Kalimantan Gold Corporation Limited

Kalimantan Gold Corporation Limited

April 23, 2007 02:00 ET

Oxiana and Kalimantan Gold Launch Major Drill Program

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - April 23, 2007) - Kalimantan Gold Corporation Limited ("KGC") (TSX VENTURE:KLG)(AIM:KLG) is pleased to announce the start of drilling operations with its funding partner Oxiana Ltd. The program covers what Oxiana has confirmed to be "numerous high potential targets" at KGC's 941 km2 Contract of Work ("KSK CoW") in Central Kalimantan, Indonesia. Both parties believe that the selected drill targets have the potential for the discovery of a significant porphyry copper gold deposit.

The first phase of the program takes place at the Beruang Kanan prospect and is then scheduled to move on to Mansur and Baroi, two other major targets on the property. The drilling at Beruang Kanan is a fully helicopter supported operation involving the use of three drills testing to varying depths over a 3.5 kilometre strike length. The location of the drilling follows what Oxiana reports are "very positive results" from its detailed analysis of existing drill and other data which was completed at the end of March.

"We are working closely with Oxiana who have targeted up to 4,500 meters of drilling for the first phase which shouldn't take more than two months," commented KGC's Vice President Exploration and geologist on the ground, Mansur Geiger. "This is our first deep drilling at Beruang and if, as recent analysis suggests, the results prove positive, the program is likely to be extended while also starting to drill at our Mansur and Baroi prospects."

Added CEO Rahman Connelly: "We are delighted for this program to get underway and follow up on the significant mineralization intersected by our original drilling and test the priority targets identified by Oxiana in their preliminary data compilation and ground reconnaissance work."

Under an Option Deed signed in December 2006, Oxiana is committed to spending US$2.5 million on data compilation and drilling over a 12-18 month period. Oxiana will then have the option of earning a 40% stake by the completion of a pre-feasibility study and a 66.67% stake by the completion of a bankable feasibility study. By this time it will have spent an estimated US$37.5 million.

In a recent briefing to stakeholders, Oxiana managing director Owen Hegarty highlighted his company's involvement with Kalimantan Gold in the region and invited his audiences to "watch this space for those results as we believe there are some red hot targets in Central Kalimantan."

Background to the drill program

Since the signing of the Option Deed, Oxiana geologists have reviewed a decade of KGC exploration data relating to the project. Work has initially focused on the Beruang Kanan prospect area, where geological, geochemical and geophysical analysis has delineated three key areas of porphyry-related mineralization; the Main, South and Rawa Zones. As a result of this work, numerous high priority targets have been identified on Beruang Kanan. A drill plan for the Main Zone has been developed and an aggressive reconnaissance drilling program for the highly prospective South and Rawa Zones is being developed. To date five diamond drill holes (approximately 2,350 metres) have been planned for the Main Zone and additional holes are being planned to test anomalies in the South and Rawa Zones. Similar detailed work will be carried out at the Baroi and Mansur prospects as part of a total program of approximately 7,000 metres.

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 copper and gold in Indonesia and has exploration rights in two areas: the Jelai-Mewet epithermal gold prospects in East Kalimantan and the copper-gold porphyry prospects in Central Kalimantan.

About Oxiana

Oxiana Limited is an international mining and exploration company listed on the Australian Stock Exchange. With a market capitalization of around A$4 billion, Oxiana owns and operates the Sepon gold and copper mines in Laos, the Golden Grove base and precious metals operation in Western Australia and is developing the Prominent Hill copper-gold mine in South Australia. The company is also exploring in Australia, Asia and the Pacific.

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

Contact Information

  • Kalimantan Gold Corporation Limited
    Rahman Connelly
    Deputy Chairman and CEO
    +61 7 552 32298 or +61 418 116 955
    Email: rconnelly@ozemail.com.au
    Kalimantan Gold Corporation Limited
    Nick Cottam
    Corporate Relations Manager
    +44 (0) 1394 384115
    Website: www.kalimantan.com
    Keith, Bayley, Rodgers & Co Limited
    Gerald Cheyne
    +44 (0)20 78712274
    Email: gerald.cheyne@wcwb.co.uk