Kinbauri Signs Letter of Intent Towards an Option Agreement for Purchase of Certain Rio Narcea Gold Assets in Northern Spain
Posted on October 30, 2006 at 10:16 AM EST
OTTAWA, ONTARIO--(CCNMatthews - Oct. 30, 2006) - Kinbauri Gold Corp. ("Kinbauri")(TSX VENTURE:KNB) is pleased to announce that it has signed a Letter of Intent ("LI") to purchase certain facilities and mineral assets lying within the Rio Narcea Gold Belt of northern Spain (the "Assets") from Rio Narcea Gold Mines, Ltd. ("RNGM") on or before March 31st, 2007 (the "Transaction"). The LI requires Kinbauri to complete its due diligence process before December 15th, 2006, to sign an Option to Purchase Agreement on or before January 15th, 2007 and provide a Notice of Intent to Purchase by no later than February 15th, 2007. Completion of the Transaction is subject to Canadian regulatory approval and other conditions, including Kinbauri's due diligence investigation of the assets.
The Assets comprise the El Valle Plant (milling and smelting facility), the El Valle Mine, the Carles Mine and two further properties within the Rio Narcea Gold Belt, namely Godán and La Brueva. Kinbauri, as part of its due diligence, will evaluate the El Valle Plant as well as assess the potential to continue, revitalize or initiate mining, as the case may be, of the other Assets. Upon completion of the Transaction, Kinbauri's intention is to develop a mining plan that will allow efficient and profitable mining of the properties utilizing the El Valle Plant.
The Assets no longer form part of RNGM's core assets for its growth strategy and it has announced closure of the El Valle and Carles Mines by the end of 2006.
In the meantime, Kinbauri is continuing with its drill program at Corcoesto where it is earning a 65% interest from RNGM. Kinbauri's present program is designed to increase open-pittable resources. In a 43-101 compatible Resource Report dated August 22, 2006, Alan C. Noble of Ore Reserves Engineering indicated that "expansion of the presently defined open-pit resources by 25% to 35% could lead to a development decision".
For more information regarding El Valle Mine, the Carles Mine, 107 Area, Godán and La Brueva, reference is made to RNGM's 2005 Annual Report and Press Releases of January 20, 2006, February 22, 2006 and August 10, 2006, which are all available on www.rngm.es and www.sedar.com. For information regarding Corcoesto, reference is made to Kinbauri's 2006 Annual Report and Press Releases of August 24, 2006 and October 19, 2006, available on www.kinbauri-gold.com and www.sedar.com.
RNGM has granted its consent for this press release to be issued.
Kinbauri is a mineral exploration company focused on the development of mineral properties, primarily precious metal prospects in northwestern Spain, Nevada and Canada. It currently has 9,469,189 common shares issued and outstanding and 10,397,189 fully diluted.
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.THIS PRESS RELEASE WAS PREPARED BY KINBAURI GOLD CORP. THE TSX VENTURE EXCHANGE HAS NEITHER APPROVED OR DISAPPROVED THE CONTENT OF THIS RELEASE.
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