Resource Report Concludes Kinbauri's Corcoesto Deposit Has Very Good Potential to Advance Into a Gold Producer
30 August 2006
Kinbauri Gold Corp. (TSX VENTURE: KNB) ("Kinbauri") has received a N.I. 43-101 compliant Resource Report from Alan C. Noble of Ore Reserves Engineering for its late-stage exploration Corcoesto gold project ("Corcoesto") in Galicia, northwestern Spain. The Report provides an independent assessment with regard to Corcoesto's exploration potential, gold resources and further development. Noble, an independent engineering consultant, had previously been engaged by Rio Narcea Gold Mines, Ltd. ("RNGM") to assist in resource estimation and open-pit mine planning at Corcoesto. As a result of his recent assessment for Kinbauri, Noble has concluded that:
"the Corcoesto Project has very good prospects for progressing from exploration to a working mine".
The Corcoesto deposit comprises several vein systems with a well-defined resource base of over 300,000 ounces of gold as originally estimated by RNGM in 2003; this estimate included the southern vein systems, namely, the Pozo del Ingles, Peton de Lobo, and Cova Crea systems. Kinbauri's 2005-2006 drill programs extended the resources down-dip at Pozo del Ingles and Peton de Lobo; these newly defined resources are estimated separately from those previously defined in 2003 and are classified as deep inferred resources with underground potential. It is noteworthy that Noble's open-pit resources do not include any resources from the Picotos, Montefurado and Fonterremula vein systems in the northern part of Corcoesto where results from limited trenching and drilling by Kinbauri and RNGM were very encouraging. Resources as estimated by Noble are as follows:
Open-Pit Resources
Noble's estimated open-pit resources at Corcoesto, using the 2003 resource model and various cut-off grades, are listed in Table 17-8 (appended) of the August 18, 2006 Resource Report. Following Noble's recommended development grade increase to 1.75g Au/t (cut-off of 0.90 Au/t), resources are estimated as follows:
- Measured Resources: 142,000 ounces Au; 2.48Mt at 1.78g Au/t - Indicated Resources: 122,000 ounces Au; 2.19Mt at 1.74g Au/t - Measured and Indicated: 264,000 ounces Au; 4.67Mt at 1.76 Au/t - Inferred Resources: 32,000 ounces Au: 0.59Mt at 1.69 Au/t
These resources are generally near surface and would be expected to be exploited through open-pit mining; a portion may be more economically extracted by underground mining.
Underground Resources
Table 17-10 (appended) summarizes the resources having underground potential at a 4.5g Au/t cut-off
- Inferred Resources: 46,700 ounces Au; 0.24 Mt at 6.15g
These resources include 12,000 ounces that are included in the open-pit resources above.
Noble has recommended that "Exploration be targeted towards a combined open-pit plus underground operation with a small mill in the 1,000 to 2,000 tpd range. A reasonable target for a development decision is to expand the current open-pit resource by 25% to 35% while increasing the grade to at least 1.75 g Au/t by raising the cut-off grade. The economics of the project may be enhanced further by developing additional high-grade underground resources, but underground reserves may not be essential for a successful project." Noble's complete Interpretation and Conclusions (Section 19.0) and Recommendations (Section 20.0) are appended to this press release. The complete Resource Report will be filed on www.sedar.com and on Kinbauri's website at www.kinbauri-gold.com.
Kinbauri recently commenced its fall drilling program (see press releases of May 31st & August 9th, 2006), which will incorporate the above Recommendations. As noted by Noble, drilling will focus on vein systems where there is high potential to significantly increase open-pittable resources. Assays are expected to be available from initial drilling in late September 2006.
In 2003, RNGM initiated a study on three of the southern-most vein systems to evaluate the feasibility of open-pit mining with heap-leach recovery for gold. The study indicated that the gold mineralization would not economically lend itself to heap-leaching at the 2003 gold price of US $350 per ounce. However, metallurgical tests showed that the ore was not refractory and that gold recoveries in the range of 90% could be achieved with conventional milling and cyanide leaching. Consequently, Noble has recommended the latter as the more probable, economically attractive method of gold extraction as well as further expansion of the resources.
The 2003 resource model was estimated using a inverse-distance-power estimation within a three-dimensional block model that defined the mineralized zones. This model was based on 317 drill holes with a drill hole spacing that was less than 25-meters for measured resource and less that 55-meters for indicated resource. The deep zone resource model was estimated using inverse-distance-power estimation within a three-dimensional model of the vein zone. The deep zone model was based on 99 drill holes, of which 24 drill holes were below the open pit varies from 40 meters up to 150 meters.
RNGM trench sampling and drilling through April 1999 were assayed at the Inspectorate laboratory in Reno, Nevada; assays were verified by later check assay programs. Subsequent sampling by RNGM and Kinbauri were sent to the ITMA laboratory in Oviedo, Asturias, Spain. During Kinbauri's drilling, one sample in every twenty was sent to ALS CHEMEX for duplicate assay; in addition, ITMA routinely assayed two duplicates, one standard and one certified standard for each batch for thirty samples. Assays were a 30-gram fire assay with atomic absorption finish. For further details on sample assay verification, see Section 13.0 in the Resource Report: Sample Preparation, Analysis and Security.
This press release was prepared by Dr. V.N. Rampton P.Eng. in his capacity as a Qualified Person. It has been reviewed for release by Alan C. Noble or ORE Reserves Engineering, a Professional Engineering and Qualified Person as defined in National Instrument 43-101.
Kinbauri is a junior gold exploration company with 9,469,189 common shares issued and outstanding and 10,217,189 fully diluted. Kinbauri can earn a 65 percent interest from Rio Narcea Gold Mines, Ltd. in Corcoesto by expending 4,000,000 euros over five years (for full details see press release of March 7, 2005).
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.
The technical report for the Corcoesto Gold Deposit is available at the following addresses
http://www.ccnmatthews.com/docs/Section17%20Tables.pdf
http://www.ccnmatthews.com/docs/Sections18and19.pdf
THIS PRESS RELEASE WAS PREPARED BY KINBAURI GOLD CORP. AND THE TSX VENTURE EXCHANGE HAS NEITHER APPROVED OR DISAPPROVED THE CONTENTS OF THIS RELEASE.
Contacts: Kinbauri Gold Corp. Dr. Vern N. Rampton President (613) 836 2594 (613) 831 2730 (FAX) vrampton@kinbauri-gold.com kinbauri@kinbauri-gold.com
Ms. Donna Yoshimatsu Investor's Relations (647) 293-7047 dyoshir@rogers.com
SOURCE: Kinbauri Gold Corp.
Source: marketwire
All trademarks and copyrighted information contained herein are the property of their respective owners.
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