5月16日，港股南戈壁（01878.HK）股价放量大跌，截至收盘，该股跌幅达16.17%，报1.97 港元/股。 消息面，5月15日，南戈壁披露了一季度的成绩单，表现不尽人意。 财报显示，今年一季度，南戈壁实现收益1.23亿美元，同比增加49.53%；归母净利润录得亏损2620.5万 美元，而上年同期为盈利1225.2万美元，由盈转亏。 据行情数据显示，进入5月份后，煤炭价格仍在持续下跌。 谈及业绩滑坡的原因，南戈壁称，主要因为公司煤炭平均售价下降及产品组合改变。今年一季度，南戈 壁平均售价每吨59.5美元，较上年同期下降20美元。这主要是受2024年以来中国煤炭市场下行的影响， 导致公司改变其产品组合，以销售更大比例的低价煤炭产品。 对此，长江证券此前研报指出，煤价加速下跌主因节后需求转差+供给增加，导致港口累库低价出货疏 港意愿增强。但考虑到迎峰度夏用煤需求确定性改善，叠加供给相对平稳下，旺季煤价企稳之势仍难 逆，后续重点关注供给端边际减少的潜在可能性所带来的利好。 事实上，南戈壁一季度业绩下滑，只是煤炭行业整体困境的一个缩影。 五矿期货则认为，短期煤炭端价格的压力仍未有明显的化解，后续5月底可能是观察价 ...

Financial Performance - In Q1 2025, the company recorded sales of 2.1 million tons, up from 1.1 million tons in Q1 2024, representing a 90.9% increase[7] - The average realized price per ton in Q1 2025 was $59.5, down from $79.5 in Q1 2024, indicating a 25.3% decrease[7] - The company reported an operating loss of $15.7 million in Q1 2025, compared to an operating profit of $32.1 million in Q1 2024, reflecting a significant decline in financial performance[8] - In Q1 2025, the company reported revenues of $122.87 million, a significant increase from $82.17 million in Q1 2024, reflecting a growth of approximately 49.7%[24] - The total coal sales volume for Q1 2025 was 2.06 million tons, up from 1.05 million tons in Q1 2024, indicating a year-over-year increase of about 96.2%[23] - The cost of sales in Q1 2025 was $133.69 million, compared to $45.53 million in Q1 2024, marking an increase of about 194.5%[24] - The company recorded an operating loss of $15.67 million in Q1 2025, a decline from an operating profit of $32.15 million in Q1 2024[26] - The company reported a gross loss for the quarter of $10,822 thousand, a significant decline from the gross profit of $36,636 thousand in the previous year, indicating a shift in profitability[70] Tax and Regulatory Issues - The company faces a tax penalty of approximately $75 million from the Mongolian tax authority, stemming from a tax audit covering the years 2017 to 2020[11] - Following an appeal, the tax penalty was reassessed to approximately $80 million, and the company has the right to appeal this decision[12] - The company is involved in a tax dispute with the Mongolian tax authority, with a revised penalty amounting to approximately $26,500,000[40] - The company has paid a total of $3.3 million in tax penalties to the Mongolian tax authority to date[16] - As of March 31, 2025, the company recorded additional tax liabilities and penalties totaling $45.5 million, including $26.5 million in tax penalties and $19 million in late payment penalties[16] - The Mongolian tax authority officials have appealed the court's decision to reduce the tax penalty[15] - The company has decided not to appeal the revised reassessment result within the 30-day period allowed by Mongolian law[14] - The company anticipates using cash generated from operations to settle unpaid taxes and penalties[42] Operational Developments - The company is expanding its coal product offerings, including mixed coal, washed coal, and dry-selected processed coal, to meet market demand[7] - The company has implemented various coal processing methods to improve coal quality and increase export volumes to China[7] - The company aims to control exploration and evaluation costs to preserve financial resources in compliance with Mongolian mining laws[30] - The company plans to expand its mining operations and coal processing capacity in 2025 to capture market share[66] - The company aims to optimize its product mix