KPS Ventures announces acquisition of uranium assets in Colombia

23.10.06

tsedb.globeinvestor.com

KPS Ventures Ltd. (TSXV: KPS.H) (“KPS” or the “Company”) announces that it has entered into an arms length agreement dated July 13, 2006 with the shareholders of Lerida Bay Ltd. (“Lerida”) to acquire interests in 21 uranium concessions located in Colombia.

KPS will acquire all of the issued and outstanding shares of Lerida, which has 21 applications for uranium concessions encompassing in excess of 66,000 hectares, covering four main areas:

<< – Berlin (Caldas) – Southwest Colombia – 6,072 hectares, – Zapatoca (Santander) – Northwest Colombia – 15,177 hectares – Chima – Simacota (Santander) – Northwest Colombia – 4,803 hectares – Ocana – Abrego (Cesar – Norte Santander) – Northwest Colombia – 40,000 hectares >>

Based on work performed by a variety of Colombian and international groups during the late 1970s, each of these areas covers geological environments which have hosted uranium deposits. The following discussion is general and historical in nature, has not been verified by the Company’s qualified person, and should not be relied upon. The Company has initiated its own independent review. Specifically, the acquisition of Lerida by the Company is subject to the completion of a Technical Report under National Instrument 43-101, which is expected to be completed in August, 2006.

The Berlin area is notable given the presence of a phosphate sequence in the black shales of the lower cretaceous, identified in 1968, and which yielded positive results in trenching and underground developments. The syncline sequence includes black carbonaceous lutites which are associated with shallow epicontinental deposits. Samples taken near the base of the sequence show highly anomalous values of uranium, vanadium and phosphate. Uranium occurs mainly in hexavalent form.

The lithology of the mineralized horizons equates to carbonaceous lutites, clays and sandstones with an elevated content of crandallite and apatite.

The Zapatoca area is part of the Giron Formation, and comprises a sequence of conglomerates, with intercalations of sandy conglomerates, in the lower portion, sandstone, with sandstone conglomerates and thin sequences of conglomerates, in the central portion, and lutites with sand intercalations in the upper portion. The formation is predominantly red in colour and locally the sequence is calcareous. Uranium mineralization, particularly pitchblend, has been observed in a number of areas of the Giron Formation in a continental environment within typical stratabound lenticular morphologies. The mineralization typically comprises gummite, autunite and uranocircite, distributed in lenses that show strong lateral variability and where the mineralized levels are a few tens of meters from each other.

The Chima – Simacota area comprises a band 1.8 km long and 60 to 80 m wide, located in the upper portions of the Grey Sandy and Red Limonitic members of the Giron Formation, which make up a group of lenticular caps of conglomerates, sandstones and limonites. The mineralization is closely linked to organic matter, and sometimes with managanese and vanadium oxides. The uranium minerals are coffinite, thucholite, pitchblend and torbernite, associated with malachite, azurite, chalcopyrite, and pyrite. The maximum thickness is 8 m, which reduces quickly laterally; the U(3)O(8) content varies from 0.03% to 0.6%, and averages 0.14%. In addition, there is a sequence representing an alluvial deposit, comprising a conglomerate filled paleo channel. The presence of organic material is associated with uranium carbonates, gummites, and uraniferous vanadates (Francevillite), which place the mineralization within the oxidation zone in the vanadium-uranium class. The uraniferous minerals are found in the base of the conglomerates or in the sandstone intercalations, or sometimes in the grey limonites, but always associated with organic matter and pyrite as the defining reducing environment. The most important associations are related to malachite, azurite, and copper sulphides. The foregoing has led to the inference of a U-V-Cu paragenesis within detritic rocks in which uranium predominates over the other elements.

In the Zapatoca and Chima areas, the Giron Formation comprises a succession of continental to transitional sediments: oligomictic conglomerates, crosscutting sandstones and pelites. The uranium mineralization occurs in the sandstone facies, and to a lesser extent in the pelities, and occasionally in the conglomerates, and is associated with continental fossil remains. There is a significant lateral variability in the mineralization due to the presence of paleo channels. The uranium source is believed to be the Santander Massif, where felsic to intermediate igneous and metamorphic rocks prevail. The mineralization is the result of multiple oxide reduction and re-mobilization events. Similar characteristics are associated with the Wyoming Basin and the Colorado Plateau in the USA.

In the Ocana and Abrego area thoriferous anomalies have been identified, which are linked to the Triassic/Jurassic Bucaramanga Gneiss, granite, pegmatites, and ryolites. This area has only been the subject of very preliminary studies, and will be the subject of additional reconnaissance and exploration work to confirm its potential.

Given the association with igneous and metamorphic rocks, comprising mainly quartzites, amphibolites, pegmatites, and gneisses intruded with quartzdiorites and granodiorites, the uranium occurrences are potentially of magmatic origin i.e. Porphyry Uranium Deposits, which are similar to Porphyry Copper Deposits.

All of the concession contracts are at the application stage; when granted the contract provides for a three year exploration period. If an orebody is declared, the concession would be granted for 30 years and can be renewed. The company estimates that its minimum first year work program will be US$3.0 million, including surface fees and taxes due to the Colombian government, and anticipates a budget of US$4.0 million in the second year.

