SGQ.V · 2025-05-15

Southgobi Announces First Quarter 2025 Financial and Operating Results

Production Results Financials

R E S O U R C E S

May 15, 2025

SOUTHGOBI ANNOUNCES FIRST QUARTER 2025 FINANCIAL AND OPERATING RESULTS

HONG KONG – 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 months ended March 31, 2025. All figures are in U.S. dollars (“USD”) unless otherwise stated.

SIGNIFICANT EVENTS AND HIGHLIGHTS

The Company’s significant events and highlights for the three months ended March 31, 2025 and the subsequent period to May 15, 2025 are as follows:

Operating Results – The Company increased the scale of its mining operations since 2024, as well as implementing various coal processing methods, including screening, wet washing and dry coal processing, which have resulted in improved coal quality and enhanced production volume and growth of coal export volume into China during the period.

In response to the market demand for different coal products, the Company focused on expanding the categories of coal products in its portfolio, including mixed coal, wet washed coal and dry processed coal. In addition, the Company has experienced success with processing its inventory of F-grade coal products through cost-effective screening procedures. As a result of the improvement in the quality of the processed F-grade coal, the Company was able to meet the import coal quality standards established by Chinese authorities and has been exporting this product to China for sale since the first quarter of 2024, further enhancing the Company’s coal export volume.

The Company recorded sales volume of 2.1 million tonnes for the first quarter of 2025 compared to 1.1 million tonnes for the first quarter of 2024, while the Company recorded an average realised selling price of $59.5 per tonne for the first quarter of 2025 compared to $79.5 per tonne for the first quarter of 2024. The decrease in the average realised selling price was mainly due to the Company facing headwinds in the China coal market since 2024, leading to the Company changing its product mix to sell a greater percentage of lower-priced coal products.

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Financial Results – The Company recorded a $15.7 million loss from operations for the first quarter of 2025 compared to $32.1 million profit from operation for the first quarter of 2024. The financial results for the first quarter of 2025 were impacted by the decreased average realised selling price and the change in product mix, as the Company sold more processed coal with higher production costs during the first quarter of 2025.
Notice from Mongolian Government Plenipotentiary and designation of Company’s mining deposits as mineral deposits of strategic importance – On April 2, 2025, Southgobi Sands LLC (“SGS”), the Company’s wholly-owned Mongolian subsidiary, received a letter from a plenipotentiary representative of the Mongolian government (the “Letter”) which invited SGS to participate in negotiations in relation to determining the Mongolian state’s ownership interest in SGS, being the legal entity which holds the Company’s coal mining licenses in Mongolia.

The Letter states that, in furtherance of Mongolia’s National Wealth Fund Law which was passed in April 2024, the Mongolian government resolved on February 5, 2025 to appoint a plenipotentiary representative (the “Plenipotentiary Representative of the Mongolian Government”) to negotiate with legal persons holding a mining license for a deposit designated by the Mongolian government as a strategically important deposit (“Mineral Deposits of Strategic Importance”) in relation to determining the proportionate interest the Mongolian state has in such legal entity or whether to replace the Mongolian state’s interest with a royalty interest.

The Company has been advised by its Mongolian legal counsel that, the Government of Mongolia is empowered to participate on an equity ownership basis with the license holder in the exploitation and/or mining of each Mineral Deposit of Strategic Importance on terms to be negotiated between the Government of Mongolia and such license holder. Based solely on the knowledge of the Company’s Mongolian legal counsel, the Company is aware that various other license holders of Mineral Deposits of Strategic Importance have entered into similar negotiations with the Plenipotentiary Representative of the Mongolian Government.

As at the date of this press release, the deposits covered by four of the Company’s Mongolian mining licenses have been designated as Mineral Deposits of Strategic Importance by Mongolian government authorities. The relevant mining licenses relate to the Company’s Ovoot Tolgoi Mine and the Soumber Deposit.

