SouthGobi Resources swings to Q1 profit on record sales
SouthGobi Resources announced it swung to a profit on record first quarter coal sales and higher selling prices.
For the first three months of the year, the Mongolia-focused coal producer posted a profit of USD 3.1 million versus a net loss of USD 46.6 million in the year ago period. Finance costs fell to USD 1.5 million in the latest period from USD 45.6 million a year earlier, when the company was hit by a USD 36.8 million unrealized loss on the fair value change of its convertible debentures.
SouthGobi focus is the exploration, development and sale of Permian-age metallurgical and thermal coal deposits in Mongolia South Gobi Region. Ovoot Tolgoi, its flagship coal mine, produces and sells coal to customers in China, the largest consumer of coal in the world.
First quarter revenue almost doubled to USD 40.2 million, on the record sale of 0.84 million tonnes of coal up by 84%YoY as the company's customer base expanded.
The company said quarterly average selling price amounted to USD 56.79 per tonne, 13% higher than a year ago and the highest quarterly average since the start of mining operations. The company reported a record profit margin of 56% in the latest quarter, versus 38% in the first quarter of 2011.
SouthGobi produced 1.07 million tonnes of raw coal with a strip ratio of 2.07 compared to production of 1.11 million tonnes of raw coal with a strip ratio of 3.47 a year earlier. The below-trend strip ratio in the latest quarter was a function of the mine plan and will be normalized over the life-of-mine.
Direct cash costs of product sold were USD 10.80 per tonne compared to USD 18.91 per tonne a year earlier with the decline due to the lower strip ratio. During the quarter, SouthGobi commissioned the dry coal-handling facility at the Ovoot Tolgoi Mine, which has the capacity to process nine million tonnes of run-of-mine coal per year and announced a deal to sell its Tsagaan Tolgoi deposit to Modun Resources for USD 30.0 million.
Source - Proactive Investors
(www.steelguru.com)
For the first three months of the year, the Mongolia-focused coal producer posted a profit of USD 3.1 million versus a net loss of USD 46.6 million in the year ago period. Finance costs fell to USD 1.5 million in the latest period from USD 45.6 million a year earlier, when the company was hit by a USD 36.8 million unrealized loss on the fair value change of its convertible debentures.
SouthGobi focus is the exploration, development and sale of Permian-age metallurgical and thermal coal deposits in Mongolia South Gobi Region. Ovoot Tolgoi, its flagship coal mine, produces and sells coal to customers in China, the largest consumer of coal in the world.
First quarter revenue almost doubled to USD 40.2 million, on the record sale of 0.84 million tonnes of coal up by 84%YoY as the company's customer base expanded.
The company said quarterly average selling price amounted to USD 56.79 per tonne, 13% higher than a year ago and the highest quarterly average since the start of mining operations. The company reported a record profit margin of 56% in the latest quarter, versus 38% in the first quarter of 2011.
SouthGobi produced 1.07 million tonnes of raw coal with a strip ratio of 2.07 compared to production of 1.11 million tonnes of raw coal with a strip ratio of 3.47 a year earlier. The below-trend strip ratio in the latest quarter was a function of the mine plan and will be normalized over the life-of-mine.
Direct cash costs of product sold were USD 10.80 per tonne compared to USD 18.91 per tonne a year earlier with the decline due to the lower strip ratio. During the quarter, SouthGobi commissioned the dry coal-handling facility at the Ovoot Tolgoi Mine, which has the capacity to process nine million tonnes of run-of-mine coal per year and announced a deal to sell its Tsagaan Tolgoi deposit to Modun Resources for USD 30.0 million.
Source - Proactive Investors
(www.steelguru.com)
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