SGQ.V · 2024-05-14

Southgobi Announces First Quarter 2024 Financial and Operating Results

Production Results Financials

R E S O U R C E S

May 14, 2024

SOUTHGOBI ANNOUNCES FIRST QUARTER 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 three months ended March 31, 2024. 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, 2024 and the subsequent period to May 14, 2024 are as follows:

Operating Results – The Company has been increasing the scale of its mining operations since 2023, 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 quarter.

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 export this product into China for sale in the first quarter of 2024, which further enhanced the Company’s coal export volume.

The Company recorded sales volume of 1.1 million tonnes for the first quarter of 2024 compared to 0.6 million tonnes for the first quarter of 2023, while the Company recorded an average realised selling price of $79.5 per tonne for the first quarter of 2024 compared to $104.1 per tonne for the first quarter of 2023. The decrease in the average realised selling price was mainly due to changes in the Company’s product mix and decreased pricing for premium semi-soft coking coal and processed coal.

1 -
Financial Results – The Company recorded a $32.1 million profit from operations for the first quarter of 2024 compared to $27.9 million for the first quarter of 2023. The financial results were impacted by increased sales volume, as a result of expansion of its sales network and diversification of its customer base.
Deferral Agreements – On March 19, 2024, the Company and JD Zhixing Fund L.P. (“JDZF”) entered into an agreement (the “2024 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 $96.5 million which will be due and payable to JDZF on or before August 31, 2024 pursuant to certain prior deferral agreements dated March 24, 2023 and October 13, 2023; (ii) semi-annual cash interest payment of approximately $7.9 million payable to JDZF on May 19, 2024 under the Company’s convertible debenture (the “Convertible Debenture”);

(iii) semi-annual cash interest payments of approximately $8.1 million payable to JDZF on November 19, 2024 and the $4.0 million in PIK Interest payable to JDZF on November 19, 2024 under the Convertible Debenture; and (iv) management fees in the aggregate amount of $2.2 million payable to JDZF on November 15, 2024 and February 15, 2025, respectively, under the amended and restated mutual cooperation agreement (the “Amended and Restated Cooperation Agreement”) (collectively, the “2024 March Deferred Amounts”).

The effectiveness of the 2024 March Deferral Agreement and the respective covenants, agreements and obligations of each party under the 2024 March Deferral Agreement are subject to the Company obtaining the requisite approval of the 2024 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 2024 March Deferral Agreement from disinterested shareholders through a special meeting of shareholders to be announced in due course.

The principal terms of the 2024 March Deferral Agreement are as follows:

Payment of the 2024 March Deferred Amounts will be deferred until August 31, 2025 (the “2024 March Deferral Agreement Deferral Date”).
As consideration for the deferral of the 2024 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 2024 March Deferred Amounts, commencing on the date on which each such 2024 March Deferred Amounts would otherwise have been due and payable under the Convertible Debenture.
As consideration for the deferral of the 2024 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 2024 March Deferred Amounts commencing on the date on which each such 2024 March Deferred Amounts would otherwise have been due and payable under the Amended and Restated Cooperation Agreement.
- 2 -
The 2024 March Deferral Agreement does not contemplate a fixed repayment schedule for the 2024 March Deferred Amounts or related deferral fees. Instead, the 2024 March Deferral Agreement requires the Company to use its best efforts to pay the 2024 March Deferred Amounts and related deferral fees due and payable under the 2024 March Deferral Agreement to JDZF. During the period beginning as of the effective date of the 2024 March Deferral Agreement and ending as of the 2024 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 2024 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 2024 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.

On April 30, 2024, the Company and JDZF entered into an agreement (the “2024 April Deferral Agreement”) pursuant to which JDZF agreed to grant the Company a deferral of the remaining US$1.1 million of PIK interest which was payable on November 19, 2022 under the Convertible Debenture, the payment of which was deferred pursuant to a certain prior deferral agreement dated November 11, 2022 (the “November 2022 Deferral Agreement”) until November 19, 2023, as well as related deferral fees under the November 2022 Deferral Agreement (collectively, the “2024 April Deferred Amounts”).

