Kinbauri sees 26% boost on El Valle drilling (August 06, 2007)

Kinbauri Gold’s (KNB-V) first set of results from its El Valle gold project, in Spain, has returned some positive results, extending a known mineralized zone and giving the company’s stock a 26% boost.

The highlight of the results from the first 10 holes of a 21-hole, 7,000-metre drill program, was a 72- metre interval from 65 metres below surface grading 5.1 grams gold per tonne, 22.9 grams silver, and 1.4% copper. The interval, in hole 9, also included a shorter 25.6-metre section from 108.7 metres below surface that assayed 11.1 grams gold, 47 grams silver, and 2.27% copper. True thicknesses were not published.

Drilled from existing mine workings, Kinbauri says the holes expand known mineralization at the high-grade Area 107 — one of two zones drilled — by at least 50 metres to the southeast, 150 metres to the west, and 100 metres below surface.

Kinbauri said that two holes with high copper and gold values appeared to show the intersection of the Area 107 epithermal structure and the Black Skarn zone to the southeast. Another 11 holes will be completed on Area 107 and Black Skarn North by the end of September.

El Valle, a past-producing mine that was put on care and maintenance last year by Rio Narcea Gold Mines (RNG-T, RNO-X), includes a 750,000-tonne-per-day mill and other infrastructure that Kinbauri is looking to capitalize on; the company is seeking to shore up resources and build reserves in order to restart mining in the near term, starting with Area 107. Kinbauri is targeting six years’ worth of production.

A March resource estimate put indicated resources at Area 107 at 38,000 tonnes grading 9.8 grams gold for 12,000 oz. gold and 913,000 inferred tonnes grading 11.6 grams gold for 342,000 oz.

In January, Kinbauri exercised an option to purchase El Valle and Carles, another past-producing property, as well as the La Brueva and Godan properties from Rio Narcea for US$5 million.

Combined, the new Spanish properties host a measured and indicated 2.6 million tonnes grading 5.7 grams gold per tonne for 477,000 oz. gold, and an inferred 3.16 million tonnes at 8l3 grams gold for 845,000 oz., plus copper credits.

Surface drilling will begin at Area 208 at El Valle, and Carles and Godan in September, as well as some drifting at Area 107. The company has earmarked $5.4 million to explore its Spanish properties this year.

Kinbauri holds other projects in Spain, as well as in Quebec, Ontario and Nevada.

The junior’s shares gained 26% on the news, up 16 to 86. The stock has traded in a 52-week range of 28.5-90.