(Expressed in United States dollars except where otherwise indicated)
TSX-V: GMN
TORONTO, April 15 /CNW/ - GobiMin Inc. (the "Company" or "GobiMin") reports its financial and operating results of 2009 and is pleased to declare an annual dividend of $0.0125 (CAD$0.0125) per share.
The audited 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
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Year ended Year ended Changes
December 31, December 31, on
2009 2008 yearly basis
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Revenue $0.9 million $21.4 million -95.6%
Net earnings(1) $29.51 million $0.03 million (greater than)
100.0%
EBITDA(2) $30.5 million $6.3 million (greater than)
100.0%
Gross Margin -8.7% 44.6% (greater than)
-100.0%
Basic earnings per share $0.43 $0.00 (greater than)
100.0%
Diluted earnings per share $0.42 $0.00 (greater than)
100.0%
EBITDA per share(2) $0.44 $0.09 (greater than)
100.0%
Cash and cash equivalents
and time deposit $78 million $54 million 46.1%
Cash and cash equivalents
and time deposit per
share(2) $1.15 $0.76 50.6%
Cash cost per tonne of ore,
after by-product credits(2) $22.20 $20.32 9.3%
Dividend per share(3) $0.0125 $0.01 25%
(1) Net earnings for the year 2009 comprised also the gain on disposal of
the 2 operating subsidiaries in China.
(2) As non-GAAP measurements, EBITDA, EBITDA per share, Cash and cash
equivalents and time deposit per share and Cash cost per tonne of ore
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.
(3) For 2008, the Company paid an annual dividend of CAD0.01 per share
according to the Company's dividend policy and a special dividend of
CAD0.07 per share following the disposal of the 2 Chinese operating
subsidiaries.
Annual dividend
---------------
On April 15, 2010, the Company declared an annual dividend of CAD0.0125 ($0.0125) per share for 2009 in accordance with the Company's dividend policy and 2009 annual financial performance. The dividend is payable on June 1, 2010 to shareholders of record on May 12, 2010.
Business Summary and Development
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(a) Gold Project in Xinjiang
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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 owns an interest of 15% (See the Company's news release on September 18, 2009).
(b) Coal Project in Xinjiang
------------------------
On February 9, 2010, GobiMin has acquired an indirect equity interest of 24.49% in the 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 (See the Company's news release on February 9, 2010).
(c) Silver Operations
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The Company intends to build a vertically integrated silver operation. During the first half year of 2009, GobiMin acquired a 49% equity interest in China Precision Material Limited ("China Precision") which engages mostly 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
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GobiMin currently owns 5 base metals exploration projects in Xinjiang, China including nickel, copper, lead and zinc projects. The most advanced project is the 40% equity interest owned Yanxi Copper Property which is located about 115 km south of the city of Hami in Xinjiang, China. During the year, the Company continued the work towards the potential development of this project and has applied for the mining licence. It is expected that the mining license can be obtained by the Company within 2010. On April 13, 2010, GobiMin entered into a framework agreement with China Daye Non-Ferrous Metals Mining Limited to dispose a 32% interests in the Yanxi Copper Property. GobiMin shall own a remaining 8% indirect equity interest in the property. The transaction is expected to be completed on or before June 30, 2010.
The Company will continue the work on the remaining exploration projects which are at early exploration stages and some of them have undergone reconnaissance-prospecting or reconnaissance exploration.
(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 $78 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 23, 2009, the Company renewed its normal course issuer bid to repurchase up to an additional 3,516,220 common shares over a maximum period of 12 months ended January 31, 2010. The Company repurchased 2,557,300 common shares during the year. All shares repurchased were returned to treasury for cancellation. GobiMin has 68,257,302 shares outstanding as at December 31, 2009.
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. Up to April 15, 2010, no common shares were repurchased. All shares purchased will be returned to treasury for cancellation.
(g) Gain on disposal of subsidiaries
--------------------------------
The Company received total sales proceeds of RMB492 million (approximately $72.2 million) for the disposal of the equity interests in Xinjiang Yakesi Resources Co. Ltd. and Hami Jubao Resources Co. Ltd.. The net asset value of the subsidiaries on the date of disposal amounted to $40.8 million which resulted in a gain on disposal of $31.4 million. The net asset value of the subsidiaries was originally estimated as $38.5 million which resulted in an estimated gain on disposal of $33.6 millions in the Company's 2009 quarterly unaudited financial statements. The change is about $2.2 million, mainly due to the net effect of adjustments on the reserve and retained earnings in relation to the disposal. The change in the estimate was made based on the latest available and reliable information become known to the Company. There is no change in the cash flow in relation to the disposal and no impact on the net asset value of the Company from this adjustment.
Outlook
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Despite the turbulence on the financial market, GobiMin is still financially well positioned to explore synergistic acquisition and investment opportunities.
Since the successful completion of the disposal of its two Chinese subsidiaries in February 2009, GobiMin endeavors to make opportunistic acquisitions with the cash reserves. In our recently completed financial year, GobiMin has acquired an equity interest in a silver trading operation and a gold property and, subsequently in early 2010, a coal project in China. Management is optimistic that these projects will bring satisfactory contribution to the Company upon commissioning and full operation.
During the coming year ahead, the Company will increase its efforts towards advancing the existing and newly acquired mining projects from exploration to development stage. Given our strong financial cash position, GobiMin will stay focused on finding investment opportunities with sound potential to sustain our development in the long run. The projects currently under evaluation and negotiation include high quality exploration and mining projects in China and overseas.
We look forward to the period ahead and the continued delivery of strong returns for the shareholders.
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."
To receive GobiMin press releases by email, send a message to [email protected] and specify "GobiMin press releases" on the subject line
For further information: Felipe Tan, Chief Executive Officer, Tel: (852) 3586-6500, Email: felipe @gobimin.com
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