(Expressed in United States dollars except where otherwise indicated)
TORONTO, Nov. 22, 2011 /CNW/ - (TSXV:GMN) GobiMin Inc. ("GobiMin" or the "Company") reports its financial and operating results
for the third quarter of 2011. 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).
The Sawayaerdun Gold Project has completed drilling works of about
30,100 meters with 84 drill holes and continues for further drilling
aiming to maximize the project potential
Completed disposal of 24.49% indirect equity interest in Balikun Coal
Project for a total consideration of $30.35 million, recording a gain
of $8.21 million
Extended the deadline for obtaining the mining license of Yanxi Copper
Deposit to January 31, 2012
Continuing the exploration of other mineral projects in Xinjiang, China
Actively searching for high quality exploration and mining projects
Three months ended
Twelve months ended
Three months ended
Cash and cash equivalents and time deposit
Cash and cash equivalents and time deposit per share(1)
Net earnings / (losses)
Basic and diluted earnings/(losses) per share
LBITDA per share(1)
As non-IFRS measurements, LBITDA (losses before interest income and expense, income taxes, stock based
compensation, depreciation and amortization), LBITDA per share and Cash and cash equivalents and time deposit per share do not comply with IFRS 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 IFRS.
Business Summary and Development
(a) Gold Project in Xinjiang
Through a wholly owned subsidiary, the Company owns a 70% equity
interest in Xinjiang Tongyuan Minerals Ltd. to develop and operate the
Sawayaerdun Gold Project in Xinjiang, China.
As at 30 September 2011, about 30,100 meters of drilling and 84 drill
holes have been completed. Eight further drill holes with around 1,490
meters in the Zone IV have been completed in October 2011. GobiMin has
been conducting the testing during the drilling programs and has
retained Mr. Philip Jones, B App Sc, AusIMM, AIG, a Qualified Person as
defined by the NI 43-101, as consultant geologist for reviewing the
exploration progress. Mr. Philip Jones has reviewed the assay results
for the 23 diamond drill holes from the 92 completed drill holes
program and commented that the assay results have confirmed the
continuity of the mineralization at depth while preparations in support
of an updated resource estimate for Zone IV is well underway and an
initial resource estimate for Zone I is expected once all the remaining
assays have been received, hopefully by the end of 2011.
Due to the snowing weather, the exploration works were suspended in
October 2011 and will be resumed by April 2012.
(b) Coal Project in Xinjiang
GobiMin formerly owned an indirect equity interest of 24.49% in the
Balikun Coal Project in Xinjiang, China. It entered into an agreement
with an existing shareholder of the project to dispose of all its
24.49% indirect equity interest. GobiMin has received the total
consideration of $30.35 million, which includes the proceeds of the
disposal, the repayment to the Company of the loans for the Balikun
Coal Project and the related interests. GobiMin has recorded a gain of
about $8.21 million as a result of the disposal.
Part of the consideration received will be used for investment and
development of the Sawayaerdun Gold Project in Xinjiang and the
remaining will be set aside for other investment opportunities.
(c) Silver Operation
GobiMin holds an equity interest of 49% in China Precision Material
Limited ("China Precision") which engages in metal trading and
processing, predominantly in silver.
The Company has made advances to China Precision from time to time
solely to finance its silver inventory depending on economic and market
conditions. As at September 30, 2011, amounts due from China Precision
to the Company amounted to $9.4 million while China Precision has a
silver stock of 12.2 tonnes with a market value of $11.7 million. The
Company recorded interest income of $242,667 through advancement of
funding to China Precision for the nine months ended September 30, 2011
and $31,972 for the three months ended September 30, 2011. For the
three months ended September 30, 2011, China Precision has a net profit
of about $1.2 million and GobiMin recorded an equity gain of $572,146
from its investment in China Precision, comparing with an equity gain
of $58,452 for the three months ended September 30, 2010.