On April 24, 2025, SGS initiated preliminary discussions with the Plenipotentiary Representative of the Mongolian Government. The Company anticipates that the discussion between SGS and the Plenipotentiary Representative of the Mongolian Government will continue and both parties will endeavour to engage in good faith for the purpose of arriving at a mutual and constructive understanding and agreement. The Company intends to fully cooperate with the Mongolian government and provide all necessary information to the extent permitted by applicable law.

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Additional Tax and Tax Penalty Imposed by the Mongolian Tax Authority (“MTA”) – On July 18, 2023, SGS received an official notice (the “Notice”) issued by the MTA stating that the MTA had completed a periodic tax audit (the “Audit”) on the financial information of SGS for the tax assessment years between 2017 and 2020, including transfer pricing, royalty, air-pollution fee and unpaid tax payables. As a result of the Audit, the MTA notified SGS that it is imposing a tax penalty against SGS in the amount of approximately $75.0 million. The penalty mainly relates to the different view on the interpretation of tax law between the Company and the MTA. Under Mongolian law, the Company had a period of 30 days from the date of receipt of the Notice to file an appeal in relation to the Audit. Subsequently the Company engaged an independent tax consultant in Mongolia to provide tax advice and support to the Company and filed an appeal letter in relation to the Audit with the MTA in accordance with Mongolian laws on August 17, 2023.

On February 8, 2024, SGS received notice from the Tax Dispute Resolution Council (“TDRC”) which stated that, after the TDRC’s review, the TDRC issued a decision in relation to SGS’ appeal of the Audit, and ordered that the audit assessments set forth in the Notice of July 18, 2023 be sent back to the MTA for review and re-assessment.

On February 22, 2024, SGS received another notice from the MTA stating that the MTA anticipated commencing the re-assessment process on or about March 7, 2024 and the duration of such process will be approximately 45 working days.

On May 15, 2024, SGS received a notice (the “Revised Notice”) from the MTA regarding the re-assessment result on the Audit (the “Re-assessment Result”). The re-assessed amount of the tax penalty is approximately $80.0 million. In accordance with applicable Mongolian laws, SGS is entitled to file an appeal to the TDRC regarding the Re-assessment Result within a 30-day period from the date of receiving the Revised Notice.

On June 12, 2024, following consultation with its independent tax consultant in Mongolia, SGS submitted an appeal letter to the TDRC regarding the Re-assessment Result, in accordance with applicable Mongolian laws.

On January 10, 2025, SGS received a resolution dated December 19, 2024 (the “Resolution”) from the TDRC in response to the appeal letter sent by SGS to the TDRC on June 12, 2024, relating to the Re-assessment Result. As set forth in the Resolution, the TDRC has determined to reduce the re-assessed amount of tax penalty against SGS from approximately $80.0 million to approximately $26.5 million (the “Revised Re-assessment Result”). In accordance with applicable Mongolian laws, SGS is entitled to file an appeal to the Administrative Court of First Instance in Ulaanbaatar, Mongolia (the “Administrative Court of First Instance”) regarding the Revised Re-assessment Result within a 30-day period from the date of receiving the Resolution. After careful consideration and consultation with the Company’s independent tax consultant in Mongolia, the Company has determined not to pursue a further appeal of the Revised Re-assessment Result with the Administrative Court of First Instance.

On March 19, 2025, SGS received correspondence from the Administrative Court of First Instance requesting supplemental information regarding a court proceeding initiated by certain officers of the MTA (“MTA Officials”) against the TDRC. Upon further enquiry, SGS obtained a copy of an order dated March 7, 2025 issued by the Administrative Court of First Instance regarding commencement of court proceedings brought by the MTA Officials. The MTA Officials are petitioning the court to overturn the TDRC’s ruling that reduced SGS’s tax penalty from approximately $80.0 million to approximately $26.5 million (“Proposed Case”).

Based on preliminary advice from the Company’s independent Mongolian legal counsel and tax consultants: (i) SGS has not been named as a third party defendant to these proceedings;

(ii) the TDRC’s Revised Re-assessment Result remains legally enforceable unless formally overturned by the court; and (iii) SGS’s acceptance of the TDRC’s decision makes the ruling final under Mongolian tax law.

