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24th Floor - 1111
W. Georgia St.
Vancouver,
BC, Canada
V6E 4M3
Phone: 604.685.5492 Fax: 604.685.2536
www.buffalogold.ca
April 5, 2007
|
Trading Symbol: TSXV
– BUF.U
OTC\BB – BYBUF
FWB
– B4K
|
BUFFALO GOLD MAKES
STRATEGIC INVESTMENT IN UPCOMING GOLD PRODUCER KINBAURI GOLD
Vancouver, B.C., April 5, 2007 – Buffalo Gold Ltd. (TSX-V: BUF.U;
OTC-BB: BYBUF; FWB: B4K) is pleased to announce
that it is expanding its gold assets through a strategic CAD$5,500,000
investment in Kinbauri Gold Corp. (TSX-V: KNB). Kinbauri is using the
proceeds of the brokered private placement to complete the purchase of the El
Valle and Carles gold mines, the El Valle mill, auxiliary facilities, and two
further exploration properties in northern Spain, from Rio Narcea Gold Mines
S.L. (“Rio Narcea”).
Under the terms of the
private placement, Buffalo
will acquire 11,000,000 subscription receipts convertible into Units of Kinbauri
at a purchase price of CAD$0.50. Each Unit will be comprised of one
common share and one-half common share purchase warrant exercisable for
eighteen months at a price of CAD$0.70. The total offering by Kinbauri is
up to CAD$13,500,000 and if closed in full will result in Buffalo holding approximately 28% of the
company. The securities are subject to a four month hold from the
closing date of the offering.
Upon approval of the
offering from the TSX Venture Exchange, Mr. Brian
McEwen, President and C.O.O. of Buffalo Gold will be
appointed to the Board of Directors of Kinbauri.
Value from
growth strategies emphasizing careful opportunity assessment
While Buffalo’s
current exploration programs are focused on Australasia,
the company is continuing with a strategy of aggressively adding value through
investing in or acquiring projects and companies that offer considerable growth
potential. By purchasing a major stake in Kinbauri, Buffalo’s management is confident that
it is making an investment with excellent upside potential. With a
current market cap of less than CAD$9,000,000 (pre-financing) Kinbauri has
positioned itself as a potential near-term gold mining company by completing
the purchase of the El Valle and Carles gold mines and associated facilities
and properties from Rio Narcea. An experienced due diligence team from
Kinbauri reviewed the projects in detail and confirmed the favourable potential
for rejuvenation of gold mining operations. In addition, they put
together a plan to re-start operations through selectively expanding resources
and establishing reserves.
“I agree with the evaluation by Kinbauri’s due
diligence team,” commented Buffalo’s President and C.O.O., Brian McEwen, after visiting the El Valle site in
March 2007. “With proper mine
development and exploration drilling prior to start-up, I expect both the El
Valle and Carles mines to be profitable. With the permits and
infrastructure in place we could be in production within 18 months.”
As reported by Kinbauri
in a January 16th 2007 news release, Rio Narcea reported the
following resources for the El Valle and Carles mines as of December 31st,
2005:
Table
1. Resource Estimates for El Valle and Carles Mines
|
Deposit
|
Category
|
Au-bearing
Tonnes (000s)
|
Au
(g/t)
|
Cu-bearing
Tonnes (000s)
|
Cu
(%)
|
Contained
Metal
|
Au
(000
ounces)
|
Cu
(tonnes)
|
El Valle
|
Measured
Indicated
M&I
Inferred
|
953
1,025
1,978
2,569
|
5.08
5.93
5.52
8.74
|
903
904
1,808
1,040
|
1.24
1.20
1.22
0.79
|
157
195
351
722
|
11,193
10,872
22,065
8,182
|
Carles
|
Measured
Indicated
M&I
Inferred
|
240
619
859
832
|
5.32
5.20
5.23
5.05
|
195
618
813
619
|
0.80
0.68
0.71
0.58
|
41
103
145
135
|
1,566
4,171
5,737
3,608
|
Rio Narcea stated its
mineral resources in accordance with the definitions adopted by CIM on August
20, 2000. They were prepared by or under the direction of Alan C. Noble, Ore
Reserves Engineering, Colorado, USA,
an independent qualified person as defined by N.I. 43-101. As of January 15th,
2007, the above stated resources need to be reduced by approximately 258,483t
as 97,021t grading 3.46g Au/t and 1.03% Cu were mined at El Valle and 161,462t
grading 4.67g Au/t and 0.72% Cu at Carles were mined during 2006. It should be
noted that Rio Narcea has indicated that the economic viability of the
resources as stated in the above table are not demonstrable.
