ATW Gold Corp.
TSX VENTURE : ATW

ATW Gold Corp.

July 14, 2009 11:21 ET

ATW Gold To Merge With Kinbauri Gold Corp.

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 14, 2009) - ATW Gold Corp. (TSX VENTURE:ATW) ("ATW") is pleased to announce that it has entered into a binding letter agreement with Kinbauri Gold Corp. (TSX VENTURE:KNB) ("KNB") to combine the two companies under a plan of arrangement. Pursuant to the agreement, Kinbauri shares will be exchanged at the agreed ratio of 1.35 ATW shares for each Kinbauri share, implying a purchase price of C$0.85 per Kinbauri share using closing share prices on July 10, 2009 (the "Transaction").

Conference Call

A conference call will be held on Tuesday July 14, 2009 at 1.00pm EDT.

Presentation is available at www.kinbaurimaximized.com and

http://events.snwebcastcenter.com/kinbaurigold/20090714/index.php

Call-in Numbers:

Greater Toronto - 416-644-3424

Toll-Free (North America) - 1-800-732-0232

Toll-Free (Europe) - 00-800-2288-3501

Toll-Free (Australia) - 0011-800-2288-3501

Playback

Toronto: 416-640-1917 Passcode: 21310993#

Toll-Free: 877-289-8525 Passcode: 21310993#

There will be a question and answer session following management presentations during the call.

The combination of ATW and Kinbauri will move ATW closer to its goal of becoming a mid-tier gold producer. With one mine currently in production and a second mine presently under scoping study, the addition of the Kinbauri assets has the potential to increase the production profile of ATW significantly. Summaries of the measured, indicated and inferred resources contained on ATW and Kinbauri properties are available on the company websites, www.atwgold.com and www.kinbauri-gold.com. Other highlights of the combined entity are:

- Diversified operations with significant reserve/resource upside in three producing or close to producing gold mines. The assets have significant infrastructure already in place, and are located in geopolitically and mining friendly jurisdictions;

- Management from both ATW and Kinbauri with their extensive combined mine operating, development, financing and exploration experience, including Graham Harris as Executive Chairman, Brent Butler as CEO and Brian McEwen as President; and

- Strategic position and management experience to leverage continued consolidation in the gold industry.

"We understand that higher offers for the Kinbauri assets were being entertained and therefore our efforts were directed towards expediting a friendly transaction that would benefit both groups of shareholders. Our merger with Kinbauri brings ATW closer to its stated goal of becoming a leading mid-tier gold producer," said Graham Harris, Executive Chairman of ATW. "We are pleased to combine ATW's strong foundation of professionals, with experience bringing our Burnakura mine into production, with Kinbauri's team."

Brian McEwen, Director of Kinbauri stated, "The Transaction with ATW delivers significant value to Kinbauri shareholders and to Kinbauri's flagship El Valle Project. We ask all shareholders to join us in supporting the transaction."

Upon completion of the Transaction, ATW will have approximately 149,691,086 shares outstanding, being the sum of its present issued and outstanding shares and the 1.35 shares ATW is issuing for each of 59,348,051 shares of Kinbauri issued and outstanding. In addition, ATW will have the obligation to issue an additional 1.35 shares of ATW for any Kinbauri warrants or options exercised prior to the closing of the Transaction. ATW's current shares outstanding figure of 69,571,217 does not include ATW's obligation to issue 4,000,000 ATW shares in settlement of its outstanding obligations to Batavia Mining Corp., an issuance that was approved by the TSX Venture Exchange.

Transaction Details

The Transaction is expected to be structured as a plan of arrangement between Kinbauri and a newly formed, wholly-owned subsidiary of ATW. Under the terms of the Transaction, Kinbauri shareholders will receive 1.35 common shares of ATW for each common share of Kinbauri. Each outstanding Kinbauri convertible security will become exercisable for ATW common shares based on the exchange ratio and resulting price adjustment. Two Kinbauri directors, Brian McEwen and Marilyn Blooval, will join the ATW Board of directors. Brian McEwen will also be appointed President of ATW and President of the Kinbauri Espana. The Transaction will be subject to approval of the shareholders of Kinbauri and ATW.

The letter agreement setting out the Transaction includes a commitment by Kinbauri not to solicit alternative transactions to the proposed Transaction. ATW has also been provided with certain other rights customary for a transaction of this nature, including the right to match competing offers made to Kinbauri. The letter agreement also provides for a break fee of approximately Cdn$1 million to be payable to ATW in certain circumstances.

Completion of the Transaction is subject to a number of conditions, including: the receipt of all necessary regulatory and court approvals (including the approval of the TSX Venture Exchange (the "Exchange")); obtaining approvals from the shareholders of ATW and Kinbauri at meetings to be held no later than September 25, 2009.

Investors are cautioned that, except as disclosed in the management information circular to be prepared in connection with the Transaction, any information released or received with respect to the Transaction may not be accurate or complete and should not be relied upon.

About Kinbauri Gold Corp.

Kinbauri Gold Corp. is a Tier 1 Exchange listed mineral exploration and development company focused on the development of precious metal prospects in Spain, Nevada and Canada. The Corporation's primary focus is to develop mine plans and begin operations at its El Valle/Carles property in Asturias, northwestern Spain in 2010.

ATW's financial advisor is PI Financial Corp. and its legal counsel is C. D. Farber Law Corporation. PI Financial have been commissioned to complete a fairness opinion on the transaction on ATW's behalf. Kinbauri's financial advisor is Gryphon Partners and its legal advisor is Wildeboer Dellelce LLP.

About ATW

ATW is a gold producer and developer, with two gold mines in Western Australia and is listed on Tier 1 of the Exchange (TSX VENTURE:ATW). ATW is incorporated under the Business Corporations Act (British Columbia) and was listed on the Exchange in November 2006 via an initial public offering. ATW made its first mining acquisition, the Burnakura Gold Mine, in December 2007. Within 15 months, Burnakura was recommissioned, permitted and gold production commenced. During that time, six months after the Burnakura acquisition, ATW acquired its second mine, the Gullewa Gold Mine. The Gullewa Mine, a past-producing mine, is ATW's flagship project. ATW is conducting further exploration and other work with the goal of commencing production from the Gullewa Mine in 12 to 15 months. ATW's team is comprised of Mine Engineers, Geologists and finance experts, with over 100 years of combined experience in the mining industry having operated worldwide.

ATW Gold Corp.

Brent Butler, President & CEO

"This news release may contain forward-looking statements. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements."

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information