Kinbauri expands gold resources in Spain

Last March, Kinbauri Gold (KNB-V, KINBF-O) bought gold assets in northwestern Spain from Rio Narcea Gold Mines for US$5 million.

The goods included two exploration properties and fixed assets at the El Valle and Carles gold-copper mines that Kinbauri estimates on its website have a replacement value of about US$100 million.

Rio Narcea Gold Mines, now part of Lundin Mining (LUN-T, LMC-N), closed the mines at the end of 2006 because they no longer fit into the company’s growth strategy, Kinbauri says. (The mines together had produced about 1 million oz. gold and 47 million lbs. copper.)

Now Kinbauri is determined to expand and upgrade resources at El Valle and Carles and get both mines up and running again by 2010. So far so good.

Kinbauri has expanded resources by 52% in terms of gold ounces and 125% in pounds of copper, over the previous March 21 2007 resource estimate.

That gain is due primarily to 29,060 metres of underground drilling at El Valle and 1,250 metres at Carles. 

Today the El Valle/Carles project has a measured and indicated resource of 6.2 million tonnes grading 4.6 gram gold per tonne (for total contained gold of 916,000 oz.) and 0.85% copper (for total contained copper of 113 million lbs.) at cut-off grades varying from 1.5 to 3.5 grams gold equivalent per tonne.

In the inferred category, El Valle/Carles has 6.6 million tonnes grading 5.2 grams gold per tonne and 0.55% copper for 1.09 million oz. gold. Those numbers yield 1.09 million oz. gold and 74 million lbs. copper.

In addition, according to a technical report filed earlier this month, additional zones that are accessible to the present mine workings (A107, Black Skarn North, Charnela South and Monica) mean that El Valle’s total resources have the potential to support a mine there for at least ten years.

“What is exciting is that Kinbauri has taken a project with a reported 1.3 million oz. gold in 2007 and surpassed the 2 million oz. mark while maintaining considerable upside potential,” Kinbauri’s president, Vern Rampton, said in a prepared statement.

The next step is a scoping study, due out in mid- to late- December.

Kinbauri is trading at 28¢ per share and has a 52-week trading window of 16¢-$1.11 per share. The Vancouver-based junior has 48.7 million shares outstanding.