GobiMin Inc has sold a partial shareholding, of Loco Hong Kong Holdings Limited to third parties for gross proceeds of approximately US$4.7 million which was to be received on September 21.
This is an Arm’s Length Transaction as defined in the TSX Venture Exchange policies and GobiMin’s equity interest in Loco HK has fallen from 48.29% to 38%.
Loco HK and its subsidiaries are engaged in the processing and trading of metals and commodity forward contracts. During the June quarter Loco HK completed setting up a testing laboratory with assistance from the Hong Kong Productivity Council. It is laying down the plan on evaluating the effectiveness and efficiency of the existing processing facilities after fine-tuning certain equipment of the laboratory.
GobiMin CEO Felipe Tan said, “Having regard to the current market price and the global economic conditions, we take the view that it is a good timing and value to realize part of the company’s investment in Loco HK.
“The resources of the company can be better deployed in developing our other assets or potential projects after the disposal. The proceeds from the transaction will strengthen our financial base and increase our financial flexibility.”
GobiMin owns a 70% equity interest in a company which is developing and operating the Sawayaerdun Gold Project in Xinjiang, Western China. The company has focused on conserving cash and controlling costs since completion of the drilling program of the project in 2014. The development plan of Sawayaerdun will only proceed when the economic climate and international gold price improve.
The group owns 40% equity interests each in three exploration companies incorporated in Xinjiang for nickel, copper, and gold. GobiMin also holds 3.5% equity interest in Xinjiang Tongxing Minerals Limited, which is the licence holding company of the Yanxi Copper Property.