Kinbauri Gold Corp.
TSX VENTURE : KNB

Kinbauri Gold Corp.

January 16, 2007 15:56 ET

CORRECTION: Kinbauri Signs Option to Purchase Rio Narcea Gold Assets in Spain

OTTAWA, ONTARIO--(CCNMatthews - Jan. 16, 2007) - The following document corrects and replaces the release sent earlier today at 2:18 PM EST. The link to the second table of the release was incorrect. The complete corrected version follows.

Kinbauri Gold Corp. ("Kinbauri") (TSX VENTURE:KNB) is pleased to announce that in accordance with the Letter of Intent announced on October 30, 2006, it has signed the Option to Purchase Agreement for a cost of $100,000 US. The option provides for purchase of certain facilities and mineral assets lying within the Rio Narcea Gold Belt in northern Spain (the "Assets") from Rio Narcea Gold Mines, Ltd. ("RNGM") for a total of $5,000,000 US on or before March 30(th), 2007 (the "Transaction"). Kinbauri is required to provide a Notice of Intent to Purchase by no later than February 15(th), 2007. Completion of the Transaction is subject to Canadian and Spanish regulatory approval.

Assets to be Purchased

The Assets comprise the El Valle Mill and auxiliary facilities, the El Valle Mine, the Carles Mine and two further properties within the Rio Narcea Gold Belt, namely Godán and La Brueva (for more details see attached Schedule A). The Assets no longer form part of RNGM's core assets for its growth strategy and as of the end of 2006 it initiated placing the El Valle Mill, the El Valle Mine and Carles Mine on care and maintenance. As of December 31(st) , 2005, RNGM reported the following resources for El Valle and Carles:



Au- Cu- Contained Metal
bearing bearing
Tonnes Au Tonnes Cu Au Cu
Category (000s) (g/t) (000s) (%) (000 ounces) (tonnes)
---------------------------------------------------------------------
El Valle Measured 953 5.08 903 1.24 157 11,193
Indicated 1,025 5.93 904 1.20 195 10,872
Total 1,978 5.52 1,808 1.22 351 22,065
Inferred 2,569 8.74 1,040 0.79 722 8,182
---------------------------------------------------------------------
Carles Measured 240 5.32 195 0.80 41 1,566
Indicated 619 5.20 618 0.68 103 4,171
Total 859 5.23 813 0.71 145 5,737
Inferred 832 5.05 619 0.58 135 3,608
---------------------------------------------------------------------


RNGM stated its mineral reserves and resources in accordance with the definitions adopted by CIM on August 20, 2000. They were prepared by or under the direction of Alan C. Noble, Ore Reserves Engineering, Colorado, USA, an independent qualified person as defined by N.I. 43-101. Kinbauri will be filing a technical report within 45 days to support the stated December 31(st), 2005 resources; if there are any changes, they will be disclosed forthright. As of January 15(th), 2007, the above stated resources need to be reduced by approximately 258,483t as 97,021t grading 3.46g Au/t and 1.03% Cu were mined at El Valle and 161,462t grading 4.67g Au/t and 0.72% Cu at Carles were mined during 2006. It should be noted that RNGM has indicated that the economic viability of the resources as stated in the above table are not demonstratable.

Due Diligence Completed -- Planned Activities at Mine

Upon completion of the Transaction, Kinbauri will concentrate its initial exploration and definition drilling on Area 107 and Black Skarn North within the El Valle/Boinas Mine to expedite the rejuvenation of operations within the Rio Narcea Gold Belt. During the course of Kinbauri's due diligence, an experienced mining/exploration team consisting of Mr. Louis Dionne (ex-Senior VP, Underground Operations, Barrick Gold Corporation), Mr. Jean Bailly (over 20 years of experience in mine development and management) and Mr. Claude Britt (Director, Kinbauri Gold Corp.) reviewed operations at El Valle and Carles. The team was encouraged with their findings. In their opinion, the most credible plan to rejuvenate operations is by expanding resources and confirming reserves through drilling and investigating the feasibility of various mining methods for Area 107 and Black Skarn North. Other prospective areas/zones with significant resources were confirmed, but would not support immediate mine development.

Of the resources reported by RNGM for December 31, 2005; Black Skarn North provided 506,668t of inferred resources containing 81,424 ounces Au (average grade 5g/t) and 50,004t Cu (average grade 0.99%); and Area 107 provided 835,834t of inferred resources containing 304,116 ounces Au (average grade 10.73g/t) . Resources for Area 107 were based on intercepts reported in attached Table 1, which lists holes intercepting for Area 107 plus significant gold values for these holes (a longitudinal section is also attached for reference). Most intercepts were previously reported in RNGM's press release of January 20(th), 2006. Some of the most significant gold intercepts are listed below (true widths range from 90% to 95% for intercepts reported below).

