Kinbauri Gold Corp.

Kinbauri Gold Corp.

April 05, 2007 15:31 ET

Kinbauri Gold Corp.: Second Tranche of $13,500,000 Financing Completed

OTTAWA, ONTARIO--(CCNMatthews - April 5, 2007) - Not for distribution to U.S. news wire services, or dissemination in the United States.

Kinbauri Gold Corp. ("Kinbauri") (TSX VENTURE:KNB) is pleased to announce that the second tranche of a $13,500,000 financing was completed today for gross proceeds of $3,669,000 through the issuance of 7,338,000 subscription receipts at a price of $0.50 per subscription receipt. Each subscription receipt will automatically convert into a unit ("Unit") of Kinbauri upon final regulatory approval of Kinbauri's Acquisition of the El Valle mill, auxiliary facilities, the El Valle and Carles mines and two further exploration properties in northern Spain (the "Assets"), all of the Assets are presently held by Kinbauri Espana, S.L. Each Unit will be comprised of one common share and one-half common share purchase warrant exercisable for eighteen months at a price of $0.70. M-Partners Inc. and Clarus Securities Inc. (collectively, the "Agents") were engaged as the Agents for the offering. The Agents will be paid a commission totalling 7 percent of the total funds raised and will receive broker warrants to purchase an aggregate of 513,660 Units at a price of $0.50 for this tranche. Kinbauri previously completed a brokered private placement on March 30th, 2007 for gross proceeds of $9,050,000 through the issuance of 18,100,000 subscription receipts at a price of $0.50 per subscription receipt. The balance of the financing is to close early next week. All securities will be subject to a 4 month hold from the closing dates of the offering.

The proceeds of both offerings totalling $12,719,000, including Agents' commissions, have been placed in escrow pending receipt of TSXV approval of the Acquisition. Necessary documentation for TSXV approval is expected to be completed before the end of April, 2007. In the event that Kinbauri does not satisfy the escrow release conditions by July 30, 2007, the proceeds will be returned to the subscribers.

Upon the conversion of the subscription receipts into Units, the net proceeds of the financing will be used toward (a) the costs of the Assets purchased by Kinbauri Espana, (b) exploration and definition drilling at El Valle, (C) determining the feasibility of various underground mining methods at El Valle, (d) maintenance of mill and mine facilities at El Valle and Carles and (e) general working capital purposes. For further details of the Assets and Work Programs please refer to the press releases of January 16th, 2007 and February 27th, 2007.

Kinbauri also wishes to announce that it has granted an aggregate of 310,000 options to purchase common shares of the Company exercisable at a price of $0.75 per share for a period of 5 years, to directors, officers and consultants of the Company. The common share issuable upon exercise of the options are subject to a four month hold period from the original date of grant.

Kinbauri is a mineral exploration company focused on the development of mineral properties, primarily precious metal prospects in northwestern Spain, Nevada and Canada. Currently it has 11,429,189 common shares issued and outstanding and 13,524,689 fully diluted.


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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