by improving mining operations and utilizing its dry and wet coal processing plants[67] - The company intends to increase coal production to leverage economies of scale and enhance operational efficiency through third-party mining contracts[67] - The company will maintain high standards of health, safety, and environmental practices in its operations[68] Financial Position and Liquidity - The company has a significant operating capital deficit of $253.4 million as of March 31, 2025, up from $228.1 million as of December 31, 2024[43] - The company's asset deficit increased to $80.3 million as of March 31, 2025, compared to $49.8 million as of December 31, 2024[43] - The company entered into a deferral agreement on March 20, 2025, allowing for the postponement of approximately $111.6 million in cash and in-kind interest payments[50] - The company will pay a deferred payment fee at an annual interest rate of 6.4% on the outstanding balance related to convertible bonds under the deferral agreement[18] - The company is positioned to leverage opportunities between China and Mongolia, supported by strong operational performance over the past decade[69] - The company expects to have sufficient liquidity and capital resources to meet ongoing operational responsibilities and future contractual obligations, including the ability to pay a tax penalty of $26.5 million and an additional tax late fee of $19 million to the Mongolian tax authority[81] Legal Matters - The company has confirmed that no provisions are required for the collective lawsuit as of March 31, 2025[56] - The company has completed all document production and deposition for the collective lawsuit, with expert reports provided regarding liability and damages[55] - The company has entered into two good faith procedural agreements with the plaintiff's lawyers, with a pre-trial mediation scheduled for August 2025[55] - The company has no obligation to pay the additional $18.5 million related to the wet washing contract with Ejina Jinda as it is deemed unlikely[57] Market Outlook - The company anticipates that the evolving geopolitical landscape, particularly U.S.-China trade tensions, will reshape the international coal market, potentially increasing imports from stable sources like Mongolia[64] - The company remains cautiously optimistic about the Chinese coal market, expecting continued reliance on coal as a primary energy source despite recent challenges in the property market affecting steel demand[65] - The company is assessing its financing needs, operational and development plans, and future production levels, including mining operations and capacity increases planned for 2025[81] - The company is conducting impairment analysis that includes estimates and assumptions regarding potential impacts[82] - The company acknowledges the risks associated with uncertainties in mining activities and actual capital and operating costs exceeding management estimates[82]

智通财经APP讯，南戈壁(01878)发布公告，于2025年4月2日，本公司全资蒙古附属公司Southgobi Sands LLC(SGS)收到一封来自蒙古政府全权代表的函件(通知)，邀请SGS参与有关厘定蒙古政府于SGS(即持 有本公司于蒙古国的煤矿开采许可证的法律实体)所有权权益的磋商。 于2025年4月24日，SGS与蒙古政府全权代表展开初步讨论。本公司预期SGS与蒙古政府全权代表的讨 论将持续进行，且双方将尽力以诚信态度达成相互理解且具建设性的谅解及协议。本公司将全力配合蒙 古政府，并在适用的法律允许范围内提供一切必要的资料。 本公司将继续关注有关具有重要战略意义的矿藏范围变化的发展情况，以及对于本公司及其业务和营运 的后续影响(如有)，同时寻求保护其矿藏的合法权益。 该通知指出，为推进蒙古国于2024年4月通过的《国家财富基金法》，蒙古政府于2025年2月5日决议任 命一名全权代表(蒙古政府全权代表)，与持有由蒙古政府指定为具有重要战略意义的矿藏(具有重要战略 意义的矿藏)开采许可证的法律实体磋商，以厘定蒙古国于该法律实体中所占的权益比例，或是否以特 许权使用费权益取代蒙古国于该法律实体的权益。 本 ...

