SouthGobi Resources Ltd. (SouthGobi) disclosed audited results for the year ended 31 December 2025, reversing the prior-year profit with a net loss attributable to shareholders of USD 168.77 million (FY2024: profit of USD 92.50 million).

Revenue and margins • Revenue climbed 21.4 % to USD 598.82 million on a 59 % jump in coal sales volumes to 11.20 million tonnes. • The average realised selling price fell 24 % year on year to USD 53.49 per tonne, reflecting a shift toward lower-priced products amid softer Chinese demand. • Unit cost of sales rose 4 % to USD 53.46 per tonne; total cash costs of product sold increased to USD 45.35 per tonne (FY2024: USD 41.14).

Profitability • Operating result swung to a loss of USD 133.22 million (FY2024: profit of USD 153.94 million). • Key non-cash charges comprised a USD 77.33 million impairment on coal stockpiles and a USD 41.96 million write-down of property, plant and equipment. • EBITDA* declined to a marginal profit of USD 1.34 million from USD 133.29 million a year earlier.

Balance-sheet pressures • Cash and cash equivalents stood at USD 12.38 million (end-2024: USD 8.59 million). • Working-capital deficit widened to USD 337.0 million (end-2024: USD 228.13 million); total deficiency in assets was USD 227.24 million. • Current liabilities include trade and other payables of USD 218.17 million, tax penalty provisions of USD 23.28 million and convertible-debenture related interest of USD 140.33 million. • In October 2025 the company secured an 18-month RMB 235 million (≈ USD 33.07 million) bank loan at 10 % to fund working capital. • In March 2026 SouthGobi and JD Zhixing Fund (JDZF) signed a new deferral agreement, postponing up to USD 140.50 million of interest, fees and management charges to 31 August 2027.

Going-concern assessment Management cited multiple adverse conditions—including large current liabilities, negative operating cash flow risk and coal-price volatility—that “cast significant doubt” on the group’s ability to continue as a going concern. Mitigating actions include the 2026 deferral, vendor payment negotiations and expectations of supportive coal pricing.

Operational update • Raw coal output rose 63 % to 16.63 million tonnes; the strip ratio improved to 4.85 bcm/t (2024: 5.84). • No lost-time injuries were recorded (FY2024 LTIFR: 0.06). • Product mix in 2025: 8 % premium semi-soft coking coal, 45 % standard semi-soft/premium thermal coal, 8 % standard thermal coal and 39 % processed coal.

Regulatory and legal developments • Four SouthGobi mining licences, including the Ovoot Tolgoi Mine and Soumber Deposit, were classified as “Mineral Deposits of Strategic Importance” by the Mongolian government. Negotiations on state equity participation are under way. • The Mongolian Tax Authority’s reassessment reduced an earlier tax penalty from USD 80.00 million to USD 26.50 million. SouthGobi has paid USD 22.20 million to date; the revised amount remains outstanding. • A long-running Canadian securities class action was conditionally settled for CAD 6.80 million in August 2025, with payments to be borne by insurers.

Outlook Management plans to expand mining and processing capacity in 2026, enhance logistics via additional electric locomotives, and pursue further cost optimisation, while monitoring coal-price volatility and geopolitical developments. The company remains reliant on successful execution of its liquidity initiatives and ongoing creditor support to sustain operations.

*EBITDA is calculated as gross profit excluding idled-asset costs and adding back depreciation, depletion and impairment charges, as defined by the company.