Southgobi Resources Ltd. · TSXV:SGQ
Southgobi Resources — Q2 2014 Earnings Presentation
14 slides from Southgobi Resources's earnings presentation, Aug 12, 2014
Slide 1: Second Quarter 2014 Results
Second Quarter 2014 Results August 12, 2014 Second Quarter 2014 Results Presentation AUGUST 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: Ross Tromans, Chief Executive Officer
SouthGobi Resources Ross Tromans Chief Executive Officer Second Quarter 2014 Results Presentation AUGUST 2014 | 3
Slide 4: Second quarter 2014 highlights and subsequent events
Second quarter 2014 highlights and subsequent events • Safety remains a key priority – At June 30, 2014, lost injury time frequency rate of 0.15 per 200,000 man hours (rolling 12 month average) • Coal market conditions continue to be challenging – SouthGobi produced 0.55 million tonnes and sold 0.63
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 Mt 1,400 9 Mongolia Australia Other 1,200 8 7 1,000 Baotou primary coking 6 800 5 600 4 Wuhai washed 1/3 coking 3 400 2 Ceke 1/3 coking coal ex-stock 200 1 0 0 2013-1
Slide 6: Mongolian landscape
Mongolian landscape • The Government of Mongolia changed the royalty regime effective April 1, 2014 – Under the new “flexible tariff” royalty regime, the royalty per tonne for export coal sales will be calculated based on the actual contracted sales price per tonne, whereby the contracted sales pric
Slide 7: Second quarter 2014 operating highlights
Second quarter 2014 operating highlights 2014 2013 • The Company Quarter Ended 30-Jun 31-Mar 31-Dec 30-Sep 30-Jun continued to pace Raw coal production (millions of tonnes) 0.55 0.64 1.73 1.13 0.17 production with market demand and as a result, Sales Volumes and Prices operated significantly below i
Slide 8: Bertrand Troiano, Chief Financial Officer
SouthGobi Resources Bertrand Troiano Chief Financial Officer Second Quarter 2014 Results Presentation AUGUST 2014 | 8
Slide 9: Second quarter 2014 financial highlights
Second quarter 2014 financial highlights ($ million, unless stated otherwise) Q2 2014 Q1 2014 Comment and Significant items Coal sales (millions of tonnes) 0.63 0.39 Average realized price ($/tonne) 12.52 19.54 Reflects lower product prices and different product mix Total cash costs of product sold
Slide 10: Continuous cost reductions
Continuous cost reductions Total cash costs of product sold (excl. idled mine asset costs) • Reduction in total cash costs per tonne in the second In $ per tonne quarter of 2014 driven by continuing production cost 20 18.6 reduction, improving equipment productivity and 15 14.2 workforce reduction t
Slide 11: Relentless focus on liquidity
Relentless focus on liquidity Cash balance (end of quarter) • Liquidity continues to be impacted by adverse coal market In $ million conditions 25.0 21.8 19.2 20.0 16.1 • $3.2 million of cash flow excluding interest and financing in 15.0 second quarter of 2014, supported by prepaid coal sales 9.9 8.
Slide 12: Ross Tromans, Chief Executive Officer
SouthGobi Resources Ross Tromans Chief Executive Officer Second Quarter 2014 Results Presentation AUGUST 2014 | 12
Slide 13: 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 additional and immediate sources of financing • Drive operational exc
Slide 14: Q&A
Q&A Second Quarter 2014 Results Presentation AUGUST 2014 | 14