Press Release

November 28, 2011 12:15 ET

Kilo Goldmines Comments on Reports of Award of Afghan Iron Ore Concession Block

TORONTO, ONTARIO--(Marketwire - Nov. 28, 2011) - Kilo Goldmines Ltd. ("Kilo" or the "Company") (TSX VENTURE:KGL)(FRANKFURT:02K) is responding to press reports today that it has been awarded one of four concession blocks comprising the Hajigak iron ore deposit in Afghanistan by the Afghan Ministry of Mines ("MOM"). Kilo confirms that it has submitted a bid in response to a request for proposals from the MOM for the mining rights to the four concession block Hajigak iron ore deposit. The Company has not been notified by the MOM of the outcome of the bidding process. If selected, Kilo would have the exclusive right to negotiate with the MOM for the mining rights to the concession block for which it was selected as a "preferred bidder" before a final award is made.

Although the bid was submitted in the name of the Company, the bid was prepared by an independent group (the "Principals"), led by David Buckle, a UK based corporate financier, who would be responsible for the financing and management of the project. If awarded, the project would be held in a new entity with Kilo receiving an initial 20% interest, subject to dilution but with no funding obligation. The independent financing and management structure was presented in the bid documents submitted to the MOM. The Principals are required to reimburse Kilo for expenses incurred in the bidding process and to indemnify it for any losses sustained.

The bid was initiated earlier in the year and the Board determined that it would be in the best interests of the Company to continue with the bid given the potential financial benefits and limited downside risk following the agreement of the Principals to reimburse the Company for expenses and provide it with indemnification.

The Hajigak iron ore deposit is situated in the mountainous Bamyan province, 130 km west of the capital, Kabul. It is one of several iron deposits within this area and is the largest located to date.

About Kilo

Kilo Goldmines Ltd. is a Canadian gold exploration company operating in the Democratic Republic of Congo (DRC). The Company has over 7,000 square km of favourable Archaean Kabalian greenstone in the Kilo-Moto area in north-eastern DRC. Kilo recently announced an inferred resource on the Adumbi Deposit of the Somituri Project of which the Company owns a 71.25% interest in the DRC entity that holds the Somituri Project Exploitation Permits.

The Company is also working on a number of other prospective areas which contain historical workings in the same region. It also has a joint venture with Rio Tinto Ltd. on potential iron ore licences in north-eastern DRC.

This news release may contain forward looking statements concerning future operations of Kilo Goldmines Ltd. All forward looking statements concerning the Company's future plans and operations, including management's assessment of the Company's project expectations or beliefs may be subject to certain assumptions, risks and uncertainties beyond the Company's control. Investors are cautioned that any such statements are not guarantees of future performance and that actual performance and exploration and financial results may differ materially from any estimates or projections.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

For more information, please contact:

Kilo Goldmines Ltd.
Alex van Hoeken
President and CEO
[email protected]

More news