(d) Base Metal Exploration Projects in Xinjiang
(i) Four Exploration Joint Ventures
GobiMin currently owns equity interests in four exploration joint
ventures in Xinjiang, China for nickel, copper, and gold. GobiMin has
invested a total of $2,883,012 (RMB19,000,000) as capital in five
exploration joint ventures in Xinjiang since 2007, including the
investment in the joint venture which found the Yanxi Copper Property
subsequently disposed. The total cost of investment for the remaining
four exploration joint ventures currently held amounted to $2,276,062
(RMB15,000,000) while the equity investment up to September 30, 2011 is
$1,829,514 (RMB12,057,106) after sharing the pre-operating and
exploration expenses of $446,548 (RMB2,942,894). GobiMin will continue
to conduct pre-survey and exploration to identify potential
mineralization through these exploration joint ventures. Those
exploration licenses not having good prospect are relinquished by not
applying for renewal or selling to third parties. During the quarter
ended September 30, 2011, the joint ventures had entered into
agreements to dispose to local third parties of five exploration
licenses not having good enough prospect for further exploration for a
total consideration of $986,293 (RMB6,500,000), which are expected to
be completed by the end of the year. The joint ventures have kept
exploring seven copper projects among the exploration licenses which
show good indications of copper mineralization.
(ii) Yanxi Copper Property
GobiMin formerly owned a 40% indirect equity interest in another joint
venture, Xinjiang Tongxing Minerals Limited ("Tongxing"), which is
engaged in exploration and development of the Yanxi Copper Property in
Xinjiang, China. The Company entered into a Share Transfer Agreement
with China Daye Non-Ferrous Metals Mining Limited ("China Daye") on
July 14, 2010 regarding the disposal of 80% of its equity interest in
Tongxing. The transaction was completed on July 22, 2010 and GobiMin
has received all the cash consideration and the first lot of
convertible bonds ("CB"). GobiMin currently retains an 8% indirect
unlisted equity interest in the Yanxi Copper Property.
The Company has entered into a supplemental agreement with China Daye on
December 30, 2010 to extend the deadline for obtaining the mining
license of the Yanxi Copper Property (the "Yanxi Mining Licence") from
December 31, 2010 to August 31, 2011. In addition to applying for
Yanxi Mining Licence, the Company will also be responsible for applying
for a mining licence (the "New Mining Licence") for an area which is
adjacent to the Yanxi Copper Property. The New Mining Licence should
be obtained on or before June 30, 2014.
Pursuant to the second supplemental agreement entered into by the
Company on August 30, 2011, the deadline for obtaining the Yanxi Mining
Licence has been further extended to January 31, 2012. In addition,
China Daye may, at its sole discretion, extend (1) the repayment date
of the CB from July 22, 2012 to June 30, 2013 without extension of the
period of the related rights of conversion or (2) the maturity date of
the CB from July 22, 2012 to June 30, 2013 including the deadline for
conversion, subject to approval of The Stock Exchange of Hong Kong
Limited and shareholders of China Daye (if necessary).
The application of the Yanxi Mining License is at the final stage and
GobiMin is liaising with relevant government departments to facilitate
the application to meet the deadline.
It is expected that upon obtaining the Yanxi Mining Licence, the Company
would realize an estimated gain of about $5.7 million for its disposal
of the 32% equity interest in Tongxing, with a further potential gain
to be ascertained and realized after finalizing the New Mining Licence
and the related exploration work.
(e) Normal Course Issuer Bid
On January 4, 2011, GobiMin announced its intention to renew its normal
course issuer bid to repurchase up to an additional 3,294,541 common
shares for a further year expiring on January 31, 2012. During the
quarter ended September 30, 2011, a total of 294,000 common shares have
been repurchased at an aggregate cost of $195,928 (CAD194,675). For the
period from January 2011 to November 22, 2011, the programme has been
completed with a total of 3,294,541 common shares repurchased at an
average price of CAD0.788. All shares repurchased were returned to
treasury for cancellation. Management believes that the repurchase by
the Company of its own shares can maximize shareholder value and is in
the best interest of the Company and its shareholders.
A copy of the related Notice of Intention to Make a Normal Course Issuer
Bid for 2011 shall be provided to shareholders upon receipt of written
request to the Company at its registered office.
(f) Working Capital
As at September 30, 2011, the Company has a working capital of about
$55.5 million (December 31, 2010: $51.1 million), after netting off its
current liabilities of $35.4 million (December 31, 2010: $33.9
Other than financing the silver stocking of China Precision and the
construction costs of the Sawayaerdun Gold Project, there is no
significant cash outflow expected for the remainder of the fiscal year.
The working capital is sufficient to support the development of the
existing projects and operations.
Certain statements contained in this press release constitute
forward-looking information. Such statements are based on the current
expectations of management of GobiMin. The readers 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 its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release."
To receive GobiMin press releases by email, send a message to firstname.lastname@example.org and specify "GobiMin press releases" on the subject line
SOURCE GobiMin Inc.
For further information: