GobiMin Signs Supplemental Agreement on Disposal of Yanxi Copper Deposit


TORONTO, Jan. 4 /CNW/ - Further to its press release published on July 23, 2010 regarding the completion of the sale of the Yanxi Copper Deposit, GobiMin Inc. ("GobiMin" or the "Company") announces that it has entered into a supplemental agreement (the "Supplemental Agreement") with China Daye Non-Ferrous Metals Mining Limited ("China Daye") on December 30, 2010.

In July 2010, the sale of 80% equity interest in Yanxi Copper Deposit (the "Deposit") to China Daye including a 32% equity interest from GobiMin was completed while GobiMin retains an 8% indirect equity interest in the Deposit thereafter. GobiMin's share of the net proceeds from the aforesaid sale will correspond to approximately 40% of the total consideration received after netting off the licensing fee, tax, stamp duty and the related expenses and payments.

After the aforesaid completion, the Company and China Daye realized that the licenced area of the Deposit will be affected by the construction of a railway across the Deposit. The Company and China Daye have accordingly entered into the Supplemental Agreement to amend, among others, the following terms and conditions:

  1. In addition to applying for the mining licence for the Deposit (the "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 Deposit (the "New Area").
  2. The deadline for obtaining the Yanxi Mining Licence is extended to August 31, 2011 from December 31, 2010.
  3. The consideration to be received upon obtaining the Yanxi Mining Licence is reduced by HK$21,000,000 to HK$259,000,000.  The amount of HK$21,000,000 will be deducted from the convertible bonds ("Non-delivered CB").
  4. The drilling work and the related expenses including the licensing fee for the New Area will be borne by the Company.
  5. The exploration licence of the New Area should be obtained on or before August 31, 2011.
  6. The resource estimate of the New Area should be provided on or before December 31, 2012.
  7. The New Mining Licence should be obtained on or before June 30, 2014.
  8. The Company will be entitled to the Non-delivered CB and an additional consideration in cash based on the resource estimate of the New Area, in total with a cap of HK$106,000,000, of which 50% will be paid upon the Company providing the resources estimate report and the remaining 50% will be used to settle the licensing fee of the New Area with the balance paid to the Company upon obtaining the New Mining Licence. The final and total consideration will accordingly be capped to HK$365,000,000.

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).

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

As announced in its press release of February 9, 2010, GobiMin acquired an indirect equity interest of 24.49% in Balikun Coal Project in Xinjiang, China and will participate 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.

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 as 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

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