May 14, 2012 / 1:27 PM / in 6 years

SouthGobi says Mongolian mining operations continue

TORONTO, May 14 (Reuters) - SouthGobi Resources Ltd said on Monday its coal mining operations in Mongolia continued despite a recent government announcement about a planned suspension of its mining licenses.

After China’s state-owned Chalco said in April it planned to acquire a majority stake in SouthGobi for $926 million, the Mongolian government said it would to suspend SouthGobi’s licenses for its several large coal projects. The government has also begun to outline new foreign investment laws.

SouthGobi said as of May 14 it had not received any official notification of the suspension and it believed its licenses were still in good standing.

However, the company cautioned it would have to halt operations if it received such a notice. Due to this uncertainty the company said it was unable to provide any forecast for the second quarter.

The company also reported first-quarter net income of $3.1 million, or 2 cents a share, compared with a year-ago loss of $46.6 million, or 25 cents a share.

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