Tiomin Resources Inc.

Tiomin Resources Inc.

March 13, 2009 14:09 ET

Tiomin Reports 2008 Audited Financial Results

TORONTO, ONTARIO--(Marketwire - March 13, 2009) - Tiomin Resources Inc. ('Tiomin' or the 'Company') (TSX:TIO) reports that for the year ended December 31, 2008, it had a loss of $9,120,000 or $0.02 per share compared to a loss of $7,930,000 or $0.02 for the same period in 2007.

Tiomin continues to protect its capital and ended the year with a strong cash position of $19.3 million and working capital of $20 million. Tiomin has significant funds available for its projects, a strong management team, and is actively reviewing investment, merger and acquisition opportunities. During the past 18 months the Company reviewed approximately 30 investment opportunities which resulted in the addition of Pukaqaqa Sur property to the Peru joint venture with Milpo; the acquisition of Radiant Resources Inc.; the investments totaling 33.5% of Kivu Gold Corp.; and a proposed merger arrangement with Cadiscor Resources Inc., which was subsequently cancelled. Tiomin remains focused on increasing shareholder value in a difficult market.

Company Highlights

- Kenya and Jinchuan:

Tiomin continues to work with Jinchuan Group Limited ('Jinchuan') of China and the Government of Kenya ('GoK') to develop the Kwale Mineral Sands Project ('Kwale' or 'the project') in Kenya. On July 28, 2008, Tiomin and Jinchuan entered into a Memorandum of Understanding ('MOU'), whereby Jinchuan will acquire 70% of Tiomin Kenya Ltd. ('TKL') by investing US$25 million into TKL, a wholly owned subsidiary of Tiomin that owns 100% of the Kwale. Jinchuan's investment will entitle it to a 70% interest in TKL and through its shareholding, the project. Under the terms of the MOU, Jinchuan will procure all financing, on normal commercial terms, to develop Kwale. Jinchuan has been providing monthly funding since November 2008 as consideration for extending the MOU. A special meeting of shareholders is required to approve the transaction.

Although Kwale still remains in Force Majeure from December 12, 2006, Tiomin is confident that, with Jinchuan's involvement and commitment to develop the project, the Government of Kenya ('GoK') will complete the steps required by international financiers and Jinchuan to secure debt financing for Kwale.

Robert Jackson, President and CEO, said "We are delighted that Jinchuan remains committed to the project at a time when about US$50 billion worth of mining projects have been cancelled globally. The GoK is almost finished and Jinchuan expects to complete an updated technical review by the third quarter, which will give us a final decision on whether to proceed".

- Radiant Resources Investment:

On September 26, 2008 Tiomin issued approximately 28.898 million common shares to acquire 100% of Radiant Resources Inc. ('Radiant'). Radiant has a portfolio of exploration properties in the Altay Shan mineral belt in Xinjiang, northwestern China, in an area with a known history of mining activity. Subsequent to Tiomin's acquisition of Radiant its 'Chinese-Foreign Co-operative Joint Venture' company Xinjiang Pacific Resources Corporation ('XPR') continued exploration work.

Due to changing market conditions and other strategic priorities the Company's management decided, on February 18, 2009, to suspend further exploration activities in the area. As a result, charges for impairment in value of mineral properties and deferred exploration of $2.144 million and $3.085 million were recorded effective December 31, 2008. The Company is actively seeking another joint venture partner or other investor in order to obtain future value from the XPR investment.

Jackson commented, "The decision to suspend activities in China was extremely difficult and driven by the speed and degree of changes in external factors in the global economy that we do not control. We really liked the exploration potential in Xinjiang but felt it was better to preserve the capital than continue to spend there".

- Kivu Gold Corp.

Tiomin invested $2 million in the first quarter of 2008 and another $1,424,375 in February 2009 increasing its ownership to 33.5% as discussed in the press release of February 20, 2009. Based on the most recent valuation analysis and the general decline in exploration company values, the Company, at December 31, 2008, recorded an impairment charge of $1.14 million against its original investment in Kivu Gold Corp. (Kivu').

