GobiMin Inc.
TSX VENTURE : GMN

GobiMin Inc.

October 11, 2005 16:38 ET

GobiMin Inc. Completes Take-Over of Goldsat Mining and Acquisition of Alexis Resources

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 11, 2005) -

Not for dissemination or distribution in the United States of America.

GobiMin Inc. (TSX VENTURE:GMN) is pleased to announce the completion of its reverse take-over of Goldsat Mining Inc. ("Goldsat") and the acquisition of Alexis Resources Limited ("Alexis"), the largest nickel producer in the Hami region of northwest China. Subject to the issuance of the final TSX Venture Exchange bulletin, it is expected that the common shares of GobiMin will begin trading on or about October 12, 2005 under the symbol " GMN ".

The transaction, which was effected through the amalgamation of Goldsat with 4209931 Canada Inc., a private company with net working capital of approximately $1,400,000, brings new management and board of directors to GobiMin. In addition, GobiMin completed a private placement of 6,405,000 units at a price of $0.60 for net proceeds of $3,843,000. Each unit is comprised of one common share and one-half of a share purchase warrant. Each full warrant entitles the holder to acquire one common share of GobiMin at a price of $1.00 for a period of twelve months.

Mr. Felipe Tan, GobiMin's new CEO, commented on the closing of the transactions: "This financing and the TSX Venture Exchange listing will facilitate our plans to grow the Company's cash flow and profitability by providing the required funding to complete the development of our mines as well as the expansion of our milling facility. Given the current economic climate in China, we are very fortunate to have been able to acquire nickel-copper-cobalt properties with such vast potential."

New Board of Directors and Senior Officers

The new Board of Directors of GobiMin is comprised of Felipe Tan, Chairman, Jean-Charles Potvin, Hubert Marleau and Dominic Cheng. Mr. Felipe Tan will serve as CEO and Mr Michael Choy as CFO.

Mr. Felipe Tan has over 28 years of experience in metals trading in Hong Kong and China. He is a director of Alexis, President of Belmont Holdings Group and Deputy Managing Director of Simsen International. He began his career as a trading assistant for the Hong Kong Far East Exchange, becoming a representative of Jebsen Co. Ltd. and subsequently a trader for Philipp Brothers. He has been responsible for the financing, development and exploration of Alexis' mining properties. He is also a member of the Political Consultation Committee of Hami City and is a resident of Hong Kong.

Alexis Resources Limited

Alexis was previously owned by Belmont Holdings Group Limited and Simsen (China) Investment Limited. Belmont is a privately held investment company while Simsen is a wholly-owned subsidiary of Simsen International Corporation Limited, a company listed on the Main Board of The Stock Exchange of Hong Kong Limited.

Since 1999, Alexis has been operating nickel-copper-cobalt deposits in the Hami City region of north west China in the Xinjiang Uygur Autonomous Region and is the largest nickel producer in the area through Chinese operating subsidiaries, Xinjiang Yakesi Resources Co. Ltd. and Hami Jubao Resources Co. Ltd. The Region has widespread mineralization with a long history of production of iron, copper, nickel and gold.

Alexis' deposits are known as Xiangshan (an operating mine), Huangshan Dong (comprised of two operating mines and three mines under development) and Huangshan (an undeveloped deposit). The properties are held under long-term licenses and are easily accessible by road.

Alexis owns and operates a concentration plant near Hami City which is operating at design capacity of 600 tonnes of ore per day at about 90% recovery. To accommodate the proposed development of its mining activities, it is envisioned to increase the capacity of the plant by 500 to 900 tonnes per day to be completed during 2006.

SRK Consulting (Canada), Inc., a recognized U.S. independent mining consulting firm, has been involved with Alexis since 1999 and has completed a technical report on Alexis' properties in compliance with NI 43-101, which can be accessed on www.sedar.com.



