Kinbauri Gold Corp.
TSX VENTURE : KNB
FRANKFURT : 3KG.DE

Kinbauri Gold Corp.

July 14, 2009 11:12 ET

Kinbauri Gold Corp. Announces Business Combination With ATW Gold Corp.

TORONTO, ONTARIO--(Marketwire - July 14, 2009) - Kinbauri Gold Corp. (TSX VENTURE:KNB)(FRANKFURT:3KG.DE)

A conference call will be held on Tuesday July 14, 2009 at 1:00 p.m. EDT

Presentation available at http://events.snwebcastcenter.com/kinbaurigold/20090714/index.php



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Kinbauri Gold Corp. (TSX VENTURE:KNB)(FRANKFURT:3KG.DE) ("Kinbauri") announced today that it has signed a binding letter agreement dated July 12, 2009, with ATW Gold Corp. (TSX VENTURE:ATW) ("ATW") to combine the two companies at the agreed exchange ratio of 1.35 ATW shares per Kinbauri share, which implies a purchase price of C$0.85 per Kinbauri share using closing share prices on July 10, 2009 (the "ATW Transaction").

The ATW Transaction represents a premium of 55% over the closing price of Kinbauri shares on July 10, 2009 and a premium of 115% over the closing price of Kinbauri shares on May 8, 2009, the last trading day prior to the announcement by Orvana Minerals Corp. (TSX:ORV) ("Orvana") of its intention to make an unsolicited offer of C$0.55 per share.

On June 9, 2009, Kinbauri's Board of Directors unanimously recommended that Kinbauri shareholders REJECT the unsolicited offer to purchase all of the outstanding Kinbauri shares made by Orvana as described in a take-over bid circular dated May 25, 2009.

Brian McEwen, Director of Kinbauri and member of its Special Committee, stated, "The ATW Transaction delivers significant value to Kinbauri shareholders and to Kinbauri's flagship El Valle Project and we recommend that all shareholders join us in supporting the transaction."

The Kinbauri Board of Directors has unanimously recommended that Kinbauri shareholders vote in favour of the ATW Transaction and continue to reject the Orvana offer. The combination of Kinbauri and ATW would move ATW closer to its goal of becoming a mid-tier gold producer. It would also feature;

- 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 shareholder groups. 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."

Upon completion of the ATW Transaction, ATW will have approximately 149,691,086 common shares issued and outstanding, with former Kinbauri shareholders holding approximately 53.5% of the issued and outstanding common shares of the combined company."

ATW Transaction Details

The ATW 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 ATW Transaction, Kinbauri shareholders will receive 1.35 common shares of ATW per common share of Kinbauri held. 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 Bloovol, will join the ATW Board of Directors. Brian McEwen will also be appointed President of ATW and President of Kinbauri Espana. The ATW Transaction will be subject to approval of the shareholders of Kinbauri and ATW.

Gryphon Partners, acting as financial advisor to the Special Committee of the Board of Directors of Kinbauri, has provided an opinion that the ATW offer is fair, from a financial point of view, to Kinbauri shareholders.

The letter agreement setting out the ATW Transaction includes a commitment by Kinbauri not to solicit alternative transactions to the proposed ATW Transaction and to enter into a definitive arrangement agreement. 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 $1 million to be payable to ATW in certain circumstances.

Completion of the ATW Transaction is subject to a number of conditions, including: the receipt of all necessary regulatory and court approvals (including the approval of the TSXV) and obtaining approvals from the shareholders of ATW and Kinbauri at meetings to be held no later than September 25, 2009. There can be no assurance that the ATW Transaction will be completed as proposed or at all.

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

Gryphon Partners is the financial advisor to Kinbauri's Special Committee and its legal advisor is Wildeboer Dellelce LLP. ATW's financial advisor is PI Financial Corp. and its legal counsel is CD Farber Law Group.

All information contained in this new release with respect to ATW was supplied by ATW for inclusion herein, and with respect to such information, Kinbauri and its board of directors and officers have relied on ATW.

About ATW

ATW is a gold producer and developer, with two gold mines in Western Australia and is listed on Tier 1 of the TSX Venture Exchange ("TSXV") (TSX VENTURE:ATW). ATW's corporate goal is to build a mid-tier gold producer.

ATW is incorporated under the Business Corporations Act (British Columbia) and was listed on the TSXV 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.

www.atwgold.com

Shareholders do not have to take any action on the Orvana offer and the Kinbauri Board urges you to reject it and vote in favour of the ATW Transaction.

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.

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 www.sedar.com and available on the Company's website at www.kinbauri-gold.com. The Company undertakes no obligation to update this forward-looking information except as required by applicable law.

www.kinbaurimaximized.com

Neither 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.

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