EVENT: POSITIVE INFILL RESULTS AND CONFIRMATION OF
ZONE EXTENSION
Kinbauri (KNB-TSX.V) issued a press release this morning detailing the
latest results from its infill program at El Valle. Consistent with the
results KNB has produced over the last year, the latest numbers
confirm the resources in Area 107 (A107) and Black Skarn North (BSN)
and offer a glimpse at the substantial upside that exists at El Valle.
We continue to believe that Kinbauri is undervalued and we reiterate
our buy recommendation and our 12 month price target of $2.25,
which is based on a 1.2X multiple of our NAV calculation.
DRILLING CONTINUES TO TURN UP GOLDEN RESULTS
KNB released results from eleven holes in A107 and BSN with
significant gold mineralization reported in close to 75% of the holes.
Two of the holes with no or low grade mineralization (08KV1087 and
08KV1091) were drilled in the eastern up-dip portion of A107,
suggesting that the zone terminates in this area. In the South Area of
BSN, the results from 08KV1084 indicate that mineralization remains
open at depth.
In A107, three infill holes were completed providing further
confirmation of the resources in this area. Of particular interest are,
holes 08KV1092 and 08KV1082 (see table to left) which returned
intersections of 23.41g/t Au and 20.33 g/t respectively. In BSN, three
holes confirmed continuity in this zone, one of which returned high
grade gold and copper values consistent with KNB’s interpretation of
enrichment where BSN and A107 intersect. KNB has returned multiple
results displaying enriched grades in this zone indicating that there is
continuity. As we previously suggested, this enrichment could lead to
the addition of resources, and this was acknowledged by management
in today’s press release.
Along with holes from A107 and BSN, KNB drilled a hole in the west
area of BSN, 08KV1079. This area was previously targeted by hole
08KV1059 (14.3m at 2.3g/t Au and 0.79%), which suggested that the
BSN extended to the west. The latest hole in this area extends the
west area along strike to the south by another 50m. KNB believes that
an additional 500,000 oz can be added to the resources due to the
extension of BSN.