On April 25, 2025, SGS obtained a copy of an order dated April 15, 2025 (the “Latest Court Order”) issued by the Administrative Court of First Instance refusing to accept the Proposed Case. According to the Latest Court Order, the Proposed Case has been dismissed by the Administrative Court of First Instance. According to applicable Mongolian laws, the plaintiff is entitled to file an appeal to the appellate court, and the Company understands that the MTA Officials, as plaintiff in the Proposed Case, has filed an appeal.

As at March 31, 2025, the Company recorded an additional tax and tax penalty in the amount of $45.5 million (December 31, 2024: $45.5 million), which consists of a tax penalty payable of $26.5 million (December 31, 2024: $26.5 million) and a provision for additional late tax penalty of $19.0 million (December 31, 2024: $19.0 million). As a result of the Revised Re-assessment Result, the Company recorded a reversal of additional tax and tax penalty of $48.5 million in 2024. To date, the Company has paid the MTA an aggregate of $3.3 million in relation to the aforementioned tax penalty. The Company anticipates paying down the outstanding amount of the tax and tax penalty from cash generated from operations in the normal course. According to Mongolian tax law, the Mongolian tax authority has a legal authority to demand payment of the outstanding amount of the Revised Re-assessment Result from the Company at its discretion.

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2025 March Deferral Agreement – On March 20, 2025, the Company and JD Zhixing Fund L.P. (“JDZF”) entered into an agreement (the “2025 March Deferral Agreement”) pursuant to which JDZF agreed to grant the Company a deferral of (i) the cash and payment-in-kind interest (“PIK Interest”), management fees, and related deferral fees in the aggregate amount of approximately $111.6 million which will be due and payable to JDZF on or before August 31, 2025 pursuant to the deferral agreement dated March 19, 2024 and the deferral agreement dated April 30, 2024; (ii) semi-annual cash interest payment of approximately $7.9 million payable to JDZF on May 19, 2025 under the Convertible Debenture; (iii) semi-annual cash interest payments of approximately $8.1 million payable to JDZF on November 19, 2025 and the $4.0 million in PIK Interest payable to JDZF on November 19, 2025 under the JDZF convertible debenture (the “Convertible Debenture”); and (iv) management fees in the aggregate amount of approximately $6.1 million payable to JDZF on May 16, 2025, August 15, 2025, November 15, 2025 and February 15, 2026, respectively, under the amended and restated mutual cooperation agreement (the “Amended and Restated Cooperation Agreement”) (collectively, the “2025 March Deferred Amounts”).

The effectiveness of the 2025 March Deferral Agreement and the respective covenants, agreements and obligations of each party under the 2025 March Deferral Agreement are subject to the Company obtaining the requisite approval of the 2025 March Deferral Agreement from shareholders in accordance with the requirements of applicable Canadian securities laws and Rule 14.33 and Rule 14A.36 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”). The Company will be seeking approval of the 2025 March Deferral Agreement from disinterested shareholders at the Company’s upcoming annual general meeting (“AGM”) of shareholders, which will be held at a future date to be set by the Board.

The principal terms of the 2025 March Deferral Agreement are as follows:

