Kinbauri Purchases 100 Percent Interest in Corcoesto, Provides Upgraded Resource Calculation
04 June 2008 - 10:00PM
Marketwired
OTTAWA, ONTARIO (FRANKFURT: 3KG.DE) ("Kinbauri") is pleased to
announce that it has entered into a purchase agreement (the
"Purchase Agreement") with Rio Narcea Gold Mines S.L. ("RNGMSL")
regarding the Corcoesto Project ("Corcoesto") in Galicia,
northwestern Spain. Under the Purchase Agreement Kinbauri, through
its wholly-owned subsidiary, Kinbauri Galicia S.L. ("K. GALICIA")
can acquire a 100% interest in Corcoesto. Corcoesto is comprised of
three exploitation concessions totalling 777.6 hectares. The
Purchase Agreement will replace an earlier option agreement with
RNGMSL whereby Kinbauri had expended approximately 1.5 million
euros of a total of 4 million euros required to earn a 65% interest
in Corcoesto.
Corcoesto Resources
Based on a 0.9g Au/t cut-off, presently determined measured,
indicated and inferred resources at Corcoesto are as follows:
Measured 142,000 ounces Au (2.48Mt at 1.78g Au/t)
Indicated 122,000 ounces Au (2.19Mt at 1.74g Au/t)
M + I 264,000 ounces Au (4.67Mt at 1.76g Au/t)
Inferred 218,000 ounces Au (3.39Mt at 2.00g Au/t)
The above measured and indicated resources were estimated by Ore
Reserves Engineering ("ORE") in a National Instrument 43-101 ("NI
43-101") compliant resource report dated August 22, 2006. They are
all contained within the Southern Vein Systems (Pozo del Ingles,
Cova Crea and Peton de Lobo: see Schedule A for locations at the
following address: http://media3.marketwire.com/docs/KINB0604.pdf).
The inferred resources are a combination of those presented by ORE
(32,000 ounces Au: 0.59Mt at 1.69g Au/t) and those reported by
Lluis Boixet ("Boixet") (164,212 ounces Au: 2.76Mt at 1.85g Au/t).
Boixet worked indirectly through RNGMSL on contract for Kinbauri,
and is a qualified person as defined by N.I. 43-101,. Boixet's
estimated resources include 73,537 ounces (1.22Mt at 1.87g Au/t)
within the Southern Vein Systems and 90,675 ounces (1.54Mt at 1.83g
Au/t) within the Northern Vein System (mainly Picotos, but also
Fonterremula and Montefurado). A NI 43-101 Technical Report will
not be filed on SEDAR, concerning the updated inferred resources as
it does not represent a material change for Kinbauri (methodology
is described below) ORE had also identified some deep inferred
resources in the Pozo del Ingles and Peton de Lobo vein systems,
namely 27,400 ounces (0.13Mt at 6.65g Au/t) at a 5.0g Au/t
cut-off.
Potential for additional near surface and deeper resources
exists at Corcoesto and Boixet has identified target areas for
expanding these resources. Kinbauri is currently investigating the
potential for improving the economics of Corcoesto by up-grading
mill feed through optical sorting. Kinbauri has verified that
quartz veins contain the majority of the gold found within the vein
systems and pilot studies are now being completed to investigate
whether mill feed can be upgraded 2 to 5 fold-plus; this would
allow for the economic transportation of mill feed to other
locations for final processing. Kinbauri has also estimated the
costs of producing a concentrate on-site by flotation and sale of
the resultant concentrate; initial estimates appear favourable. A
recently completed study has also indicated that, subject to
testing and permitting, waste rock could be sold domestically and
shipped off-shore as construction material, resulting in a benefit
to the project's economics. It is also noteworthy that higher gold
prices may increase the project's viability through lower cut-offs
and higher profit per tonne of ore mined. For details of estimated
resources at different cut-offs see Schedules B, C and D. A scoping
study is to be commissioned shortly.
ORE's 2006 resource estimates were based on a 2003 resource
model, which used an inverse-distance-power estimation within a
three-dimensional block model with mineralized zones defined by
wireframed solids. This model was based on 317 drill holes with a
drill hole spacing that was less than 25-meters for measured
resources and less that 55-meters for indicated resources. The deep
zone resource model was estimated using inverse-distance-power
estimation within a three-dimensional model of the vein zone. The
deep zone model was based on 99 drill holes, of which 24 drill
holes were below those included in the 2003 open pit resource
model.
Boixet's incremental resources were based on results from
Kinbauri's drilling subsequent to ORE's 2006 estimates. Boixet used
inverse-distance-power estimation with a power of 4.0 and a search
ellipse of 50 x 50 x 4.17 meters. The long axis of the search
ellipse was oriented parallel to the quartz veins in each area. The
search ellipse and weighting parameters for the 2008 model were
based on a trial-and-error process where the parameters were
adjusted to provide approximately the same result as ORE's estimate
(when only the pre-mid 2006 drilling was used for estimation). The
incremental expansion of the resource was estimated by subtracting
ORE's resources from the 2008 estimated resource. All resources in
the incremental expansion are classified as inferred.
RNGMSL trench sampling and drilling through April 1999 were
assayed at the Inspectorate laboratory in Reno, Nevada; assays were
verified by later check assay programs. Subsequent sampling by
RNGMSL and Kinbauri were sent to the ITMA laboratory in Oviedo,
Asturias, Spain. During Kinbauri's drilling, one sample in every
twenty was sent to ALS CHEMEX for duplicate assay; in addition,
ITMA routinely assayed two duplicates, one standard and one
certified standard for each batch of thirty samples. Gold was
determined using a fire assay procedure on a 30-gram sample with an
atomic absorption finish.
Corcoesto Agreement
The Purchase Agreement provides that the purchase price for the
exploitation concessions will be the sum of 1.5 million euros
payable in instalments as follows: 100,000 euros upon approval of
the transaction by all regulatory authorities; 100,000 euros 30
days following approval; 400,000 euros by May 1, 2009; 400,000
euros by May 1, 2010 and 500,000 euros by December 1st, 2010. An
additional payment of 1.5 million euros will be due upon the
commencement of commercial production. Kinbauri's 100% interest in
the exploitation concessions will be subject to a 3% NSR (1% of
which can be repurchased by Kinbauri for $1.5M US) by paying RNGMSL
. All payments may be accelerated at Kinbauri's discretion. The
Purchase Agreement is subject to regulatory approvals including
approval of the transfer of exploration concessions by the Galician
Mining Authorities and the TSX Venture Exchange approval.
This press release was prepared by Dr. V.N. Rampton, P.Eng. in
his capacity as a qualified person. It has been reviewed for
release by Alan C. Noble of Ore Reserves Engineering, a
professional engineer, Lluis Boixet of RNGMSL, a professional
geologist, both qualified persons as defined in National Instrument
43-101 and RNGMSL.
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 early 2010. It
currently has 48,461,564 common shares issued and outstanding.
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.
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
Schedules are available at the following address: (INSERT
LINK)
Contacts: North America Kinbauri Gold Corp. Darrell Munro, BB.A,
LL.B Manager Corporate Communications 613-836-0198
dmunro@kinbauri-gold.com Kinbauri Gold Corp. Dr. Vern Rampton, P.
Eng. President 613-836-2594 613-831-2730 (FAX)
vrampton@kinbauri-gold.com or kinbauri@kinbauri-gold.com Europe
INVESTEL Ruediger (Rudy) Hnyk, CEO Investor Relations &
Telecommunications ceo@investel.de
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