Kinbauri Gold Corp. (TSX VENTURE: KNB)(FRANKFURT:
3KG.DE)("Kinbauri") announced today that it has been advised by
Scott Wilson Roscoe Postle Associates ("SWRPA") that there were
material errors in certain numbers provided to Kinbauri and
reported in its press release dated February 9, 2009. The numbers
pertain to the Preliminary Economic Assessment or Scoping Study
(the "Scoping Study") for Kinbauri's 100% owned El Valle/Carles
project (the "Project") in northwestern Spain. The Base Case
Scenario numbers are correct. However under the "Current Metals
Prices" headings, certain input conversions resulted in a material
understatement of Revenue, Cash Flow, Net Present Value and
Internal Rate of Return (both pre-tax and after tax). SWRPA has
also lowered the payback periods.
As previously reported under the Base Case Scenario, the results
reveal a pre-tax NPV (net present value) at a 10% discount rate of
CAD $132M and an IRR (internal rate of return) of 42%. However,
under the revised numbers, using current metal prices and exchange
rates, (as they were on February 9) the Project has a pre-tax NPV
at a 10% discount rate of CAD $221M versus the previously reported
CAD $178M. Similarly, under the corrected version, the IRR is 58%
versus the previously reported IRR of 51%. The financial highlights
are summarized below and the revised numbers are highlighted in
bold:
Scoping Study(1) Financial Summary
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Base Case Scenario Current Metal Prices
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Undiscounted cash flow (pre-tax) CAD 274,244,800 CAD 422,652,800
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NPV @ 10% (pre-tax) CAD 132,537,600 CAD 220,980,800
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IRR (pre-tax) 42% 58%
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Undiscounted cash flow (after tax) CAD 213,307,200 CAD 331,948,800
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NPV @ 10% (after tax) CAD 94,235,200 CAD 164,955,200
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IRR (after tax) 33% 47%
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Total gold production 894,000 oz 894,000 oz
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Total copper production 83,710,000 lbs. 83,710,000 lbs.
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(1) All conversions to CDN dollar are based on an exchange rate of 1.6 CDN
equals 1 euro
(2) Base case price $750 Au, $2.50 Cu, Exchange rate Euro to USD 1.4
(3) Current price $910 Au, $1.50 Cu, Exchange rate Euro to USD 1.3
Detailed Cash Flow and Assumptions
The revised table below presents a complete list of assumptions
and results comparing the base case to current prices (as of
February 9) as well as pre and post tax scenarios. Cost assumptions
are based on contractor quotes and the overall economics are
estimated by SWRPA to be plus or minus 15%, which is significantly
more concise than standard scoping study estimates. However this
analysis does contain inferred resources as part of the assessment
and therefore is classified as a Scoping Study. All figures are in
Euros to reflect costs of production in Spain.
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Project Parameter Base Case Current Prices
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Total Ore Tonnes Processed 6,331,000t 6,331,000t
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Average Diluted Gold Grade 4.77 g/t 4.77 g/t
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Average Diluted Copper Grade 0.73% 0.73
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Gold Recovery (total) 92% 92%
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Copper Recovery (total) 82% 82%
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Total Gold Production 894,000 oz 894,000 oz
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Total Copper Production 83,710,000 lbs 83,710,000 lbs
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Gold Price 536 EUR/oz 700 EUR/oz
(750 USD/oz) (910 USD/oz)
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Copper Price 1.79EUR/lb 1.15EUR/lb
(2.50 USD/lb) (1.50 USD/lb)
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Exchange Rate: US to EUR 1.4 1.3
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Gold Revenue 466,825,000 EUR 609,985,000 EUR
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Copper Revenue 144,101,000 EUR 93,111,000 EUR
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Total Revenue 610,926, 000 EUR 703,097,000 EUR
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Cash Operating Cost 303,125,000 EUR 303,125,000 EUR
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Pre-Production CAPEX 67,474,000 EUR 67,474,000 EUR
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Deferred CAPEX 22,449, 000 EUR 22,449,000 EUR
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Total Project CAPEX 89,923, 000 EUR 89,923,000 EUR
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Cash cost per Au oz
without Cu credits 348EUR (USD 487) 348EUR (USD 452)
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Cash cost per Au oz with
Cu credits 266EUR (USD 372) 302EUR (USD 393)
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Cash Flow (pre-tax) 171,403,000 EUR 264,158,000 EUR
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NPV at 10% (pre-tax) 82,836,000 EUR 138,113,000 EUR
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IRR (pre-tax) 42% 58%
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Cash Flow (post-tax) 133,317,000 EUR 207,468,000 EUR
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NPV at 10% (post-tax 58,897,000 EUR 103,097,000 EUR
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IRR (post-tax) 33% 47%
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Payback Period 1.8 years 1.4 years
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Cautionary Statement as Required by NI 43-101, Sect 2.3 (3):
This assessment is preliminary in nature; it includes inferred
mineral resources that are considered too speculative geologically
to have the economic considerations applied to them that would
enable them to be categorized as mineral reserves, and there is no
certainty that the preliminary assessment will be realized.
This press release has been prepared by Dr. V. N. Rampton, P.
Eng and Mr. Brian McEwen, PGeol in their capacity as qualified
persons under the guidelines of NI 43-101. The press release has
also been reviewed and approved by SWRPA.
About Kinbauri:
Kinbauri is a TSXV - Tier 1 Mineral Exploration Company focused
on the development of mineral properties, primarily precious metal
prospects in northwestern Spain, Nevada and Canada. Its immediate
focus is to expand and upgrade resources to reserves at the El
Valle property in Asturias, Spain in order to start operations at
the mine and existing mill complex there in 2011. It currently has
48,852,695 common shares issued and outstanding.
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.
VISIT: Kinbauri Gold's Hub at
http://www.agoracom.com/IR/kinbauri where investors can post
questions and receive answers or review questions and answers
already posted by other investors.
THIS PRESS RELEASE WAS PREPARED BY KINBAURI GOLD CORP. THE TSX
VENTURE EXCHANGE DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR
ACCURACY OF THIS RELEASE.
Contacts: North America Kinbauri Gold Corp. Dr. Vern Rampton, P.
Eng., President 613-836-2594 613-831-2730 (FAX)
vrampton@kinbauri-gold.com kinbauri@kinbauri-gold.com Kinbauri Gold
Corp. Mr. Brian McEwen, PGeol, Director 604-551-6979
bmcewen@kinbauri-gold.com Kinbauri Gold Corp. Darrell Munro, BB.A,
LL.B Manager, Corporate Communications 613-836-0198
dmunro@kinbauri-gold.com www.kinbauri-gold.com Europe INVESTEL
Ruediger (Rudy) Hnyk, CEO Investor Relations &
Telecommunications ceo@investel.de
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