GobiMin Announces Second Quarter 2010 Results

(Expressed in United States dollars except where otherwise indicated)

TSX-V: GMN

TORONTO, Aug. 19 /CNW/ - GobiMin Inc. (the "Company" or "GobiMin") reports its financial and operating results for the second quarter of 2010. 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
    --------------------

                                              3 months ended  3 months ended
                                                  June 30,        June 30,
                                                    2010            2009
    -------------------------------------------------------------------------
    Cash and cash equivalents                    $48 million     $81 million
    Cash and cash equivalents per share(1)             $0.71           $1.17
    Revenue                                               $-             $-
    Net losses                                 ($0.1 million)  ($0.5 million)
    LBITDA(1)                                 ($0.04 million)  ($0.5 million)
    Basic losses per share                           ($0.002)        ($0.007)
    Diluted losses per share                         ($0.002)        ($0.007)
    LBITDA per share(1)                              ($0.001)        ($0.007)
    -------------------------------------------------------------------------
    (1) As non-GAAP measurements, LBITDA, LBITDA 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) Gold Project in Xinjiang
        ------------------------
    

The Company, through a wholly owned subsidiary, entered into an agreement with Xinjiang Baodi Mining Company ("Baodi") and a subsidiary of Brigade No. 2 of Xinjiang Bureau of Geology and Mineral Resources ("Brigade No. 2") to form a joint venture company, Xinjiang Tongyuan Minerals Ltd. ("Tongyuan"), in China to develop and operate the Sawayaerdun Gold Project in Xinjiang, China. GobiMin owns a 70% equity interest in Tongyuan while Baodi and Brigade No. 2 each own a 15% interest. Tongyuan has obtained the related mining license and started a new drilling program so as to prepare a NI 43-101 compliant resource estimate. It aims for completing the mine construction and development by late 2011. It has also applied for an exploration license for the surrounding area of 20.27 km(2) for further exploration and development.

    
    (b) Coal Project in Xinjiang
        ------------------------
    

On February 9, 2010, GobiMin acquired an indirect equity interest of 24.49% in the Balikun Coal Project in Xinjiang, China and participates in its management and operations. GobiMin and its partner jointly have a controlling interest in the project through Xinjiang Ruide Mining Limited. According to a NI 43-101 Mineral Resource estimate prepared by Scott Wilson Ltd. in February 2010, the Balikun Coal Project hosts 38 million tonnes of coal in Measured Resources and 50 million tonnes in Indicated Resources. The power and water supply facilities have been installed and in operation. Ventilation ramp is almost completed while main ramp and auxiliary ramp are approximately 30% completed.

    
    (c) Silver Operations
        -----------------
    

In 2009, GobiMin acquired a 49% equity interest in China Precision Material Limited ("China Precision") which engages predominantly in silver trading. China Precision buys physical silver ingots from producers and sells them directly to end consumers. All its positions are hedged and it is not exposed to market price movements. To increase product variety and profit contribution, GobiMin will continue to source and explore new business opportunities with potential partners in this sector.

    
    (d) Base Metals Exploration Projects in Xinjiang
        --------------------------------------------
    

GobiMin currently owns 4 base metals exploration projects in Xinjiang, China including nickel, copper, lead and zinc projects.

GobiMin owns a 40% indirect equity interest in another joint venture which is engaged in exploration and development of the Yanxi Copper Property. On April 13, 2010, GobiMin entered into a framework agreement to dispose of a 32% interest in the Yanxi Copper Property located about 115 km south of the city of Hami in Xinjiang, China. The Company has completed the reorganization to form a new holding company ("Holdco") to hold 80% equity interest in Xinjiang Tongxing Minerals Limited ("Tongxing") and entered into a Share Transfer Agreement on July 14, 2010 to dispose of the 100% equity interest in Holdco. The transaction was completed on July 22, 2010 and GobiMin has received all the cash consideration and the first lot of convertible bonds. After the mining license of the Yanxi Copper Property is granted, the Company shall receive the final lot of convertible bonds. It is expected that the mining license of the Yanxi Copper Property will be obtained by the end of December 2010 according to the normal processing procedures in China and the net proceeds receivable by GobiMin is about HKD60.48 million (CAD8.16 million). Should the mining license not be granted by December 31, 2010, GobiMin guarantees to refund to the buyer all the consideration received and in return, the buyer shall transfer the interest in the Holdco back to GobiMin. The related gain on disposal shall be recognised by the Company upon obtaining the mining license. GobiMin currently retains an 8% indirect equity interest in the Yanxi Copper Property.

For the remaining exploration projects, the Company will continue to conduct pre-survey and exploration to identify potential mineralization.

    
    (e) Investment Opportunities
        ------------------------
    

The Company ceased to have its substantial mining operations in Hami, Xinjiang of China following the disposal of two operating subsidiaries in February 2009. With a cash balance of $48 million, the Company will keep on searching for potential investment opportunities.

    
    (f) Normal Course Issuer Bid
        ------------------------
    

On January 26, 2010, GobiMin has renewed its normal course issuer bid to repurchase up to an additional 3,412,865 common shares for a further one year period. The normal course issuer bid will expire on January 31, 2011. Up to June 30, 2010, a total of 453,500 common shares were repurchased for an aggregate cost of CAD374,326 ($365,605). For the period from July 1, 2010 to August 19, 2010, a total of 781,500 common shares were repurchased at an aggregate cost of CAD632,726 ($617,983). All shares repurchased were returned to treasury for cancellation.

    
    Outlook
    -------
    

The successful completion of the disposal of the 32% equity interest in Yanxi Copper Property further enhances the financial strength of the Company. GobiMin expects to receive net proceeds of about HKD60.48 million (CAD8.16 million) after the mining license of Yanxi Copper Property is granted. The new funding will be used to accelerate the Company's growth and the development of its existing and new exploration program.

The development of Sawayaerdun Gold Project and the Balikun Coal Project in Xinjiang are progressing smoothly. The Company believed that the newly injected fund will speed up the development and push us ahead of schedule.

With a healthy financial position, the management is confident that GobiMin can capture the opportunities ahead and maximize the return for shareholders.

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. 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.

"Neither TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release."

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

SOURCE GobiMin Inc.

For further information: For further information: Felipe Tan, Chief Executive Officer, Tel: (852) 3586-6500, Email: felipe @gobimin.com

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