UPDATE 1-SouthGobi reports loss as Mongolian mine stays closed

Tue Nov 13, 2012 9:03am EST

Nov 13 (Reuters) - Coal miner SouthGobi Resources Ltd , caught in a dispute with the Mongolian government that has closed its only producing mine, reported a quarterly loss and warned operations would likely remain suspended in the fourth quarter.

The Mongolian government suspended the mining license of the company, which operates the Ovoot Tolgoi coal mine, in April following a bid by Chinese state-owned Chalco .

Chalco dropped its $926 million bid for a majority stake in SouthGobi in early September in the face of stiff political opposition.

Vancouver-based SouthGobi said on Tuesday that it could not estimate production volumes, sales volumes and pricing for 2012.

The company recorded a net loss of $54.6 million, or 30 cents per share, in the third quarter, compared with a net income of $55.9 million, or 31 cents per share, a year earlier.

Revenue fell 95 percent to $3.3 million.

SouthGobi has been struggling with a churn at its top since the failed Chalco bid. It hired Ross Tromans from Rio Tinto Coal Australia as chief executive in September, after firing the former CEO, chief operating officer. The chief financial officer resigned last week.

SouthGobi's shares, which have lost 67 percent value since the Chalco bid, closed at C$2.14 on the Toronto Stock Exchange on Monday.

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