SouthGobi Resources Ltd anticipated its existing coal inventories are sufficient to satisfy the expected selling demand for at least four months after the resumption of coal exports to China.
China officially resumed customs clearance of coal trucks from Mongolian at Ceke border crossing on May 25 but on a trial basis at present, with only a small number of cargoes allowed to pass through at the first stage.
SouthGobi said it has been actively adjusting its sales strategy to adapt to the changing situation and exploring opportunities to expand sales.
However, the company couldn't guarantee it will be able to continue exporting coal to China or the border port will not be closed again in the future due to the epidemic.
Therefore, the company is not able to ensure its performance of revenue, liquidity and profitability until coal exports to China return to normal levels.
SouthGobi said it will continue to closely track the situation at the Ceke border crossing, including the number of trucks allowed to clear customs and the impact on the company's business and will review the best time to fully resume mining operations from time to time.
SouthGobi Resources is a coal mining company listed on the Hong Kong Stock Exchange and Toronto Stock Exchange. It owns and operates its flagship Ovoot Tolgoi coal mine, which is located in the South Gobi province of Mongolia and only 46 km north of China's Ceke border crossing. SouthGobi mainly produces and sells metallurgical coal to customers in China.
(Writing by Emma Yang Editing by Tammy Yang)
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