Kinbauri Gold Corp.

Kinbauri Gold Corp.

June 09, 2009 06:00 ET

Kinbauri Gold Corp. Strongly Recommends that Shareholders Reject Orvana's Offer

TORONTO, ONTARIO--(Marketwire - June 9, 2009) - Kinbauri Gold Corp. (TSX VENTURE:KNB)(FRANKFURT:3KG.DE)


A conference call with Management and members of the Board will be held on Tuesday June 9, 2009 at 10:30 a.m. EDT

Presentation available at,

Call in number: 416-644-3424 or 1-800-732-0232


Kinbauri Gold Corp. (TSX VENTURE:KNB)(FRANKFURT:3KG.DE) ("Kinbauri") today announced that its Board of Directors has unanimously recommended that Kinbauri shareholders REJECT the unsolicited offer to purchase all of the outstanding Kinbauri shares made by Orvana Minerals Corporation (TSX: ORV) ("Orvana") as described in a take-over bid circular dated May 25, 2009, and that shareholders NOT TENDER their Kinbauri shares to the Orvana offer. The Board's recommendation, Kinbauri's Special Committee's assessment of the Orvana offer and the reasons for the recommendation to reject the Orvana offer are set out in a Directors' Circular which has been mailed to Kinbauri shareholders and may be viewed in its entirety on and on Kinbauri's newly launched website

"After a full and thorough review by our Board, our Special Committee and our financial and legal advisors, our Directors were unanimous in recommending rejection of the Orvana offer," said Brian McEwen, Director and member of the Special Committee. "Our Board believes the Orvana offer is inadequate and fails to reflect the true value of Kinbauri and its flagship El Valle Project."

The Special Committee has initiated a process that it believes should crystallize superior value for all shareholders. The strong interest that has been expressed to date demonstrates that Kinbauri has a superior asset and an excellent future. The Committee intends to surface all expressions of interest and present shareholders with a transaction that clearly maximizes shareholder value.

Kinbauri's Board of Directors cited the following reasons to reject the offer:

- The Orvana offer significantly undervalues Kinbauri's advanced stage El Valle Project, and its growth potential. A recent scoping study assigned a net present value to the El Valle Project of $237 million - Orvana is offering only $33 million for the entire company.

- The EL Valle Project is expected to begin production in 2010 with an anticipated annual output of approximately 145,000 of gold equivalent ounces. The project is located in a highly prospective gold region with many opportunities to expand our current resource base. Orvana is pressuring Kinbauri shareholders to tender their shares before we reach production and generate greater value for our shareholders.

- The El Valle Project has infrastructure in place with a replacement cost of over $100 million and an experienced mining team on the ground in Spain. This team is familiar with the assets and is skilled at advancing projects and operating mines. By tendering to the Orvana offer you may forego significant value upside.

- The Orvana offer is financially inadequate. Gryphon Partners Canada Inc. has provided an opinion that, as of June 5, 2009, the consideration under the Orvana offer is inadequate from a financial point of view to Kinbauri's shareholders.

- The Orvana offer is conditional and not a firm offer.

- The Orvana offer is not a "Permitted Bid" under Kinbauri's shareholder rights plan.

- Kinbauri's officers and directors are rejecting Orvana's offer. None of Kinbauri's directors and officers will tender their common shares to the Orvana offer. A major independent shareholder, holding approximately 8 percent of the common shares outstanding, has communicated to the Board that they will not tender their shares to the Orvana offer.

If you agree with the Board's recommendation, you do not need to take any action. For assistance in withdrawing any shares already tendered, or other questions, please contact Laurel Hill Advisory Group, the Information Agent retained by Kinbauri in connection with the Orvana Offer, toll free at 1-888-812-9184 from anywhere in Canada or the United States and collect at 416-637-4661 from outside North America.

Kinbauri also announces today the launch of the website which provides presentations and documents that explain why Kinbauri shareholders should reject the inadequate hostile takeover bid from Orvana Minerals.

Note Regarding Forward-Looking Statements

This press release and other written or oral communication from the Company may include certain statements that may be considered "forward-looking statements" within the meaning of that phrase under Canadian securities laws. Statements other than historical facts that address possible future events, plans or developments are forward-looking statements. Such statements may be identified by the use of words such as "will", ""may", "expects", "estimate", "intend" or the use of the future or conditional tense. Certain material factors or assumptions were applied in drawing our conclusions and making those forward-looking statements. Forward-looking statements reflect management's current views with respect to possible future events and conditions and, by their nature, are based on management's beliefs and assumptions and subject to known and unknown risks and uncertainties, both general and specific to the Company. Although the Company believes the expectations expressed in such forward-looking statements are reasonable, such statements are not guarantees of future performance and actual results or developments may differ materially from those in our forward-looking statements. Readers are cautioned that risks may change or new risks may emerge. Additional information regarding the material factors and assumptions that were applied in making these forward looking statements as well as the various risks and uncertainties we face are described in greater detail in the "Risk Factors" section of our annual and interim Management's Discussion and Analysis of our financial results and other continuous disclosure documents and financial statements we file with the Canadian securities regulatory authorities which are available at and available on the Company's website at The Company undertakes no obligation to update this forward-looking information except as required by applicable law.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this news release.

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