Financial Performance - In 2024, the average selling price of coal was $70.4 per ton, a decrease of 24.3% from $93.0 per ton in 2023[16] - The company achieved a record raw coal production of 10.2 million tons, an increase of 151.9% year-on-year, and coal sales reached 7.02 million tons, up 95.5% year-on-year[16] - Annual revenue reached $493 million, reflecting a year-on-year growth of 48.8%, with net profit attributable to equity holders amounting to $92.5 million[16] Operational Capacity and Expansion - The coal processing capacity was enhanced to approximately 9 million tons per year, with a significant upgrade to the wet washing plant, increasing its input capacity to 1.7 million tons per year[18] - The total customs clearance volume at the Ceke port reached 24.52 million tons, the highest in its history, with SouthGobi's coal accounting for about 31% of this volume[19] - A new dry coal selection project with a capacity of 6 million tons per year was initiated in collaboration with Tangshan Shenzhou Machinery Group, enhancing product quality and cash flow[18] - The company plans to expand mining operations and enhance coal processing capabilities to achieve economies of scale and increase profitability[26] - The completion of the coal production, transportation, and sales closed-loop industry chain is expected to significantly impact future production capacity expansion[20] Strategic Initiatives - The company is actively pursuing a "cash is king" strategy to improve inventory turnover and accelerate cash flow recovery[20] - Southgobi aims to create more tax revenue and job opportunities for the local government through its expansion strategy[26] - The company is positioned to capitalize on opportunities between China and Mongolia, leveraging its strong operational performance over the past decade[31] Governance and Leadership - The company has a strong leadership team with extensive experience in the energy and finance sectors, including over 40 years in traditional energy investment and management[48] - The independent directors bring diverse expertise in compliance, regulatory management, and financial consulting, enhancing the company's governance[52][54] - The company is committed to developing new technologies and products to enhance its competitive edge in the energy sector[52] - The company is focused on enhancing shareholder value through effective governance and strategic decision-making[52] Employee and Community Engagement - As of the end of 2024, Southgobi Sands LLC employed 768 staff, an increase of 214 from 2023, with 86% being Mongolian nationals[22] - The company achieved zero work-related fatalities and injuries for the third consecutive year in 2024, providing 8,687 hours of training to 598 employees[23] - In 2024, the company planted 55,000 trees as part of Mongolia's "One Billion Trees" initiative, demonstrating commitment to sustainable development[25] - Charitable donations made by the company in the fiscal year amounted to $853,273, compared to $228,318 in 2023[124] Financial Management - The company has a cautious treasury policy to manage cash flow, ensuring sufficient cash for operational and investment needs[70] - The company is closely monitoring its foreign exchange risk exposure and may consider appropriate hedging policies in the future[70] - The company has not declared any dividends since its establishment and does not anticipate declaring any in the foreseeable future[64] Shareholder Information - As of December 31, 2024, the company has issued 296,704,666 shares of common stock[66] - The major shareholder JD Zhixing Fund L.P. holds 85,714,194 shares, representing 28.89% of the total issued shares as of December 31, 2024[106] - The company has a public float of approximately 46.74%, which meets the TSX-V requirements[119] Corporate Governance Practices - The company has adopted various corporate governance measures to enhance shareholder confidence and protect their interests[138] - The board consists of 3 executive directors, 2 non-executive directors, and 3 independent non-executive directors, maintaining a balanced representation[147] - The company has implemented a compliance plan for all directors and employees, including a code of conduct[139] - The company has established a governance framework that reflects best practices in corporate governance[170] Board Committees and Meetings - The audit committee consists of three independent non-executive directors: Ms. Kwan Kam-lan (Chair), Mr. He Ying-bin, and Mr. Cai Fen-qiang[165] - The compensation committee is composed of three independent non-executive directors, with a focus on determining the compensation and benefits for directors and executives[176] - The board held a total of 7 meetings in the fiscal year, achieving an overall attendance rate of 94.34%[185] Training and Development - The company encourages directors to participate in professional development, with all directors attending various training sessions during the fiscal year[193] - Directors received training on International Financial Reporting Standards (IFRS) sustainability disclosure standards hosted by the Hong Kong Stock Exchange[199][200] - The company provided opportunities for directors to participate in various online courses related to corporate governance and the mining industry, with costs covered by the company[197]