Summary of Financial Information of Alexis(1)

----------------------------------------------------------------------
Three month Eight month
period period Year Year
ended ended ended ended
March 31,December 31, April 30, April 30,
2005 2004 2004 2003
(unaudited) (audited) (audited) (audited)
----------------------------------------------------------------------
Operating revenue $1,813,200 $9,726,612 $4,637,620 $4,786,476
Cost of sales $574,101 $3,966,760 $4,296,268 $3,237,973
Other revenue $3,847 $25,997 $12,993 $29,217
EBITDA $789,090 $4,884,544 $899,685 $1,000,683
Depreciation
& amortisation $283,993 $671,070 $986,413 $962,259
Profit (Loss)
before tax $499,431 $4,194,133 $(126,981) $(29,052)
Profit (Loss)
for the period
/ year $333,566 $3,448,579 $(263,210) $(104,210)
Current assets $4,039,732 $5,037,843 $2,095,106 $2,496,923
Current liabilities $2,668,264 $2,902,767 $2,468,341 $2,426,666
Total assets $13,843,451 $13,718,364 $11,239,206 $11,647,238
Total liabilities $6,865,400 $7,079,703 $7,098,563 $13,590,839
----------------------------------------------------------------------

(1) This summary is derived from the financial statements of Alexis
which were prepared in accordance with Hong Kong GAAP and the
unaudited statements of Alexis which were prepared in accordance
with Canadian GAAP. Income statement items were converted to
Canadian dollars based on the weighted average exchange rate during
the period and balance sheet items were converted to Canadian
dollars based on the rate at the end of the period.


GobiMin's Acquisition of Alexis

GobiMin acquired all the issued and outstanding shares of Alexis for an aggregate purchase price of $15,820,263 and shareholders loans totalling $4,179,737 for an aggregate purchase price equal to their face value.

The consideration for the acquisition of Belmont's interest in Alexis was paid by the issuance of 27,007,500 common shares at a deemed price per share of $0.40, and 4,500,000 warrants, each warrant entitling the holder to purchase one common share of Goldsat at the price of $0.50 for a period of eighteen months. Belmont is owned by six shareholders, none of which holds a controlling interest in Belmont.

The consideration for the acquisition of Simsen's interest in Alexis was paid by the issuance of a convertible note in the amount of $3,810,000, the issuance of a promissory note in the amount of $2,667,000 and a cash payment of $2,720,000. The convertible note was converted on closing in accordance with its terms into 9,525,000 common shares of GobiMin. The promissory note bears no interest and is payable in cash on the day immediately preceding its first anniversary date. The promissory note is secured by 1,695 shares of Alexis. Mr. Tan owns less than 1% of Simsen International.

GobiMin's issued and outstanding share capital is comprised of 51,021,542 common shares, of which 27,007,500 are held by Belmont. A total of 11,923,271 additional common shares have been reserved for issuance upon the exercise of existing warrants, at prices between $0.40 and $1.00 per share. These warrants have a maximum duration of 18 months. An additional 4,900,000 shares are reserved for issuance under GobiMin's newly created stock option plan.

At a board meeting held on October 1, 2005, the board appointed on additional director, Mr. Zhang Ming, subject to regulatory approval. Mr. Zhang, a resident of Hami in the People's Republic of China, is the general manager of Yakesi and 24% beneficial holder of Belmont Holdings. The board also granted to the three independent directors, namely Jean-Charles Potvin, Hubert Marleau and Dominic Cheng, options to acquire 150,000 common shares under the option plan. Mr. Marleau and Mr. Cheng were also each granted 75,000 additional options as members of the audit committee. Mr. Tan and Mr. Zhang were granted 500,000 and 300,000 options respectively. In addition, the CFO, Mr. Michael Choy, was granted options to acquire 75,000 shares. An aggregate of 1,125,000 additional options were granted to employees of GobiMin's subsidiaries. All options were granted for a period of five years and are subject to regulatory approval. They will be exercisable at a price corresponding to the highest of (i) $0.60 per share; and (ii) the lowest price allowed by the Exchange.

Caution Concerning Forward-Looking Statements

This press release contains certain "forward-looking statements". Forward-looking statements involve a number of risks and uncertainties, and there can be no assurance that such statements will prove to be accurate. Therefore, actual results and future events could differ materially from those anticipated in such statements. Risks and uncertainties that could cause results or future events to differ materially from current expectations expressed or implied by the forward-looking statements include, but are not limited to, factors associated with fluctuations in the market price of base metals, risks associated with mining operations, including environmental risks and hazards and other risks.


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

Contact Information

  • GobiMin Inc.
    Michael Choy
    Chief Financial Officer
    (604) 649-3766