Southgobi Resources Ltd. · TSXV:SGQ
Southgobi Resources — Q3 2014 Earnings Presentation
13 slides from Southgobi Resources's earnings presentation, Nov 11, 2014
Slide 1: Third Quarter 2014 Financial Results
Third Quarter 2014 Financial Results November 11, 2014 Third Quarter 2014 Results Presentation NOVEMBER 2014 | 1
Slide 2: Cautionary statement
Cautionary statement Forward-looking statements This presentation includes certain “forward-looking statements.” All statements, other than statements of historical fact, are forward-looking statements that involve various risks and uncertainties. There can be no assurances that such statements will
Slide 3: SouthGobi Resources - Ross Tromans, CEO
SouthGobi Resources Ross Tromans Chief Executive Officer Third Quarter 2014 Results Presentation NOVEMBER 2014 | 3
Slide 4: Third quarter 2014 highlights
Third quarter 2014 highlights • Safety remains a key priority – No recorded injury in third quarter. • Coal market conditions continue to be challenging – Production has remained low in response to current market conditions. – SouthGobi produced 0.17 million tonnes and sold 0.65 million tonnes of co
Slide 5: Market conditions for Mongolian coal continue to be challenging
Market conditions for Mongolian coal continue to be challenging Chinese coking coal prices Chinese coking coal imports RMB/t incl VAT 1,000 Mt 9 Mongolia accounts for 24% of China’s 8 coking coal import in 2014 YTD 800 7 Baotou primary coking 600 6 5 Wuhai washed 400 1/3 coking 4 3 Ceke 1/3 coking c
Slide 6: Third quarter 2014 operating highlights
Third quarter 2014 operating highlights • The Company continued 2014 2013 to pace production with Quarter Ended 30-Sep 30-Jun 31-Mar 31-Dec 30-Sep market demand and as a Sales Volumes and Prices result, operated Premium semi-soft coking coal significantly below its Coal sales (millions of tonnes) -
Slide 7: SouthGobi Resources - Bertrand Troiano, CFO
SouthGobi Resources Bertrand Troiano Chief Financial Officer Third Quarter 2014 Results Presentation NOVEMBER 2014 | 7
Slide 8: Third quarter 2014 financial highlights
Third quarter 2014 financial highlights ($ million, unless stated otherwise) Q3 2014 Q2 2014 Comment and Significant items in Q3 2014 Coal sales (millions of tonnes) 0.65 0.63 Average realized price ($/tonne) 13.87 12.52 Reflects improved product mix, offset by lower prices Cost reduction driven by
Slide 9: Continuous cost reductions
Continuous cost reductions Unit cash costs of product sold (excl. idled mine asset costs) • Reduction in total unit cash costs of product sold in the In $ per tonne third quarter of 2014 is driven by continuing production 15 12.5 14.2 cost reduction, improving equipment productivity and 11.6 11.1 10
Slide 10: Relentless focus on liquidity
Relentless focus on liquidity Cash balance (end of quarter) • Liquidity continues to be impacted by adverse coal In $ million market conditions; $2.4 million of cash outflow excluding interest and financing in third quarter of 2014. 25 21.8 20 16.1 15 • Continues to focus on prepaid sales and minimi
Slide 11: SouthGobi Resources - Ross Tromans, CEO
SouthGobi Resources Ross Tromans Chief Executive Officer Third Quarter 2014 Results Presentation NOVEMBER 2014 | 11
Slide 12: Outlook
Outlook Outlook • Market outlook – Market is expected to remain challenged – Production to continue to be paced to market conditions, with focus on productivity improvement and cost reduction • 2014 and medium-term objectives – Secure immediate and additional sources of financing – Drive operational
Slide 13: Q & A
Q&A Third Quarter 2014 Results Presentation NOVEMBER 2014 | 13