Sales and Revenue Performance - In 2024, the company recorded sales of 7 million tons, up from 3.6 million tons in 2023, representing a 94.4% increase[6]. - The average realized price per ton in 2024 was $70.4, down from $93.0 in 2023, indicating a decline of 24.5% due to market conditions[6]. - The company's revenue for 2024 was $493.378 million, a significant increase from $331.506 million in 2023, driven by expanded sales network and diversified customer base[20]. - Total coal sales volume increased to 7.02 million tons in 2024 from 3.59 million tons in 2023, with an average realized price of $70.40 per ton, down from $93.02 per ton[18]. - In Q4 2024, the company's coal sales volume reached 2.7 million tons, a significant increase from 1.0 million tons in Q4 2023[30]. - Revenue for Q4 2024 was $174.6 million, up from $88.5 million in Q4 2023, driven by an expanded sales network and diversified customer base[34]. Profitability and Costs - The operating profit for 2024 was $153.9 million, compared to $75.9 million in 2023, reflecting a significant increase[7]. - Operating profit for 2024 was $153.942 million, up from $75.870 million in 2023, attributed to an increase in sales volume by 3.4 million tons[22]. - The cost of sales in 2024 was $360.588 million, compared to $158.195 million in 2023, mainly due to increased sales and expansion into higher-cost coal categories[20]. - The cash cost of sold products was $51.37 per ton in 2024, up from $44.07 per ton in 2023[18]. - The company's unit sales cost rose to $51.4 per ton in 2024 from $44.1 per ton in 2023, reflecting changes in product mix[19]. - Total operating expenses for the year ended December 31, 2024, amounted to $339,436,000, an increase from $255,636,000 in 2023[116]. Tax and Penalties - The company faced a tax penalty of approximately $75 million from the Mongolian tax authority, which was later reduced to about $26.5 million after an appeal[10]. - The company recorded additional tax and penalties of $45.5 million for the year ended December 31, 2024, down from $85.1 million in 2023, including $26.5 million in tax penalties and $19 million in additional tax late payment provisions[11]. - The company has received a revised tax penalty assessment of approximately $26.5 million, down from $80 million, and has decided not to appeal further[43]. - The company has paid a total of $1.7 million related to the aforementioned tax penalties to the Mongolian tax authority[75]. Production and Operations - The company produced 10.20 million tons of raw coal in 2024, compared to 4.05 million tons in 2023[18]. - The company reported a waste stripping volume of 59.47 million cubic meters in 2024, significantly higher than 25.71 million cubic meters in 2023[18]. - The company expanded its mining operations and improved coal quality and output through various processing methods, enhancing coal exports to China[6]. - The company aims to expand its mining operations and coal processing capacity to capture market opportunities and increase market share by 2025[86]. Financial Position and Liquidity - The company's working capital deficit reached $228.1 million as of December 31, 2024, slightly increasing from $218.8 million on December 31, 2023[46]. - The company has established a cash flow forecast covering a 12-month period starting from December 31, 2024, which includes cost-saving measures[48]. - The company anticipates obtaining up to $127 million in financial support from its major shareholder's affiliates during the forecast period[48]. - The company is currently managing its capital resources to support ongoing operations and expansion plans[39]. - The company must closely monitor factors affecting its liquidity, including coal sales in China, economic growth, and market prices[49]. Management and Governance - The company appointed Ms. Zhu Chonglin as Chief Financial Officer on February 2, 2024[15]. - The company has complied with corporate governance requirements, except for the absence of a board chairman since November 2017, with an independent lead director fulfilling those duties[81]. - The company will seek shareholder approval for the March 2025 Deferred Payment Agreement at the upcoming annual general meeting[12]. Market Outlook and Strategy - The company maintains a cautious optimism regarding the Chinese coal market, anticipating that coal will remain a primary energy source despite challenges in the property market and infrastructure investment[84]. - The company plans to optimize its product mix by improving mining operations and utilizing its dry and wet coal processing plants[87]. - The company aims to enhance its customer base and sales network while increasing coal logistics capacity to address distribution bottlenecks[87]. - The company is focused on improving the operational efficiency and output of its coal washing facilities at the Aobao Te Talu Coal Mine[161]. Risks and Uncertainties - The company is facing significant uncertainties regarding its ability to meet financial obligations, which may impact its going concern assumption[104]. - The company is subject to ongoing scrutiny from the Mongolian tax authority, which may lead to significant additional tax assessments and penalties[74]. - The company acknowledges that actual events may differ significantly from current expectations due to assumptions, risks, and uncertainties[163].

智通财经APP讯，南戈壁(01878)发布公告，于2025年3月19日，本公司位于蒙古的全资附属公司 Southgobi Sands LLC(SGS)收到蒙古乌兰巴托行政法院(行政法院)发出的通知，要求 SGS 提供补充资料 并配合蒙古税务局(蒙古税务局)若干官员(蒙古税务局官员)(作为原告)针对蒙古税务争议解决委员会* (Tax Dispute Resolution Council)(TDRC)(作为被告)提起的法院讼诉。经过进一步查询，本公司取得行政 法院于2025年3月7日发出关于由蒙古税务局官员发起的法院诉讼的展开命令(法院命令)副本。法院命令 提到，蒙古税务局官员试图对 TDRC 先前作出的决定提出异议或推翻该等决定，内容有关重新评估结 果，据此 TDRC 决定将对 SGS 的税务罚款由约8000万美元下调至2650万美元。 南戈壁(01878)：TDRC 决定将对 SGS 的税务罚款 由约8000万美元下调至2650万美元 本公司并非上述法院诉讼的当事方。根据本公司的蒙古独立税务顾问及蒙古法律顾问的初步意见，蒙古 税务局个别成员针对 TDRC 提起法院诉讼的情况极为罕见。根据本公司截至本公告日期所 ...

