Kinbauri Closes Royalty Agreement With Anglo Pacific
15 May 2008 - 2:10AM
Marketwired
OTTAWA, ONTARIO (TSX VENTURE: 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.
Contacts: North America Kinbauri Gold Corp. Darrell Munro, BB.A,
LL.B, Manager Corporate Communications 613-836-2594 613-831-2730
(FAX) dmunro@kinbauri-gold.com Dr. Vern Rampton, P. Eng. President
613-836-2594 613-831-2730 (FAX) kinbauri@kinbauri-gold.com
www.kinbauri-gold.com Europe INVESTEL Ruediger (Rudy) Hnyk, CEO
Investor Relations & Telecommunications ceo@investel.de (FAX)
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.
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