News

February 19, 2009

The Timing Is Right For Kinbauri Gold To Cash In On Its Investment In Spanish Gold

By Our Canadian Correspondent

Timing is everything in the mineral exploration business and this fact has not been lost on Vern Rampton and his team at Canadian-listed Kinbauri Gold. Back in 2007 the company acquired the gold assets of Rio Narcea Gold Mines in northwestern Spain for only US$5 million. The acquisition included two exploration properties, the El Valle and Carles gold-copper mines, which had a history of recent production amounting to a million ounces of gold and 47 million pounds of copper over an eight year period. These properties also came with some fixed assets, including a 2,000 tonnes per day mill and a tailings disposal facility, which together have a combined value that could be pegged at about US$100 million.

So how did Kinbauri come to pick these assets up on the cheap? Well, Rio Narcea, which was subsequently taken over by Lundin Mining, put the project on care and maintenance in 2006 after determining that due to increasing mining costs the projects did not fit its growth profile. And, recognizing a great opportunity, Kinbauri laid down a US$5million bet that the past-producing gold-copper operations could be revived. When Kinbauri bought the project, measured and indicated resources tallied...