Mr. Philip Gibbs reports

KILO GOLDMINES ANNOUNCES EXPLORATION UPDATE AND GRANT OF STOCK OPTIONS

Kilo Goldmines Ltd. has provided an update on its exploration activities on its Imbo licence (PE 9691) within the Ngayu greenstone belt.

Highlights

• Identification of three prospective drill-ready targets totalling 5.1 kilometres of strike;
• Recommended drill program of 88 holes for a total of approximately 9,000 metres; the previously announced drilling for March, 2015, has been held over pending finalization of the data review and is subject to financing to complete the full program;
• Stream sediment sampling program now 75 per cent complete, with balance of samples to be collected by mid-June.

Other activities

• Completion of review of all historic data, including core relogging and plotting of cross-sections, long sections and plans;
• Surface mapping of known targets and extensions;
• Mapping and sampling of artisanal workings;
• IP (induced polarization) surveys;
• Selected test pitting.

Exploration activities

A comprehensive property-scale understanding of the geology and the controls of mineralization within the Imbo licence (PE 9691) has been gained from the year-long review of all historical drilling, Adumbi underground structural mapping, geochemical and geophysical data. In addition to the review of the historical data, exploration has been conducted over known targets, including surface mapping along 50-metre-spaced lines over known prospects and their extensions, mapping and sampling of known artisanal workings, a stream sediment sampling program to the west of the Imbo river, a detailed cartographic survey of all historical and artisanal workings, induced polarization (IP) surveys (using both pole-dipole and gradient arrays), and selected pitting programs to gain an understanding of the regolith profile. This has resulted in the identification of three prospective targets, Adumbi West, Adumbi South and the Kitenge extension (KT zone"). These targets have a total strike length of approximately 5.1 kilometres and are ready to be drill tested.

The review has included detailed relogging of all drill hole core and the plotting of data on cross-sections, long sections and plans at a scale of 1:500. This work is now complete for all drilled prospects (Adumbi, Kitenge, Manzako, Senegal, Vatican, Mondarabe and Lion) and represents a total of 34,660 metres in 153 drill holes. The work has enabled a more in-depth analysis of lithological and structural controls on mineralization, focusing on the delineation of high-grade zones. At Adumbi, this is being assessed in conjunction with previously completed detailed underground mapping with the objective of defining additional downplunge drill targets. Wire-frame modelling of mineralization and structural features is being re-evaluated accordingly and is continuing. Systematic bulk density determinations were completed on core from all Adumbi drill holes. Measurements were taken at one-metre intervals within the mineralized zones and at two-metre intervals in unmineralized rock, resulting in a total of 5,360 readings, all of which passed the company's quality control (QC) criteria. Reliable density data are now available for resource calculations for the oxide zone (1,384 measurements), transition zone (826 measurements) and sulphide zone (3,150 measurements). Bulk density determinations have also been completed on selected Kitenge drill core.

A pole-dipole IP geophysical survey has been completed over the Adumbi West target, with the objective of defining zones of mineralization for drill testing. Pole-dipole IP surveys have also been carried out to more closely define the northwestern and southeastern extensions of the Adumbi mineralized trend, outside the current area of drilling. Additional IP lines have been completed in the areas of the Kitenge, Manzako, Senegal, Vatican and Lion prospects, with a view to identifying the mineralized zones and better interpreting the structural framework and mineralization controls.

In view of the very poor exposure in the licence area, test pitting at 80-metre intervals has been carried out on selected IP lines. A total of 52 pits have been dug to the saprolite horizon in order to provide lithological and structural information to assist in the IP interpretation. The nature of the overburden has also been logged in detail, with the main objective of distinguishing areas of residual and transported material and better interpreting the soil geochemistry data.

A study was made of the multielement data for the previously completed soil sampling survey, with the main objective of determining whether areas of transported and residual soil can be distinguished geochemically. It was found that: (a) the residual soils overlying the metasedimentary and metavolcanic terrains have very distinct geochemical characteristics, and (b) areas interpreted from airborne radiometrics and pitting to be covered by transported overburden have elemental abundances, indicating mixing of metasedimentary and metavolcanic components.

