Moto gold project update

Moto Goldmines Ltd (MGL) has provided an update on events relating to the Moto gold project in the northeast of the DRC. MGL has been working closely with the DRC’s state-owned gold mining company, OKIMO, and with various bodies for confirmation that OKIMO is authorized to resume its discussions with the company with a view to formalizing the terms agreed under the protocol entered into with OKIMO in November 2006 and to formalize the withdrawal of the several allegations of breach of various agreements.

As part of this process certain outstanding payments have been made to OKIMO on the basis agreed in the November 2006 Protocol and the company has responded in detail to the allegations of breach setting out in clear detail why there is no breach of any of the agreements. No notice of termination was issued by OKIMO following the expiry of the 60 day cure period last month in relation to three of the agreements with OKIMO, nor following the 90 day cure period which expired on April 26 2007 in relation to the other agreement covered by the notices.

MGL recently obtained a copy of the formal legal notice under which it understands that a Commission has been appointed under the authority of the Minister of Mines to review various mining agreements entered into by the DRC Government, or state bodies such as OKIMO, within a period prior to mid July 2007. Whilst MGL has not formally been notified that its contracts with OKIMO will fall within the ambit of the review, it is aware of news stories circulating with statements from the Deputy Minister of Mines to the effect that some or all of its contracts will be reviewed, along with 60 other mining agreements starting on May 15, with a decision expected after mid July 2007.

Whilst MGL is also aware that the Deputy Minister of Mines was quoted recently as having said that the period for curing of breaches in relation to the MGL agreements expired on April 26 2007 without the company having fulfilled its commitments, MGL wishes to reiterate that this statement has been made without foundation, and to point out that the OKIMO Board of Directors and relevant government ministries have been made fully aware of the work carried out by MGL and its partners in compliance with its contractual obligations. The MGL Board remains confident that any review process will confirm the validity and fairness of its recently negotiated November 2006 Protocol.

In the meantime, whilst the company has not yet received formal confirmation, MGL’s understanding is that OKIMO will be restricted from progressing matters, including the withdrawal of its allegations of breaches, until the various agreements have been reviewed by the Commission. MGL, along with the other foreign investors affected by the review, is seeking further clarity with respect to the timing and procedures for the review.