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
2008-18
KINBAURI CLOSES
ROYALTY AGREEMENT WITH ANGLO PACIFIC
OTTAWA, ONTARIO, MAY 14, 2008: Kinbauri Gold
Corp. (“Kinbauri”) (Toronto:
TSXV.KNB; Frankfurt: 3KG.DE) is pleased to
announce that it has closed its $7.5M Net Smelter Return Royalty agreement with
Anglo Pacific Group PLC (“Anglo Pac”) (LSE: APF; ASX:AGP).
Under the terms of the agreement, Anglo Pac is funding Kinbauri,
through the issuance of a convertible debt instrument in the principal 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 US$1,100 an ounce. Upon
repayment of principal, the instrument converts to a net smelter return royalty.
In the event that the rate of production from the El Valle/Carles mill does not
exceed 90,000 ounces of gold within the 2012 calendar year, Anglo Pac will have
the right to convert all or a portion of the outstanding principal into Kinbauri
common shares: (a) at a price of $0.958 per share until May 12, 2013, and (b)
subject to the approval of the TSX Venture Exchange, thereafter until December
31, 2015, at the discounted market price.
Funds have been deposited into escrow pending registration of documents
evidencing the Net Smelter Return Royalty against title to the El Valle/Carles
project, which is expected to occur within the next two weeks. In addition, Anglo Pac has been granted
1.5 million warrants of Kinbauri, each exercisable into one common share at a
price of $0.90 until May 12, 2010.
M Partners received a fee from Kinbauri of 3.5% of the principal amount
of the debt instrument.
The agreement is an important milestone for Kinbauri as it allows it
to complete drilling and development plans at the El Valle/Carles mines and mill
in northwestern Spain with minimum dilution of share
capital. The injection of $7.5M of capital will allow Kinbauri to complete its
feasibility study by the end of this year without further equity placements.
With its recent receipt of a VAT (Value Added Tax) refund of $1.7M from the
Spanish Government, the expected infusion of additional Spanish government
subsidies totalling $750,000 and $1M from a recent private placement with Anglo
Pac (press release of April 23), Kinbauri is well capitalized and in a strong
position to complete its 23,000 metre infill drilling program ahead of schedule
and subsequently commence an aggressive exploratory drill program at both its El
Valle/Carles properties in search of additional resources. The feasibility study
will allow Kinbauri to finance the remainder of its pre-production and
production development by non-dilutive alternatives.
Dr Vern Rampton, President and CEO of Kinbauri commented. “By any standards, we have
made huge progress over the last year; above expectations and ahead of schedule.
We are most pleased that our corporate goal of achieving production at El Valle
by 2010 is now within reach”.
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 46,875,689 common shares issued and outstanding.
Anglo Pacific Group PLC
is a public limited company quoted on the London
Stock Exchange and the Australian Stock Exchange. It generates returns for its shareholders
by receiving royalties, including 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.
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 of
Kinbauri 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
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