Mongolia Energy Corporation issues profit warning

Mongolia Energy Corporation Limited board informed the shareholders of the company and potential investors that based on the information currently available it is expected that the Group may record a significant gross loss for the financial year ending March 31st 2013 as compared with the audited results in 2012 on the same basis.

It said “This profit warning announcement is only based on the preliminary review on the currently available information and the management accounts of the company which have not been confirmed nor audited by the company's independent auditor. Shareholders of the Company and potential investors are advised to exercise caution when dealing in the shares of the company.”

It added “Based on the preliminary review on the management accounts of the Company the gross loss will among others, be attributable to the temporary halt of commercial coking coal production since last September due to the retreat of Leighton as mine contractor of our Khushuut Coal Mine and the technical issues in operation facing by the Group.”

It said “As a result of a change of mining contractor the mining plan for the Khushuut Coal Mine may be subject to change which may affect the valuation of the group's mining assets.”

It also said “In view of the sluggish coal market condition, technical issues facing by the Group and the strategic deposit issues our mining operation has been curtailed due to such uncertainties. Nevertheless our operation team on site is currently performing the overburden removal and other preparation works to prepare for our resumption of commercial coal production at any time. In the meantime we are finalizing the coal extraction contractor selection process and hopes to conclude and sign up a coal extraction contractor as soon as possible.”

It added “Also as part of the costs saving measures we are reviewing the development potential of our other non Khushuut mining and exploration licenses so as to cut down the mandatory exploration and routine maintenance costs of these licenses.”

Source - Mongolia Energy Corporation Limited

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