Southgobi Announces Fourth Quarter and Full Year 2024 Financial and Operating Results
R E S O U R C E S
March 28, 2025
SOUTHGOBI ANNOUNCES FOURTH QUARTER AND FULL YEAR 2024 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 quarter and year ended December 31, 2024. All figures are in U.S. dollars (“USD”) unless otherwise stated.
The Board of Directors (the “Board”) wish to inform that the Company’s independent auditors, BDO Limited, have completed their audit of the consolidated financial statements of the Company for the year ended December 31, 2024 in accordance with Canadian generally accepted auditing standards and would like to announce the audited annual results of the Company for the year ended December 31, 2024 together with the comparative figures for the previous year and the respective notes in this announcement.
SIGNIFICANT EVENTS AND HIGHLIGHTS
The Company’s significant events and highlights for the year ended December 31, 2024 and the subsequent period to March 28, 2025 are as follows:
- Operating Results – The Company increased the scale of its mining operations in 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 year.
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 7.0 million tonnes in 2024 compared to 3.6 million tonnes in 2023, while the Company recorded an average realised selling price of $70.4 per tonne in 2024 compared to $93.0 per tonne in 2023. The decrease in the average realised selling price was mainly due to the Company facing headwinds in the China coal market in 2024, leading to the Company changing its product mix to sell a greater percentage of lowerpriced coal products.
- 1 -
- Financial Results – The Company recorded a $153.9 million profit from operations in 2024 compared to $75.9 million profit from operations in 2023. The financial results for 2024 were impacted by the expansion of its sales network and diversification of its customer base, and a reversal of additional tax and tax penalty of $48.5 million, which was recorded in the fourth quarter of 2024.
- Build-Operate-Transfer Agreement – On July 15, 2024, the Company’s wholly-owned Mongolian subsidiary, Southgobi Sands LLC (“SGS”), entered into a Build-Operate-Transfer agreement (the “BOT Agreement”) with Tangshan Shenzhou Manufacturing Group Co., Ltd (“Tangshan”), pursuant to which Tangshan will be responsible for the construction, operation, and quality management of a new dry coal separation system, including key machinery (collectively, the “Dry Coal Separation System”) at the Company’s Ovoot Tolgoi Mine in Mongolia, which will be a stand-alone plant separate from the Company’s existing dry processing plant. Tangshan will also be responsible for the construction of all related facilities for the Dry Coal Separation System. Under the BOT Agreement, SGS has the right to supervise and manage the overall work of coal quality assurance and operation, including, but not limited to, the supervision and management of operational safety, production planning, and operations management.
The total consideration payable by the Company over the term of the BOT Agreement is approximately $10.9 million, together with certain additional processing volume-based fees. Subject to the terms as set out therein, the BOT Agreement is effective from July 15, 2024 until October 1, 2029.
- 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, airpollution 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.
- 2 -
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 the applicable Mongolian laws, SGS is entitled to file an appeal to the Administrative Court in Ulaanbaatar, Mongolia (the “Administrative Court”) 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.
As at December 31, 2024, the Company recorded an additional tax and tax penalty in the amount of $45.5 million (2023: $85.1 million), which consists of a tax penalty payable of $26.5 million (2023: $75.0 million) and a provision for additional late tax penalty of $19.0 million (2023: $10.1 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 (2023: $nil). To date, the Company has paid the MTA an aggregate of $1.7 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.
- 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-inkind 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) semiannual 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”).
- 3 -
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.
- 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.
- 4 -
- 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 Directors and Management
Ms. Chonglin Zhu: Ms. Zhu was appointed as Chief Financial Officer on February 2, 2024.
Mr. Alan Ho: Mr. Ho was redesignated from Chief Financial Officer to a new management position within the Company on February 2, 2024.
Mr. Fan Keung Vic Choi: Mr. Choi was elected as an independent non-executive director at the Company’s AGM held on June 27, 2024.
Mr. Mao Sun: Mr. Sun did not stand for the re-election at the AGM and ceased to be an independent non-executive director on June 27, 2024.
- 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.