Sales Performance - For Q3 2024, the company recorded sales of 2.1 million tons, up from 1.2 million tons in Q3 2023, representing a 75% increase[5] - For the three months ended September 30, 2024, the company recorded coal sales of 2.11 million tons, an increase from 1.15 million tons in the same period of 2023, representing an 83.5% increase[11] - For the nine months ended September 30, 2024, the company sold 4.4 million tons of coal, compared to 2.6 million tons in the same period of 2023, representing a 69.2% increase[14] Revenue and Profitability - The company's total revenue for the three months ended September 30, 2024, was $143.75 million, compared to $97.98 million in the same period of 2023, marking a 46.6% increase[15] - Revenue for Q3 2024 was $143.7 million, compared to $98 million in Q3 2023, driven by an expanded sales network and diversified customer base[17] - The company reported a net profit attributable to equity holders of $10.04 million for the three months ended September 30, 2024, compared to $29.35 million in the same period of 2023, a decrease of 65.8%[15] Cost and Expenses - The average realized price per ton in Q3 2024 was $67.8, down from $85.6 in Q3 2023, indicating a decrease of approximately 20.5%[5] - The unit sales cost for the three months ended September 30, 2024, was $52.77 per ton, up from $42.23 per ton in the same period of 2023, indicating a 24.5% increase[15] - Sales costs for Q3 2024 increased to $111.4 million from $48.6 million in Q3 2023, mainly due to higher production costs associated with the expansion into certain processed coal categories[18] Tax Liabilities - As of September 30, 2024, the company recorded $85.1 million in additional tax liabilities and penalties, including $75 million in payable tax penalties[10] - The company has paid a total of $1.7 million in tax penalties to the Mongolian tax authority to date[10] - The company anticipates potential recoveries of approximately $46 million from the tax penalties if future appeals are successful, although outcomes remain uncertain[10] Operational Performance - The gross profit for the three months ended September 30, 2024, was $32.39 million, down from $49.41 million in the same period of 2023, a decline of 34.5%[15] - The company recorded an operating profit of $27.7 million in Q3 2024, compared to $46.3 million in Q3 2023, reflecting a decline of about 40.3%[6] - The company is expanding its product portfolio to include various coal products, including blended coal, wet-washed coal, and dry-selected processed coal[5] Financial Position - The company's working capital deficit reached $273,100,000 as of September 30, 2024, compared to a deficit of $218,800,000 at the end of 2023[41] - Total liabilities increased to $487,993 thousand as of September 30, 2024, compared to $437,070 thousand in the previous year, reflecting a growth of 11.5%[76] - The company reported a working capital deficit of $139 million, including trade and other payables of $101.39 million and additional tax liabilities of $83.4 million as of September 30, 2024[42] Future Outlook - The company is optimistic about the Chinese coal market, anticipating that coal will remain a primary energy source despite increasing environmental regulations[70] - Future coal demand in China and trends in the Chinese coal industry are critical factors for the company's outlook[81] - The company acknowledges risks related to mining activities, including potential deviations in capital and operational costs from management estimates[82] Environmental and Safety Practices - The company aims to maintain high standards of health, safety, and environmental practices in its operations, emphasizing corporate social responsibility[70] - The company is focused on the environmental impact of its activities and measures to mitigate potential environmental effects, emphasizing health, safety, and environmental performance[81] Legal and Regulatory Matters - The company is involved in a class action lawsuit related to restated financial statements, with ongoing proceedings expected to continue into 2025[56] - The appeal by the Gurvantes soum citizens' representative regarding the mining license area was ruled invalid by the appellate court, making the decision final[60] Capital Management - The company is actively managing its capital resources to ensure sufficient funding for ongoing operations and expansion plans[35] - The company has secured a financial support channel of up to $127 million (approximately RMB 900 million) from affiliates of its major shareholder to improve liquidity and financial condition[44]