A detailed stream sediment sampling program over the whole of the Imbo licence has commenced, with the objective of identifying and prioritizing new targets outside the known areas of mineralization. A total of 166 sampling sites have been selected using satellite imagery, to test drainage catchments with an average area of 0.75 square kilometre. All sampling to the west of the Imbo River (75 sites) has been completed, and analytical results are awaited.

Adumbi West target

The Adumbi West target lies to the west of the Adumbi prospect and is believed to be the faulted extension of Adumbi. This target occurs in a topographical low and for the most part is covered by transported material varying in depth from 30 centimetres to greater than three metres. The target is defined by a 1.7-kilometre-long linear magnetic anomaly and a coincident and linear gold-in-soil anomaly with values of 50 parts per billion to 1,000 parts per billion. This magnetic feature is similar to that which defines the banded ironstone formation (BIF) at the Adumbi gold prospect hosting 19.11 million tonnes at 2.2 grams per tonne gold for 1,362,000 ounces. All soil samples were collected at a depth of one metre below the surface and, for the most part, were taken in transported material. The fact that the gold-in-soil anomaly is linear and coincident with an underlying, but offset, magnetic feature gives confidence that the source of the gold-in-soil anomaly is in the underlying bedrock, rather than in the transported overburden. Detailed mapping over the Adumbi West target has revealed BIF float that is believed to be the source of the strong magnetic feature, similar to Adumbi.

Adumbi South target

The Adumbi South target lies 480 metres to the south the Adumbi prospect. This target is defined by a 1.4-kilometre-long magnetic anomaly that appears to be demagnetized in places, and a greater-than-200-part-per-billion gold-in-soil anomaly. This target has similar geomorphological features to that of Adumbi West in that it occurs in a topographical low, variably covered by transported soil with little to no lithological exposure.

The tenor of the gold-in-soil anomaly and the associated magnetic feature at Adumbi South is very similar to that associated with the Canal zone, which is thought to be the southeastern extension of the Adumbi mineralization. The previously announced Kilo drill intersections of Canal mineralization include:

• SCDD0001 -- 12.55 metres of 7.7 grams per tonne gold;
• SCDD0004 -- 6.45 metres of 4.21 grams per tonne gold;
• SADD0006 -- 11.35 metres of 3.45 grams per tonne.

Kitenge extension (KT) target

The KT zone lies to south and northwest of the Kitenge prospect, which was drilled in 2013, and is defined by an approximately two-kilometre-long magnetic feature with a coincident gold-in-soil anomaly with values from 50 parts per billion to 450 parts per billion. The magnetic feature has similar characteristics to that at the Canal and Adumbi South targets. Geomorphologically, this target is similar to both the Adumbi West and Adumbi South targets.

A gradient-array IP survey is currently being conducted over this target in order to better assess the lithologies, structures and mineralization causing the magnetic and gold-in-soil anomalies.

Current and next phase program

Stream sediment samples from west of the Imbo River have been dispatched for analysis, and sampling to the east is in progress to complete the program. Further IP surveys are in progress, and, upon completion, activities will be curtailed to consolidate the results and to finalize planning for the next phase of exploration. Subject to budgetary constraints, this is likely to include:

• Drilling of both Adumbi West and Adumbi South targets on 160-metre line spacing with each drill hole drilled to an approximate depth of 100 metres, entailing 58 drill holes for 6,128 metres;
• Drilling of Kitenge extension on a line spacing of 320 metres, entailing 30 drill holes for a total of 3,000 metres.

Grant of stock options

The company announces that, subject to regulatory approval, it has granted stock options to acquire a total of 400,000 common shares to an officer and a consultant under the employee stock option plan. Each option is exercisable for a five-year period to acquire one common share at a price of eight cents per share. Options granted to an officer vest as to 100 per cent immediately, and options granted to a consultant vest subject to performance criteria.

Qualified person

Dr. Howard Fall, BSc, PhD, MAusIMM, QP (Geo), is the qualified person (as such term is defined under National Instrument 43-101) of Kilo and has reviewed the scientific and technical information contained in this release.

We seek Safe Harbor.