal from $66.6 per tonne in the second quarter of 2022 to $95.3 per tonne in the second quarter of 2023 as a result of improved market conditions in China, expansion of its sales network and diversification of its customer base.Financial Results - The Company recorded a $40.5 million loss from operations in the second quarter of 2023 compared to a $2.7 million profit from operations in the second quarter of 2022. While the Company experienced increased sales volume and improvement in its average realised selling price during the first half of 2023, the Company's financial results were negatively offset by the provision of a tax penalty of $75.0 million imposed by the Mongolian Tax Authority (\"MTA\"), which the Company received notice of in July 2023 (see \"Provision of tax penalty imposed by MTA\" below).Convertible Debenture - On March 24, 2023, the Company and JD Zhixing Fund L.P. (\"JDZF\") entered into the an agreement (\"2023 March Deferral Agreement\") pursuant to which JDZF agreed to grant the Company a deferral of (i) the cash interest payment of approximately $7.9 million (the \"2023 May Cash Interest\") which will be due and payable on May 19, 2023 under the Convertible Debenture; (ii) the cash interest, managem...