On March 22, 2013, SouthGobi announced the resumption of operations at the Ovoot Tolgoi Mine after having been fully curtailed since the end of the second quarter of 2012. The Company plans to produce 3.2 million tonnes of semi-soft coking coal in 2013. The 2013 mine plan assumes a conservative resumption of operations, designed to achieve a cost effective approach that will allow operations to continue on a sustainable basis and align production levels with forecast market conditions.
Moving forward, saleable products from the Ovoot Tolgoi Mine will primarily be based on a two product strategy and will consist of SouthGobi standard ("Standard") and SouthGobi premium ("Premium") semi-soft coking coal products. The Standard and Premium semi-soft coking coal products will be produced from raw semi-soft coking coals, together with raw medium and higher-ash coals which can be washed and blended into the Standard and Premium semi-soft coking coal products. Some higher-ash product will be sold as a thermal coal product as required.
For the three months ended March 31, 2013, the Company produced 0.02 million tonnes of raw coal with a strip ratio of 26.21 compared to production of 1.07 million tonnes of raw coal with a strip ratio of 2.07 for the three months ended March 31, 2012. In the first quarter of 2013, the Company's production was significantly impacted by the curtailment of mining operations until March 22, 2013. The Company's strip ratio of 26.21 in the first quarter of 2013 is due to a higher proportion of waste material being mined over the limited operating period and is not indicative of the Company's strip ratio moving forward.
For the three months ended March 31, 2013, SouthGobi recorded revenue of $3.3 million compared to $40.2 million in the first quarter of 2012. Revenue decreased primarily due to decreased sales volumes and a lower average realized selling price. The Company sold 0.08 million tonnes of coal at an average realized selling price of $45.02 per tonne in the first quarter of 2013 compared to sales of 0.84 million tonnes of coal at an average realized selling price of $56.79 per tonne in the first quarter of 2012. In the first quarter of 2013, SouthGobi generated revenue through the sale of existing coal stockpiles. SouthGobi's sales volume and average realized selling price was negatively impacted by the continued softness of the inland China coking coal markets closest to SouthGobi's operations. The Company's thermal coal product continued to be impacted more substantially than its other products. Market participants continue to deplete their existing stockpiles on the Mongolian and Chinese sides of the Shivee Khuren-Ceke crossing at the Mongolia-China border ("Shivee Khuren Border Crossing") and this movement provides some indication of future sales once the remaining stockpiles are depleted in the second quarter of 2013. However, this has adversely impacted SouthGobi's ability to sign new contracts to date in the second quarter of 2013.
Direct cash costs of product sold excluding idled mine costs (a non-IFRS financial measure, see Non-IFRS Financial Measures section) were $35.46 per tonne for the three months ended March 31, 2013 compared to $10.80 per tonne for the three months ended March, 31 2012. Direct cash costs of product sold excluding idled mine costs primarily increased in the first quarter of 2013 due to higher cost coal inventory being sold. In the first quarter of 2012, direct cash costs of product sold excluding idled mine costs were also lower due to a below-trend strip ratio.
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