Moto Goldmines Limited

Moto Goldmines Limited

January 29, 2007 09:15 ET

Update on Development Agreement for Moto Gold Project

PERTH, WESTERN AUSTRALIA--(CCNMatthews - Jan. 29, 2007) - Moto Goldmines Limited ("MGL") (TSX:MGL)(AIM:MOE) announced on 8 November 2006 that it had entered into an agreement ("November 2006 Agreement") with L'Office des Mines d'or de Kilo-Moto ("OKIMO") and Orgaman sprl ("Orgaman") that will govern the development of and future production activities at the Moto Gold Project in the north east of the Democratic Republic of Congo ("DRC").

Under the November 2006 Agreement all parties re-iterated the validity of the existing contracts ("Existing Contracts") and agreed that these Existing Contracts be amended and amalgamated in favour of a contract in respect of the newly consolidated perimeter covering a total surface area of approximately 2,350 km2.

The November 2006 Agreement is a binding agreement that was approved by the Board of Directors of OKIMO, with the support of the Umbrella Authority for OKIMO (including the Minister of Mines and Minister of the Portfolio) of the Government of the DRC.

Further documentation is being prepared to implement the November 2006 Agreement. However, MGL has recently been requested to wait until the appointment of the new Government of the DRC and the appointment of officials to the state companies following the recent elections before progressing the documentation.

The Company has recently received letters from Mr Victor Kasongo, the Chief Executive Officer of OKIMO, claiming certain performance criteria under some of the Existing Contracts (including the Contract of Technical and Financial Assistance entered into in December 2003) have not been satisfied. The letter in respect of the Contract of Technical and Financial Assistance states the Company has ninety days to rectify the matters. The Company strongly disputes that it has failed to satisfy any performance criteria under any of its contracts with OKIMO. The Company has also subsequently received correspondence from the Chairman of OKIMO stating that the letter from Mr Kasongo in respect of the Contract of Technical and Financial Assistance has been issued without the appropriate authority and is of no effect, and confirming that all matters relating to the Contract of Technical and Financial Assistance have been resolved pursuant to its integration within the November 2006 Agreement.

The Company has also become aware of public statements by Mr Kasongo stating that OKIMO was calling for its contracts with the Company to be cancelled or revisited.

The Company has consistently received support for it's significant investment in the mining sector in the DRC from the Office of the President of the Republic and from the offices of the Minister of Mines and Minister of the Portfolio. These Government offices have consistently confirmed the validity of the contractual arrangements governing the Moto Gold Project. The Company will take all necessary steps to protect its legal rights including bringing legal actions where appropriate.

The Company will continue working with OKIMO, with the support and in accordance with the instructions of the Umbrella Authority for OKIMO, to complete the documentation to implement the November 2006 Agreement that will govern the successful development of the Moto Gold Project.

Additional Notes:

Caution Regarding Forward Looking Statements: Statements regarding MGL's plans with respect to negotiating an increase in its interest in and developing the Moto Gold Project are forward looking. There can be no assurance (i) regarding the final nature of the detailed agreements or that the detailed agreements will be concluded in a form that is satisfactory to the parties involved; and (ii) that any mineralisation will be proven to be economic, that anticipated metallurgical recoveries will be achieved, that future evaluation work will confirm the viability of deposits identified with the project or that future required regulatory approvals will be obtained.

ARBN 113 274 874

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