Mr. Alex van Hoeken reports

KILO GOLDMINES LTD.: A REVIEW BY ROSCOE POSTLE OF PROSPECTIVE IRON ORE LICENCES HELD BY KGL ISIRO SARL INDICATES POTENTIAL FOR IRON ORE DEPOSIT OF REGIONAL/GLOBAL SIGNIFICANCE

A review of exploration data produced by Rio Tinto Mining and Exploration (RTME) during its joint venture (JV) agreement with Kilo Goldmines Ltd. from 2007 to 2012 has been completed by Roscoe Postle Associates (RPA). The findings of this review are summarized herewith.

Highlights

• Ngayu greenstone belt:
  • Five licences covering approximately 749 square kilometres;
  • Itabirites (metamorphosed banded iron formation) potentially extend over a 20-kilometre non-contiguous strike length (as defined by airborne geophysics);
  • Initial analytical results suggest that mineralized material may be suitable as direct-shipping ore (DSO);
  • RPA estimates that Mt. Asonga may contain between 750 million tonnes and 1.5 billion tonnes of mineralized material, grading 59 to 65 per cent Fe focused on a 19-square-kilometre area on Mt. Asonga. Note that the potential quantity and grade are conceptual in nature, there has been insufficient exploration to define a mineral resource, and it is uncertain if further exploration will result in the target being delineated as a mineral resource. Furthermore:
    • 12 diamond drill holes totalling 1,198 metres were drilled by RTME;
    • Minimal overburden and intercepts up to 127 m with an average overall seam thickness of 70 m;
  • Reconnaissance sampling has confirmed the presence of mineralization at an exploration target to the southeast of Mt. Asonga known as Mt. Zatua. This shares the characteristic of coincident topographical highs and magnetic anomalies that have been observed at Mt. Asonga;
• Isiro greenstone belt:
  • Seven licences covering 1,306 square km;
  • Itabirites (metamorphosed banded iron formation) potentially extend over a 60-kilometre non-contiguous strike length (as defined by airborne geophysics);
  • Outcrops at Mt. Abambula and Mt. Dududu contain both massive and laminated types of hematite mineralization.

In RPA's opinion, the project warrants additional exploration to estimate mineral resources and bring the project to a preliminary economic assessment level, as well as further exploration on the other targets.

Alex van Hoeken, president and chief executive officer of KGL, stated: "The RPA review of the RTME data indicates that the licences held by KGL have the potential of generating an iron deposit of regional and global significance.

"Whilst KGL's primary business focus is the KGL Somituri gold project, this review indicates that the iron potential of the exploration licences held by KGL Isiro SARL can potentially add significant value. KGL will over the coming months approach potential business partners, with the view of soliciting a new JV partner for the development of this iron ore deposit."

Background

The 12 exploration licences covering approximately 2,056 square km are held in the name of KGL Isiro SARL, a company registered in the Democratic Republic of Congo (DRC). Through this entity, Randgold Resources and KGL also have a joint venture for gold and associated minerals only, whilst all other non-gold rights (iron) remain contractually with KGL and its minority partner Suez Holdings, a private Jersey-registered holding company and the original owner of the licences.

During the joint venture period RTME had purchased a 15-per-cent equity stake in the project. In exchange for this equity and in recognition of exploration effort expended including discovery of the Mt. Asonga prospect, RTME's equity stake was swapped for a 0.8-per-cent production royalty over eight years. The final contractual iron ownership is 89 per cent KGL and 11 per cent Suez Holdings.

RTME terminated the JV agreement with KGL in April of 2013, and as per the termination agreement, RTME provided the entire data set collected during the joint venture period. This data set included: geophysical and remote sensing data over the entire property; downhole drill logging and surveys from 12 holes totalling approximately 1,198 metres of drilling; reconnaissance sampling; basic lithology information; and analytical results and certificates.

In July of 2013, KGL submitted the data supplied by RTME to international mining consultant Roscoe Postle Associates (RPA), for an independent assessment of the data. RPA subsequently produced a report, based on a review of the available data and a site visit by Ian Blakley, vice-president and general manager of RPA U.K. Ltd. (qualified person), on Mt. Asonga and RMTE's former base camp at Isiro (core storage facility). The drill core was cut in half, and one-half was submitted by RTME to Ultra Trace Pty. Ltd. in Perth, Western Australia, for X-ray fluorescence (XRF) analysis.

Qualified person

The data review disclosed in this press release was supervised by RPA's geological consultant Pierre Landry, BScH, PGeo, who is also the qualified person (as that term is defined under National Instrument 43-101) retained by the company, and has reviewed the scientific and technical information contained in this release.

We seek Safe Harbor.