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Published in Stocks and Investing on Wednesday, May 13th 2009 at 12:15 GMT, Last Modified on 2009-05-13 12:16:20 by Market Wire
OTTAWA, ONTARIO--(Marketwire - May 13, 2009) - Kinbauri Gold Corp. ("Kinbauri") (TSX VENTURE:KNB)(FRANKFURT:3KG.DE) and Glen Eagle Resources Inc. ("Glen Eagle") (TSX VENTURE:GER) would like to clarify the legal structure for funds being advanced to Kinbauri Espana S.L. ("Espana") and how anticipated profits will be repatriated to the respective parties. Based on inquiries, we understand that the press releases issued by both parties may have lacked clarity as to these issues. The following is an explanation to clarify the structure of the transaction with Glen Eagle:
The investment by Glen Eagle in Espana is structured in part as share capital and in part as loan. Similar to Glen Eagle, Kinbauri has also advanced development funds to Espana in the form of share capital and loans. With this structure, both Glen Eagle and Kinbauri can repatriate positive cash flow to Canada from Kinbauri Espana with a minimum of withholding tax, maximizing monetary benefits to Kinbauri, Glen Eagle and their shareholders.
All loans are non-recourse, meaning that neither Kinbauri nor Glen Eagle can make a call on their loans or demand loan payments. The agreements restrict loan repayments to positive cash flow generated from Espana's operations; further to be authorized by the Board of Espana. Funds applied by Kinbauri and Glen Eagle toward loan repayments should not be taxed in Canada. Cash or kind will only be distributed to Glen Eagle and Kinbauri in the ratio of their participating interest, whether it be by dividend or loan repayment; i.e. 55% Kinbauri: 45% Glen Eagle or 50% Kinbauri: 50% Glen Eagle, or as the case may be.
About Kinbauri:
Kinbauri is a TSXV - Tier 1 Mineral Exploration Company focused on the development of precious metal prospects in Spain, Nevada and Canada. Its immediate focus is to begin operations at its El Valle/Carles property in Asturias, northwestern Spain by 2010. It has 53,243,051 common shares issued and outstanding.
This press release contains certain forward-looking statements, which are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected. Kinbauri undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements.
VISIT:
Kinbauri Gold's Hub at [ http://www.agoracom.com/IR/kinbauri ] where investors can post questions and receive answers or review questions and answers already posted by other investors. Kinbauri Web-Site: [ www.kinbauri-gold.com ]
THIS PRESS RELEASE WAS PREPARED BY KINBAURI GOLD CORP. THE TSX VENTURE EXCHANGE DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
