GobiMin Signs Definitive Sales and Purchase Agreement To Sell its Chinese Nickel Properties
Mon Nov 24, 7:56 AM
ca.news.finance.yahoo.com
TORONTO, Nov. 24 /CNW/ - Subsequent to the two revocable framework agreements (the "Framework Agreement") signed on November 1, 2008 and the press release published on November 3, 2008, GobiMin Inc. ("GobiMin" or the "Company") is pleased to announce that it has entered into two definitive Sale and Purchase Agreements (the "Definitive Agreement") with Xinjiang Xinxin Mining Industry Co., Ltd. ("Xinxin") to dispose of its three nickel-copper mining properties, namely Yellow Mountain East, Xiangshan and Yellow Mountain, in Hami, Xinjiang Uygur Autonomous Region ("Xinjiang") of the People's Republic of China ("China"). The transaction (the "Transaction") will be facilitated by the sale of its respective entire 93.55% and 95.16% equity interests in the two Chinese subsidiaries, Xinjiang Yakesi Resources Co. Ltd. ("Yakesi") and Hami Jubao Resources Co. Ltd ("Jubao") through its wholly owned subsidiary, Alexis Investments Limited ("Alexis"). Xinxin, based in Xinjiang, is China's second-largest nickel producer. Its "H" shares have been listed on The Stock Exchange of Hong Kong Limited since 2007.
Details of the three nickel-copper mining properties can be found on GobiMin website at www.gobimin.com and in previous press releases.
Terms of the Agreement
As a result of the completion of Xinxin's due diligence review and audit of Yakesi and Jubao's accounts as at October 31, 2008 and the receipt of the applicable approvals, the Company and Xinxin finalized the terms of the Transaction and entered into the irrevocable Definitive Agreement on November 23, 2008 which superseded the Framework Agreement. Under the Definitive Agreement, Xinxin agrees to acquire Alexis's equity interest in Yakesi and Jubao for a total cash consideration (the "Consideration") of RMB492.33 million (approximately CAD$87.9 million).
For settlement of the Consideration, Xinxin remitted/will remit several amounts under the Definitive Agreement as follows:
1. The initial deposit of RMB25 million received under the Framework
Agreement was replaced by a new non-refundable deposit (20% of the
Consideration) of RMB98.47 (CAD$17.6 million) paid to Alexis on
November 24, 2008;
2. RMB147.70 million (CAD$26.4 million) was paid to Alexis as the first
non-refundable installment (30% of the Consideration) on November 24,
2008; and
3. On or before November 27, 2008, an amount corresponding to the
remaining 50% of the Consideration will be deposited to a bank
account, jointly controlled by Alexis and Xinxin, to be disbursed as
follows:
a. On February 6, 2009 when title of the equity interest in Yakesi
and Jubao is transferred to Xinxin, a second non-refundable
installment (20% of the Consideration) of RMB98.47 million
(CAD $17.6 million) will be paid to Alexis; and
b. On February 28, 2009 or when the transfer is approved and
registered by the Chinese regulatory authority, whichever is
earlier, the final non-refundable installment (30% of the
Consideration) for RMB147.70 million (CAD$26.4 million), after
deducting the Chinese withholding tax (estimated to be CAD$5
million), will be paid to Alexis.
All sums paid under the Consideration will be held in China by Alexis until Xinxin has obtained the necessary government approval for foreign exchange remittance which is expected by the end of February 2009.
As security for its due performance under the Definitive Agreement, the Company entered into a pledge agreement and a trust agreement in respect of the entire equity interest in Yakesi and Jubao in favour of Xinxin.
Pursuant to the Definitive Agreement, Yakesi and Jubao declared a special dividend of RMB43.89 million (CAD$7.8 million) which will be payable to Alexis together with the final installment of the Consideration. Xinxin will be entitled to all the earnings of Yakesi and Jubao starting from November 1, 2008.
GobiMin holds as of October 31, 2008 cash and cash equivalents outside of Yakesi and Jubao of approximately CAD$18.4 million. In November 2008, GobiMin received from Yakesi and Jubao repayment of receivable of approximately CAD$6.5 million. GobiMin is expected to receive repayment of all the outstanding shareholder loan of CAD$2.8 million to the Company before the end of December.
Exchange rate used: CAD $1= RMB 5.6
About GobiMin
GobiMin is a junior mining company with nickel/copper sulphide operations and development properties in northwestern China. Through its subsidiaries, Xinjiang Yakesi Resources Co. Ltd. and Hami Jubao Resources Co. Ltd., GobiMin controls three concessions, within a 10-kilometre radius, totaling 455 hectares. In operation since 1999, GobiMin currently operates two underground mines (Yellow Mountain East and Xiangshan) and is developing its Yellow Mountain nickel/copper deposit.
GobiMin also has 40% interest in the newly discovered Yanxi Copper Deposit in Hami region of Xinjiang, China. The Company received for its Yanxi Copper Deposit an initial NI 43-101 compliant Mineral Resource Estimate from Scott Wilson RPA in October 2008. The Company is planning the development of this project, using typical low-cost Chinese mining methods.
GobiMin has another four new joint ventures, exploring various base metal projects in the Xinjiang region. GobiMin also has set up joint venture for exploration of metal properties in Indonesia.
GobiMin continues to aggressively seek opportunities to acquire identified high grade mining projects for metals, either in exploration, pre-production or production stage.
FORWARD-LOOKING STATEMENTS AND RISK FACTORS
This release contains certain forward-looking statements. These forward-looking statements are subject to a variety of risks and uncertainties beyond the Company's ability to control or predict which could cause actual events or results to differ materially from those anticipated in such forward-looking statements. These risks include, but are not limited to, those associated with our capacity to finance our activities, the price of minerals and other commodities, reliance on subcontractors and key personnel, and other risks and uncertainties detailed from time-to-time in our filings with the Canadian securities commissions. There is no guarantee that the Transaction will be completed or that its terms will not vary from those described above.
Readers should not place undue reliance on forward-looking statements, given that (i) our actual results could differ materially from a conclusion, forecast or projection in the forward-looking information, and (ii) certain material factors or assumptions which were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking information, could prove to be inaccurate. 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 Company's annual report and other documents filed from time to time with the Canadian securities commissions and which are available at www.sedar.com.
The TSX Venture Exchange has neither approved nor disapproved the
contents of this press release.
To receive GobiMin press releases by email, please send a message to
info@gobimin.com and specify "GobiMin press releases" on
the subject line.
Contacts
James Xiang
Chief Financial Officer
GobiMin Inc.
Tel: (416) 915-0133
james@gobimin.com
www.gobimin.com |