Payment of the 2025 March Deferred Amounts will be deferred until August 31, 2026 (the “2025 March Deferral Agreement Deferral Date”).
As consideration for the deferral of the 2025 March Deferred Amounts which relate to the payment obligations arising from the Convertible Debenture, the Company agreed to pay JDZF a deferral fee equal to 6.4% per annum on the outstanding balance of such 2025 March Deferred Amounts, commencing on the date on which each such 2025 March Deferred Amounts would otherwise have been due and payable under the Convertible Debenture.
As consideration for the deferral of the 2025 March Deferred Amounts which relate to payment obligations arising from the Amended and Restated Cooperation Agreement, the Company agreed to pay JDZF a deferral fee equal to 1.5% per annum on the outstanding balance of such 2025 March Deferred Amounts commencing on the date on which each such 2025 March Deferred Amounts would otherwise have been due and payable under the Amended and Restated Cooperation Agreement.
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The 2025 March Deferral Agreement does not contemplate a fixed repayment schedule for the 2025 March Deferred Amounts or related deferral fees. Instead, the 2025 March Deferral Agreement requires the Company to use its best efforts to pay the 2025 March Deferred Amounts and related deferral fees due and payable under the 2025 March Deferral Agreement to JDZF. During the period beginning as of the effective date of the 2025 March Deferral Agreement and ending as of the 2025 March Deferral Agreement Deferral Date, the Company will provide JDZF with monthly updates of its financial status and business operations, and the Company and JDZF will on a monthly basis discuss and assess in good faith the amount (if any) of the 2025 March Deferred Amounts and related deferral fees that the Company may be able to repay to JDZF, having regard to the working capital requirements of the Company’s operations and business at such time and with the view of ensuring that the Company’s operations and business would not be materially prejudiced as a result of any repayment.
If at any time before the 2025 March Deferred Amounts and related deferral fees are fully repaid, the Company proposes to appoint, replace or terminate one or more of its chief executive officer, its chief financial officer or any other senior executive(s) in charge of its principal business function or its principal subsidiary, the Company will first consult with, and obtain written consent (such consent shall not be unreasonably withheld) from JDZF prior to effecting such appointment, replacement or termination.
Changes in Management

Mr. Munkhbat Chuluun: Mr. Chuluun was transitioned from Vice President of Public Relations to a non-managerial position within the Company on January 1, 2025.

Going Concern – Several adverse conditions and material uncertainties relating to the Company cast significant doubt upon the going concern assumption which includes the deficiencies in assets and working capital.

See section “Liquidity and Capital Resources” of this press release for details.

OVERVIEW OF OPERATIONAL DATA AND FINANCIAL RESULTS

Summary of Operational Data

Three months ended March 31, 2025

2024

Sales Volumes, Prices and Costs

Premium semi-soft coking coal

0.04

Coal sales (millions of tonnes) 0.36 $ 90.75 $ Average realised selling price (per tonne) 111.01 Standard semi-soft coking coal/premium thermal coal

0.95

Coal sales (millions of tonnes) 0.28 $ 70.46 $ Average realised selling price (per tonne) 76.07 Standard thermal coal

0.14

Coal sales (millions of tonnes) 0.12 $ 35.37 $ Average realised selling price (per tonne) 47.91 Processed coal

0.93

Coal sales (millions of tonnes) 0.29 $ 50.57 $ Average realised selling price (per tonne) 56.65 Total

2.06

Coal sales (millions of tonnes) 1.05 $ 59.51 $ Average realised selling price (per tonne) 79.52

3.92

Raw coal production (millions of tonnes) 1.25

$ 64.90 $ Cost of sales of product sold (per tonne) 43.36 $ 53.97 $ Direct cash costs of product sold (per tonne) ⁽ⁱ⁾ 30.70 $ 1.70 $ Mine administration cash costs of product sold (per tonne) ⁽ⁱ⁾ 1.08 $ 55.67 $ Total cash costs of product sold (per tonne) ⁽ⁱ⁾ 31.78

Other Operational Data

19.36

Production waste material moved (millions of bank cubic meters) 12.36 Strip ratio (bank cubic meters of waste material per tonne of coal

4.93

produced) 9.87

0.00

Lost time injury frequency rate ⁽ⁱⁱ⁾ 0.22

(i) A Non-International Financial Reporting Standards (“non-IFRS”) financial measure, refer to “Non-IFRS Financial Measures” section. Cash costs of product sold exclude idled mine asset cash costs.

(ii) Per 200,000 man hours and calculated based on a rolling 12 month average.

Overview of Operational Data

The Company ended the first quarter of 2025 without a lost time injury. As at March 31, 2024, the Company had a lost time injury frequency rate of 0.22 per 200,000 man hours based on a rolling 12-month average.

