Kinbauri Purchases 100 Percent Interest in Corcoesto, Provides Upgraded Resource Calculation

OTTAWA, ONTARIO (FRANKFURT: 3KG.DE) ("Kinbauri") is pleased to announce that it has entered into a purchase agreement (the "Purchase Agreement") with Rio Narcea Gold Mines S.L. ("RNGMSL") regarding the Corcoesto Project ("Corcoesto") in Galicia, northwestern Spain. Under the Purchase Agreement Kinbauri, through its wholly-owned subsidiary, Kinbauri Galicia S.L. ("K. GALICIA") can acquire a 100% interest in Corcoesto. Corcoesto is comprised of three exploitation concessions totalling 777.6 hectares. The Purchase Agreement will replace an earlier option agreement with RNGMSL whereby Kinbauri had expended approximately 1.5 million euros of a total of 4 million euros required to earn a 65% interest in Corcoesto.

Corcoesto Resources

Based on a 0.9g Au/t cut-off, presently determined measured, indicated and inferred resources at Corcoesto are as follows:

Measured   142,000 ounces Au (2.48Mt at 1.78g Au/t)
Indicated  122,000 ounces Au (2.19Mt at 1.74g Au/t)
M + I      264,000 ounces Au (4.67Mt at 1.76g Au/t)
Inferred   218,000 ounces Au (3.39Mt at 2.00g Au/t)

The above measured and indicated resources were estimated by Ore Reserves Engineering ("ORE") in a National Instrument 43-101 ("NI 43-101") compliant resource report dated August 22, 2006. They are all contained within the Southern Vein Systems (Pozo del Ingles, Cova Crea and Peton de Lobo: see Schedule A for locations at the following address: http://media3.marketwire.com/docs/KINB0604.pdf). The inferred resources are a combination of those presented by ORE (32,000 ounces Au: 0.59Mt at 1.69g Au/t) and those reported by Lluis Boixet ("Boixet") (164,212 ounces Au: 2.76Mt at 1.85g Au/t). Boixet worked indirectly through RNGMSL on contract for Kinbauri, and is a qualified person as defined by N.I. 43-101,. Boixet's estimated resources include 73,537 ounces (1.22Mt at 1.87g Au/t) within the Southern Vein Systems and 90,675 ounces (1.54Mt at 1.83g Au/t) within the Northern Vein System (mainly Picotos, but also Fonterremula and Montefurado). A NI 43-101 Technical Report will not be filed on SEDAR, concerning the updated inferred resources as it does not represent a material change for Kinbauri (methodology is described below) ORE had also identified some deep inferred resources in the Pozo del Ingles and Peton de Lobo vein systems, namely 27,400 ounces (0.13Mt at 6.65g Au/t) at a 5.0g Au/t cut-off.

Potential for additional near surface and deeper resources exists at Corcoesto and Boixet has identified target areas for expanding these resources. Kinbauri is currently investigating the potential for improving the economics of Corcoesto by up-grading mill feed through optical sorting. Kinbauri has verified that quartz veins contain the majority of the gold found within the vein systems and pilot studies are now being completed to investigate whether mill feed can be upgraded 2 to 5 fold-plus; this would allow for the economic transportation of mill feed to other locations for final processing. Kinbauri has also estimated the costs of producing a concentrate on-site by flotation and sale of the resultant concentrate; initial estimates appear favourable. A recently completed study has also indicated that, subject to testing and permitting, waste rock could be sold domestically and shipped off-shore as construction material, resulting in a benefit to the project's economics. It is also noteworthy that higher gold prices may increase the project's viability through lower cut-offs and higher profit per tonne of ore mined. For details of estimated resources at different cut-offs see Schedules B, C and D. A scoping study is to be commissioned shortly.

ORE's 2006 resource estimates were based on a 2003 resource model, which used an inverse-distance-power estimation within a three-dimensional block model with mineralized zones defined by wireframed solids. This model was based on 317 drill holes with a drill hole spacing that was less than 25-meters for measured resources and less that 55-meters for indicated resources. The deep zone resource model was estimated using inverse-distance-power estimation within a three-dimensional model of the vein zone. The deep zone model was based on 99 drill holes, of which 24 drill holes were below those included in the 2003 open pit resource model.

Boixet's incremental resources were based on results from Kinbauri's drilling subsequent to ORE's 2006 estimates. Boixet used inverse-distance-power estimation with a power of 4.0 and a search ellipse of 50 x 50 x 4.17 meters. The long axis of the search ellipse was oriented parallel to the quartz veins in each area. The search ellipse and weighting parameters for the 2008 model were based on a trial-and-error process where the parameters were adjusted to provide approximately the same result as ORE's estimate (when only the pre-mid 2006 drilling was used for estimation). The incremental expansion of the resource was estimated by subtracting ORE's resources from the 2008 estimated resource. All resources in the incremental expansion are classified as inferred.

RNGMSL trench sampling and drilling through April 1999 were assayed at the Inspectorate laboratory in Reno, Nevada; assays were verified by later check assay programs. Subsequent sampling by RNGMSL and Kinbauri were sent to the ITMA laboratory in Oviedo, Asturias, Spain. During Kinbauri's drilling, one sample in every twenty was sent to ALS CHEMEX for duplicate assay; in addition, ITMA routinely assayed two duplicates, one standard and one certified standard for each batch of thirty samples. Gold was determined using a fire assay procedure on a 30-gram sample with an atomic absorption finish.

Corcoesto Agreement

The Purchase Agreement provides that the purchase price for the exploitation concessions will be the sum of 1.5 million euros payable in instalments as follows: 100,000 euros upon approval of the transaction by all regulatory authorities; 100,000 euros 30 days following approval; 400,000 euros by May 1, 2009; 400,000 euros by May 1, 2010 and 500,000 euros by December 1st, 2010. An additional payment of 1.5 million euros will be due upon the commencement of commercial production. Kinbauri's 100% interest in the exploitation concessions will be subject to a 3% NSR (1% of which can be repurchased by Kinbauri for $1.5M US) by paying RNGMSL . All payments may be accelerated at Kinbauri's discretion. The Purchase Agreement is subject to regulatory approvals including approval of the transfer of exploration concessions by the Galician Mining Authorities and the TSX Venture Exchange approval.

This press release was prepared by Dr. V.N. Rampton, P.Eng. in his capacity as a qualified person. It has been reviewed for release by Alan C. Noble of Ore Reserves Engineering, a professional engineer, Lluis Boixet of RNGMSL, a professional geologist, both qualified persons as defined in National Instrument 43-101 and RNGMSL.

Kinbauri is a TSXV - Tier 1 Mineral Exploration Company focused on the development of mineral properties, primarily precious metal prospects in northwestern Spain, Nevada and Canada. Its immediate focus is to expand and upgrade resources to reserves at the El Valle property in Asturias, Spain in order to start operations at the mine and existing mill complex there in early 2010. It currently has 48,461,564 common shares issued and outstanding.

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.

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.

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Contacts: North America Kinbauri Gold Corp. Darrell Munro, BB.A, LL.B Manager Corporate Communications 613-836-0198 [e-mail] Kinbauri Gold Corp. Dr. Vern Rampton, P. Eng. President 613-836-2594 613-831-2730 (FAX) [e-mail] or [e-mail] Europe INVESTEL Ruediger (Rudy) Hnyk, CEO Investor Relations & Telecommunications [e-mail]