Anglo Pacific Group to Provide $7.5M to Kinbauri in Exchange for Net Smelter Return at El Valle/Carles
10 Marzo 2008 - 6:46PM
Marketwired
OTTAWA, ONTARIO (TSX VENTURE: 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. 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.
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.
Contacts: North America (Kinbauri) Darrell Munro, BB.A, LL.B
Manager Corporate Communications 613-836-2594 613-831 2730 (FAX)
dmunro@kinbauri-gold.com kinbauri@kinbauri-gold.com Dr. Vern
Rampton, P. Eng. President 613-836-2594 613-831 2730 (FAX)
vrampton@kinbauri-gold.com www.kinbauri-gold.com Europe (INVESTEL)
Ruediger (Rudy) Hnyk, CEO Investor Relations &
Telecommunications ceo@investel.de
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