The effectiveness of the 2024 April Deferral Agreement and the respective covenants, agreements and obligations of each party under the 2024 April Deferral Agreement are subject to the Company obtaining the requisite approval of the 2024 April Deferral Agreement from shareholders in accordance with the requirements of applicable Canadian securities laws and Rule 14.33 and Rule 14A.36 of the Listing Rules. The Company will be seeking approval of the 2024 April Deferral Agreement from disinterested shareholders through a special meeting of shareholders to be announced in due course.

The principal terms of the 2024 April Deferral Agreement are as follows:

Payment of the 2024 April Deferred Amounts will be deferred until August 31, 2025 (the “2024 April Deferral Agreement Deferral Date”).
As consideration for the deferral of the 2024 April Deferred Amounts, the Company agreed to pay JDZF a deferral fee equal to 6.4% per annum on the outstanding balance of such 2024 April Deferred Amounts, commencing on the date on which each such 2024 April Deferred Amounts would otherwise have been due and payable under the Convertible Debenture.
- 3 -
The 2024 April Deferral Agreement does not contemplate a fixed repayment schedule for the 2024 April Deferred Amounts or related deferral fees. Instead, the 2024 April Deferral Agreement requires the Company to use its best efforts to pay the 2024 April Deferred Amounts and related deferral fees due and payable under the 2024 April Deferral Agreement to JDZF. During the period beginning as of the effective date of the 2024 April Deferral Agreement and ending as of the 2024 April 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 2024 April 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 2024 April 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.
Amendment of Convertible Debenture – On May 13, 2024, the Company and JDZF entered into an amendment agreement (the “Convertible Debenture Amendment”) to amend certain terms of the Convertible Debenture.

Pursuant to the Convertible Debenture Amendment, the Company may, by resolution of the Board of Directors (the “Board”) of the Company, at any time and from time to time prepay, without penalty, the whole or any part of the principal amount outstanding under the Convertible Debenture, together with accrued cash interest and PIK interest thereon to the date of prepayment, provided that:

(i) the Company has, not later than three (3) business days prior to the proposed prepayment date, delivered to JDZF an irrevocable written notice, signed by an independent director of the Company and setting out the terms of the prepayment;

(ii) the amount of such prepayment reduces the then outstanding principal amount under the Convertible Debenture by an amount that is (a) not less than US$500,000 and (b) if in excess of US$500,000, an integral multiple of US$500,000; and

(iii) the proposed prepayment date falls on a business day.

The Company is not providing any additional form of consideration to JDZF in connection with the Convertible Debenture Amendment. Aside from the aforementioned amendments, the existing terms of the Convertible Debenture continue in full force and effect and unchanged.

The effectiveness of the Convertible Debenture Amendment is subject to the Company providing notice to, and obtaining acceptance (if required) from the TSX-V and requisite approval from disinterested shareholders of the Company in accordance with the requirements of applicable Canadian securities laws and Listing Rules. The Company must obtain the requisite approval from disinterested shareholders of the Company by August 30, 2024, or otherwise the Convertible Debenture Amendment shall automatically terminate and cease to be of any force and effect.

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 anticipates commencing the re-assessment process on or about March 7, 2024 and the duration of such process will be approximately 45 working days. Up to the date of this press release, the MTA is still reviewing the supplementary documents and information submitted by the Company and yet to have the re-assessment decision. Any decision of the MTA following the re-assessment process may not be conclusive as the Company retains the right to appeal such decision under Mongolian laws.

