Kinbauri Gold Corp.

Kinbauri Gold Corp.

August 13, 2009 12:56 ET

Kinbauri Board Issues No Recommendation on Orvana Offer

OTTAWA, ONTARIO--(Marketwire - Aug. 13, 2009) - The board of directors of Kinbauri Gold Corp. ("Kinbauri") (TSX VENTURE:KNB)(FRANKFURT:3KG.DE) today advised that it intends to maintain a no recommendation with respect to the offer (the "Offer") of Orvana Minerals Corp. ("Orvana"). On July 21, 2009, Orvana raised the price under the Offer to C$0.75 per share from C$0.55 and extended the expiry date of the Offer to July 31, 2009. On August 4, 2009, Orvana extended the expiry time of the Offer to 8:00 pm (Toronto time) on August 17, 2009.

As advised in its press release of August 7, 2009, Kinbauri continues to conduct its value maximization process. It has received a preliminary, non-binding expression of interest (the "Expression of Interest") from a large European based private mining corporation. The Expression of Interest contemplates purchasing a 51% interest in Kinbauri Espana from Kinbauri. The proposed transaction would be financed through the current financial resources of the interested company, and would be subject to certain conditions, including satisfactory completion of due diligence.

The Kinbauri Board has decided to continue to make no recommendation with respect to the Offer. Although they have been advised by Gryphon Partners, financial advisor to the Special Committee, that the Offer is fair to Shareholders from a financial point of view, no Kinbauri director intends to tender their Common Shares to the Offer because they do not believe that the Offer is satisfactory.

Since termination of the agreement with ATW Gold Corp., the Kinbauri board has attempted to negotiate with Orvana a higher price under the Offer, in exchange for the support of the Offer by the Kinbauri board. Orvana has declined to enter into any such negotiations. The Kinbauri board believes that this failure by Orvana to be willing to gain the support of the Kinbauri board for the Offer is a clear intention of Orvana's determination to acquire Kinbauri at the lowest price possible. From communications received from shareholders, the Kinbauri board knows that a significant number of Kinbauri shareholders have the same opinion of the Offer. Also, Orvana has failed to achieve the minimum tender condition of the Offer despite four extensions of the expiry date of the Offer and an increase in the price of the Offer. This failure to achieve the Offer's minimum tender condition has not been a result of the refusal of the directors and officers of Kinbauri to accept the Offer, as they hold less than 5% of the outstanding Common Shares.

In considering how to respond to the Offer, Shareholders are advised to consider the following:

- Orvana indicated in its press release dated August 3, 2009 that the extension of the Offer on August 4, 2009 was "our final offer and final extension".

- Gryphon Partners has advised that the Offer is fair, from a financial point of view, to Shareholders.

- Although Kinbauri will continue its process to secure value maximizing alternatives to the Offer, such as the Expression of Interest, based on the current status of this process, it is uncertain whether an offer superior to the Offer will emerge before the expiry of the Offer on August 17, 2009. Shareholders should be aware that if Shareholders do not tender, and the Offer is withdrawn and no other offer is forthcoming, the Common Shares may trade at a significant discount to the current market price.

- In the absence of a value maximizing transaction such as the Offer, Kinbauri will ultimately require additional financing in the order of 40 million euros to complete development of the El Valle/Carles mining project. There can be no certainty as to whether, or on what conditions, this additional financing will be secured.

Kinbauri will file today a Notice of Change to its Directors' Circular and mail the Notice of Change to shareholders thereafter. Kinbauri's board is advising shareholders to consider the Offer, the matters referred to in the Notice of Change and other factors that are important to each shareholder and urges them at this time to seek independent advice and/or make their own decision regarding whether to accept or reject the Offer. Shareholders do not need to take any action if they do not wish to accept the Offer.

For questions, including how to withdraw shares tendered to the Offer, 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.

About Kinbauri

Kinbauri (TSX VENTURE:KNB) is a mineral exploration company focused on the development of precious metal prospects in Spain, Nevada and Canada. Its immediate focus is to begin operations at its El Valle/Carles property in Asturias, northwestern Spain in 2010. It currently has 60,276,385 common shares issued and outstanding. For more information visit or


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.

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