OWING to difficult economic conditions and the sustained drop in gold prices, GobiMin is not proceeding with the 2015 development plan for Sawayaerdun Gold Project in the far west of Xinjiang Uygur Autonomous Region. The company is focusing on conserving cash and controlling mining costs and expenditures but has entered into a provisional agreement to acquire an office property in Hong Kong.
Block grades of the Zone IV deposit at Sawayaerdun Gold Project.
GobiMin believes that in light of low interest rates and soaring property prices in Hong Kong, rental prices will keep increasing. It says the additional office property represents a sound investment and will also enable it to cope with future business expansion.
The total consideration of the acquisition is approximately US$2 million. An initial deposit of about US$64,000 was paid upon signing of the provisional agreement in early July. The formal sales and purchase agreement was to be signed by late July with the payment of a further deposit of US$136,000. The acquisition is expected to be completed by November when the balance of the consideration of about US$1.8 million will become payable.
Earlier this year the company received updated Sawayaerdun resource estimates with total measured and indicated resources of 26.84 million tonnes @ 1.79 grams/tonne gold for 1.545 million ounces, and total inferred resources are 59.38 million tonnes @ 1.38 grams/tonne for 2.626 million ounces.
Resources contained within the project have been independently estimated by Mining One and are based on data collected by GobiMin as at October 13, 2014. The 2014 resources have been estimated using results from 313 surface diamond drill holes for a total of 97,204 metres plus adits and trenches.
The estimates include the Zone IV and Zone 1 areas. In Zone IV there are measured and indicated resources of 26.84 million tonnes @ 1.79 grams/tonne for 1.545 million ounces and inferred resources of 49.71 million tonnes @ 1.39 grams/tonne for 2.222 million ounces. In Zone 1 there are 9.67 million tonnes in the inferred category @ 1.30 grams/tonne for 404,000 ounces.
GobiMin holds an equity interest of 48.02% in Loco Hong Kong Holdings which together with its subsidiaries are engaged in the processing and trading of metals and commodity forward contracts. Loco HK has commenced design of a laboratory with assistance from the Hong Kong Productivity Council to match with a plan of expansion. Loco HK is also studying the possibility of building a raw material supply base in China.