- 5 -
OVERVIEW OF OPERATIONAL DATA AND FINANCIAL RESULTS
Summary of Annual Operational Data
2023
Sales Volumes, Prices and Costs
Premium semi-soft coking coal
0.91
Coal sales (millions of tonnes) 2.08 $ 105.10 $ Average realised selling price (per tonne) 106.91 Standard semi-soft coking coal/premium thermal coal
2.96
Coal sales (millions of tonnes) 0.53 $ 71.86 $ Average realised selling price (per tonne) 70.58 Standard thermal coal
0.86
Coal sales (millions of tonnes) – $ 38.40 $ Average realised selling price (per tonne) – Processed coal
2.29
Coal sales (millions of tonnes) 0.98 $ 66.62 $ Average realised selling price (per tonne) 75.23 Total
7.02
Coal sales (millions of tonnes) 3.59 $ 70.40 $ Average realised selling price (per tonne) 93.02
10.20
Raw coal production (millions of tonnes) 4.05
$ 51.37 $ Cost of sales of product sold (per tonne) 44.07 $ 39.56 $ Direct cash costs of product sold (per tonne) (i) 30.46 $ 1.58 $ Mine administration cash costs of product sold (per tonne) (i) 1.39 $ 41.14 $ Total cash costs of product sold (per tonne) (i) 31.85
Other Operational Data 59.47
Production waste material moved (millions of bank cubic meters) 25.71 Strip ratio (bank cubic meters of waste material per tonne of
5.84
coal produced) 6.36
0.06
Lost time injury frequency rate (ii) 0.17
(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.
- 6 -
Overview of Annual Operational Data
The Company recorded an average realised selling price of $70.4 per tonne for 2024 compared to $93.0 per tonne for 2023. The decrease was mainly due to the Company facing headwinds in the China coal market in 2024, leading to the Company changing its product mix to sell a greater percentage of lower-priced coal products. The product mix for 2024 consisted of approximately 13% of premium semi-soft coking coal, 42% of standard semi-soft coking coal/premium thermal coal, 12% of standard thermal coal and 33% of processed coal compared to approximately 58% of premium semi-soft coking coal, 15% of standard semi-soft coking coal/premium thermal coal and 27% of processed coal in 2023.
The Company’s unit cost of sales of product sold was $51.4 per tonne in 2024 compared to $44.1 per tonne in 2023. The increase was due to change in product mix with the Company expanding into certain categories of processed coal with higher production costs.
Summary of Annual Financial Results
Year ended December 31,
$ in thousands, except per share information 2024 2023
$ 493,378 $ Revenue (i) 331,506
| Cost of sales(i) | (360,588) | (158,195) |
| Gross profit excluding idled mine asset costs(ii) | 133,286 | 173,487 |
| Gross profit | 132,790 | 173,311 |
(3,698)
Other operating expenses, net (870)
| Administration expenses | (13,454) | (10,437) |
| Evaluation and exploration expenses | (1,362) | (991) |
| Reversal of/(provision for) additional tax and tax penalty | 39,666 | (85,143) |
| Profit from operations | 153,942 | 75,870 |
| Finance costs | (37,766) | (49,072) |
| Finance income | 3,626 | 5,084 |
| Share of earnings of joint ventures | 3,227 | 2,840 |
| Share of earnings of associates | 587 | 4 |
(31,119)
Current income tax expenses (33,818)
| Net profit attributable to equity holders of the Company | 92,497 | 908 | |
| Basic earnings per share | $ | 0.312 $ | 0.003 |
| Diluted earnings per share | $ | 0.311 $ | 0.003 |
(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 selected information from the notes to the consolidated financial statements in this press release 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.
- 7 -
Overview of Annual Financial Results
The Company recorded a $153.9 million profit from operations in 2024 compared to $75.9 million profit from operations in 2023. The increase was mainly due to an increase of 3.4 million tonnes of sales volume in 2024 as compared to 2023 and a reversal of additional tax and tax penalty of $48.5 million was recorded in the fourth quarter of 2024.
Revenue was $493.4 million in 2024 compared to $331.5 million in 2023. 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 $360.6 million in 2024 compared to $158.2 million in 2023. The increase in cost of sales was mainly due to increased sales and the Company expanding into certain categories of processed coal with higher production costs.
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 year.
Year ended December 31, 2024
$ in thousands 2023
$ 288,773 $ Operating expenses 114,346 Share-based compensation expense 4
19,924
Depreciation and depletion 5,165
51,377
Royalties 38,504
| Cost of sales from mine operations | $ | 360,092 $ | 158,019 |
| Cost of sales related to idled mine assets | 496 | 176 | |
| Cost of sales | $ | 360,588 $ | 158,195 |
Operating expenses in cost of sales were $288.8 million in 2024 compared to $114.3 million in 2023. The overall increase in operating expenses was due to the Company expanding into certain categories of processed coal with higher production costs.
Cost of sales related to idled mine assets in 2024 included $0.5 million related to depreciation expenses for idled equipment (2023: $0.2 million).