Financial Performance - In Q2 2024, the company recorded sales of 1.2 million tons, up from 0.9 million tons in Q2 2023, representing a 33.3% increase[11]. - The average realized price per ton in Q2 2024 was $77.6, down from $95.3 in Q2 2023, indicating a decrease of 18.1%[11]. - The company achieved an operating profit of $15 million in Q2 2024, a turnaround from an operating loss of $40.5 million in Q2 2023[11]. - Revenue for the second quarter of 2024 was $92.8 million, compared to $83.2 million in the second quarter of 2023, marking an increase of 19.0%[30]. - The company reported a gross profit of $55.9 million for the first six months of 2024, compared to $72.0 million in the same period of 2023, a decrease of 22.3%[28]. - Operating profit for the second quarter of 2024 was $15.0 million, a turnaround from an operating loss of $40.5 million in the second quarter of 2023[30]. - Revenue for the first six months of 2024 was $175 million, up from $145 million in the same period of 2023, driven by an expanded sales network, diversified customer base, and increased coal product offerings[38]. - The company reported a net loss attributable to equity holders for the first six months of 2024 was $2.1 million, a significant improvement from a loss of $60.6 million in the same period of 2023[28]. - The company’s total operating expenses for the second quarter of 2024 were $73.6 million, compared to $42.0 million in the second quarter of 2023, reflecting a 75.5% increase[32]. Tax Liabilities and Penalties - SGS received a tax penalty of approximately $75 million from the Mongolian tax authority, related to an audit covering the years 2017 to 2020[19]. - As of June 30, 2024, the company recorded additional tax liabilities and penalties totaling $85.1 million, including $75 million in tax penalties and $10.1 million in late payment penalties[20]. - The company has paid a total of $1.7 million of the tax penalties to the Mongolian tax authority to date[20]. - The company has the potential to recover approximately $46 million of the tax penalties if the appeal is successful, although the outcome remains uncertain[20]. - The company submitted an appeal regarding the revised tax assessment of approximately $80 million on June 12, 2024[19]. Operational Efficiency and Production - The company is focused on improving the operational efficiency and output of its coal washing facilities at the Oyu Tolgoi coal mine[4]. - The company anticipates a significant increase in coal production levels in 2024, driven by operational and development plans[4]. - The company is actively engaged in the development of a new dry coal washing system at the Oyu Tolgoi coal mine[4]. - The company has been enhancing its mining operations by adopting various coal processing methods, resulting in improved coal quality and increased export volumes[11]. - The company aims to enhance coal product quality and expand market penetration in China through various processing methods[58]. - The company plans to continue focusing on operational efficiency and cost management strategies to enhance profitability in the upcoming quarters[44]. Financing and Liquidity - The company expects to have sufficient liquidity and capital resources to meet its ongoing obligations, including a $75 million tax penalty and $10.1 million in additional tax late fees[2]. - The company entered into a payment deferral agreement with JDZF on March 19, 2024, allowing the deferral of approximately $96.5 million in cash and in-kind interest payments due by August 31, 2024[12]. - The company will provide monthly updates on its financial condition and business operations to JDZF during the deferral period[14]. - The company anticipates receiving financial support of up to $127 million from its major shareholder's affiliated company to improve liquidity[71]. - The company faces significant uncertainties regarding its ability to continue as a going concern due to ongoing tax disputes and working capital challenges[70]. Market and Demand - The company is assessing the impact of future coal demand in China on its operations and profitability[4]. - The company is evaluating the implications of coal price fluctuations and global economic conditions on its business[4]. - The company is optimistic about the Chinese coal market, believing that coal will remain a primary energy source in the foreseeable future[103]. - The company plans to enhance its logistics capabilities to address distribution bottlenecks and improve sales network efficiency[104]. Environmental and Safety Commitments - The company is committed to mitigating environmental impacts and enhancing health, safety, and environmental performance[4]. - The company is committed to maintaining high health, safety, and environmental standards in its operations, emphasizing corporate social responsibility[104]. Shareholder and Governance Matters - The company will seek shareholder approval for both the March and April 2024 deferral agreements at a special meeting scheduled for August 28, 2024[12]. - The effectiveness of the convertible bond amendments is contingent upon obtaining necessary shareholder approvals by August 30, 2024[17]. - The company is required to communicate with JDZF before appointing or terminating any senior management personnel during the deferral period[14].

