Kalimantan Gold Corporation Limited

Kalimantan Gold Corporation Limited

December 30, 2008 17:31 ET

Kalimantan Gold Completes C$428,414 Private Placement

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 30, 2008) - Kalimantan Gold Corporation Limited (TSX VENTURE:KLG)(AIM:KLG) (the "Company") has raised C$428,414 from a non-brokered private placement financing involving the sale of 4,284,145 common shares at a price of $0.10 per share. The common shares issued are restricted from trading through the TSX Venture Exchange until May 1, 2009.

Commenting on the outcome, CEO Rahman Connelly said, "In today's market filling nearly half the placement was a good result, due to the support of some of our long term shareholders."

As a consequence of the shortfall, the Company has instituted strong cost cutting measures including suspension of drilling at its Jelai gold project so as to focus the Company's resources on advancing the recently announced IBP Coal Project in East Kalimantan.

On November 17, 2008 the Company announced the terms of an option agreement with PT Indobara Pratama ("IBP") pursuant to which the Company can acquire up to an 80% interest in IBP from the selling shareholders. The Company has an exclusive 90 day option to undertake due diligence on IBP and fund and undertake a 3,000 meter drilling program during the option period. The IBP coal KP (the "Concession") is permitted for production and has the potential to be an open cut coal deposit. The work done on the Concession to date indicates a potential deposit of between 55-60 million tonnes of approximately 5,400 kcal/kg coal.

Drilling at IBP commenced on 12 December using two drill rigs drilling to depths of between 50-100 meters. To date, twelve holes have been completed over 500 meters, with coal seams of between 2.5 and 8 meters intercepted in ten of the twelve holes. Assays are pending. A third rig will commence drilling in early January.

The Company is in active discussions with several power station operators with regard to coal off-take and project equity participation given that the specifications of IBP coal closely match the requirements of new power stations in India and Indonesia.

All data, as disclosed in this press release, has been verified by Arif Hadian, the Company's Qualified Person for the coal prospects. Mr. Hadian, who is the Company's Coal Manager, is a geologist with over 13 years experience in all aspects of the coal industry in East Kalimantan. He is a member of the Indonesian Geologists Association.

About Kalimantan Gold

Kalimantan Gold Corporation Limited is a junior exploration company listed on both the TSX Venture Exchange in Canada and on AIM. The Company is focused on gold, coal and copper prospects in Indonesia and has exploration rights in three areas: the Jelai epithermal gold prospect in East Kalimantan, five coal prospects, also in East Kalimantan and porphyry copper and gold prospects in Central Kalimantan. With the completion of this placement there are 99,389,262 common shares outstanding.

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.

The TSX Venture Exchange does not accept responsibility for the adequacy or the accuracy of this release.

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