- Pukaqaqa Project in Peru

In the first quarter of 2008 Tiomin invested approximately $0.9 million to acquire a 49% interest in the Pukaqaqa South property consistent with its joint venture agreement with Compania Minera Milpo S.A. ('Milpo'). As a result of the decrease in copper prices and general market conditions, Milpo and the Company deferred the development of the exploration plan until later in 2009.

Results of Operations
(Expressed in thousands of Canadian dollars)

Twelve months ended December 31 2008 2007

Loss before interest and amortization 9,763 8,807
Loss before income tax 9,120 7,930
Loss per share 0.02 0.02

Total assets 61,268 68,184
Working capital 19,964 29,135
Mineral properties 9,816 8,915
Deferred exploration and development 27,046 27,063

Share Capital:
Outstanding (000's of shares) 476,614 445,365
Warrants (000's) 103,385 98,438
Options (000's) 44,764 35,995

Cash Flow and Liquidity

At December 31, 2008 the Company had a working capital surplus of $19,964,000, compared to $29,135,000 at December 31, 2007. Tiomin's net cash used for the year ended December 31, 2008 was $10,046,000 and $5,121,000 for the same period in 2007. With the current issues in the financial markets, it is important to note that the Company's treasury investment strategy ensured it was never exposed to asset backed commercial papers or sub-prime mortgages.

During the year ended December 31, 2009 the Company invested $2,148,000 into Freegold Ventures Limited ('Freegold') as a short term investment, which matured on January 15, 2009. Due to the economic downturn Freegold was unable to repay the loan. The senior US lender extended the loan to July 15, 2009 to enable Freegold to complete various NI 43-101 studies on its gold resources. The completed studies should assist Freegold to raise money and repay Tiomin and the US lender. The Company also invested $2,000,000 into Kivu during 2008.

During the year ended December 31, 2008, the Company did not issue any shares for cash.

The information above should be reviewed in conjunction with the Company's audited consolidated financial statements, management discussion and analysis, and the annual information form for the year ended December 31, 2008 that will be available shortly on www.sedar.com and www.tiomin.com.

About Tiomin Resources Inc.

Tiomin is enhancing shareholder value by the acquisition, exploration and development of industrial mineral, precious and base metal projects. Jinchuan Group Limited ('Jinchuan'), one of China's largest mining companies, owns approximately 18.5% of Tiomin.

Tiomin currently has four main assets:

1) Approximately $17.3 million of working capital (after the Feb. 20th Kivu Gold Corp. investment);

2) 49% interest in the Pukaqaqa copper and gold project in Peru;

3) 100% interest in the Kwale titanium project in Kenya; and

4) 33.5% interest in Kivu Gold Corporation, a mineral exploration focused on sub-Saharan Africa.

Tiomin's share price currently only reflects the value of its working capital position and it receives no value for its other assets in Peru, Kenya or Kivu.

To find out more about Tiomin Resources Inc., please visit the company website at www.tiomin.com or review the documents filed on www.sedar.com.

Certain of the information contained in this news release constitute 'forward-looking statements' within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, including but not limited to those respect to the prices of metals and minerals, estimated future production, estimated costs of future production and the Company's sales policy, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any forecast results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the actual prices of copper and gold, the actual results of current exploration, development and mining activities, changes in project parameters as plans continue to be evaluated, as well as those factors disclosed in the Company's documents filed from time to time with the Ontario Securities Commission.

Contact Information

  • Tiomin Resources Inc.
    Jim O'Neill
    VP Corporate Controller and Investor Relations
    (416) 350-3779, ext. 231
    Email: joneill@tiomin.com
    Tiomin Resources Inc.
    Bruce Ramsden
    VP Finance and CFO
    (416) 350-3779, ext. 232
    Email: bramsden@tiomin.com
    Website: www.tiomin.com