PRESS
RELEASE
Kinbauri
Gold
Corp.
110
Westhunt Drive
P.O.
Box
158
Carp, Ontario K0A 1L0 CANADA
Stock
Symbol:
TSXV.KNB:
3KG.DE
Website: www.kinbauri-gold.com
FOR IMMEDIATE RELEASE 2008-07
ANGLO PACIFIC GROUP TO PROVIDE $7.5M TO KINBAURI iN
EXCHANGE FOR NET SMELTER RETURN at EL
VALLE/CARLES
OTTAWA, ONTARIO, March 10th, 2008: Kinbauri Gold
Corp. (“Kinbauri”) (Toronto:
TSXV.KNB; Frankfurt: 3KG.DE) is pleased to
announce that Anglo Pacific Group (APF.L) has agreed to purchase a Net Smelter
Return from Kinbauri for C$7.5M.
The agreement is an important
strategic milestone for Kinbauri as it allows the Company to complete drilling
and development plans at its El Valle/Carles mines and mill in northwestern
Spain with minimum dilution of share
capital. Most significantly, the injection of $7.5M of non-dilutive capital at
this point in time will allow Kinbauri the option to complete its feasibility
study by November of this year without further equity placements. The delivery
of the study will then allow the Company to finance the remainder of its pre-production and production development by non-dilutive
alternatives.
Under the terms of the agreement,
Anglo Pacific will fund Kinbauri, through the issuance of a convertible debt
instrument in the amount of $7.5M. Principal is to be repaid through a 2.5% net
smelter return royalty on Kinbauri’s El Valle/Carles project located in
Asturias, Spain. The
royalty increases to 3% in the event gold prices exceed $1,100 an ounce. Upon
repayment of principal, the instrument converts to a net smelter return
royalty. In the event that
production from the El Valle mill does not exceed a rate of 90,000 ounces of
gold per year on or before Dec 31, 2012, the outstanding principal can be
converted at Anglo Pacific’s option into common shares at a price equal to the
lower of $0.73 or the discounted market price at the time of conversion. In connection with the transaction,
Kinbauri has agreed to issue 1.5 million warrants to Anglo Pacific; each warrant
is exercisable into one common share for a period of two years from the date of
closing at an exercise price of $0.90 per warrant. M Partners, the agent in the
transaction, will be paid a fee of 3.5% of the gross amount of the debt
instrument. The final agreement is subject to regulatory approval, title verification and definitive documentation.
Dr Vern Rampton, President
and CEO of Kinbauri commented, “Our agreement with Anglo-Pacific is a solid
endorsement of Kinbauri’s plan to quickly re-start the 2,000 tpd El Valle mill.
We are most pleased that our corporate goal of achieving production at El Valle
by 2010 is now within reach without any further dilutive financing.”
Gold and Copper Resources at El Valle and
Carles
On January 17th
Kinbauri filed a N.I. 43-101 compliant technical report. This report
delineated Kinbauri’s resources as of November 7th 2007 as:
- Total Measured +
Indicated:
725,200 oz Au and 87,100,000 lbs. Cu (4,159,000 tonnes at 5.4 g Au/t
and approximately 0.97% Cu(1)).
- Total
Inferred:
1,042,000 oz Au and 50,000,000 lbs. Cu (5,357,000t at 6.1g Au/t and
approximately 0.56% Cu(2)).
(1) 0.97% Cu for
4,054,000 tonnes resource, copper resource and grade is not estimated for
105,000 tonnes resource.
(2) 0.56% Cu for
4,074,000 tonnes resource, copper resource and grade is not estimated for
1,283,000 tonnes resource.
(3) With the
exception of 78,000oz. Au (898,000 tonnes @2.7g/Au/t), all resources are located
at El Valle and Carles.
In its press release of March 7, 2008 Kinbauri announced that
recent drilling at El Valle has suggested a 300m extension of known mineralization in the
Northwestern Area of the Black Skarn that could result in resources mirroring or
exceeding those resources presently delineated within the Central and South
Areas of the Black Skarn on the eastern flank of the intrusion. These latter two Areas contain indicated
resources of 105,362 ounces gold and 16.8 million pounds copper (912,588t
grading 3.6g Au/t and 0.84% Cu) and inferred resources of 85,596 ounces gold and
12.8 million pounds copper (768,505t grading 3.5g Au/t and 0.76% Cu), as noted
in Kinbauri’s N.I. 43-101 compliant technical report of January 17th,
2008.
Kinbauri is a TSXV – Tier 1 Mineral Exploration Company focused on the
development of mineral properties, primarily precious metal prospects in northwestern Spain, Nevada and Canada. Its immediate focus is to expand and
upgrade resources to reserves at the El Valle property in Asturias, Spain in order
to start operations at the mine and existing mill complex there in
2010. It currently has 43,608,320
common shares issued and outstanding.
Anglo Pacific Group PLC generates returns
for shareholders by receiving royalties from coal mines in Australia operated by BHP and Rio
Tinto. The strategy of Anglo Pacific is to pay a substantial proportion of these
royalties to shareholders as dividends, while reinvesting the balance in strategic listed and unlisted mineral exploration and production opportunities
with a view to obtaining more royalties for shareholders. Anglo Pacific is
resolved to continue its policy of pursuing other mining interests by adopting
an active, merchant banking approach to each project to achieve better returns
at reduced risk. For further information see www.anglopacificgroup.com
.
M Partners is a full service investment
dealer based in Toronto,
Ontario. For further information
see www.mpartners.ca
THIS PRESS RELEASE WAS PREPARED BY KINBAURI GOLD
CORP. THE TSX VENTURE EXCHANGE DOES
NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS
RELEASE.
This press release contains
certain forward-looking statements, which are based on the opinions and
estimates of management at the date the statements are made, and are subject to
a variety of risks and uncertainties and other factors that could cause actual
events or results to differ materially from those projected. Kinbauri undertakes no obligation to
update forward-looking statements if circumstances or management’s estimates or
opinions should change. The reader
is cautioned not to place undue reliance on forward-looking
statements.
FOR FURTHER INFORMATION
CONTACT:
North
America
Darrell Munro, BB.A, LL.B, Manager Corporate
Communications
E-mail:
dmunro@kinbauri-gold.com
Dr. Vern Rampton, P. Eng., President vrampton@kinbauri-gold.com
E-mail: kinbauri@kinbauri-gold.com
Tel:
(613) 836 2594 Fax: (613) 831 2730
Europe
Ruediger (Rudy) Hnyk, CEO
INVESTEL
Investor Relations &
Telecommunications
E-Mail: ceo@investel.de
OR
VISIT:
Kinbauri Gold’s Hub at http://www.agoracom.com/IR/kinbauri
where investors can post questions and receive answers or review questions
and answers already posted by other investors.
Kinbauri Web-Site: www.kinbauri-gold.com