GobiMin Announces Results of Second Quarter of 2008



    
    (Expressed in United States dollars except where otherwise indicated)

    TSX-V: GMN
    

    TORONTO, Aug. 22 /CNW/ - GobiMin Inc. (the "Company" or "GobiMin")
reports its financial and operating results for the second quarter of 2008.
The unaudited interim consolidated financial statements along with
management's discussion and analysis have been filed with SEDAR
(www.sedar.com) and are also available at the website of the Company
(www.gobimin.com).

    
    Financial Highlights
    --------------------
    
    In the second quarter, total tonnage ore production increased
significantly and reached record level of 110,705 tonnes processed and the
Company sold over 95,000 tonnes in this quarter. However, second quarter
profit was lower reflecting a significant decline of nickel price, higher
labour and energy costs and a stronger Renminbi ("RMB"). The average LME
nickel price in Q2 2008 was $11.64 (China nickel price: $14.11), compared to
$21.79 (China nickel price: $22.66) in Q2 2007 while RMB appreciated from
USD0.1302 per RMB to USD0.1437 per RMB in the same period.
    The comparative financial highlights for the second quarter of the past
three years are:

    
                                 Quarter ended  Quarter ended  Quarter ended
                                     June 30,       June 30,       June 30,
                                       2008           2007           2006

    -------------------------------------------------------------------------
    Revenue                       $6.8 million   $9.8 million   $3.5 million
    Net earnings                  $1.3 million   $5.4 million   $0.9 million
    EBITDA(1)                     $2.6 million   $6.6 million   $1.5 million
    Gross Margin                         48.3%          72.8%          56.2%
    Basic earnings per share            $0.018         $0.075         $0.016
    Diluted earnings per share          $0.018         $0.073         $0.014
    EBITDA per share(1)                 $0.035         $0.096         $0.026
    Cash and cash equivalents      $39 million    $37 million     $9 million
    Cash and cash equivalents
     per share(1)                        $0.54          $0.50          $0.16

    (1) As non-GAAP measurements, EBITDA, EBITDA per share and Cash and cash
    equivalents per share do not comply with GAAP and, therefore, the amounts
    presented in the above table may not be comparable to similar data
    presented by other companies. The data is intended to provide additional
    information and should not be considered in isolation or as a substitute
    for measures of performance prepared in accordance with GAAP.

    Business Summary and Development
    --------------------------------
    (a)    Record Mining Production

    Ore processed in this quarter increased to 110,705 tonnes from
73,623 tonnes in the same period of last year, reflecting the improved mining
capacity and production rate from the implementation of the mining
optimization plan and the construction of mining shafts in the previous years.

    (b)    Exploration and Development Projects
    

    On August 6, 2008, the Company received for its Yellow Mountain Deposit
(also known as Huangshan Deposit) an updated NI 43-101 compliant Mineral
Resource Estimate from Met-Chem Canada Inc. of Montreal ("Met-Chem"). At 0.2%
nickel cut-off, Indicated Mineral Resources are estimated at over 22 million
tonnes averaging 0.45% nickel, 0.30% copper and 0.03% cobalt. The new
Indicated Resources almost doubled from the initial Mineral Resource Estimate
of 12 million tonnes (See news release on June 11, 2007 and August 6, 2008).
Inferred Resources now totals 44 million tonnes averaging 0.46% nickel, 0.30%
copper and 0.03% cobalt. Based on Met-Chem's report, the Company made an
estimate of the in-situ metal content in the table below:

    
    Nickel
    -------------------------------------------------------------------------
                         New Estimate         Previous Estimate
    Classification       In-Situ Nickel        In-Situ Nickel(*)       Change
                              lbs                    lbs                  %
    -------------------------------------------------------------------------
    Indicated             221 million            113 million            +96%
    -------------------------------------------------------------------------
    Inferred              438 million            442 million             -1%
    -------------------------------------------------------------------------


    Copper
    -------------------------------------------------------------------------
                          New Estimate         Previous Estimate
    Classification       In-Situ Nickel        In-Situ Nickel(*)       Change
                              lbs                    lbs                  %
    -------------------------------------------------------------------------
    Indicated             147 million             73 million           +101%
    -------------------------------------------------------------------------
    Inferred              290 million            287 million             +0%
    -------------------------------------------------------------------------

    (*) Previous NI 43-101 compliant resource estimate was prepared by
    Met-Chem on July 20, 2007.

