Mr. Philip Gibbs reports

KILO GOLDMINES AND RANDGOLD RESOURCES ANNOUNCE SIGNING OF JOINT VENTURE AGREEMENT ON KILO'S SOMITURI PROPERTIES IN DRC

Kilo Goldmines Ltd. and Randgold Resources (DRC) Ltd. have signed a definitive agreement for a joint venture on Kilo Goldmines' Somituri licences located in the Democratic Republic of the Congo.

The purpose of the JV is to conduct exploration on the licensed properties to evaluate possible development and mining of the licences, and to operate future mines thereon, if appropriate. Randgold will obtain incremental ownership through financing of exploration, based on milestone events, commencing with establishment of a prefeasibility study. Randgold will manage exploration activities, and a joint venture committee with representation from both parties will direct the project.

Randgold will manage and finance all exploration of the permit areas until the completion of a prefeasibility study. Once the joint venture has determined to move ahead with a full feasibility study, a special purpose vehicle would be created to hold the specific discovery areas. Subject to the DRC's carried interest, Randgold would retain 65 per cent of the SPV with KGL's DRC 71.25-per-cent-owned subsidiary, KGL-Somituri SARL, holding the balance of 35 per cent. Randgold can earn an additional 5 per cent on completion of a bankable feasibility study should KGL choose not to co-finance the feasibility study. KGL will be required, from the completion of a feasibility study, to finance its pro rata share of the SPV in order to maintain its interest or be diluted.

The agreement is subject to due diligence by Randgold, and any necessary regulatory and shareholder approvals.

Six permis d'exploitation, or exploitation licences, comprise the Randgold/KGL JV, namely PE 137, PE 138, PE 140, PE 9691, PE 9692 and PE 9695, totalling 361 square km. These licences cover prospective Archaen (Kibalian) terrain within the Ngayu greenstone belt in the northeast DRC. To date KGL has conducted exploration on PE 9691 and has established an estimated NI 43-101 inferred mineral resource of 20.78 million tonnes at a grade of 2.5 g/t Au for 1,675,000 ounces of gold. The licences have numerous gold occurrences.

David Netherway, chairman of Kilo Goldmines, commented:

"Kilo Goldmines is very pleased to continue our partnership with Randgold, which commenced in 2012 with entry into a joint venture on the Isiro licences in the DRC. We look forward to continuing this cordial relationship on the Somituri licences."

Mark Bristow, chief executive officer of Randgold, commented:

"This agreement, along with our other JVs in the area which include the existing JV with KGL on the Isiro properties, brings our landholding in the Ngayu belt to over 3,300 square kilometres. Furthermore, this agreement highlights Randgold's commitment to greenfields exploration and our long-term strategy in northeast DRC. Randgold explores for world-class gold deposits with the potential to deliver three million ounces with a 20-per-cent IRR [internal rate of return] at a $1,000-(U.S.)-per-ounce gold price. We believe northeast DRC is one of the few areas in Africa where this potential remains unexplored."

Qualified person

Howard Fall, BSc, PhD, MAusIMM (geologist), 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.