Mr. Philip Gibbs reports

KILO GOLDMINES ANNOUNCES PRIVATE PLACEMENT AND CLOSING OF FIRST TRANCHE

Kilo Goldmines Ltd. is proceeding with a non-brokered private placement of equity units to raise up to $7.5-million, of which it has completed a first tranche, raising gross proceeds of $930,000.

The units were and are being offered and sold at a price of 10 cents per unit with each unit consisting of one common share and one common share purchase warrant. Each warrant entitles the holder to acquire one additional common share of the company for two years (until July 27, 2018, for the first tranche) at a price of 13.5 cents. The company has the right to accelerate the expiry of the warrants on 30 days written notice if, following four months from the issuance of the warrants, the volume-weighted trading price of the common shares of the company on the TSX Venture Exchange, for any period of 20 consecutive trading days, exceeds 30 cents per share. All securities sold in the offering, including any shares issued on exercise of the warrants, are subject to a four-month hold period in Canada (expiring on Nov. 28, 2016, for the first tranche) and such other hold periods in other jurisdictions applicable to the purchaser.

Sprott Private Wealth LP and one of its affiliates have agreed to act as finders for the offering on a non-exclusive basis.

The company plans to use the net proceeds from the offering for the exploration of its gold properties in the Democratic Republic of the Congo and for working capital and other general corporate purposes.

Osisko Mining Corp., a significant shareholder of the company, acquired two million units under the first tranche of the offering. Prior to the offering, Osisko directly owned 15.6 million common shares and warrants to acquire a further 14.1 million common shares of the company. Following the offering, Osisko now owns 17.6 million common shares, representing approximately 22.3 per cent of the number of common shares issued and outstanding, as well as warrants to acquire up to a further 16.1 million common shares of the company. Assuming the exercise of all warrants by Osisko only and no other exercises, Osisko would own up to approximately 30.2 per cent of the common shares of the company.

As a result of the participation in the offering by Osisko noted above, the first tranche of the offering was considered to be a related party transaction as defined under Multilateral Instrument 61-101 and TSX-V Policy 5.9. The transaction was exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 and TSX-V Policy 5.9; however, as neither the fair market value of the securities issued to insiders nor the cash consideration paid for such securities exceeded 25 per cent of Kilo's market capitalization. The participants in the first tranche of the offering and the extent of such participation were not finalized until shortly prior to the completion of the first tranche of the offering. Accordingly, it was not possible to publicly disclose details of the nature and extent of related party participation in the first tranche of the offering at least 21 days prior to the completion date.

The company intends to complete further tranches of the private placement up to a targeted maximum of $7.5-million (inclusive of proceeds received from the first tranche of the placement). Kilo will pay cash finders' fees to registered dealers and eligible finders that procure subscriptions for units equal to 6 per cent of the proceeds received from such subscriptions. No finders' fees were payable in connection with the completion of the first tranche of the offering.