VANCOUVER, March 3 /CNW/ - Kimber Resources Inc. (AMEX:KBX, TSX:KBR)
Main Events
December and January saw two milestone events for Kimber: first, the
listing of Kimber's shares on the American Stock Exchange and, second,
launching of the financing which was closed on March 1 with over C$14 million
raised.
Period Covered
This newsletter was due to cover December and January and be released in
early February, but to comply with US Securities regulations there could be no
discussion of the financing announced on January 31 prior to it being closed.
For this reason, this newsletter was postponed and now includes February.
The Financing
The C$14M just raised was part brokered and part non-brokered. A portion
of the non-brokered came with a finder's fee. Averaged across the entire sum
the cost in broker's fees and commissions was 3%. The discount to the average
of the closing share price for the five days ending on February 20, when the
issue was priced, was 8.8%. No warrants or brokers' warrants were issued with
the shares.
Since the financing price was announced on February 20, our share price
has increased, possibly in recognition that cashed-up companies are better
positioned to perform than others. Assuming the in-the-money warrants are
exercised by their due date on March 8, the recent financing combined with
current cash will total over C$20M. We have specific uses for these funds:
principally drilling on the Carotare and El Orito Norte, completion of
drilling on the Carmen deposit, and advancing towards production.
American Stock Exchange Listing
On December 22, 2005, after many months of preparation, Kimber was listed
on the American Stock Exchange (AMEX). This listing has reduced barriers to
trading Kimber shares in the United States, where some institutional and
individual investors had been waiting for Kimber to become listed. Since the
listing, our volume and liquidity has increased, the share price strengthened,
and it has become very apparent that the listing has filled a need for both
investors and the Company. Kimber had the honour of ringing the bell to open
trading on the Amex on February 1. A video of this ceremony can be seen at
http://www.kimberresources.com/media.html.
Financings and Share Dilution
Often, when Kimber announces a financing, we get calls from a few
investors concerned about share dilution. Kimber's business (and the business
of any company at the same stage of development) is to raise money by selling
shares and using the proceeds to create value which is a multiple of the
amount raised. The cost of our resources to date has been about US$7 in
on-property expenditure per gold-equivalent resource ounce (in all categories,
including Inferred). Assuming success and using C$10 per resource ounce for
simplicity, each million ounces will cost about C$10,000,000 to demonstrate.
Management's objective is to increase resource ounces on the mapped and
sampled portion of the Monterde property to at least three million
gold-equivalent ounces from the current 1.6 million (in all categories, as
shown in the table on Page 5). Obviously, there can be no certainties that our
objectives will be realised, but these are well-founded estimates based on our
experience with drilling the Monterde property.
We will succeed in adding shareholder value for as long as we can
continue to add Resource ounces for about C$10/oz and have Resource ounces
recognised by the market at US$40/oz or better. Reserve valuations are even
higher, generally well over US$100 per ounce in today's market.
The diagram (http://www.kimberresources.com/newsletter149) shows how the
amount of gold and silver in Measured & Indicated (the only categories which
can be advanced to Reserves) represented by each share has increased despite
more shares being issued. (For a chart showing how resources have increased
since 2002, see the newsletter for November).
We add value in two ways: by increasing the number of Resource ounces and
by upgrading those Resources to Measured & Indicated, then to Reserves, and
ultimately to production. As shown
(http://www.kimberresources.com/newsletter149), production valuations
(recently over $3,000 per annual ounce) are higher than for in-place
valuations of either Resources or Reserves. Resources now demonstrated on the
Monterde property put the Company at the yellow dot on the Resource bar. If
Kimber reaches its stated objective of three million resource ounces it will
be well positioned to follow the blue arrows to a much higher valuation.
AGM
The Annual General Meeting held on December 9th, 2005 was well attended.
In addition to management's slide presentation on the Company's progress,
there was a presentation by Jim Puplava, a major shareholder and director of
Kimber, on gold, silver and the junior mining companies. Both presentations
are available on Kimber's website.
Progress in the Field
The second reverse circulation drill rig returned to the site in
December, following a major overhaul. Until then we were using a single drill
but working it with two 12-hour shifts. With only one drill for all of
November and some of December, we were unable to resume work on the El Orito
Norte or the Carotare. Only two holes were completed on the El Orito Norte
before year-end. Since then road work has been creating better access in
preparation for a substantial drill program in the months ahead. The second
drill period of the year began on February 9 with both drills on the Carmen
deposit. One drill has now been moved to the Carotare. Preparation of access
roads continues on the El Orito Norte.
Pre-feasibility
The pre-feasibility study expected on the Carmen by the end of April will
be a major milestone, but it will not define the entire deposit. A further
20,000 to 30,000 metres (60 to 100 holes) are needed to complete the drilling.
At the same time, drilling will be directed at developing resources on the
Carotare and El Orito Norte so that feasibility studies can be based on all
the local sources of feed for mill and heap.
Google Earth
As mentioned in the previous news release there is now a Google Earth
"placemark" file on our website that shows the topography of the Monterde
property and the location of drill holes. Although Kimber is not the first to
use this software to showcase a mineral property, we think we are the first to
use it in such a comprehensive way. Nearly every drill hole published in the
resource estimates has been plotted. Drill intercepts can be obtained with the
click of a mouse. The outline of the Monterde property is shown together with
improved ground resolution from air photos. More data will be added as it
comes available. For details see:
http://www.kimberresources.com/monterde3d.html
Next Steps
The Monterde property will generate a lot of information in the months
ahead. In addition to publication of the pre-feasibility study we expect to
see an updated resource estimate on the Carmen incorporating drilling since
August 2005, as well as extensive drilling on the Carotare and El Orito Norte.
Robert Longe, P.Eng
President and CEO
About Kimber
Kimber Resources Inc., which holds a 100% interest in the Monterde
property in the Sierra Madre of northern Mexico, is advancing the Carmen
gold-silver deposit towards production. The Carmen deposit, an underground
mine in the 1930's, is a typical low sulphidation epithermal system, oxidized,
and believed to be suitable for open pit mining. A pre-feasibility study is
expected on the Carmen deposit in April 2006. Two adjacent epithermal systems
first identified in 2005, the Carotare deposit and El Orito Norte exploration
target appear to be similar to the Carmen. The initial resource estimate on
Carotare was reported in November 2005. The goal of the company is to
demonstrate at least three million resource ounces from the two deposits and
exploration target identified. For further information on the company visit
SEDAR or the company website at www.kimberresources.com.
<<
Resources on the Monterde Property
Resource Category Tonnes Au Ag Gold, Silver, Gold-
----------------- ------ -- -- ----- ------- -----
g/t g/t ounces ounces equivalent
--- --- ------ ------ ----------
ounces
------
MEASURED 17,737,000 0.86 59 488,900 33,366,000 878,000
INDICATED 5,332,000 0.86 45 147,100 7,690,600 236,500
MEASURED+INDICATED 23,068,000 0.86 55 636,000 41,056,700 1,114,500
INFERRED 11,556,000 0.93 36 343,900 13,201,800 497,800
Cautionary Statement
Statements in this release may be viewed as forward-looking statements.
Such statements involve risks and uncertainties that could cause actual
results to differ materially from those projected. There are no assurances the
Company can fulfil such forward-looking statements and the Company undertakes
no obligation to update such statements. Such forward-looking statements are
only predictions; actual events or results may differ materially as a result
of risks facing the Company, some of which are beyond the Company's control.
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