GobiMin Announces Third Quarter 2020 Results - Seite 3

As uncertainties from the outbreak are likely to persist, the management will actively seek out the most up-to-date market information and formulate various plans for each scenario in the context of business continuity.

Gold Project in Xinjiang

The Company owns a 70% equity interest in Xinjiang Tongyuan Minerals Limited which holds the Sawayaerdun Gold Project (the “Gold Project”) in Xinjiang. The exploration licence has an expiry date on August 22, 2021. The mining licence was expired on December 23, 2019 and renewal application had been accepted by the related departments. Due to the outbreak of COVID-19 in Xinjiang in July 2020, approval process of mining licence renewal by the Department of Land and Resources was further impacted. Comments on the land rehabilitation report has been received from the Department of Land and Resources of Xinjiang in November 2020 and the revised report will be submitted by the end of 2020. It is expected that our renewal application will be processed after determination of reserve by the Department of Land and Resources as well as payment for the related fee based on the assessed reserve. However, due to work piled up during the lockdown, it may take longer time to proceed our application.

The on-site industrial test on applying bio-tech methodology on extraction of metals from large-scale samples of gold ores was in pre-oxidation stage. Attributable to the two waves of COVID-19 in Xinjiang in July and October 2020, the test has been adversely affected by the lockdown and travel restrictions. Suspension of public services of the local government from July to September 2020 delayed the approval process for our sulfuric acid procurement application. In virtue of the acid shortage, we adjusted the spray time and suspend the spray of oxidized ores to ensure pre-oxidation of the ore heap. Alkali tablets cannot be transported to the test site on time due to lockdown measures, resulting in the delay of neutralization work to the next spring. In consideration of the long delivery time of samples to the Institute in Beijing, we engaged a local analysis centre to conduct sample analysis work. According to their analysis results, iron and arsenic in the ore heap has been gradually separated out. More samples were delivered for comprehensive analysis to the Institute in October. We will have a better knowledge of the development and effect of the pre-oxidation test after receiving the results.