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GobiMin Announces First Quarter 2018 Results

(Expressed in United States dollars except where otherwise indicated)

TORONTO, May 24, 2018 (GLOBE NEWSWIRE) -- (TSX-V:GMN) GobiMin Inc. (“GobiMin” or the “Company”, together with its subsidiaries collectively the “Group”) reports its financial and operating results for the first quarter of 2018.  The unaudited condensed interim financial statements along with quarterly highlights of 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

 3 months ended March 3112 months ended
 2018 2017 December 31, 2017
 $$$
Net loss for the period/year(0.6 million)(0.5 million)(3.1 million)
LBITDA (1)(0.6 million)(0.5 million)(2.9 million)
Basic and diluted losses per share(0.011)(0.009)(0.059)
LBITDA per share (1)(0.013)(0.010)(0.057)
    
Cash and cash equivalents18.0 million23.9 million19.1 million
Cash and cash equivalents per share (1)0.36 0.48 0.38 
Working capital20.7 million29.9 million21.7 million
Total liabilities3.3 million3.5 million3.7 million
Total assets83.0 million84.4 million84.0 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. Change of Business

    GobiMin completed its change of business from a “mining issuer” to an “investment issuer” in September 2017.  The investment objective of the Company is to seek superior returns by making investments in equity, debt or other securities of publicly traded or private companies or other entities as well as direct ownership stakes in projects.   New investments will be directed by an Investment Committee and guided by the Company’s Investment Policy which govern its investment activities and investment strategy. For further details regarding the change of business, please see the Company’s Management Information Circular dated August 3, 2017 and the Investment Policy appended thereto on SEDAR at www.sedar.com.

(a) Equity Investments

Equity investments represent equity interests of other publicly‐trading or privately‐held companies that the Company has acquired.  The equity investments portfolio is summarized as follow:

  1. Gold Project in Xinjiang

    The Company owns a 70% equity interest in Xinjiang Tongyuan Minerals Limited which is developing and operating the Sawayaerdun Gold Project (the “Gold Project”) in Xinjiang.  In this quarter, our renewal application on the existing exploration and mining license was still under consideration by the Department of Land Resources of Xinjiang. It is estimated to take half a year to obtain the approval. The third Chinese standard geological reports concerning the development plan is under schedule of preparation as required. Meanwhile, GobiMin is seeking potential partners to jointly develop the project.

    As at March 31, 2018, there was no addition to the exploration and evaluation assets and the Group had a contractual commitment of $1.6 million for the development of the Gold Project.

  2. Base Metal Exploration Projects in Xinjiang

    The Group owns a 40% equity interest in each of the three companies incorporated in Xinjiang, China, which are engaged in exploration of nickel, copper, and gold. As at March 31, 2018, the carrying value of these companies, which are regarded as associates of the Group, amounted to $0.2 million (RMB1.3 million) in aggregate.  The dissolution procedures of these three exploration companies have been commenced since November 2017.

  3. Others

    The Group holds 40,260,000 shares of Loco Hong Kong Holdings Limited (“Loco HK”), representing 8.38% of the total outstanding shares of Loco HK.  Loco HK is a company incorporated in Hong Kong and the shares of which are listed on the GEM of The Stock Exchange of Hong Kong Limited under the stock code 8162.  For the three months ended March 31, 2018, the fair value loss on investment in Loco HK were $26,000 (3 months ended March 31, 2017: $0.1 million).

    The Group invested about $4.12 million in Dragon Silver Holdings Limited (“Dragon Silver”), a Hong Kong based metal trading and processing company, by way of (1) an equity investment of $1.1 million in 670,000 shares, representing 9.90% of its total issued capital and (2) a loan of $3 million, bearing interest at 8.5% per annum and repayable on demand at a notice of 7 days. Dragon Silver is mainly engaged in trading, production, processing and investment in precious metals and non-ferrous metals and related products.

    In April 2018, the Group invested a total of RMB10 million (equivalent to approximately $1.5 million), through its China indirect wholly-owned subsidiary, in an agriculture project for development, planting and sales of primary agricultural products and plants cultivation in Hami City, Xinjiang, China. The project would occupy an area of about 250 mu (equivalent to about 166,000 sq. meters) to plant Hami red dates or any cash crops. The invested funding would be mainly used for land acquisition, infrastructure facilities, crops and staff costs as well as general working capital.

(b) Debentures

The Group would hold debentures bearing low risks and reasonable interest return from various industries through the open market. Debentures are held to receive coupon interest payments as well as to realize potential gains. The Group may dispose of debentures through the open market when the Group requires funds for operational or investment needs.

As at March 31, 2018, the Group held $7.6 million debentures with coupon rates ranged from 4.250% to 9.000% (December 31, 2017: 4.250% to 9.000%) per annum and maturities ranged between November 14, 2018 and perpetual (December 31, 2017: November 14, 2018 and perpetual).

  1. Liquidity and Capital Resources

    As at March 31, 2018, the working capital of the Group amounted to approximately $20.7 million (December 31, 2017: $21.7 million), by netting off its current assets of $24.0 million (December 31, 2017: $25.4 million) with current liabilities of $3.3 million (December 31, 2017: $3.7 million).

    Taking into account of its financial position, the management of the Group considered that its cash and cash equivalents will be more than sufficient to finance its operation, including the contractual commitments of the Gold Project of approximately $1.6 million.

For further information, please contact:

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

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.

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