The Company recorded an average realised selling price of $59.5 per tonne in the first quarter of 2025 compared to $79.5 per tonne in the first quarter of 2024. The decrease was mainly due to the Company facing headwinds in the China coal market since 2024, leading to the Company changing its product mix to sell a greater percentage of lower-priced coal products. The product mix for the first quarter of 2025 consisted of approximately 2% of premium semi-soft coking coal, 46% of standard semi-soft coking coal/premium thermal coal, 7% of standard thermal coal and 45% of processed coal compared to approximately 34% of premium semi-soft coking coal, 27% of standard semi-soft coking coal/premium thermal coal, 11% of standard thermal coal and 28% of processed coal for the first quarter of 2024.

The Company’s unit cost of sales of product sold was $64.9 per tonne in the first quarter of 2025 compared to $43.4 per tonne in the first quarter of 2024. The increase was due to change in product mix with the Company expanding into certain categories of processed coal with higher production costs and more sales were made to a farther destination with higher transportation cost.

Summary of Financial Results

Three months ended March 31, 2025

$ in thousands, except per share information 2024

Revenue(i)	$ 122,867 $	82,169
Cost of sales(i)	(133,689)	(45,533)
Gross profit/(loss) excluding idled mine asset costs(ii)	(10,571)	36,682

(10,822)

Gross profit/(loss) 36,636

Other operating expenses, net	(1,571)	(1,053)
Administration expenses	(3,249)	(3,413)
Evaluation and exploration expenses	(32)	(22)

(15,674)

Profit/(loss) from operations 32,148

Finance costs	(8,812)	(11,021)
Finance income	21	73
Share of earnings of joint ventures	613	833

(187)

Share of earnings/(loss) of associates 10

Current income tax expenses	(2,166)	(9,791)
Net profit/(loss) attributable to equity holders of the Company	(26,205)	12,252
Basic and diluted earnings/(loss) per share	$ (0.088) $	0.041

(i) Revenue and cost of sales related to the Company’s Ovoot Tolgoi Mine within the Coal Division operating segment. Refer to note 3 of the condensed consolidated interim financial statements for further analysis regarding the Company’s reportable operating segments.

(ii) A non-IFRS financial measure, idled mine asset costs represents the depreciation expense relates to the Company’s idled plant and equipment.

Overview of Financial Results

The Company recorded a $15.7 million loss from operations for the first quarter of 2025 compared to $32.1 million profit from operations for the first quarter of 2024. The decrease was mainly due to the decreased average realised selling price and the change in product mix, as the Company sold more processed coal with higher production costs during the first quarter of 2025.

Revenue was $122.9 million for the first quarter of 2025 compared to $82.2 million for the first quarter of 2024. The financial results were impacted by increased sales volume, as a result of expansion of its sales network, diversification of its customer base and expansion of the categories of coal products in its portfolio.

Cost of sales was $133.7 million for the first quarter of 2025 compared to $45.5 million for the first quarter of 2024. The increase in cost of sales was mainly due to increased sales volume, the Company expanding into certain categories of processed coal with higher production costs and more sales were made to a farther destination with higher transportation cost.

Cost of sales consists of operating expenses, share-based compensation expense, equipment depreciation, depletion of mineral properties, royalties and idled mine asset costs. Operating expenses in cost of sales reflect the total cash costs of product sold (a Non-IFRS financial measure, refer to “Non-IFRS Financial Measures” section of this press release for further analysis) during the quarter.

Three months ended March 31, 2025

$ in thousands 2024

$ 114,682 $ Operating expenses 33,371

8,775

Depreciation and depletion 2,210

9,981

Royalties 9,906

Cost of sales from mine operations	133,438	45,487
Cost of sales related to idled mine assets	251	46
Cost of sales	$ 133,689 $	45,533

Operating expenses in cost of sales were $114.7 million for the first quarter of 2025 compared to $33.4 million for the first quarter of 2024. The overall increase in operating expenses was due to the Company expanding into certain categories of processed coal with higher production costs and more sales were made to a farther destination with higher transportation cost.

