GMN Gobimin Inc

(Expressed in United States dollars except where otherwise indicated)

TSX-V: GMN

TORONTO, April 21, 2016 /CNW/ - (TSXV: GMN) GobiMin Inc. (the "Company" or "GobiMin") announces its financial results for the year ended December 31, 2015 and the declaration of an annual dividend of $0.01 (CAD0.01) per share.  

Financial Highlights

Annual Dividend

On April 21, 2016, the Company declared an annual dividend of $0.01 (CAD0.01) per share in accordance with its dividend policy and 2015 performance. The dividend is payable on June 23, 2016 to shareholders of record on May 27, 2016.

Business Summary and Development

The Company owns a 70% equity interest in a company incorporated in China to develop and operate the Sawayaerdun Gold Project (the "Gold Project") in Xinjiang.  During 2015, GobiMin has kept seeking potential investors to develop the Gold project and undertaken the process to convert the exploration licence into a mining licence.  The Company has submitted for approval the resource estimate, which was the first of three Chinese standard geological reports that the Company expects to be required to complete the conversion.  In practice, the reports submitted would be amended subject to the comments of the relevant authorities.  It is expected that it would take about one to six months to get an approval of each report. GobiMin expects to get the approval of the first report by July 2016. Upon receipt of this approval, the Company would proceed to prepare the second report.  If the process goes well, a mining licence would be obtained by the end of 2017. However, the Company has no control over the length of the process and might delay the process depending on market conditions. The most important costs associated with the application process are the report preparation and mining licence fees. The fees for preparing the second and third reports are currently estimated at about $0.1 million.  The mining licence fees would be determined by the relevant authority at the final stage before granting the licence.  In view of the gold price recovery from $1,061 per ounce as at December 31, 2015 to $1,232 per ounce as at March 31, 2016, the management is optimistic that the Gold Project will generate positive return to the Group in future.  However, to minimize risk associated with further development of the Gold Project, GobiMin is actively seeking for cooperation with potential investors in China. The Company will continue to postpone its development plan in 2016 and concentrate its effort to convert the exploration licence into a mining licence to enable the Company to take immediate response to any market change.

The equity interest of GobiMin in Loco Hong Kong Holdings Limited ("Loco HK") was reduced from 48.03% to 38.3% during the year.  In September 2015, the Group disposed of 40,000,000 shares of Loco HK and recognised a gain on disposal of $3.5 million.  Loco HK together with its subsidiaries ("Loco HK Group") engage in the trading of metals and commodity forward contracts.  During the year under review, the silver market price maintained at relatively low level, which adversely affected the overall silver supply in Hong Kong. Loco HK Group recorded a revenue from sales of metal of approximately $137.9 million (2014: $273.6 million), representing a significant decrease of 50% as compared with last year.  Such decrease in sale revenue was mainly due to the decrease in quantity sold of processed silver products by 37% to 258 tonnes (2014:  409 tonnes).  The silver price recorded a significant drop of 12% from $15.71 per ounce on January 1, 2015 to $13.85 per ounce on December 31, 2015. Loco HK Group recorded loss of approximately $40,000 (2014: profit of $0.3 million) for the year ended December 31, 2015.  The decrease in profit was due to (i) decrease in sales revenue by 50% from $273.6 million in last year to $137.9 million in current year; and (ii) increase in staff cost by 83% from $0.6 million in last year to $1.1 million in current year.  The increase in staff cost in the year under review was mainly because of additional work force required for the laboratory, internal control and compliance matters and due to payroll raised for existing staff and the grant of staff options.  Looking ahead, the tendency of silver price would remain not optimistic due to the unstable and enfeeble equity global market. Facing the challenge ahead, Loco HK Group will continue to exercise prudence in managing its expenditures, commit efforts in daily operation to maintain the quality of their silver products and constantly evolve its business strategies in a cautious manner.

In addition, GobiMin owns 40% equity interest each in three companies incorporated in China to engage in base metals and precious metal exploration, including nickel, copper, and gold, in Xinjiang, and a 2.66% equity interest in the Yanxi Copper Property.

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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SOURCE GobiMin Inc.