Kalimantan Gold Corporation Limited

Kalimantan Gold Corporation Limited

February 16, 2011 02:00 ET

Kalimantan Gold Signs Definitive Agreement

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 16, 2011) - Kalimantan Gold Corporation Limited (TSX VENTURE:KLG)(AIM:KLG) (the "Company") is pleased to provide an update on the option to joint venture agreement announced on December 2, 2010.

Jelai Gold Project

As announced on December 2, 2010 the Company signed a binding letter of intention ("LOI") with Tigers Realm Minerals Pty Ltd. ("Tigers"), an Australian based, privately owned resources company, whereby Tigers may earn up to a 70% interest in the Company's Jelai Gold Project by meeting certain project expenditure obligations and completing a bankable feasibility study ("BFS").

Tigers has completed its due diligence and on February 16, 2011 the Company and Tigers executed a definitive option agreement (the "Deed"). The Deed remains conditional upon the term of the Izin Usaha Pertambangan granted by Bupati Bulungan of the Republic of Indonesia in respect of land near the village of Tenggiling in the Regency of Bulungan, Province of East Kalimantan ("IUP") being extended to at least June 2, 2015 and forestry permits being granted as necessary to enable the on ground activities to be conducted. Both the IUP revision and forestry permits are expected to be in hand shortly. Tigers can incrementally earn up to a 70% interest in the Jelai Project by spending US$6,000,000 by June 2, 2015, with the first US$2,000,000 by June 30, 2012 being an obligation. If Tigers doesn't complete the BFS by the IUP expiry date, its interest earned in Jelai will convert to a royalty capped at two times its investment in the Jelai project.

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.

Contact Information

  • Kalimantan Gold Corporation Limited
    Rahman Connelly
    Deputy Chairman and CEO
    +61 7 552 32298 or Mobile: +61 418 116 955
    Kalimantan Gold Corporation Limited
    Gerald Cheyne
    Director Corporate Development
    +44 (0) 2077311806 or Mobile: +44 (0) 7717473168
    Alexander David Securities Limited
    Bill Sharp/David Scott
    +44 (0) 20 7448 9820