GobiMin signs Supplemental Agreement regarding the Balikun Coal Project in Xinjiang, China

TSX-V: GMN

TORONTO, Jan. 31 /CNW/ - Further to the press release on February 9, 2010, GobiMin Inc. ("GobiMin" or the "Company") announces the extension of the deadline for obtaining the approval for the Balikun Coal Project (the "Project") from the National Development & Reform Commission of the PRC ("NDRC Approval") from January 31 to September 30, 2011.

After the completion of the acquisition of a 49% equity stake in Hami Coal Corporation (formerly "Fortune Aspect Limited") in February 2010, GobiMin owns an indirect equity interest of 24.49% in the Project.  According to the acquisition agreement entered into between GobiMin and the Vendor, the 2nd installment of RMB100,000,000 (CAD15.33 million) was payable upon receipt of NDRC Approval, to be obtained on or before January 31, 2011, and would be offset by the secured loan of RMB100,000,000 made to the existing shareholder of the Project. 

The PRC government is currently integrating the domestic coal industry in order to standardize coal exploration and intensify development of the coal resources, aiming to maintain a reliable supply of resources and a sustainable development. Therefore, it is expected that the PRC government shall require more time to review the application and that NDRC Approval shall not be granted on or before January 31, 2011.

The Corporation and the Vendor have accordingly entered into a Supplemental Agreement to extend the deadline for obtaining the NDRC Approval to September 30, 2011.  Other than the extension, all other terms and conditions of the acquisition agreement shall continue in full force and legal effect.

Project Update

A total of 1,800m of shaft work was completed during the year 2010 (2,900m since commencement of construction in late 2009), covering the main ramp, the ventilation ramp and the auxiliary ramp.

The supporting and basic living facilities were mainly completed in 2010. The equipments purchased and systems installed generally included power supply, drainage, heating, production commanding centre and communication network. At the end of 2010, the power and water supply is in place, and the central commanding system and the communication system are in operation.

All construction work is currently suspended for winter and will resume in April 2011. The planned work for 2011 includes continuance of the mining construction and infrastructure, and improvement on the installed systems.

According to a NI 43-101 Mineral Resource estimate prepared by Scott Wilson Ltd. in February 2010, the Project hosts 38 million tonnes of coal in Measured Resources and 50 million tonnes in Indicated Resources.

About GobiMin

As at September 30, 2010, GobiMin had approximately USD47 million in cash and cash equivalent (approximately USD0.69 per share based on the total issued capital of 67,443,202 shares).

Other than the equity interest of 24.49% in the Balikun Coal Project, GobiMin owns an equity interest of 70% in Xinjiang Tongyuan Minerals Ltd. for the Sawayaerdun Gold Project in Xinjiang, China.  GobiMin has an 8% equity interest in the Yanxi Copper Deposit and four other joint ventures on base metal projects in Xinjiang.

GobiMin is aggressively seeking opportunities to acquire high quality mining and exploration projects.

     

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. There is no guarantee that the transaction  mentioned in this press release will be completed or that its terms will not be varied.

"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:

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

Profil de l'entreprise

GobiMin Inc.

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