As at March 31, 2024, the Company recorded an additional tax and tax penalty in the amount of $85.1 million, which consists of a tax penalty payable of $75.0 million and a provision of additional late tax penalty of $10.1 million. The Company has paid the MTA an aggregate of $1.7 million in relation to the aforementioned tax penalty. According to Mongolian tax law, the MTA has a legal authority to demand payment from the Company irrespective of any potential appeal process that may change the aforesaid tax penalty. Based on the advice from tax professionals and the best estimate from the management, in the event that the Company’s appeal is to be successful in future, it is probable that the Company may recover approximately $46.0 million which represents a portion of the tax penalty payable to the MTA. However, there are inherent uncertainties surrounding the development and outcome of the appeal. The Company cannot determine with virtually certainty the exact recoverability or recoverable amount of the tax penalty paid in future. If any subsequent event occurs that may impact the amount of the additional tax and tax penalty, an adjustment would be recognised in profit or loss and the carrying amount of the tax liabilities shall be adjusted.

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, 2024

2023

Sales Volumes, Prices and Costs

Premium semi-soft coking coal

0.36

Coal sales (millions of tonnes) 0.33

$ 111.01

Average realised selling price (per tonne) $ 124.72 Standard semi-soft coking coal/premium thermal coal

0.28

Coal sales (millions of tonnes) 0.01

$ 76.07

Average realised selling price (per tonne) $ 73.52 Standard thermal coal

0.12

Coal sales (millions of tonnes) –

$ 47.91

Average realised selling price (per tonne) $ – Processed coal

0.29

Coal sales (millions of tonnes) 0.26

$ 56.65

Average realised selling price (per tonne) $ 78.19 Total

1.05

Coal sales (millions of tonnes) 0.60

$ 79.52

Average realised selling price (per tonne) $ 104.11

1.25

Raw coal production (millions of tonnes) 0.56

$ 43.36

Cost of sales of product sold (per tonne) $ 51.59

$ 30.70

Direct cash costs of product sold (per tonne) ⁽ⁱ⁾ $ 28.95

$ 1.08

Mine administration cash costs of product sold (per tonne) ⁽ⁱ⁾ $ 1.48

$ 31.78

Total cash costs of product sold (per tonne) ⁽ⁱ⁾ $ 30.43

Other Operational Data

12.36

Production waste material moved (millions of bank cubic meters) 2.83 Strip ratio (bank cubic meters of waste material per tonne of coal

9.87

produced) 5.07

0.22

Lost time injury frequency rate ⁽ⁱⁱ⁾ 0.00

(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

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 $79.5 per tonne in the first quarter of 2024 compared to $104.1 per tonne in the first quarter of 2023, the decrease was mainly due to changes in the Company’s product mix and decreased pricing for premium semi-soft coking coal and processed coal. The product mix for the first quarter of 2024 consisted of 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 compared to approximately 55% of premium semi-soft coking coal, 2% of standard semi-soft coking coal/premium thermal coal and 43% of processed coal in 2023.

The Company’s unit cost of sales of product sold was $43.4 per tonne in the first quarter of 2024 compared to $51.6 per tonne in the first quarter of 2023. The decrease was mainly driven by the economies of scale due to increased sales.

Summary of Financial Results

Three months ended March 31,

$ in thousands, except per share information 2024 2023

Revenue ⁽ⁱ⁾ $ 82,169 $ 61,780

(45,533)

Cost of sales ⁽ⁱ⁾ (30,954)

Gross profit excluding idled mine asset costs(ii)	36,682	30,861
Gross profit	36,636	30,826
Other operating expenses, net	(1,053)	(764)

(3,413)

Administration expenses (2,056)

Evaluation and exploration expenses	(22)	(64)
Profit from operations	32,148	27,942
Finance costs	(11,021)	(11,914)

Finance income 85 Share of earnings of joint ventures 833 502 Share of earning of an associate 10 – Current income tax expenses (9,791) (8,760)

12,252

Net profit attributable to equity holders of the Company 7,855 Basic and diluted earnings per share $ 0.041 $ 0.027

(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 $32.1 million profit from operations for the first quarter of 2024 compared to $27.9 million for the first quarter of 2023. Revenue was $82.2 million for the first quarter of 2024 compared to $61.8 million for the first quarter of 2023. The financial results were impacted by increased sales volume, as a result of expansion of its sales network and diversification of its customer base.

Cost of sales was $45.5 million for the first quarter of 2024 compared to $31.0 million for the first quarter of 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 during the quarter. 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 Section 3 of this MD&A for further analysis) during the quarter.

Three months ended March 31, 2024

$ in thousands 2023

$ 33,371 $ Operating expenses 18,257

–

Share-based compensation recovery (1)

2,210

Depreciation and depletion 1,177

9,906

Royalties 11,486

Cost of sales from mine operations	45,487	30,919
Cost of sales related to idled mine assets	46	35
Cost of sales	$ 45,533 $	30,954

Operating expenses in cost of sales were $33.4 million for the first quarter of 2024 compared to $18.3 million for the first quarter of 2023. The overall increase in operating expenses was due to the increased sales and the Company expanding into certain categories of processed coal with higher production costs during the quarter.

Cost of sales related to idled mine assets for the first quarter of 2024 included $0.1 million related to depreciation expenses for idled equipment (first quarter of 2023: $0.1 million).

Other operating expenses were $1.1 million for the first quarter of 2024 (first quarter of 2023: $0.8 million). The change was mainly due to increased management fee.

Three months ended March 31, 2024

$ in thousands 2023

$ 1,116 $ Management fee 772 Provision/(reversal of provision) for doubtful trade and

(19)

other receivables 83 Foreign exchange loss/(gain), net (433)

(7)

Reversal of impairment loss on materials and supplies inventories (85)

–

Penalty on late settlement of trade payables 454

–

Rental income from short term leases (27)

(237)

Gain on contract offsetting arrangement –

Other operating expenses, net $ 1,053 $ 764

Administration expenses were $3.4 million for the first quarter of 2024 (first quarter of 2023: $2.1 million). The change was mainly due to increase in legal and professional fees and salaries and benefits as a result of expansion of operations.

Three months ended March 31,

$ in thousands		2024	2023
Corporate administration	$	704 $	457
Legal and professional fees		849	389
Salaries and benefits		1,726	1,089
Share-based compensation expense/(recovery)		1	(2)
Depreciation		133	123
Administration expenses	$	3,413 $	2,056

The Company continued to minimise evaluation and exploration expenditures in the first quarter of 2024 in order to preserve the Company’s financial resources. Evaluation and exploration activities and expenditures in the first quarter of 2024 were limited to ensuring that the Company met the Mongolian Minerals Law requirements in respect of its mining licenses.

Finance costs were $11.0 million and $11.9 million for the first quarter of 2024 and 2023 respectively, which primarily consisted of interest expense on the $250.0 million Convertible Debenture.

10 -

Summary of Quarterly Operational Data

2024 2023 2022 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) 0.36 0.54 0.64 0.57 0.33 0.06 0.17 0.04 $ 111.01 $ Average realised selling price (per tonne) 107.59 $ 100.33 $ 103.33 $ 124.72 $ 65.82 $ 71.01 $ 92.87 Standard semi-soft coking coal/premium thermal coal Coal sales (millions of tonnes) 0.28 0.29 0.18 0.05 0.01 0.01 0.03 0.04 Average realised selling price (per tonne) $ 76.07 $ 72.41 $ 68.43 $ 67.09 $ 73.52 $ 64.69 $ 43.34 $ 30.41 Standard thermal coal Coal sales (millions of tonnes) 0.12 – – – – – – – Average realised selling price (per tonne) $ 47.91 $ – $ – $ – $ – $ – $ – $ – Processed coal Coal sales (millions of tonnes) 0.29 0.13 0.33 0.26 0.26 0.40 0.35 0.01 $ 56.65 $ Average realised selling price (per tonne) 77.23 $ 66.03 $ 82.99 $ 78.19 $ 65.94 $ 64.57 $ 79.02 Total

Coal sales (millions of tonnes)	1.05	0.96	1.15	0.88	0.60	0.47	0.55	0.09
Average realised selling price (per tonne) $	79.52 $	92.93 $	85.57 $	95.34 $	104.11 $	65.90 $	65.37 $	66.55
Raw coal production (millions of tonnes)		1.34	1.18	0.97	0.56	0.57	0.12	–

1.25

Cost of sales of product sold (per tonne) $ 43.36 $ 38.17 $ 42.23 $ 47.76 $ 51.59 $ 41.81 $ 58.25 $ 56.32 Direct cash costs of product sold (per tonne) ⁽ⁱ⁾ $ 30.70 $ 26.20 $ 32.26 $ 33.79 $ 28.95 $ 25.65 $ 41.44 $ 33.10 Mine administration cash costs of product sold (per tonne) ⁽ⁱ⁾ $ 1.08 $ 1.83 $ 0.82 $ 1.60 $ 1.48 $ 1.86 $ 1.47 $ 1.20 Total cash costs of product sold (per tonne) ⁽ⁱ⁾ $ 31.78 $ 28.03 $ 33.08 $ 35.39 $ 30.43 $ 27.51 $ 42.91 $ 34.30

Other Operational Data

Production waste material moved (millions of bank cubic meters) 12.36 7.81 7.34 7.73 2.83 2.68 0.91 – Strip ratio (bank cubic meters of waste

9.87

material per tonne of coal produced) 5.85 6.24 7.93 5.07 4.67 7.33 – Lost time injury frequency rate ⁽ⁱⁱ⁾ 0.22 0.22 0.21 0.23 0.00 0.00 0.00 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.

11 -

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.

$ in thousands, except per share information 2024 2023 2022 Quarter Ended 31-Mar 31-Dec 30-Sep 30-Jun 31-Mar 31-Dec 30-Sep 30-Jun

Financial Results

Revenue ⁽ⁱ⁾ $ 82,169 $ 88,504 $ 97,979 $ 83,243 $ 61,780 $ 30,487 $ 36,807 $ 5,790 Cost of sales ⁽ⁱ⁾ (45,533) (36,645) (48,569) (42,027) (30,954) (19,652) (32,036) (5,069) Gross profit excluding idled mine

asset costs(ii)	36,682	51,908	49,491	41,227	30,861	10,891	4,982	940
Gross profit including idled mine asset costs	36,636	51,859	49,410	41,216	30,826	10,835	4,771	721
Other operating income/(expenses), net	(1,053)	4,308	(413)	(4,001)	(764)	(1,066)	546	3,778
Administration expenses		(3,879)	(1,846)	(2,656)	(2,056)	(2,111)	(1,830)	(1,772)

(3,413)

Evaluation and exploration expenses	(22)	(91)	(808)	(28)	(64)	(26)	(31)	(66)
Additional tax and tax penalty	–	(10,153)	–	(74,990)	–	–	–	–
Profit/(loss) from operations	32,148	42,044	46,343	(40,459)	27,942	7,632	3,456	2,661
Finance costs		(12,334)	(13,266)	(11,558)	(11,914)	(11,190)	(10,800)	(10,247)

(11,021)

Finance income		73	40	4,915	44	85	1,589	69	1,160
Share of earnings/(loss) of joint ventures		833	1,101	809	428	502	143	237	(109)
Share of earning of an associate		10	4	–	–	–	–	–	–
Current income tax expenses		(9,791)	(6,519)	(9,452)	(9,087)	(8,760)	(2,751)	(979)	(518)
Net profit/(loss)		12,252	24,336	29,349	(60,632)	7,855	(4,577)	(8,017)	(7,053)
Basic earnings/(loss) per share	$	0.041 $	0.082 $	0.099 $	(0.205) $	0.027 $	(0.016) $	(0.029) $	(0.026)
Diluted earnings/(loss) per share	$	0.041 $	0.082 $	0.099 $	(0.205) $	0.027 $	(0.016) $	(0.029) $	(0.026)

(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.

12 -

← Back to feed