Kilo Goldmines Ltd. ("Kilo" or "KGL" or the "Company") (TSX
VENTURE:KGL)(FRANKFURT:02K) Kilo Goldmines Ltd ("Kilo or KGL") and
Randgold Resources plc ("RRL") are pleased to announce that they
have signed a definitive agreement for a Joint Venture ("JV") on
Kilo's KWR Iron Sprl Exploration licences in the Democratic
Republic of Congo ("DRC").
Randgold will undertake to finance all exploration on Kilo's KWR
licences for which they will obtain incremental ownership based on
milestone events. Randgold has up to five years to establish a pre
feasibility study and a joint venture committee will manage the
exploration programmes which will rely on knowledge and expertise
from both companies.
The terms of the agreement are:
-- RRL to earn 51% for the completion of a pre feasibility study ("PFS")
-- KGL right to maintain 49% post PFS
-- RRL to earn 65% for the completion of a bankable feasibility study
("BFS") should KGL not contribute post PFS
-- KGL equity to convert to 1.5% royalty if diluted to 10% or less
-- KGL keeps the exploration rights to all minerals not associated with
gold
-- PFS to be established within 5 years
-- BFS to be established within 1 year after PFS, or such longer time to be
agreed by the parties
Alex Van Hoeken, President & CEO of Kilo Goldmines
commented: "Kilo Goldmines is very pleased to have entered into a
partnership with a FTSE 100 company having the reputation of
aggressively finding and developing profitable gold resources. Kilo
Goldmines will benefit from Randgold's expertise and shared costs
to help advance its other main Somituri project as well."
Mark Bristow, CEO of Randgold Resources commented: "The Kilo
Goldmines portfolio is highly prospective and constitutes an
excellent target for continued growth for Randgold. The geology is
akin to the large world class deposits in Tanzania and recently at
Kibali, and we are committed to search for similar discoveries.
Signing this agreement is a first step in establishing a long term
collaboration with Kilo Goldmines. With Kilo Goldmines' established
exploration infrastructure in the area, our teams can get a running
start on their exploration programmes."
Twelve Permis d'Exploration ("PR"), Exploration Licences
attributed to the RRL/KGL JV namely PR 2227, PR 2226, PR 2229, PR
2230, PR 2231, PR2285, PR2286, PR 2287, PR2288, PR 2289, PR 2290,
and PR 2291, totaling 2 056.76 km2, are illustrated on Figures 1
and 2 on Kilo's website. These licences are currently in a joint
venture with Rio Tinto for iron only, whilst KGL and its partner
Suez retain all non-iron mineral rights. The Northern portion of
the Archaean Ngayu Greenstone Belt and the entire Isiro Greenstone
Belt, both set in a granitic basement, are covered by the twelve
PRs. The licenses have numerous gold occurrences which were
explored during the colonial-era, and are current active artisanal
sites.
Examination of available data to date has enabled preliminary
interpretation of major structural features permissive for gold
mineralization, such as local and regional folding, thrusting,
faulting and displacements, and structural directional changes.
Many of such features led to the major Randgold discoveries which
have become operating mines in its portfolio.
In addition, Kilo is also pleased to announce that it has
reached an agreement to buy out its 25% minority partner, Suez
Holdings Ltd, which has a free carried interest through production
for non-iron commodities in the KWR licences under the current Kilo
- Suez JV agreement. The transaction involves an aggregate of 635
000 USD in cash and 356 000 shares over a 6 year period with
initial no cash down, and is subject to review by the TSXV. The
buyout is simultaneously for Suez' gold interest in the KWR
licences, as well as Suez interest in a Kilo DRC subsidiary, KGL
ERW Sprl, which holds permit PR 2274 illustrated on Figures 1 and 3
on Kilo's website, and allows KGL, once the consideration has been
paid, to retain Randgold as its sole partner.
Kilo also reports that Rio Tinto is withdrawing from its joint
venture for iron ore on the KWR Licences. Kilo and Rio Tinto are
inventorising all data and joint venture assets to be handed over
to Kilo, and discussions about the withdrawal process are in
progress.
About Kilo
Kilo Goldmines Ltd. is a Canadian gold exploration company that
is listed on the TSX Venture Exchange under the symbol 'KGL' and on
the Frankfurt Exchange under the symbol '02K'. The Company holds
about 3,000 square kilometres of favourable Archaean Kibalian
greenstone in the Kilo-Moto area in the Democratic Republic of the
Congo. Kilo's principal focus is to advance its projects from
exploration through feasibility to project development and
ultimately to full production in a socially and environmentally
responsible manner. The Company owns a 71.25% interest in the DRC
entity that holds the Somituri Project Exploitation Permits.
About Suez
Suez is a private Jersey registered company, and the original
holder of the PRs, which were vended into a new entity, ERW, on the
basis of share capital ownership, namely Kilo 75% and vendors
(Suez) 25%. ERW PRs optioned by Rio Tinto were transferred to KWR
whereas PRs not subject to the Rio Tinto option remained in
ERW.
About Randgold
Randgold Resources is a gold mining and exploration company
operating in the prospective gold belts of west and central Africa.
The company's strategy is to create real value for all its
stakeholders through the discovery of multi-million ounce gold
deposits and their development into profitable mines.
Major discoveries to date include the 7.5 million ounce Morila
deposit in southern Mali, the 7 million ounce Yalea deposit and the
5.5 million ounce Gounkoto deposit, both in western Mali, the 4
million ounce Tongon deposit in the Cote d'Ivoire and the 3 million
ounce Massawa deposit in eastern Senegal.
Today Randgold operates four gold mines: Morila, Loulo, and
Gounkoto in Mali and Tongon in Cote d'Ivoire. A fifth mine, Kibali
in the Democratic Republic of Congo, is currently being developled
and first gold is scheduled for the end of 2013. The Massawa
project in Senegal is at feasibility stage and exploration
programmes are underway in Burkina Faso, Cote d'Ivoire, DRC, Mali,
and Senegal.
This news release may contain forward looking statements
concerning future operations of Kilo Goldmines Ltd. All forward
looking statements concerning the Company's future plans and
operations, including management's assessment of the Company's
project expectations or beliefs may be subject to certain
assumptions, risks and uncertainties beyond the Company's control.
Investors are cautioned that any such statements are not guarantees
of future performance and that actual performance and exploration
and financial results may differ materially from any estimates or
projections.
Figure 1. Map illustrating the Kilo Exploration Licences
optioned to Randgold, the Kilo ERW Exploration Licence, other Kilo
Licences, Adumbi gold deposit and geology:
http://media3.marketwire.com/docs/KILOFigure1.pdf
Figure 2. Map illustrating the Kilo Licences optioned by
Randgold, geology and gold occurrences:
http://media3.marketwire.com/docs/KILOFigure2.pdf
Figure 3. Map illustrating Kilo's ERW Exploration Licence and
geology: http://media3.marketwire.com/docs/KILOFigure3.pdf
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Contacts: Kilo Goldmines Ltd. Alex Van Hoeken President and CEO
+1 (416) 360 3415info@kilogoldmines.com www.kilogoldmines.com