Kalimantan Gold Corporation Limited
TSX VENTURE : KLG
AIM : KLG

Kalimantan Gold Corporation Limited

March 12, 2012 12:00 ET

Kalimantan Gold-Freeport JV Exploration to Commence

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 12, 2012) - Kalimantan Gold Corporation Limited (TSX VENTURE:KLG)(AIM:KLG) -

Highlights

  • Forestry permit issued
  • Exploration activities to commence immediately
  • Deep drilling program defined
  • Drill rig mobilization to start immediately

Kalimantan Gold Corporation Limited (the "Company") is pleased to advise that the extension to the expired Forestry Permit for its PT Kalimantan Surya Kencana sixth generation Contract of Work ("KSK CoW") copper porphyry property has been issued and mobilisation of equipment can now commence immediately and drilling will start as soon as possible thereafter. The KSK CoW is located in central Kalimantan, Indonesia.

Freeport-McMoRan Joint Venture

As announced on April 19, 2011, the Company signed a joint venture agreement with a wholly owned subsidiary of Freeport-McMoRan ("Freeport") in relation to the KSK CoW copper project. Under the terms of the joint venture, Freeport may earn up to a 75% interest in the project by sole funding the completion of a feasibility study. The phase one Forestry Permit has been granted for an area totaling 7,422 hectares of the KSK CoW and gives the rights to the holder to carry out full mineral exploration activities within the permitted concession area.

The company is pleased to have obtained this Forestry Permit, allowing it to commence its long-delayed exploration program. Field crews will commence mobilization and camp construction immediately.

This successful initial phase of the forestry permitting process will allow the company to execute drill tests of key prospects at Beruang Tengah and Beruang Kanan, resource definition drilling at Beruang Kanan as well as bring other priority prospects to the drilling stage with additional important ground follow-up work.

The company appreciates the patience and support of the local government and community during the drawn-out Forestry Permitting process. In addition, the company appreciates the efforts made by officials of the Forestry Ministry to expedite this current permit, and looks forward to working with them to secure permitting over the remaining prospective areas, including Tambang Huoi, one of the three highest priority targets, of the KSK Contract of Work area, as per the terms of the contract of Work.

Fieldwork Commences

The main focus of the first year minimum US$3 million exploration program will be drill testing the deeper porphyry copper targets that have been identified by the Company on the KSK CoW. Recent advanced inversion modeling by Freeport identified numerous massive deep seated magnetic bodies below extensive surface geochemical anomalies and existing drill holes where copper mineralization was present. The three highest priority targets identified are the Beruang Tengah, Beruang Kanan and Tambang Huoi prospects.

Previous drilling results at Beruang Kanan have included intersections of:

  • 167 meters at 0.59% copper from 4.5 meters;
  • 79 meters at 0.89% copper from 6.5 meters; and
  • 102 meters at 0.62% copper from 3 meters.

Further details on the inversion modeling and identified targets are contained in technical reports on the Company's website at www.kalimantan.com. The Company will be the operator during this initial phase under the direction of the Freeport. The drill program may be increased dependent on early results.

Multiple deep drilling targets have collectively been defined and prioritized at five of the priority copper porphyry targets with the Freeport exploration team.

In addition, the Company will commence an extensive exploration drilling program covering 34 holes at Beruang Kanan with two drill rigs to define a potential resource at this prospect. The Company plans to conduct further exploration at several other identified copper porphyry targets this year to make them drill ready.

"The issuance of this Forestry Permit is an important milestone that will enable the project's substantial deep drilling program with its world class JV partner, Freeport to rapidly get underway," stated Faldi Ismail, CEO of the Company. "One of our key strengths is our ability to manage the complex regulatory process related to our exploration projects. Receipt of the Forestry Permit is evidence of the strength, dedication and depth of our Indonesian experience."

The Qualified Person responsible for the technical content and verification in this press release is Dr. Peter Pollard, the Company's Qualified Person.

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 is optioned to Tigers Realm Minerals) and the KSK Contract of Work in Central Kalimantan with multiple porphyry copper and gold prospects (which is optioned to a wholly owned subsidiary of Freeport-McMoRan Exploration Corporation). For further information please visit www.kalimantan.com.

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.

Contact Information

  • Kalimantan Gold
    Faldi Ismail
    Deputy Chairman and CEO
    Mobile: +61 (0) 423 206 324
    faldi.ismail@kalimantan.com

    Kalimantan Gold
    Gerald Cheyne
    Director Corporate Development
    Telephone: +44 (0) 2077311806 or Mobile: +44 (0) 7717473168
    gerald.cheyne@kalimantan.com
    www.kalimantan.com

    Alexander David Securities Limited
    Bill Sharp/ David Scott
    Telephone: +44 (0) 20 7448 9820

    KLG's Nominated Adviser
    RFC Corporate Finance Ltd
    Stuart Laing
    Telephone: +61 8 9480 2506
    stuartl@rfc.com.au