Australian firm to acquire 85% of C. Kalimantan copper-gold prospects

Australia-based junior resources exploration firm Prosperity Resources Limited announced Tuesday it had signed an option to acquire 85 percent of the Masuparia Contract of Work (CoW) area in Central Kalimantan.

The firm said in a statement that the concession held advanced and drill-ready, epithermal, high sulphidation and porphyry copper-gold prospects with multi-million ounce potentials.

Under a 12 month option agreement, Prosperity will disburse cash and shares for A$216,000 and an exploration budget of up to A$1,000,000, including for a diamond drilling of up to 2000 meters.

Prosperity also agreed to make a share purchase agreement involving shares and/or cash at Prosperity?s discretion to the value of A$5,000,000.

The Masuparia concession, held by PT Pasifik Masao Mineral, covers an area of 335 square kilometers, next to the Mt Muro CoW area that has produced more than 1.3 million ounces of gold during the period 1995-2002, and is scheduled to be restarted later this month with a 600,000 ounce resource base by Straits Resources Ltd.

The Masuparia concession also lies within the same geological belt as the Kelian mine in East Kalimantan, which has produced more than 7 million ounces of gold since 1992, Prosperity said.

The study by Leigh Rankin of Geointerp, a geologist with extensive experience on world class porphyry systems, indicates that the Rina Prospect discovered in the Masuparia may be a very large intrusive body of up to 7 kilometers long. He sees broad similarity between the Rina Prospect?s geological setting and the major Chilean and Peruvian porphyry copper?gold mines.

Prosperity considers this the priority drill target.

In 2001-2002, US-based Phelps Dodge Corporation carried out an exploration under a 12-month option agreement, focusing on the search for porphyry copper gold mineralisation. Phelps Dodge was successful in proving that porphyry copper mineralisation did exist at a depth within a geological setting analogous to the Cadia Hill- Ridgeway Deposit in New South Wales.

Rina Prospect drillhole RDH-02 intersected 310 metres @ 0.18% Cu and 0.32 g/t Au from surface, with the last 172 metres finishing in mineralisation averaging 0.26% Cu and 0.50 g/t Au. Subsequent geophysical surveying suggests that this drilling has only tested the periphery of a much larger system and one with potentially higher grades, which has not been drill tested. (Robert)