VANCOUVER, May 2 /CNW/ - Kimber Resources Inc. (TSX:KBR) Long term plans --------------- For the last two years we have deliberately avoided making a decision as to whether we wish to take the Carmen to production ourselves, joint venture the deposit, or merge with another company. We are now getting off the fence for one compelling reason: production attracts the greatest market valuation. Assume, for example, that to be well-recognised by the market, we need to produce a minimum of 100,000 gold-equivalent ounces per year. Producer valuations average over US$2500 per annual ounce (US$250,000,000 for 100,000 ounces of annual production). Such a valuation outshines the kind Kimber has now (US$46,000,000 for just over one million Resource ounces), or the US$100 per ounce we may expect for one million Reserve ounces. So production is our goal. We are aware of the challenges and milestones on the way, among them the task of assembling a production team. We are already looking for an experienced manager who will lead the feasibility, construction, and then production. The time to engage such a person will be when the pre-feasibility report is near completion. Exploration ----------- With results from the first four holes in hand (news release, April 18), the Carotare, which lies two kilometres west of Carmen, is shaping up as a very promising drill target. In structural direction, type of mineralization, mix of gold and silver, grades and widths, it is similar to Carmen. Differences lie in the greater surface expression of the Carotare. It is twice the length of the Carmen and the alteration zone is at least as wide. Because the Carotare has the potential to add significantly to the Company's resources, it is expected to occupy at least one drill for the next few months. If results warrant, we will add another drill. While the Carotare is being drilled, and while the Carmen deposit is being taken, one essential step at a time, towards pre-feasibility and ultimately feasibility, our exploration program remains focussed on the search for additional deposits. Mapping and sampling to identify exploration targets and drill sites continues on Kimber's land holdings surrounding the original Monterde concessions (28,000 hectares extending along 37 kilometres of the structural trend. See http://www.kimberresources.com/location.html(number sign)rubia ) Beyond our own claims our exploration is deliberately opportunistic, not systematic. If we become aware of another property that might become our fastest or most certain route to another million ounces, we will examine it with a view to taking an option, provided terms are suitable. As all funding to date has been for the Monterde property, the Carmen deposit in particular, any new property would have to be of sufficient quality to justify its own funding. Progress Report on Carmen Deposit --------------------------------- The last time we announced a resource estimate on the Carmen deposit was when we released Estimate K at the end of September, 2004. During the six months since then, we have drilled 84 holes within or very close to the Carmen deposit and 33 holes elsewhere on exploration targets. Eleven holes closed off the north end of the Carmen. Twenty nine of the Carmen holes were "infill" and were intended to upgrade resources, not to add to them. Similarly 22 core holes were directed at geologic, metallurgical and geotechnical data, not at adding resources. From the core holes we have obtained over 50 samples for determination of bulk density, a necessary feature of any advanced resource estimate. If preliminary samples are a guide, the actual bulk density of the rock will be less than was assumed for earlier estimates. We expect, therefore, to lose some resources from this aspect of the deposit, while we gain resources from intersections in the 22 holes drilled on the south and east of the deposit. In addition to adding resources, these same holes will raise some of Estimate K's Inferred resources to higher categories (Measured & Indicated). A reasonable geologic objective for the Carmen deposit by the time we get to feasibility is 1.5 million Resource ounces, about two thirds of which are likely to become the recoverable portion of Reserves. The pre-feasibility study will be based on the current size of the Carmen deposit, which we expect to be less than its eventual size. Much of the promising area to the east and south of it is yet to be drilled. When the Cocos, a structure about 200 metres east of the Carmen deposit was first drilled, it was treated as an exploration target. Now, because of its proximity, it seems likely to be incorporated into the Carmen pit. With results from eight holes, we can say this structure will almost certainly contribute resources, but until the geologic controls are well understood, it is too soon to quantify them. Some tasks take longer than intended and our resource estimation is one of them. After starting the process towards a block model in November, we realized that some simplifying assumptions we made to hasten the process were not applicable and that we needed more geologic and metallurgical data. As all aspects of the pre-feasibility study hinge on it, the resource estimate has to be correct. The industry has too many examples of resource estimates which did not stand up to subsequent review. The steps we are taking to make sure this is a reliable estimate include relogging the holes to refine the geologic model on which we can base our understanding of mineralization. With over 40 million ounces of silver in the deposit, maximizing its recovery is a key issue. To this end we are looking into the possibilities that recovery is controlled by grade or by metallurgical zones within the deposit. Gold recoveries appear to be excellent and do not require additional research at this stage. Among the drilling tasks ahead are condemnation holes to make sure that areas selected for heaps, tailings, waste or buildings are not underlain by ore. These essential holes (not known for being newsworthy) will not be announced unless the results take us by surprise (ie by finding mineralization where none was expected). Other activities include gathering environmental data in preparation for permitting, and working with the local community towards systems and relationships which will benefit both the community and the operation during construction and production. Activity in May --------------- Along with drilling the Cob and Cocos structures and carrying out the pre-feasibility tasks (principally metallurgy and block-modelling) on the Carmen deposit, we will continue drilling the Carotare with a step-out to the north west into a wider alteration zone. Robert Longe, P.Eng., President 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.