Cost of sales related to idled mine assets for the first quarter of 2025 included $0.3 million related to depreciation expenses for idled equipment (first quarter of 2024: $0.1 million).

Other operating expenses were $1.6 million for the first quarter of 2025 (first quarter of 2024: $1.1 million). The increase was due to increased management fee for the first quarter of 2025.

Three months ended March 31, 2025

$ in thousands 2024

$ 1,688 $ Management fee 1,116

(56)

Reversal of provision for doubtful trade and other receivables (19)

(31)

Foreign exchange loss/(gain), net 200

(30)

Reversal of impairment loss on materials and supplies inventories (7)

–

Gain on contract offsetting arrangement (237)

Other operating expenses, net $ 1,571 $ 1,053

Administration expenses were $3.2 million for the first quarter of 2025 as compared to $3.4 million for the first quarter of 2024.

Three months ended March 31,

$ in thousands		2025	2024
Corporate administration	$	1,042 $	704
Legal and professional fees		541	849
Salaries and benefits		1,567	1,726
Share-based compensation expense		–	1
Depreciation		99	133
Administration expenses	$	3,249 $	3,413

The Company continued to minimise evaluation and exploration expenditures in the first quarter of 2025 in order to preserve the Company’s financial resources. Evaluation and exploration activities and expenditures in the first quarter of 2025 were limited to ensuring that the Company met the Mongolian Minerals Law requirements in respect of its mining licenses.

Finance costs were $8.8 million and $11.0 million for the first quarter of 2025 and 2024 respectively, which primarily consisted of interest expense on the $250.0 million Convertible Debenture.

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Summary of Quarterly Operational Data

2025

2024 2023 Quarter Ended 31-Mar 31-Dec 30-Sep 30-Jun 31-Mar 31-Dec 30-Sep 30-Jun

Sales Volumes, Prices and Costs

Premium semi-soft coking coal Coal sales (millions of tonnes) 0.04 0.16 0.10 0.29 0.36 0.54 0.64 0.57 Average realised selling price (per tonne) $ 90.75 $ 89.56 $ 116.48 $ 102.61 $ 111.01 $ 107.59 $ 100.33 $ 103.33 Standard semi-soft coking coal/premium thermal coal

0.95

Coal sales (millions of tonnes) 1.31 1.09 0.28 0.28 0.29 0.18 0.05 Average realised selling price (per tonne) $ 70.46 $ 69.30 $ 72.54 $ 77.04 $ 76.07 $ 72.41 $ 68.43 $ 67.09 Standard thermal coal Coal sales (millions of tonnes) 0.14 0.38 0.24 0.12 0.12 – – – Average realised selling price (per tonne) $ 35.37 $ 36.99 $ 37.20 $ 36.10 $ 47.91 $ – $ – $ – Processed coal Coal sales (millions of tonnes) 0.93 0.81 0.68 0.51 0.29 0.13 0.33 0.26 Average realised selling price (per tonne) $ 50.57 $ 68.66 $ 63.65 $ 73.04 $ 56.65 $ 77.23 $ 66.03 $ 82.99 Total Coal sales (millions of tonnes) 2.06 2.66 2.11 1.20 1.05 0.96 1.15 0.88

$ 59.51

Average realised selling price (per tonne) $ 65.72 $ 67.77 $ 77.55 $ 79.52 $ 92.93 $ 85.57 $ 95.34

Raw coal production (millions of tonnes)	3.92		4.19		2.75		2.01		1.25		1.34		1.18		0.97
Cost of sales of product sold (per tonne)	$ 64.90	$	48.92	$	52.77	$	61.32	$	43.36	$	38.17	$	42.23	$	47.76
Direct cash costs of product sold (per tonne)(i)		$	37.92	$	41.74	$	47.15	$	30.70	$	26.20	$	32.26	$	33.79

$ 53.97

Mine administration cash costs of product sold (per tonne) ⁽ⁱ⁾ $ 1.70 $ 1.88 $ 0.94 $ 2.42 $ 1.08 $ 1.83 $ 0.82 $ 1.60 Total cash costs of product sold (per tonne) ⁽ⁱ⁾ $ 55.67 $ 39.80 $ 42.68 $ 49.57 $ 31.78 $ 28.03 $ 33.08 $ 35.39