Sales Performance - For Q2 2024, the company recorded sales of 1.2 million tons, an increase from 0.9 million tons in Q2 2023[5] - For the three months ended June 30, 2024, the company reported coal sales of 1.20 million tons, an increase from 0.88 million tons in the same period of 2023, representing a 36% increase[16] - For the first six months of 2024, the company achieved coal sales of 2.30 million tons, compared to 1.50 million tons in the same period of 2023, indicating a 53.3% increase[17] - The company reported a total coal sales volume of 1.20 million tons for the quarter ending June 30, 2024, compared to 1.05 million tons in the previous quarter, representing a 14.29% increase[30] Revenue and Profitability - The total revenue for the three months ended June 30, 2024, was $92.82 million, compared to $83.24 million in the same period of 2023, reflecting an increase of about 11.5%[18] - Revenue for Q2 2024 was $92.8 million, up from $83.2 million in Q2 2023, driven by an expanded sales network, diversified customer base, and increased sales of coal products[20] - Revenue for the first half of 2024 was $175 million, compared to $145 million in the first half of 2023, influenced by sales network expansion and product diversification[25] - The company reported a net loss attributable to equity holders of $2.09 million for the three months ended June 30, 2024, compared to a loss of $60.63 million in the same period of 2023[18] Pricing and Costs - The average realized price per ton in Q2 2024 was $77.6, down from $95.3 in Q2 2023, primarily due to changes in the product mix and price declines of premium semi-soft coking coal and processed coal[5] - The average realized price per ton for the second quarter of 2024 was $77.55, down from $95.34 in the second quarter of 2023, reflecting a decrease of approximately 18.5%[18] - The unit sales cost for sold products increased to $61.32 per ton in Q2 2024 from $47.76 per ton in Q2 2023, marking a rise of about 28.3%[16] - The cash cost of sold products per ton was $49.57 in the first half of 2024, up from $41.27 in the first half of 2023, an increase of about 20.5%[18] Operating Performance - The company achieved an operating profit of $15 million in Q2 2024, a turnaround from an operating loss of $40.5 million in Q2 2023, largely due to a previous tax penalty of $75 million imposed by the Mongolian tax authority[6] - For the first six months of 2024, the company reported an operating profit of $47.2 million, compared to an operating loss of $12.5 million in the same period of 2023[25] - Operating expenses in Q2 2024 were $59.5 million, up from $31.1 million in Q2 2023, reflecting increased sales and expansion efforts[21] Tax Liabilities and Penalties - The company received a tax penalty of approximately $75 million from the Mongolian tax authority following an audit covering the years 2017 to 2020[11] - Following an appeal, the tax penalty was reassessed to approximately $80 million, with the company recording $85.1 million in additional tax liabilities as of June 30, 2024[12] - The company has paid a total of $1.7 million towards the tax penalties to date, with potential recoverable amounts estimated at $46 million if the appeal is successful[12] Financial Position and Liquidity - The company faces significant uncertainties regarding its ability to continue as a going concern due to insufficient assets and working capital[13] - As of June 30, 2024, the company's asset deficit was $129 million, an improvement from $141.3 million on December 31, 2023[40] - The company's working capital deficit reached $274.7 million as of June 30, 2024, compared to $218.8 million on December 31, 2023[40] - The company must generate sufficient operating cash flow or secure additional capital to continue as a going concern[39] Agreements and Contracts - A construction and operation contract was signed with Tangshan Shenzhou Machinery Group for a new dry coal selection system at the company's coal mine in Mongolia, with a total cost of approximately $10.9 million[6] - The BOT agreement with Tangshan will be effective from July 15, 2024, to October 1, 2029, allowing the company to oversee coal quality assurance and operations management[6] - The company has entered into a payment deferral agreement with JD Zhixing Fund L.P., allowing for the deferral of cash and in-kind interest payments totaling approximately $7.9 million until August 31, 2024[7] Operational Efficiency and Expansion - The company is committed to expanding its mining operations and enhancing coal quality through various processing methods[5] - The company plans to export improved quality F-grade coal to China starting from Q1 2024, meeting the import quality standards set by Chinese authorities[5] - The company is focused on enhancing operational efficiency and production capacity at its coal washing facilities in the Aobao Te Tolei coal mine[92] Corporate Governance and Compliance - A new independent non-executive director was elected at the annual general meeting held on June 27, 2024, while another director did not seek re-election[13] - The company continues to comply with corporate governance requirements, with the independent chairman fulfilling the responsibilities of the chairman since November 2017[53] - All directors confirmed compliance with the standards set forth in the company's securities trading policy during the six months ended June 30, 2024[54] Legal Matters - The company is involved in ongoing litigation related to previously disclosed financial restatements, with a collective lawsuit permitted to proceed against the company[47] - The company is engaged in ongoing litigation related to a class action in Ontario, which may impact its operations[92] - The company has entered into a payment deferral agreement with JDZF, allowing the deferral of $1.1 million in interest payments due on November 19, 2022, to November 19, 2023[44]

