Kinbauri Expands Resources At El Valle, Carles Gold-Copper Mines

Last March, Kinbauri Gold (KNB-V, KINBF-o) acquired gold assets in northwestern Spain from Rio Narcea Gold Mines for US$5 million. The goods included two exploration properties and fixed assets at the El Valle and Carles gold-copper mines, which the company estimates on its website to have a replacement value of about US$100 million.

Rio Narcea, which was subsequently taken over by Lundin Mining (LUN-T, LMC-n), closed the mines at the end of 2006 because theyno longer fit into the company’s growth strategy, Kinbauri says. (The mines together had produced about 1 million oz. gold and 47 million lbs. copper.)

Now Kinbauri is determined to expand and upgrade resources at El Valle and Calle and get both mines up and running again by 2010.

So far so good.

Kinbauri has expanded its resources by 52% in terms of gold ounces and 125% in pounds of copper, over the previous March 2007 resource estimate. That gain is due primarily to 29,060 metres of underground drilling at El Valle and 1,250 metres at Carles.

Today the El Valle/Carles project hosts a measured and indicated resource of 6.2 million tonnes grading 4.6 grams gold per tonne (for total contained gold of 916,000 oz.) and 0.85% copper (for total contained copper of 113 million lbs.) at cutoff grades varying from 1.5 to 3.5 grams gold equivalent per tonne.

In the inferred category, El Valle/ Carles has 6.6 million tonnes grading 5.2 grams gold per tonne and 0.55% copper for 1.09 million oz. gold. Those numbers yield 1.09 million oz. gold and 74 million lbs. copper.

Moreover, according to a technical report filed earlier this month, additional zones that are accessible to the present mine workings (A107, Black Skarn North, Charnela South and Monica) mean El Valle’s total resources have the potential to support a mine there for at least 10 years.

“What is exciting is that Kinbauri has taken a project with a reported 1.3 million ounces gold in 2007 and surpassed the 2-million-ounce mark while maintaining considerable upside potential,” Kinbauri’s president, Vern Rampton, said in a prepared statement.

The next step is a scoping study, due out in mid-to late December.

At presstime, Kinbauri traded at about 28 per share in a 52-week window of 16-$1.11 per share. The Vancouver-based junior has 48.7 million shares outstanding.