Mr. Alex Van Hoeken of Kilo Goldmines reports

KILO GOLDMINES AND RANDGOLD RESOURCES SIGN JOINT VENTURE AGREEMENT

Kilo Goldmines Ltd. and Randgold Resources PLC have signed a definitive agreement for a joint venture (JV) on Kilo's KWR iron Sprl exploration licences in the Democratic Republic of Congo (DRC).

Randgold will undertake to finance all exploration on Kilo's KWR licences, for which it will obtain incremental ownership based on milestone events. Randgold has up to five years to establish a prefeasibility study, and a joint venture committee will manage the exploration programs which will rely on knowledge and expertise from both companies.

The terms of the agreement are:

• RRL to earn 51 per cent for the completion of a prefeasibility study (PFS);
• KGL right to maintain 49 per cent post PFS;
• RRL to earn 65 per cent for the completion of a bankable feasibility study (BFS) should KGL not contribute post PFS;
• KGL equity to convert to 1.5-per-cent royalty if diluted to 10 per cent or less;
• KGL keeps the exploration rights to all minerals not associated with gold;
• PFS to be established within five years;
• BFS to be established within one year after PFS, or such longer time to be agreed by the parties.

Alex Van Hoeken, president and chief executive officer of Kilo Goldmines, commented: "Kilo Goldmines is very pleased to have entered into a partnership with a FTSE 100 company having the reputation of aggressively finding and developing profitable gold resources. Kilo Goldmines will benefit from Randgold's expertise and shared costs to help advance its other main Somituri project as well."

Mark Bristow, CEO of Randgold Resources, commented: "The Kilo Goldmines portfolio is highly prospective and constitutes an excellent target for continued growth for Randgold. The geology is akin to the large world-class deposits in Tanzania and recently at Kibali, and we are committed to search for similar discoveries. Signing this agreement is a first step in establishing a long-term collaboration with Kilo Goldmines. With Kilo Goldmines's established exploration infrastructure in the area, our teams can get a running start on their exploration programs."

Twelve permis d'exploration (PR) (exploration licences) attributed to the RRL/KGL JV, namely PR 2227, PR 2226, PR 2229, PR 2230, PR 2231, PR2285, PR2286, PR 2287, PR2288, PR 2289, PR 2290 and PR 2291, totalling 2,056.76 square kilometres, are illustrated on Kilo's website. These licences are currently in a joint venture with Rio Tinto for iron only, whilst KGL and its partner Suez Holdings Ltd. retain all non-iron mineral rights. The northern portion of the Archaean Ngayu greenstone belt and the entire Isiro greenstone belt, both set in a granitic basement, are covered by the 12 PRs. The licences have numerous gold occurrences which were explored during the Colonial era and are current active artisanal sites.

Examination of available data to date has enabled preliminary interpretation of major structural features permissive for gold mineralization, such as local and regional folding, thrusting, faulting and displacements, and structural directional changes. Many of such features led to the major Randgold discoveries which have become operating mines in its portfolio.

In addition, Kilo is also pleased to announce that it has reached an agreement to buy out its 25-per-cent minority partner, Suez Holdings Ltd., which has a free carried interest through production for non-iron commodities in the KWR licences under the current Kilo-Suez JV agreement. The transaction involves an aggregate of $635,000 (U.S.) in cash and 356,000 shares over a six-year period with initial no cash down and is subject to review by the TSX Venture Exchange. The buyout is simultaneously for Suez's gold interest in the KWR licences, as well as Suez interest in a Kilo DRC subsidiary, KGL ERW Sprl, which holds permit PR 2274 illustrated on Kilo's website, and allows KGL, once the consideration has been paid, to retain Randgold as its sole partner.

Kilo also reports that Rio Tinto is withdrawing from its joint venture for iron ore on the KWR licences. Kilo and Rio Tinto are inventorizing all data and joint venture assets to be handed over to Kilo, and discussions about the withdrawal process are in progress.

About Suez

Suez is a private Jersey registered company and the original holder of the PRs, which were vended into a new entity, ERW, on the basis of share capital ownership, namely Kilo with 75 per cent and vendors (Suez) with 25 per cent. ERW PRs optioned by Rio Tinto were transferred to KWR, whereas PRs not subject to the Rio Tinto option remained in ERW.

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