    Since 2007, GobiMin has formed four new joint ventures with subsidiaries
of Xinjiang Bureau of Geology and Mineral Resources ("Xinjiang Bureau"),
exploring various base metal projects in Xinjiang region.
    GobiMin also has set up joint venture for exploration in Indonesia.

    (c)    Progress at Yellow Mountain Deposit

    GobiMin is developing the Yellow Mountain project, including the design of
mines and mills, the sinking of the production shaft and ventilation shafts,
and construction of infrastructures in the mine site including water, power
and transportation. Starting at the end of 2007, the Company has entered into
contracts totalling $44 million and already paid $17 million.

    (d)    Yakesi's IPO in China

    On July 6, 2008, on the recommendation of its sponsor, the Company decided
to postpone the IPO of its Chinese subsidiary due to the deteriorating IPO
market conditions in China.

    (e)    Normal Course Issuer Bid

    On February 6, 2008, the Company began a normal course issuer bid to
repurchase some of its common shares on the TSX Venture Exchange. The Company
has repurchased 482,900 common shares during the quarter and 1,601,600 shares
cumulatively as of August 21, 2008. All shares purchased were returned to
treasury for cancellation. GobiMin now has 71,958,902 shares outstanding.

    Outlook
    -------
    
    Despite the fall in production to 20,527 tonnes in the first quarter due
to severe weather conditions, this quarter's results provides confirmation
that the Company should be able to catch up not only lost production but even
surpass the 330,000 tonnes of ore for the whole year. The Company also expects
to improve the nickel head grade for the next quarters to maintain
profitability.
    Yellow Mountain development is on schedule. By the end of July 31, 2008,
the Company completed access road, power infrastructure and several
constructions on the site. The Company has also advanced the sinking of the
main shaft to 152 meters, auxiliary shaft to 130 meters and 217/303 meters in
two ventilation shafts.

    Certain statements contained in this press release constitute
forward-looking information. Such statements are based on the current
expectations of management of GobiMin. You are cautioned that such statements
are subject to a multitude of risks and uncertainties that could cause actual
results, future circumstances or events to differ materially from those
projected in the forward-looking information. These risks include, but are not
limited to, risks associated with fluctuations in metal prices, risks
associated with mining operations including environmental hazards, GobiMin's
reliance on key suppliers and on key personnel, the potential for changes in
the legislative and regulatory environment in China and other risks and
uncertainties detailed from time to time in GobiMin's annual report and other
filings with the Canadian securities commissions. The reader should not place
undue reliance on the forward-looking information included in this press
release given that (i) actual results could differ materially from a
conclusion, forecast or projection in the forward-looking information, and
(ii) certain material factors or assumptions were applied in drawing a
conclusion or making a forecast or projection as reflected in the
forward-looking information could prove to be inaccurate. These statements
speak only as of the date they are made, and GobiMin assumes no obligation to
revise such statements as a result of any event, circumstance or otherwise,
except in accordance with law. Additional information about (i) the material
factors that could cause actual results to differ materially from the
conclusion, forecast or projection in the forward-looking information, and
(ii) the material factors or assumptions that were applied in drawing a
conclusion or making a forecast or projection as reflected in the
forward-looking information, is contained in the GobiMin's annual report and
other documents filed from time to time with the Canadian securities
commissions, all of which are available at www.sedar.com and the Company's
website www.gobimin.com.

    
    The TSX Venture Exchange has neither approved nor disapproved the
    contents of this press release.

        To receive GobiMin press releases by email, send a message to
       info@gobimin.com and specify "GobiMin press releases" on the
                                 subject line
    

    %SEDAR: 00009152E




For further information:

For further information: James Xiang, Chief Financial Officer, GobiMin
Inc., Tel: (416) 915-0133, Email: james@gobimin.com, www.gobimin.com

Organization Profile

GobiMin Inc.

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890