- 8 -
Other operating expenses were $3.7 million in 2024 (2023: $0.9 million). The increase was due to increased management fee in 2024 and no reversal of impairment on materials and supplies inventories was recorded in 2024 (2023: $5.0 million).
$ in thousands 2023
$ 6,630 $ Management fee 4,879 Provision for doubtful trade and other receivables 59 Foreign exchange loss, net 1,202
(261)
Gain on disposal of items of property, plant and equipment, net – Impairment/(reversal of impairment) on materials and supplies inventories (4,988)
–
Rental income from short term leases (68)
–
Penalty on late settlement of trade payables 454
(3,046)
Gain on contract offsetting arrangement (668)
Other operating expenses, net $ 3,698 $ 870
Administration expenses were $13.5 million in 2024 as compared to $10.4 million in 2023. The change was mainly due to higher daily administration fees and increased salaries and benefits as a result of expansion of operations.
Year ended December 31,
| $ in thousands | 2024 | 2023 | |
| Corporate administration | $ | 3,688 $ | 2,673 |
| Legal and professional fees | 2,836 | 2,483 | |
| Salaries and benefits | 6,415 | 4,779 | |
| Share-based compensation expense | 45 | 10 | |
| Depreciation | 470 | 492 | |
| Administration expenses | $ | 13,454 $ | 10,437 |
The Company continued to minimise evaluation and exploration expenditures in 2024 in order to preserve the Company’s financial resources. Evaluation and exploration activities and expenditures in 2024 were limited to ensuring that the Company met the Mongolian Minerals Law requirements in respect of its mining licenses.
Finance costs were $37.8 million and $49.1 million in 2024 and 2023 respectively, which primarily consisted of interest expense on the $250.0 million Convertible Debenture.
- 9 -
Summary of Quarterly Operational Data
2024 2023 Quarter Ended 31-Dec 30-Sep 30-Jun 31-Mar 31-Dec 30-Sep 30-Jun 31-Mar
Sales Volumes, Prices and Costs
Premium semi-soft coking coal Coal sales (millions of tonnes) 0.16 0.10 0.29 0.36 0.54 0.64 0.57 0.33 Average realised selling price $ 89.56 $ (per tonne) 116.48 $ 102.61 $ 111.01 $ 107.59 $ 100.33 $ 103.33 $ 124.72 Standard semi-soft coking coal/ premium thermal coal Coal sales (millions of tonnes) 1.31 1.09 0.28 0.28 0.29 0.18 0.05 0.01 Average realised selling price $ 69.30 $ (per tonne) 72.54 $ 77.04 $ 76.07 $ 72.41 $ 68.43 $ 67.09 $ 73.52 Standard thermal coal Coal sales (millions of tonnes) 0.38 0.24 0.12 0.12 – – – – Average realised selling price (per tonne) $ 36.99 $ 37.20 $ 36.10 $ 47.91 $ – $ – $ – $ – Processed coal Coal sales (millions of tonnes) 0.81 0.68 0.51 0.29 0.13 0.33 0.26 0.26 Average realised selling price (per tonne) $ 68.66 $ 63.65 $ 73.04 $ 56.65 $ 77.23 $ 66.03 $ 82.99 $ 78.19 Total
2.66
Coal sales (millions of tonnes) 2.11 1.20 1.05 0.96 1.15 0.88 0.60 Average realised selling price (per tonne) $ 65.72 $ 67.77 $ 77.55 $ 79.52 $ 92.93 $ 85.57 $ 95.34 $ 104.11
Raw coal production
4.19
(millions of tonnes) 2.75 2.01 1.25 1.34 1.18 0.97 0.56
Cost of sales of product sold (per tonne) $ 48.92 $ 52.77 $ 61.32 $ 43.36 $ 38.17 $ 42.23 $ 47.76 $ 51.59 Direct cash costs of product sold $ 37.92 $ (per tonne) (i) 41.74 $ 47.15 $ 30.70 $ 26.20 $ 32.26 $ 33.79 $ 28.95 Mine administration cash costs of product sold (per tonne) (i) $ 1.88 $ 0.94 $ 2.42 $ 1.08 $ 1.83 $ 0.82 $ 1.60 $ 1.48 Total cash costs of product sold (per tonne) (i) $ 39.80 $ 42.68 $ 49.57 $ 31.78 $ 28.03 $ 33.08 $ 35.39 $ 30.43
Other Operational Data
Production waste material moved (millions of bank cubic meters) 17.48 15.04 14.59 12.36 7.81 7.34 7.73 2.83 Strip ratio (bank cubic meters of waste material per tonne of coal produced) 4.17 5.48 7.27 9.87 5.85 6.24 7.93 5.07 Lost time injury frequency rate (ii) 0.00 0.00 0.00 0.22 0.22 0.21 0.23 0.00
(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.