Other Operational Data

Production waste material moved (millions of bank cubic meters) 19.36 17.48 15.04 14.59 12.36 7.81 7.34 7.73 Strip ratio (bank cubic meters of waste

4.93

material per tonne of coal produced) 4.17 5.48 7.27 9.87 5.85 6.24 7.93 Lost time injury frequency rate ⁽ⁱⁱ⁾ 0.00 0.00 0.00 0.00 0.22 0.22 0.21 0.23

(i) A non-IFRS financial measure, refer to section “Non-IFRS Financial Measures”. Cash costs of product sold exclude idled mine asset cash costs.

(ii) Per 200,000 man hours and calculated based on a rolling 12 month average.

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Summary of Quarterly Financial Results

The Company’s condensed consolidated interim financial statements are reported under IFRS Accounting Standards issued by the International Accounting Standards Board. The following table provides highlights, extracted from the Company’s annual and interim consolidated financial statements, of quarterly results for the past eight quarters.

2025

$ in thousands, except per share information 2024 2023 Quarter Ended 31-Mar 31-Dec 30-Sep 30-Jun 31-Mar 31-Dec 30-Sep 30-Jun

Financial Results

$ 122,867

Revenue ⁽ⁱ⁾ $ 174,640 $ 143,748 $ 92,821 $ 82,169 $ 88,504 $ 97,979 $ 83,243 Cost of sales ⁽ⁱ⁾ (133,689) (130,119) (111,354) (73,582) (45,533) (36,645) (48,569) (42,027) Gross profit/(loss) excluding idled mine asset costs ⁽ⁱⁱ⁾ (10,571) 44,757 32,544 19,303 36,682 51,908 49,491 41,227 Gross profit/(loss) including idled mine

(10,822)

asset costs 44,521 32,394 19,239 36,636 51,859 49,410 41,216

Other operating income/(expenses), net	(1,571)	(1,194)	(294)	(1,157)	(1,053)	4,308	(413)	(4,001)
Administration expenses	(3,249)	(3,627)	(3,400)	(3,014)	(3,413)	(3,879)	(1,846)	(2,656)
Evaluation and exploration expenses	(32)	(314)	(1,003)	(23)	(22)	(91)	(808)	(28)

Reversal of/(provision for) additional tax and

tax penalty	–	39,666	–	–		–	(10,153)	–	(74,990)
Profit/(loss) from operations	(15,674)	79,052	27,697	15,045	32,148		42,044	46,343	(40,459)
Finance costs	(8,812)	(6,893)	(10,679)	(10,322)	(11,021)		(12,334)	(13,266)	(11,558)
Finance income		3,247	733	722		73	40	4,915	44

Share of earnings of joint ventures	613	1,206	133	1,055	833	1,101	809	428
Share of earnings/(loss) of associates	(187)	578	(1)	–	10	4	–	–
Current income tax expenses	(2,166)	(4,899)	(7,844)	(8,585)	(9,791)	(6,519)	(9,452)	(9,087)
Net profit/(loss)		72,291	10,039	(2,085)	12,252	24,336	29,349	(60,632)

(26,205)

Basic earnings/(loss) per share $ (0.088) $ 0.244 $ 0.034 $ (0.007) $ 0.041 $ 0.082 $ 0.099 $ (0.205) Diluted earnings/(loss) per share $ (0.088) $ 0.228 $ 0.034 $ (0.007) $ 0.041 $ 0.082 $ 0.099 $ (0.205)

(i) Revenue and cost of sales relate to the Company’s Ovoot Tolgoi Mine within the Coal Division operating segment. Refer to note 3 of the condensed consolidated interim financial statements for further analysis regarding the Company’s reportable operating segments.

(ii) A non-IFRS financial measure, idled mine asset costs represents the depreciation expense relates to the Company’s idled plant and equipment.

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