Kalimantan Gold Corporation Limited

Kalimantan Gold Corporation Limited

March 26, 2009 03:00 ET

Kalimantan Gold Corporation Limited: Coal Update-4,600 Meter Drilling Program Completed

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 26, 2009) - Kalimantan Gold Corporation Limited ("KLG" or the "Company") (TSX VENTURE:KLG)(AIM:KLG) is pleased to announce the completion of a 4600m drilling program on the PT Indobara Pratama ("IBP") coal project. KLG's option to acquire up to 80% of IBP (refer to press release November 17, 2008) has been extended to 30 April 2009. The Company is confident it will be successful in concluding its current negotiations for improved terms.


The IBP coal concession (the "IBP KP") is permitted for production and has the potential to be an open-cut coal mine. Work completed on the concession to date indicates a potential deposit of between 100 and 120 million tonnes of between 4,800 and 5,000 kcal/kg coal (air dried basis). The coal has a low ash and low sulfur content. The potential quantity and grade is conceptual in nature as there has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in the target being delineated as a mineral resource. The basis for the potential quantity and grade is discussed in a summary of the IBP program set out below.

KLG's 58 hole drilling program covered over 4,610 meters and identified two seams, one of between 1 to 6 meters and the other between 8 to 13 meters in thickness. The flat lying to shallow dipping nature of the seams results in a low overburden ratio of around 2:1 (2 meters of overburden per 1 meter of coal) for the conceptual tonnages indicated above.

Commenting on the outcome, Rahman Connelly, CEO, said, "The program confirms the validity of data provided to us by the owners. It also indicates that the area has substantial unexplored potential, given that the focus of our program was on just 418 ha of the concession's 2,700 ha. The thick seams and low overburden ratio also suggest the potential for relatively low mining costs."

KLG is in active discussions with several power station operators regarding coal off-take and project equity participation, given that the specifications of IBP coal closely matches the requirements of new power stations in India and Indonesia. There is an excellent 20 km road from mine-site to jetty, for which land has recently been acquired by IBP. The distance by barge from jetty site to the Balikpapan Coal Terminal is 304 km.

Summary of the IBP Program

- A total of 58 drill holes successfully completed

- 50 holes were drilled on 250 meter spacing's within an area of 418 ha

- 8 holes were drilled on 1,000 meter spacing's within an area of 949 ha

- Most holes were drilled to 60 meters, with a range of 12 to 81 meters

- 32 holes were redrilled to ensure high core recovery

- A total of 4,610 meters drilled including 390 meters of coring

- Geophysical logging of all holes

- The majority of coal seams intersected at 20 to 30 meters depth and possess a constant dip of 2 to 3 degrees, producing a strip ratio of 1:1 up to 3:1

- Seam A thickness between 1 to 6 meters occupies the eastern part of the drill area

- Seam B thickness between 8 to 13 meters occupies the western part of the drill area and remains open and increasing in thickness to the west

- Potential exists to substantially increase the mineralized area within the remaining 1333 ha, the exploitation area, and an adjoining 2285 ha exploration area

Core samples were placed in trays on site, geologically logged, photographed and placed in heavy duty plastic bags. Coal analysis was carried out at the Intertek and Geoservices Laboratories in East Kalimantan.

The average results of the 58 samples analyses are as follows:

Summary assay (average) :
Weight (kg) : 3.26 kg
Total Moisture (%) : 37.69 %
Inherent Moisture (%) : 20.82 %
Ash Content (%) : 4.43 %
Volatile Matter (%) : 40.46 %
Fixed Carbon (%) : 34.26 %
Sulfur (%) : 0.16 %
Gross Caloric Value (cal/g)
(adb) : 4915
Caloric Value (cal/g) (db) : 6213
Caloric Value (cal/g) (daf) : 6577
Caloric Value (cal/g) (ar) : 3815
Hardgrove Index : 39 - 53
Relative Density : 1.35

Note: Due to the porous nature of IBP coal, 1 day air drying tests of
samples showed that the total moisture (ar) content can be reduced
from 40-45% to between 20-35%.

Qualified Person

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 in London. The Company is active on gold, coal and copper prospects in Indonesia and has exploration rights in three areas: the Jelai epithermal gold prospect in East Kalimantan, an option over the IBP coal prospect, also in East Kalimantan and a Contract of Work in Central Kalimantan with multiple porphyry copper and gold prospects.

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.

"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."

Contact Information

  • Kalimantan Gold Corporation Limited
    Rahman Connelly
    Deputy Chairman and CEO
    +61 7 552 32298 or Mobile: +61 418 116 955
    Email: rconnelly@ozemail.com.au
    Kalimantan Gold Corporation Limited
    Gerald Cheyne
    Director Corporate Development
    +44 (0) 2077311806 or Mobile: +44 (0) 7717473168
    Email: gerald.cheyne@kalimantan.com
    Kalimantan Gold Corporation Limited
    Nick Cottam
    Corporate Relations Manager
    +44 (0) 1394384115
    Email: nick@nickcottam.com
    Website: www.kalimantan.com