SouthGobi Resources Announces Third Quarter 2011 Financial and Operating Results

- November 9th, 2011

SouthGobi Resources Ltd. (TSX:SGQ) announced its financial results for the nine months ended September 30, 2011.

SouthGobi Resources Ltd. (TSX:SGQ) announced its financial results for the nine months ended September 30, 2011.

As quoted in the press release:

For the three months ended September 30, 2011, the Company produced 1.25 million tonnes of raw coal with a strip ratio of 3.28 compared to production of 0.87 million tonnes of raw coal with a strip ratio of 4.74 for the three months ended June 30, 2011 and production of 0.57 million tonnes of raw coal with a strip ratio of 5.09 for the three months ended September 30, 2010. Mining capacity increased in the third quarter of 2011 compared to the third quarter of 2010 due to the commissioning of additional mining equipment. Mining activities also commenced in the Sunrise Pit during the third quarter of 2011.

Direct cash costs of product sold were $23.55 per tonne for the nine months ended September 30, 2011 compared to $21.22 per tonne for the same period in 2010. The increase in direct cash costs is due primarily to increased screening activities by the Company of its raw higher-ash coals and higher diesel prices in the second quarter of 2011.

The Company’s total assets at September 30, 2011 were $954.9 million compared with $961.9 million at December 31, 2010.
At September 30, 2011, the Company had $205.8 million in cash and cash equivalents and $55.0 million in money market investments for a total liquidity of $260.8 million compared with $492.0 million in cash and cash equivalents and $62.7 million in money market investments for a total liquidity of $554.7 million at December 31, 2010.

The Company’s non-current liabilities at September 30, 2011 were $157.2 million compared with $252.5 million at December 31, 2010. The decrease in non-current liabilities primarily relates to the decrease in the fair value of the CIC convertible debenture.

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