Last checked at 18 Dec 2006 07:44
Kalimantan Gold Corporation Limited For Immediate Release NR06-17 TSX Venture ExchangeDecember 18, 2006 and AIMVancouver, British Columbia Symbol: "KLG"
Oxiana joins forces with Kalimantan in the hunt for Indonesian copper
Kalimantan Gold Corporation Limited is pleased to announce that it has finalized its option deed with Australian copper and gold mining company, Oxiana Ltd. Previously announced as a Heads of Agreement in October, the option deed grants Oxiana an option to earn up to a total interest of 66.67 in the KSK Contract of Work. The agreement is designed to advance exploration at Kalimantan's copper gold prospects in Central Kalimantan, Indonesia which both parties agree has the potential to produce a world class deposit.
"This is an excellent deal for ourselves and for Oxiana," commented Kalimantan Gold ("KGC") CEO Rahman Connelly. "At a time when global demand for copper shows no sign of abating, it's an opportunity for us to pool our resources and confirm what could turn out to be one of the world's most significant new deposits."
The option covers three key prospects, Baroi, Beruang and Mansur, which form part of KGC's 941km‚² holding in Central Kalimantan. Under the agreement, Oxiana will initially spend US$2.5 million to include the drilling of 12 deep holes over a period of 12-18 months. If it elects to proceed, 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 which time it will have spent an estimated US$37.5 million.
Should any of the projects proceed to mine development, the Deed allows for Oxiana to provide significant funding assistance for Kalimantan Gold ("KGC") to fund its one third share of mine development finance. If KGC cannot raise sufficient funds at the development stage, Oxiana will pay its share of the equity as a loan taken out at agreed commercial terms. "This could enable KGC to achieve its objective of owning a one third share in a world class copper mine," said Connelly.
KGC began working on the project in 1996, since when it has spent around US$12 million, drilling 70 holes, totaling 12,309 metres in the process. Of critical importance has been the company's extensive community programmes which are aimed at strengthening the quality of governance and well-being in the areas close to where exploration is taking place. "It's about capacity building," added Connelly. "We work with local communities to help them improve their living standards but also to improve their management skills when playing a part in projects like ours'."
Kalimantan Gold 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.
Oxiana 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.
For further information please visit www.kalimantan.com or contact:
Rahman Connelly Gerald Cheyne Deputy Chairman and CEO, Keith, Bayley, Rodgers & Co Kalimantan Gold Limited Telephone: +61 7 55232298 Telephone: +44 (0)20 78712274 +61 (418) 116 955 Email: gerald.cheyne@wcwb.co.uk Email: rconnelly@ozemail.com.au Nick Cottam Associates (UK public relations) Telephone 07834 978139
The TSX Venture Exchange does not accept responsibility for the adequacy or the
accuracy of this release. NR05-14
KALIMANTAN GOLD CORPORATION LTD