- 10 -
Overview of Quarterly Operational Data
The Company experienced a decrease in the average selling price of coal from $92.9 per tonne in the fourth quarter of 2023 to $65.7 per tonne in the fourth quarter of 2024, as a result of the Company facing headwinds in the China coal market in 2024, leading to the Company changing its product mix to sell a greater percentage of lower-priced coal products. The product mix for the fourth quarter of 2024 consisted of approximately 6% premium semi-soft coking coal, 49% standard semi-soft coking coal/premium thermal coal, 14% standard thermal coal and 31% of processed coal compared to approximately 56% premium semi-soft coking coal, 30% standard semi-soft coking coal/premium thermal coal and 14% of processed coal in the fourth quarter of 2023.
The Company sold 2.7 million tonnes for the fourth quarter of 2024, compared to 1.0 million tonnes for the fourth quarter of 2023.
The Company’s unit cost of sales of product sold increased from $38.2 per tonne in the fourth quarter of 2023 to $48.9 per tonne in the fourth quarter of 2024. The increase was mainly due to the Company expanding into certain categories of processed coal with higher production costs.
- 11 -
Summary of Quarterly Financial Results
The Company’s annual financial statements are reported under the IFRS Accounting Standards issued by the International Accounting Standards Board (“IASB”) (“IFRS Accounting Standards”). The following table provides highlights, extracted from the Company’s annual and interim consolidated financial statements, of quarterly results for the past eight quarters.
$ in thousands, except per share information 2024 2023 Quarter Ended 31-Dec 30-Sep 30-Jun 31-Mar 31-Dec 30-Sep 30-Jun 31-Mar
Financial Results
Revenue (i) $ 174,640 $ 143,748 $ 92,821 $ 82,169 $ 88,504 $ 97,979 $ 83,243 $ 61,780 Cost of sales (i) (130,119) (111,354) (73,582) (45,533) (36,645) (48,569) (42,027) (30,954) Gross profit excluding idled mine asset costs (ii) 44,757 32,544 19,303 36,682 51,908 49,491 41,227 30,861 Gross profit including idled mine asset costs 44,521 32,394 19,239 36,636 51,859 49,410 41,216 30,826
Other operating income/
| (expenses), net | (1,194) | (294) | (1,157) | (1,053) | 4,308 | (413) | (4,001) | (764) |
| Administration expenses | (3,627) | (3,400) | (3,014) | (3,413) | (3,879) | (1,846) | (2,656) | (2,056) |
| Evaluation and exploration expenses | (314) | (1,003) | (23) | (22) | (91) | (808) | (28) | (64) |
Reversal of/(provision for)
| additional tax and tax penalty | 39,666 | – | – | – | (10,153) | – | (74,990) | – | |
| Profit/(loss) from operations | 79,052 | 27,697 | 15,045 | 32,148 | 42,044 | 46,343 | (40,459) | 27,942 | |
| Finance costs | (6,893) | (10,679) | (10,322) | (11,021) | (12,334) | (13,266) | (11,558) | (11,914) | |
| Finance income | 3,247 | 733 | 722 | 73 | 40 | 4,915 | 44 | 85 | |
| Share of earnings of joint ventures | 1,206 | 133 | 1,055 | 833 | 1,101 | 809 | 428 | 502 |
Share of earnings/(loss) of
| associates | 578 | (1) | – | 10 | 4 | – | – | – | |
| Current income tax expenses | (4,899) | (7,844) | (8,585) | (9,791) | (6,519) | (9,452) | (9,087) | (8,760) | |
| Net profit/(loss) | 72,291 | 10,039 | (2,085) | 12,252 | 24,336 | 29,349 | (60,632) | 7,855 | |
| Basic earnings/(loss) per share | $ | 0.244 $ | 0.034 $ | (0.007) $ | 0.041 $ | 0.082 $ | 0.099 $ | (0.205) $ | 0.027 |
| Diluted earnings/(loss) per share | $ | 0.228 $ | 0.034 $ | (0.007) $ | 0.041 $ | 0.082 $ | 0.099 $ | (0.205) $ | 0.027 |
(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 selected information from the notes to the consolidated financial statements in this press release 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.
- 12 -