Financial Performance - In Q1 2024, the company recorded an operating profit of $32.1 million, compared to $27.9 million in Q1 2023, reflecting an increase of approximately 11.4%[5][26] - The revenue for Q1 2024 was $82.2 million, up from $61.8 million in Q1 2023, representing a growth of about 33.5%[26] - The net profit for Q1 2024 was $12.3 million, a decrease from $24.3 million in Q4 2023[50] - Basic earnings per share for Q1 2024 were $0.041, down from $0.082 in the previous quarter[50] - The company reported a net profit attributable to equity holders of $12.3 million for the first quarter of 2024, compared to $7.9 million in the same period of 2023[87] Sales and Production - The company experienced a 33% decrease in coal sales volume, from 0.54 million tons in Q4 2023 to 0.36 million tons in Q1 2024[40] - The company reported a total coal sales volume of 1.05 million tons in Q1 2024, compared to 0.96 million tons in Q4 2023[40] - In Q1 2024, the company recorded sales of 1.1 million tons, up from 600,000 tons in Q1 2023, representing an increase of 83.33% year-over-year[58] - Total coal sales volume increased to 1.05 million tons, up from 0.60 million tons year-over-year, with an average realized price of $79.52 per ton, down from $104.11 per ton[84] Cost and Expenses - Operating expenses for Q1 2024 were $33.4 million, compared to $18.3 million in Q1 2023, reflecting a significant increase of approximately 83%[16] - The sales cost for coal operations in Q1 2024 was $45.5 million, compared to $30.9 million in Q1 2023, indicating an increase of about 47%[16] - The average realized price per ton in Q1 2024 was $79.5, down from $104.1 in Q1 2023, indicating a decrease of approximately 23.6%[58] - The unit sales cost for products sold in Q1 2024 was $43.4 per ton, compared to $51.6 per ton in Q1 2023, showing a reduction of about 15.5%[24] Tax Liabilities and Penalties - As of March 31, 2024, the company recorded additional tax liabilities and penalties totaling $85.1 million, which includes $75 million in tax penalties and $10.1 million in late payment penalties[47] - The company has paid a total of $1.7 million of the tax penalties to the Mongolian tax authority[47] - SGS received a tax penalty of approximately $75 million from the Mongolian tax authority, primarily due to differing interpretations of tax laws[44] Financing and Debt - The company entered into a payment deferral agreement with JD Zhixing Fund L.P. allowing for the deferral of approximately $96.5 million in cash and in-kind interest payments until August 31, 2024[59] - The company agreed to pay a deferral fee at an annual interest rate of 6.4% on the unpaid balance of the deferred payments[60] - The company issued $500 million of secured convertible bonds with an interest rate of 8.0%, where 6.4% is paid in cash semi-annually and 1.6% in shares annually[97] Operational Developments - The company is focused on expanding its coal product categories to meet market demand, including mixed coal, washed coal, and dry processed coal[4] - The company is expanding its mining operations and utilizing various coal processing methods to improve coal quality and increase production, which has boosted coal exports to China[72] - The company aims to diversify its coal product offerings, including mixed coal, washed coal, and dry-selected processed coal, to meet market demand[120] Market and Strategic Initiatives - The company is focused on expanding its market reach and customer base in China to enhance the profitability of its coal products[120] - The company has engaged in strategic initiatives to strengthen coal trade relations between Mongolia and China, including infrastructure development and streamlined customs processes[120] - The company remains cautiously optimistic about the Chinese coal market, anticipating that coal will continue to be a primary energy source in the foreseeable future[121] Legal Matters - The collective lawsuit against the company is ongoing, with hearings scheduled for May 13-14, 2024, and further evidence collection set for August 7-9 and September 17, 2024[112] - The company has confirmed that no provisions are required for the collective lawsuit as of March 31, 2024[114] Future Outlook - The company anticipates receiving financial support of up to $127 million from its major shareholder's affiliates to improve liquidity and financial conditions[94] - The company plans to expand its mining operations and production capacity in 2024[139] - The company is preparing for the renewal of its cooperation agreement with local customs in Mongolia in Q2 2024[139]