Kinbauri announces restructuring

Junior Kinbauri Gold has entered a loan agreement for $200,000 with Millfield Capital of Toronto, Ont., subject to regulatory approval and Kinbauri being accepted for listing on the Canadian Dealing Network (CDN).

Proceeds from the loan will be used by Kinbauri to discharge outstanding debt, acquire and explore properties in West Africa, pay legal fees related to its outstanding claim against International African Mining Gold (IAMGOLD) and for additional working capital.

Kinbauri has a claim against IAMGOLD for specific performance and damages of $10 million, while IAMGOLD has a counter-claim against Kinbauri for $500,000. Both parties are near completion of examinations of discovery. The agreement calls for Millford Capital to advance Kinbauri $200,000, which will bear interest at prime plus 2% per annum and will be convertible at Millford’s option into units of Kinbauri on the basis of one unit for each 20 cents of principal converted. Each unit will consist of one share of Kinbauri and half of a warrant. One warrant will entitle Millfield to acquire a further Kinbauri share at 40 cents on or before the third anniversary of issue. Millfield will receive 200,000 Kinbauri shares in consideration for providing the loan.

Upon completion of the loan arrangement, M.C. Henderson and M.W. Pickens will be appointed to Kinbauri’s board of directors. According to Kinbauri President Vernon Rampton, these two individuals bring expertise in mineral exploration, mine development and corporate financing to Kinbauri. Kinbauri currently owns two mining properties near Kirkland Lake, Ont., Morrissette Creek and Alfie Creek. Both properties are close to the recent discovery near Victoria Lake, made by Sudbury Contact Mines (TSE). Under a recent agreement, Freewest Resources (TSE) can earn a 60% interest in the Morrissette Creek property by paying $165,000 and spending $275,000 on exploration over four years. Kinbauri is seeking partners for the Alfie Creek project.

In West Africa, Kinbauri has applied for a gold concession in Burkino Faso. Kinbauri has 2.2 million outstanding shares. Should Millford elect to convert the loan to shares and exercise its warrants, there will be 3.9 million shares outstanding, with Millford owning a 41.6% interest.

Currently delisted from the Alberta Stock Exchange, Kinbauri hopes to resume trading on CDN in the near future.