In consideration for the acquisition of Lerida, KPS will issue to the sellers 20,000,000 common shares and pay US$1,150,000 as well as grant to certain of the sellers a royalty equal to 1% on the gross receipts of all production from the concessions. KPS will also assume all of Lerida’s obligations relating to the concessions, primarily consisting of maintenance costs that are not expected to exceed US$850,000 annually.

In addition and in accordance with an agreement between KPS and Endeavour Financial Ltd. (“Endeavour”) KPS will issue to Endeavour 400,000 shares and pay US$23,000 in consideration for Endeavour’s assistance with the acquisition.

In conjunction with the acquisition, KPS will make a number of changes to its board and management. Upon completion of the acquisition, its board will compriseMichael Beckett (Chairman), Jaime Perez Branger, Jose Francisco Arata and Juan Manuel Pelaez and its management will consist of Juan Manuel Pelaez (President), Mario Miranda (Chief Financial Officer) and Peter Volk (General Counsel and Secretary). The company intends to appoint two more independent directors prior to closing.

Mr. Beckett is the Chairman of Endeavour Mining Capital Corp. He also serves as the Chairman to several international public corporations, including Ashanti Goldfields Company Limited, Watts Blake Bearne & Company Plc, and Clarkson plc. In addition, he holds directorships with several diverse and international natural resource companies, including Coalcorp Mining Inc., Northam Platinum Limited, Sibelco Minerals & Chemicals Limited, and Orica Ltd. Formerly, he was a Managing Director of Consolidated Goldfields plc, where one of his responsibilities included the management of its international investment portfolio.

Mr. Perez Branger has a Master’s degree in economics from the London School of Economics and has more than 18 years of experience in the financial and industrial sector. Currently he is President of a family holding company, with among other things, interests in tourism and construction. In addition, he is a member of the board of directors of a number of companies inside and outsideVenezuela related to the financial, agricultural, commercial, and tourism sectors as well as a director of several business guild organizations. Previously he was a founding partner of Andino Capital Markets, a Latin American investment bank where he was directly responsible for corporate finance and private equity investments. From 1991 to 1992,Mr. Perez Branger managed the Corporate Finance Department at Vestcorpartners, a regional investment bank. Prior to this, he was Vice-President in charge of capital markets and corporate finance at Citibank,Caracas.

Mr. Arata is Executive Vice-President, Exploration and a co-founder of Coalcorp Mining Inc. and has over 24 years experience in mineral and oil exploration in a number of countries inSouth America. He was also co-founder and Executive Vice-President, Exploration at Bolivar Gold Corp.

Mr. Pelaez is currently the Vice President, Business Development of Coalcorp Mining Inc., and has over fifteen years in the exploration and development of hydrocarbons and precious metals projects inColombia. He has also held executive positions in companies, such as Gran Colombia Resources, Tecnopetrol, and more recently, Pacific Stratus Energy.

Mr. Miranda is a Chartered Accountant with a B.A. in International Economics. He has over 20 years experience in mining, energy, and manufacturing inCanada and Latin America. He is currently Corporate Controller of Coalcorp Mining Inc., and CFO of Medoro Resources Ltd. and Pacific Stratus Energy Ltd.

Mr. Volk is General Counsel and Secretary of Coalcorp Mining Inc. Previously he was General Counsel and Secretary of Bolivar Gold Corp. Prior to this,Mr. Volk worked in the Securities Group at Blake, Cassels & Graydon LLP and then at Anderson Mori, Japan’s largest law firm.

Lerida is incorporated under the laws of the British Virgin Islands and is beneficially owned by the following group of shareholders, none of whom has a controlling interest in Lerida and all of whom are currently at arms’ length to the company: Blue Pacific Assets Corp., Next Com Italia Ltd., Finanziaria Energia SpA, Orinoquia Belt Trading, C.A., Glanzo Investments Inc., Poma Management, S.A., Amerisur Corporation Ltd.,Peter Volk, Efrain Carrera, Laureano von Siegmund, Fernando Moreno Zuluaga and German Rubio Maldonaldo. No financial statements currently exist for Lerida as it was only recently incorporated.

KPS is in discussions with investors for the provision of funding to pay for the acquisition and exploration programmes and it intends to finalize the terms of the financing after the resumption of trading. It is a condition of the acquisition that the company complete a financing of a minimum of 8,312,000 shares.

Following successful completion of the acquisition of the uranium assets, KPS will be a uranium exploration company. Prior to the acquisition of the uranium assets, KPS had no active business.

The acquisition of Lerida is subject to regulatory and shareholder approval, and financing in an amount sufficient to complete the acquisition.

Completion of the transactions are subject to a number of conditions, including but not limited to, Exchange acceptance and disinterested Shareholder approval. The transactions cannot close until required Shareholder approval is obtained. There can be no assurance that the transactions will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the Management Information Circular and/or Filing Statement to be prepared in connection with the transactions, any information released or received with respect to the transactions may not be accurate or complete and should not be relied upon. Trading in the securities of KPS should be considered highly speculative.

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