The Table is available at the following address:

http://www.ccnmatthews.com/docs/table2.JPG

In their press release of January 20(th), 2006, RNGM reported that quality control (QC) for sample preparation and analysis of samples for the drill programs at Area 107 followed procedures designed for the El Valle deposits by independent consultant, Alan Noble of Ore Reserves Engineering, Colorado, U.S.A., to meet or exceed the requirements of National Instrument 43-101. This QC program includes the use of blanks, duplicates and standard reference samples, in conjunction with systematic check assays in external laboratories. Compilation of all drill results for the 107 Area was supervised by Dr. C.F. Gleeson, Kinbauri's Vice-President of Exploration and a qualified person under N.I. 43-101. Dr. Gleeson, as part of Kinbauri's due diligence program, visited the El Valle/Boinas Mine site and core facility in late October.

This press release was prepared by Dr. V. N. Rampton in his capacity as a qualified person.

RNGM has granted its consent for this press release to be issued.

Simon Britt Appointed CFO

Kinbauri is also pleased to announce that Mr. Simon N. Britt has been appointed Chief Financial Officer. Mr. Britt received a Bachelor of Commerce from Hautes Etudes Commerciales, University of Montreal in 2000 and was engaged in auditing and financial analyst for Deloitte between 2000 and 2005. Presently, he is Vice-President of Finance for Venture Corporate Outsourcing Services; providing financial and regulatory advice to public companies.

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 11,429,189 common shares issued and outstanding and 13,524,689 fully diluted.

THIS PRESS RELEASE WAS PREPARED BY KINBAURI GOLD CORP.

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.

Schedule A: Brief Summary Description of the Assets.

A) El Valle/Boinas

1. Mineral rights (exploitation permits) where all reserves and resources of El Valle/Boinas are located including areas with reasonable expansion potential.

2. Surface rights (ownership or control) of all land required to carry mining activities except the "old" tailings pond where restoration (by RNGM) will take place and other dumps that are in restoration. It includes the land where the "new" in-pit tailings facility is located, plus all access and surface infrastructure.

3. El Valle mill and auxiliary facilities.

A mill constructed in late 1997 with name plate capacity of 600,000 t/y but where subsequent expansions have enabled to treat over 750,000 t/y depending on ore types. The installation includes circuits of: primary crushing; ore stockpile and reclaim; SAG and ball milling; pebble crushing; several stages of flotation; concentrate thickening and filtration, gravity circuit (several stages of spirals; 3 knelsons and shaking tables); CIL circuit; cyanide destruction (INCO) system including SO2 storage; carbon regeneration; elution electro mining, calcining and smelting for dore production; reagent preparation; water recovery systems; gas storage; all other auxiliary installations of electrical supply and control boilers, gas heaters, blowers, compressors, etc.

4. Surface buildings for plant and mine such as offices, warehouses, maintenance shops, change houses, equipped fire assay laboratory, etc.

5. Underground workings and auxiliary fixed installaations like main and auxiliary ventilation; pumping system; electrical distribution, etc. It includes mine and surface water treatment circuit.

6. Tailing facility at "El Valle pit", lined pond with drainages and pumping system. The facility has not been used with tailings. Permits are in place but exclude bonds (recoverable) required to operate with tailings.

7. Sample preparation plant and core storage, including core and samples.

B) Carles

1. Mineral rights (exploitation permits) where all reserves and resources of Carles are located including areas with reasonable expansion potential.

2. Surface rights required to carry all underground mining activities. Includes access to portal, ventilation, drainage, water decant, old open pit, etc.

3. Surface facilities such as house refurbished as office, electrical line and substation, etc.

4. Underground workings and auxiliary fixed installations like main and auxiliary ventilation, pumping system, electrical distribution, etc.

C) Narcea belt

Godan/La Ortosa, and La Brueva concessions volume gold intercepts or resources have been found.

It includes all those concessions that the company had an option to buy with a rental such as those where some of the prospects known as Sta Marina,

Villaverde, Pontigo, Pepito are located

D) Others

1. Files of all geological data in the properties mentioned in A, B and C, including all reports available, core, samples, duplicates, etc.

2. Technical information, operating manuals, technical projects, etc, relating to the El Valle/Boinas and Carles operations.

3. All office supplies, furniture, computers, etc, available at the offices corresponding to the mentioned operations excluding licences and hardware required to operate mining software like Datamine, GIS programs or Whittle among others.

The Table of Drill Results and the map of Longitudinal Section Area 107 are available at the following address:

http://www.ccnmatthews.com/docs/TableMap.pdf

THE TSX VENTURE EXCHANGE HAS NEITHER APPROVED OR DISAPPROVED THE CONTENT OF THIS RELEASE.

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