SOURCE: GobiMin Inc.

April 15, 2008 18:29 ET

GobiMin Announces Outstanding 2007 Financial Results and Increases Dividend by 150%

(Expressed in United States Dollars Except Where Otherwise Indicated)

TORONTO--(Marketwire - April 15, 2008) - GobiMin Inc. (TSX-V: GMN) (the "Company" or "GobiMin") is pleased to report its financial and operating results for the fourth quarter and the fiscal year of 2007. 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).

Following the outstanding 2007 financial and operating results, GobiMin is pleased to declare an annual dividend of CAD$0.03 per share. The dividend is payable on June 5, 2008 to shareholders of record on May 15, 2008.

Financial Highlights

                             Year ended       Year ended      Increase
                            December 31,     December 31,        on
                                2007              2006       yearly basis

-------------------------------------------------------------------------
Revenue                    $38.5 million     $19.6 million      96.8%
Net earnings               $20.4 million      $6.4 million       221%
EBITDA(1)                  $26.0 million     $10.0 million       161%
Gross Margin                   69.8%              66.3%          5.3%
Basic earnings per share       $0.29              $0.11          167%
Diluted earnings per share     $0.28              $0.10          183%
EBITDA per share(1)            $0.37              $0.17          117%
Cash and cash equivalents  $46 million         $15 million       201%
Cash and cash equivalents
per share(1)                   $0.62              $0.24          158%
Cash cost per tonne of ore,
after by-product credits(1)   $14.04             $13.07          7.4%
Annual dividend per share      $0.03             $0.012          150%

(1) As non-GAAP measurements, EBITDA, EBITDA per share, Cash and cash equivalents 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.

Business Summary and Development

In its 2006 annual report, the Company set ambitious targets for 2007:

* Increase production by 50%
* Complete National Instrument ("NI") 43-101 compliant mineral resources
estimate for Yellow Mountain Deposit
* Improve efficiency of mines and mills
* Expand into new base metal projects to spur continuous growth.

Not only had the Company met all the above objectives, the management has succeeded at record pace to complete 2 major milestones which will catapult the Company into a significant mining company in China:

* Obtained government permits to start building the Yellow Mountain Deposit
* Started process for the initial public offering of its subsidiary in
China ("China IPO").

(a) Production Growth

The Company processed approximately 330,000 tonnes in the whole year compared to 220,000 tonne production in 2006. Started in Q2 2007, the optimization program is to improve the underground operations' efficiency and safety standards. With the benefit of the optimization program and the added capacity of two new shafts in 2008, the Company has a mining plan to increase ore production each year until 2009 from the existing mines.

(b) Progress at Yellow Mountain Deposit

During the year, GobiMin received a NI 43-101 compliant resource estimate from Met-Chem Canada Inc. of Montreal for its Yellow Mountain Deposit. At 0.2% cut-off, Indicated Mineral Resources are estimated at 12 million tonnes averaging 0.44% nickel, 0.29% copper and 0.026% cobalt while Inferred Resources total 48 million tonnes averaging 0.42% nickel, 0.27% copper and 0.026% cobalt. This represents 113 million pounds of nickel and 73 million pounds of copper in-situ.

The 2007 diamond drilling campaign not only confirmed the continuity of the main ore body but extended the known mineralization to the west by nearly 300 meters towards the surface. This reveals the potential of expanding the resource tonnage and opportunity to implement early development of the near-surface ore body.

After obtaining development permit from local government in September 2007, GobiMin started the development work of Yellow Mountain Deposit and is actively negotiating with local engineering consultants and contractors for the planning, designing and construction of the mine site and mill, which is estimated to have a capacity of 3,500 to 4,000 tonnes per day. It is expected that construction will last approximately 4 years.

(c) Exploration Projects

During 2007, GobiMin formed four new joint ventures with subsidiaries of Xinjiang Bureau of Geology and Mineral Resources ("Xinjiang Bureau"). By combining GobiMin's project development expertise with Xinjiang Bureau's considerable mining property portfolio, the new joint ventures aim to acquire quality projects in Xinjiang. The joint ventures have already obtained over 25 exploration licenses of copper, nickel, lead and zinc projects all over Xinjiang region and will apply for further exploration licenses in 2008. GobiMin also participated in a joint-venture to explore for nickel laterite in Indonesia.

(d) China IPO

In October 2007, GobiMin announced that its Chinese subsidiary, Xinjiang Yakesi Resources Co. Ltd. ("Yakesi"), plans to apply for IPO on Shenzhen Stock Exchange in China. Yakesi intends to issue approximately 25% of its shares to the Chinese public. Net proceeds will be used mainly to fund the development of Yellow Mountain Deposit. In March 2008, Yakesi entered into a 3-month period of tutoring offered by the sponsor relating to compliance and listing requirements in China. At the end of the tutoring period, the tutoring results will be submitted for approval to Chinese Securities Regulatory Commission ("CSRC") when the IPO application can be submitted. As there are many companies queued up for IPO processing with CSRC, the China IPO may be delayed to the third or fourth quarter of 2008.

(e) Operations of first quarter of 2008

In January 2008, the worst winter weather for half a century across China stranded millions of people as highways, railways and airports were paralyzed. This is even more dramatic as it coincided with the China New Year when workers return to their homes and families in other provinces. This is the most important holiday for our staff and the weather disrupted the employees' travel plans both in their way out and in their return. In the process, the Company lost 20 working days in the first quarter of 2008. The production and the earning in the quarter have been impacted accordingly. It is expected that the net profit will be substantially reduced compared to the first quarter of 2007. The production has returned to normal since the end of March 2008. The management expects to be able to catch up with the lost production in the remaining quarters and still plan to end up with higher production in 2008 compared to last year.

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. These risks include, but are not limited to, risks associated with fluctuations in metal prices, risks associated with mining operations including environmental hazards, GobiMin's reliance on key suppliers and on key personnel, the potential for changes in the legislative and regulatory environment in China and other risks and uncertainties detailed from time to time in GobiMin's annual report and other filings with the Canadian securities commissions. 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. Additional information about (i) the material factors that could cause actual results to differ materially from the conclusion, forecast or projection in the forward-looking information, and (ii) the material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information, is contained in the GobiMin's annual report and other documents filed from time to time with the Canadian securities commissions, all of which are available at www.sedar.com and the Company's website www.gobimin.com.

The TSX Venture Exchange has neither approved nor disapproved the contents of this press release.

To receive GobiMin press releases by email, send a message to info@gobimin.com and specify "GobiMin press releases" on the subject line.

Contact Information

  • For further information, please contact:

    James Xiang
    Chief Financial Officer
    GobiMin Inc.
    Tel: (416) 915-0133
    Email: Email Contact
    www.gobimin.com