(Expressed in United States dollars except where otherwise indicated)
TSX-V: GMN
TORONTO, May 24, 2012 /CNW/ - (TSXV:GMN) GobiMin Inc. ("GobiMin" or the "Company") reports its financial and operating results for the first quarter of 2012. 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
| Three months ended | Twelve months ended | Three months ended | |
| March 31, 2012 | December 31, 2011 | March 31, 2011 | |
| $ | $ | $ | |
| Revenue | - | - | - |
| Other revenue and gains | 0.6 million | 0.9 million | 0.1 million |
| Share of results of associates and a jointly-controlled entity | 0.3 million | 0.5 million | (0.1 million) |
| Gain on disposal of an associate | - | 8.8 million | - |
| Change in fair value on other financial assets | - | (2.7 million) | - |
| (Loss)/profit for the period/year | (0.3 million) | 2.5 million | (0.8 million) |
| LBITDA (1) | (0.6 million) | (3.8 million) | (0.7 million) |
| Basic and diluted (losses)/earnings per share | (0.003) | 0.05 | (0.012) |
| LBITDA per share(1) | (0.009) | (0.06) | (0.011) |
| Cash and cash equivalents | 51.6 million | 62.3 million | 25.0 million |
| Cash and cash equivalents per share | 0.83 | 1.00 | 0.39 |
| Working capital | 52.2 million | 53.2 million | 49.7 million |
| Total non-current financial liabilities | 68,000 | 83,000 | - |
| Total assets | 119.1 million | 120.6 million | 117.2 million |
Note:
(1) As non-IFRS measurements, LBITDA (losses before interest income and expense, income taxes, depreciation and amortisation), LBITDA per share and cash and cash equivalents 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
1. Gold Project in Xinjiang
Through a wholly owned subsidiary, the Company owns a 70% equity interest in Xinjiang Tongyuan Minerals Ltd. ("Tongyuan") which is developing and operating the Sawayaerdun Gold Project in Xinjiang, China.
(a) Update
In April 2012, GobiMin retained Mr. Philip A. Jones, B App Sc, AusIMM, AIG, a Qualified Person as defined in NI 43-101, to review the 92 drilling results of the 2011 exploration program and update the NI 43-101 compliant resource estimate. The NI 43-101 compliant technical report can be viewed at www.sedar.com. At a lower cutoff grade of 0.5 grams/tonne gold, Zone IV and Zone I are estimated to contain indicated resources of approximately 2.30 million ounces (72 tonnes) gold content with an average grade of 1.3 grams/tonne and inferred resources of approximately 1.9 million ounces (61.25 tonnes) gold content with an average grade of 0.8 grams/tonne.
GobiMin announced the new NI 43-101 compliant resource estimate in April 2012. According to the comments of Mr. Philip A. Jones, the assay results have confirmed that the mineralized structure is mapped over a strike length of over 6,500 m and at depth.
(b) Plan for 2012
In order to facilitate the plan and design of the projected mine, GobiMin will continue to implement in-fill drilling programs and other exploration programs to further ascertain the mineralised structure with detailed information including shape, scale, distribution and ores features. GobiMin aims to complete approximately 30,000 meters in drilling programs in 2012, which commenced in April 2012.
Along with the above planned drilling programs, GobiMin will continue to pursue the infrastructure construction programs for the mine site.
2. Silver Operation
GobiMin holds an equity interest of 48.02% in China Precision Material Limited ("China Precision") which engages in metal trading and processing, predominantly in silver.
The Group has made advances to China Precision from time to time to finance its silver inventory. As at March 31, 2012, amounts due from China Precision to the Group amounted to $14.6 million while China Precision had a silver inventory of 13.3 tonnes with a market value of $13.7 million. The Group recorded interest income of $53,191 on these advances for the three months ended March 31, 2012. China Precision had a net profit of about $0.55 million for the three months ended March 31, 2012, with GobiMin's share amounting to $0.26 million compared with $0.1 million for the three months ended March 31, 2011.
3. Base Metal Exploration Projects in Xinjiang
(a) Four Exploration Companies
GobiMin has invested a total of $3,652,767 (RMB23,000,000) as capital in five exploration companies in Xinjiang since 2007, including an investment in the Yanxi Copper Property disposed of in 2010. Other than the Yanxi Copper Property, GobiMin currently owns equity interests in four exploration companies in Xinjiang, China for nickel, copper, and gold.
Among the exploration projects of these four companies, three projects showed good indications of copper mineralisation. GobiMin will continue the exploration programs for those three projects, which are located in Nileke and Hejing, Xinjiang. The total cost of investment in the four exploration companies amounted to $2,382,239 (RMB15,000,000) while the equity investment up to March 31, 2012 amounted to $2,338,015 (RMB14,721,540).
(b) Yanxi Copper Property
GobiMin formerly owned a 40% indirect equity interest in another exploration company, Xinjiang Tongxing Minerals Limited ("Tongxing"), which is engaged in exploration and development of the Yanxi Copper Property in Xinjiang, China. The Group 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 received all the cash consideration and a first lot of convertible bonds. GobiMin currently retains an 8% indirect unlisted equity interest in the Yanxi Copper Property.
The Group entered into supplemental agreements with China Daye to extend until May 31, 2012 the deadline for obtaining the Yanxi Mining Licence.
The application for the Yanxi Mining Licence is at the final stage. However, as the Yanxi Mining Licence may not be granted by May 31, 2012, the Group is in discussion with the buyer to review the related terms and arrangements.
It is expected that upon obtaining the Yanxi Mining Licence, the Group 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.
4. Normal Course Issuer Bid
On January 20, 2012, GobiMin renewed its normal course issuer bid to repurchase up to an additional 3,129,814 common shares over a maximum period of 12 months ending on January 31, 2013. During the quarter ended March 31, 2012, a total of 423,000 common shares were repurchased at an aggregate cost of $323,655 (CAD329,163). For the period from April 1, 2012 to May 24, 2012, a total of 606,000 common shares were repurchased at an aggregate cost of $424,663 (CAD431,889). All shares repurchased were returned to treasury for cancellation.
Management believes that the repurchase by the Company of its own shares can maximise 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 2012 shall be provided to shareholders upon receipt of written request to the Company at its registered office.
5. Working Capital
As at March 31, 2012, the Group has a working capital of about $52.2 million (December 31, 2011: $53.2 million), after netting off its current liabilities of $32.9 million (December 31, 2011: $33.9 million). The working capital is sufficient to support the development of the existing projects and operations, including the Sawayaerdun Gold Project, in the foreseeable future.
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. Forward looking information includes without limitation, statements regarding the size and quality of the Company's mineral resources, progress in development of mineral properties, the prospective mineralization of the properties, and planned exploration programs. 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 [email protected] and specify "GobiMin press releases" on the subject line
Felipe Tan, Chief Executive Officer
Tel: (852) 3586-6500
Email: [email protected]
Share this article