Kalimantan Gold Corporation Limited
TSX VENTURE : KLG
AIM : KLG

Kalimantan Gold Corporation Limited

May 06, 2011 17:00 ET

Kalimantan Gold Closes Private Placement With Freeport

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 6, 2011) - Kalimantan Gold Corporation Limited (the "Company") (TSX VENTURE:KLG)(AIM:KLG) is pleased to announce that it has raised C$350,000 from the issue of 2,500,000 common shares at price of C$0.14 per share to a wholly owned subsidiary of Freeport-McMoRan Exploration Corporation ("Freeport"). The common shares issued are restricted from trading through the TSX Venture Exchange until September 7, 2011.

The placement shares will be fully paid and will rank pari passu in all respects with the existing common shares in the Company. Application has been made for the placement shares to be admitted to trading on AIM ("Admission") and to be listed on the TSX Venture Exchange. It is expected that Admission will become effective and that dealings in the placement shares will commence on May 12, 2011. Regulatory approval for the placement has been received from the TSX Venture Exchange.

The Company intends to use the proceeds to fund its ongoing projects in Indonesia, as well as general working capital purposes.

The Company and Freeport entered into a joint venture agreement in relation to the Company's KSK Contract of Work copper project in Kalimantan, Indonesia as announced on April 19, 2011. Pursuant to the joint venture agreement the private placement was priced at 125% of the volume weighted average price of the seven day period following execution of the agreement.

About Kalimantan Gold

Kalimantan Gold Corporation Limited is a junior exploration company listed on both the TSX Venture Exchange in Canada and on AIM in London. The Company has two exploration projects in Kalimantan: the Jelai epithermal gold project in East Kalimantan (which has been optioned to Tigers Realm Minerals) and the KSK Contract of Work in Central Kalimantan with multiple porphyry copper and gold prospects (which has been optioned to Freeport). In addition, the Company continues as agent for the shareholders of PT Indobara Pratama ("IBP") who are seeking to sell IBP's coal concession in exchange for a share of the proceeds and active negotiations with a qualified purchaser are in process.

RFC Corporate Finance Ltd acts as KLG's Nominated Adviser for the purposes of its AIM listing, contact Stuart Laing, ph: +618 9480 2506 or email: stuartl@rfc.com.au.

This news release contains forward-looking statements that are based on the Company's current expectations and estimates. Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate", "suggest", "indicate" and other similar words or statements that certain events or conditions "may" or "will" occur. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause actual events or results to differ materially from estimated or anticipated events or results implied or expressed in such forward-looking statements. Such factors include, among others: the actual results of current exploration activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; possible variations in ore grade or recovery rates; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing; and fluctuations in metal prices. There may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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