The immediate plan for
the El Valle project is to commence exploration drilling both from surface and
underground with an objective of delineating a minimum of 1 million ounces gold
prior to feasibility.
Kinbauri
Portfolio
As well as the mining
operations at El Valle and Carles, Kinbauri has options on advanced exploration
permits at the Corcoesto project in Spain. Kinbauri can earn up
to a 65% interest in the property from Rio Narcea by spending 4 million Euros
over the next 5 years. An NI 43-101 Technical Report completed by Alan C.
Noble confirmed resource estimates reported by Rio Narcea in 2003 for the
Corcoesto deposit. This includes a Measured and Indicated resource of 7.1
million tonnes at 1.43 g/t gold at a 0.65 g/t gold cut-off grade.
In addition to its
projects in Spain, Kinbauri
also has early stage gold tenements in Nevada,
platinum group element and diamond projects in Quebec
and a gold project near Kirkland Lake,
Ontario.
Damien Reynolds, Chairman
and C.E.O. of Buffalo commented, “This investment by Buffalo is exciting as it takes us one step
closer to our corporate strategy of becoming a mid-tier gold producer through
mergers, acquisitions and exploration.”
For additional details on
Kinbauri and its portfolio of assets, please refer to the website www.kinbauri-gold.com ..
Mr. Brian McEwen, President and C.O.O. for Buffalo Gold,
is a qualified person for Buffalo
and has approved the contents of this news release.
To find out more about Buffalo Gold Ltd. (TSX-V:
BUF.U), please visit the company website at
www.buffalogold.ca.
On behalf of the Board of Directors of
BUFFALO GOLD LTD.
“Damien Reynolds”
Damien Reynolds,
Chair of the Board of Directors
and Chief Executive Officer
For further information please contact:
Julie Hajduk, Investor Relations
E-mail: julie@buffalogold.ca
Phone: 604.685.5492 or tollfree 1.888.685.5492
THE TSX
VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE
ACCURACY OF THIS PRESS RELEASE
Cautionary
Note to U.S. Investors – The United States
Securities and Exchange Commission (“SEC”) permits mining companies
in filings with the SEC to disclose only those mineral deposits that a company
can economically and legally extract or produce. The Company uses certain terms
in this news release, such as “inferred resource”, that the SEC
guidelines strictly prohibit from including in filings with the SEC. U.S.
investors are urged to consider closely the disclosure contained in the
Company’s Form 20-F Registration Statement, File No. 000- 30150. The
Company’s filings are available on the SEC’s website at http://www.sec.gov/edgar.shtml.
Statements in this news release regarding anticipated commencement
dates of mining or metal production operations and operating efficiencies or
profitability are forward-looking statements. Actual results could differ
materially depending upon the availability of materials, equipment, required
permits or approvals and financing, the occurrence of unusual weather or
operating conditions, the accuracy of reserve estimates, lower than expected ore grades or the
failure of equipment or processes to operate in accordance with
specifications. Statements as to management's beliefs, strategies, plans,
expectations or opinions are based on a number of assumptions concerning future
conditions that may ultimately prove to be inaccurate and may differ materially
from actual future events or results.