...more news today (May 13) coming from Kinbauri:

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Kinbauri signs definitive deal with Glen Eagle

2009-05-13 01:37 ET - News Release

Dr. Vern Rampton reports

KINBAURI SIGNS DEFINITIVE AGREEMENT WITH GLEN EAGLE ENABLING ACCELERATED DEVELOPMENT AT EL VALLE/CARLES

Kinbauri Gold Corp. has signed a definitive subscription agreement with Glen Eagle Resources Inc. pursuant to the binding letter of intent as announced in Stockwatch on April 17, 2009. Under the terms of the subscription agreement, Glen Eagle will invest $32-million to acquire a 45-per-cent interest in Kinbauri Espana S.L., which holds a 100-per-cent interest in the El Valle/Carles gold/copper project and other exploitation concessions within the Rio Narcea gold belt in northwestern Spain. The initial investment of $32-million will be allocated as to 3,068,850 euros to purchase Class B voting participations of Espana and the balance will be advanced as a non-recourse shareholder loan to be paid back in accordance with the agreement of shareholders to be entered into by the parties. All disbursements of cash or kind will be strictly according to participating interest whether by dividend or loan repayment. The subscription agreement also grants Glen Eagle the right to acquire a further 5-per-cent interest for an additional $5-million, to be allocated as to 673,650 euros to purchase Class B voting participations with the balance being advanced as a loan on the same terms as the initial loan. The subscription agreement does not contain a break fee. Due to the registration process in Spain, the transaction is anticipated to close on or about May 29, 2009, and is subject to all necessary regulatory approvals. Kinbauri and Glen Eagle have received conditional approval from the TSX Venture Exchange. M Partners Inc. is acting as financial adviser to Kinbauri.

In addition to the subscription agreement, Kinbauri, Espana and Glen Eagle will enter into an agreement of shareholders on closing of the transaction. Under the terms of the agreement, Espana will have a board of directors consisting of five nominees, three to be appointed by Kinbauri and two to be appointed by Glen Eagle. In addition, a management committee of Espana comprising five nominees will be established to approve annual budgets with respect to the project, with three nominees appointed by Kinbauri and two nominees appointed by Glen Eagle. The agreement of shareholders also contains a provision for the dilution of a non-participating shareholders' interest and upon either parties' interest being diluted under 10 per cent, it will be converted into a 2.5-per-cent net smelter return royalty. Distributions will be determined by the directors of Espana, declared quarterly and paid to each shareholder strictly in accordance to their participating interest. Either party has the ability to take their distribution in production from the project. In addition, either party has the option to purchase production from the project on standard commercial terms.

Kinbauri will be the operator of the project under the terms of an operator agreement to be entered into on closing of the transaction.

Further to Kinbauri's news in Stockwatch dated May 11, 2009, the company wishes to add the following information:

• Since receipt of the Scott Wilson Roscoe Postle Associates scoping study, Kinbauri's engineers have been working diligently to improve the mine plan and move production forward. The revised mine plan resulted in a significant reduction in preproduction capex, quicker access to high-grade zones and moved production forward to the second quarter of 2010.
• Kinbauri has engaged an independent mining consultant to review and comment on the viability of the updated mine plan and associated costs, cash flow projections, and production schedule. This will be completed prior to May 22, 2009.
• Kinbauri's on-site management team is headed by Jean Bailly, with over 35 years of experience in mine management and development, project valuation, cost control, and employee relations.
• Kinbauri has retained key personnel from Rio Narcea Gold, all with extensive experience at the project.
• Mining will be by independent contractors with extensive underground and production experience.
• The company has developed extremely good relationships with local and regional governments. The mine will employ approximately 200 people and will be welcome in an area which has high unemployment.
• Under the new mine plan, further financing beyond that being provided by Glen Eagle will be minimal. Discussions with financial institutions indicate that project financing at that stage could be obtained under favourable terms.

This press release has been prepared by Dr. V.N. Rampton, PEng, in his capacity as a qualified person under the guidelines of National Instrument 43-101.

We seek Safe Harbor."

Interesting, eh?

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