Toronto, Canada. May 27, 2010 - GobiMin Inc. (the "Company" or "GobiMin") reports its financial and operating results for the first 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).
3 months ended
3 months ended
Cash and cash equivalents
Cash and cash equivalents per share(1)
Gain on disposal of subsidiaries
Basic (losses)/earnings per share
Diluted (losses)/earnings per share
EBITDA per share(1)
(1) (1) As non-GAAP measurements, (LBITDA)/EBITDA, (LBITDA)/EBITDA per share and Cash and cash equivalents and time deposit 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 drilling program so as to document a NI 43-101 compliant resource estimate. It is targeting for the mine construction and development during 2011. It has also applied for an exploration license for the surrounding area of 20.27 km2 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 mine construction is actively in process while the infrastructure and electricity and water supply will be in place during 2010.
(c) Silver Operations
The Company intends to build a vertically integrated silver operation. 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. 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 5 base metals exploration projects in Xinjiang, China including nickel, copper, lead and zinc projects. The most advanced project is the Yanxi Copper Property located about 115 km south of the city of Hami in Xinjiang, China, which is held by the 40% owned joint venture, Xinjiang Tongxing Minerals Ltd. ("Tongxing"). Tongxing is in the process of applying for the mining licence, which is expected to be obtained within 2010. On April 13, 2010, GobiMin entered into a framework agreement to dispose of a 32% interest in the Yanxi Copper Property, retaining an 8% indirect equity interest in the Property.
For the remaining exploration projects, the Company will continue to conduct pre-survey, reconnaissance or detailed survey and to identify potential mineralization of good scale among the licensed area.
(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 and time deposit balance of $53.4 million, the Company will keep on searching for potential investment opportunities. Several projects are currently under negotiation and assessment.
(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. No common shares were repurchased during the quarter. For the period from April 1, 2010 to May 27, 2010, a total of 267,500 common shares were repurchased at an aggregate cost of CAD220,681 ($212,692). All shares repurchased were returned to treasury for cancellation.
GobiMin is entering the year 2010 with a comfortable cash position of US$53.4 million. Our primary focus remains on advancing our existing projects while looking for potential opportunities in base and precious metals.
The Sawayaerdun gold project will take another 10,000 metres drilling this year to be followed by metallurgical tests. For the Balikun coal project, we will push forward the infrastructure construction during 2010, aiming at production in 2013.
We are optimistic about the prospect of the Company in 2010 by taking full advantage of our sound financial fundamentals and growth impetus.
For further information, please contact:
Felipe Tan, Chief Executive Officer
Tel: (852) 3586-6500
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."
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