2012-11-26 11:57 AT - News Release
Mr. Felipe Tan reports
GOBIMIN ANNOUNCES THIRD QUARTER 2012 RESULTS
Gobimin Inc. has released its financial and operating results for the third 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 endedSeptember 30 Year ended 2012 2011 December 31, 2011 $ $ $ Revenue - - - Other revenue and gains 0.19 million 0.18 million 0.9 million Share of results of associates and a jointly-controlled entity 0.40 million 0.44 million 0.5 million Gain on disposal of an associate 6.0 million 8.2 million 8.8 million Profit for the period/year 4.7 million 7.7 million 2.5 million LBITDA (1) (1.2million) (0.5 million) (3.8 million) Basic and diluted earnings per share 0.084 0.123 0.05 LBITDA per share(1) (0.020) (0.008) (0.06) Cash and cash equivalents 50.3 million 63.0 million 62.3 million Cash and cash equivalents per share 0.84 1.01 1.00 Working capital 29.6 million 55.5 million 53.2 million Total non-current financial liabilities 44,000 - 83,000 Total assets 112.2 million 123.5 million 120.6 million Equity attributable to shareholders 86.8 million 86.3 million 84.8 million Equity attributable to shareholders per share 1.45 1.38 1.36
Business Summary and Development
Gold Project in Xinjiang
The Group owns a 70% equity interest in Xinjiang Tongyuan Minerals Ltd. ("Tongyuan") which is developing and operating the Gold Project.
During the quarter ended September 30, 2012, Tongyuan has obtained the exploration and mining licences and the remaining commitment of $873,488 has been paid. The total consideration of $7,034,237 paid for the licences was classified as exploration and evaluation assets in this quarter.
Tongyuan has other commitments of $10,114,437 (RMB63,686,528) for the further development of the Gold Project including the exploration service, construction of an office building and design of mine and related facilities.
For this quarter, drilling of around 21,000 meters has been completed. Up to the end of September 2012, exploration drilling totaled approximately 30,000 meters with a total 66 drill holes completed. Due to the weather condition in winter, it is scheduled that all the field works are suspended by the end of October 2012.
As part of the planned work program, in October 2012 Gobimin has been conducting sample testing and analysis. The resource estimate will be reviewed and updated in accordance with the NI 43-101 standards after laboratory results of the drill cores are available.
The Group 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 September 30, 2012, amounts due from China Precision to the Group amounted to $1.1 million while China Precision had a silver inventory of 8.8 tonnes with a market value of about $9.6 million. The Group recorded interest income of $156,761 on these advances for the nine months ended September 30, 2012.
For the nine months ended September 30, 2012, China Precision had a net profit of about $1,203,000 with Gobimin's share amounting to $577,000 (nine months ended September 30, 2011: $824,000). For the three months ended 30 September 2012, China Precision had a net profit of $843,000, with Gobimin's share amounting to $405,000 (three months ended September 30, 2011: $572,000).
Base Metal Exploration Projects in Xinjiang
Four Exploration Companies
Since 2007 to the end of September 2012, the Group has invested a total of $3,652,767 (RMB23,000,000) as capital in five exploration companies in Xinjiang, including the Yanxi Copper Property and four exploration companies in Xinjiang, China for nickel, copper, and gold. The Yanxi Copper Property was disposed of in 2010 at a gain of $6.0 million
The total cost of the investment in the four remaining exploration companies amounted to $2,382,239 (RMB15,000,000). In May 2012, the Group received dividend income of $259,540 (RMB1,634,221) from the four exploration companies, thus reducing the cost of investment to $2,122,699. The equity investments as at September 30, 2012 are $2,088,434 (RMB13,150,028), slightly less than the net cost of investment.
Gobimin continues the exploration programs of its four exploration companies and also actively searches for high quality mining and exploration projects.
Yanxi Copper Property
On July 22, 2010, Gobimin has completed the disposal of 32% of its equity interest in Xinjiang Tongxing Minerals Limited which is engaged in exploration and development of the Yanxi Copper Property in Xinjiang, China. After the disposal, Gobimin retains an 8% indirect unlisted equity interest in the Yanxi Copper Property.
In August 2012, the Yanxi Mining Licence was obtained and the final payment of the consideration for the Yanxi Copper Property was received. The total consideration of $33.3 million comprised $7.7 million cash and $25.6 million in convertible bonds. After netting off provisions for the related tax and expenses, the disposal resulted in a gain of $6.0 million.
The Company is currently conducting drilling work of the New Area adjacent to the Property. The Group will be entitled to additional consideration based on the resources estimate of the New Area. A further announcement will be made once additional information is available.
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 January 31, 2013. For the nine months ended September 30, 2012, a total of 2,610,500 common shares were repurchased at an aggregate cost of $1,700,955 (CAD1,729,898). For the period from October 1, 2012 to November 26, 2012, a total of 519,314 common shares were repurchased at an aggregate cost of $294,472 (CAD299,483), thus completing the 2012 buy back program. 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.
As at September 30, 2012, the Group has a working capital of about $29.6 million (December 31, 2011: $53.2 million), after netting off its current liabilities of $24.1 million (December 31, 2011: $33.9 million). The working capital is sufficient to support the development of the existing projects and operations, including the Gold Project, in the foreseeable future.
We seek Safe Harbor.