SouthGobi Resources Ltd. (TSX: T.SGQ, Stock Forum) a Canadian coal miner with operations in Mongolia, said it could default on a debt repayment and was looking to raise money, according to a Reuters report, sending its shares down as much as 27% to 53 cents on Monday.

The warning comes after the company reported a deeper net loss of $138.7 million, or 75 cents per share, for the fourth quarter of 2013.

That compared to a loss of $56.5 million, or 31 cents per share, in the same period a year earlier.

Revenues increased to $32.4 million from $1.2 million, the company said in a press release.

Monday”s trading action leaves SouthGobi with a market cap of $116.1 million, based on 187.3 million. The 52-week range is $2.16 and 71 cents.

The company, controlled by Rio Tinto Plc (NYSE: RIO, Stock Forum) through its unit Turquoise Hill Resources Ltd., reported a bigger quarterly loss, mainly due to impairment charges.

A delay in securing additional financing could result in a default of $250 million debentures held by China Investment Corp, SouthGobi said in a statement on Monday.

The company had working capital – the difference between current assets and liabilities – of $41.7 million as of Dec. 31, compared with $120.4 million a year earlier. As of March 24, the company had $10 million cash on hand.

SouthGobi said it expects liquidity problems to continue and margins to remain weak as coal prices are likely to stay anemic in China this year, echoing U.S. rivals such as Alpha Natural Resources and Arch Coal Inc.

Producers of metallurgical, or steelmaking, coal have been hit by weak demand amid slowing growth in China.

SouthGobi is being investigated by Mongolia”s Independent Authority Against Corruption (IAAC) and State Investigation Office (SIA) for possible breaches of anti-corruption, money laundering and taxation laws.

The company said on Monday it had received a notice from the Mongolian authorities that might lead to criminal actions against three of its former employees and SouthGobi could be held liable as “civil defendant.”