GobiMin Announces Investment in Metal Trading and Processing Business
TORONTO, Jan. 09, 2018 (GLOBE NEWSWIRE) -- GobiMin Inc. (TSX-V:GMN) (the “Company” or “GobiMin”), together with its subsidiaries (collectively with GobiMin, the “GobiMin Group”) is pleased to announce that it invested about USD4,120,000 in Dragon Silver Holdings Limited (the “Investee”), a Hong Kong based metal trading and processing company, by way of an equity investment of USD1,120,000, representing a 9.90% interest, and a loan of USD3,000,000, bearing interest at 8.5% per annum, repayable on demand at a notice of 7 days (collectively the “Investment”).
The Investee is mainly engaged in trading, production, processing and investment in precious metals and non-ferrous metals and related products. Equipped with self-developed testing facility, it has the capacity of producing 1,500 tonnes of tin ingots per month. It commenced tin processing and trading in July 2017 and has achieved a satisfactory performance after operation of four months. It targets to be recognized as a LME-approved brand of tin ingots producer by 2018-9. As an approved brand, it can secure better source of supply, sale channel and price which in turn will further increase profitability.
The sole director and shareholder of the Investee (the “Guarantor”) irrevocably guaranteed that for each of the five financial years ended after the Investment, (1) the audited net profit after tax per the audited financial statements of the Investee shall be not less than HKD15,000,000, equivalent to about USD1,930,000; and (2) the dividend paid shall not be less than HKD1.25 per share, equivalent to about USD0.16. GobiMin Group will accordingly be entitled to an annual dividend of HKD837,000, equivalent to about USD107,000, representing a return rate of 9.62%. In addition, GobiMin Group has the option to sell all its shareholding to the Guarantor at the original subscription price within the period commencing from the fourth anniversary to the date falling the fifth anniversary from the date of the Investment.
Mr. Felipe Tan, President & CEO commented: “We expect the tin market to be bullish due to its wide-range of application in manufacturing of electronics and chemicals, as well as in soldering which is used in a range of industries. Furthermore, growth in demand for consumer electronics will support tin prices. With a promising tin business, the Investee will have a strong financial performance which also enhance its good dividend payment and loan repayment capability as well as the potential capital gain to GobiMin.”
For further information, please contact:
Felipe Tan, Chief Executive Officer
Tel: (852) 3586-6500
Email: felipe@gobimin.com
“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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