Kalimantan Gold expands into coal mining

Vancouver-based junior copper-gold exploration firm Kalimantan Gold Corporation Limited (KGC)is expanding business to Indonesian coal mining following the signing of a Heads of Agreement with the Indonesian-based Jhoswa Group, designed to earn the company an interest in a number of coal prospects situated in the Kutai area, East Kalimantan.

As part of the Agreement, KGC is working closely with the specialist mining consultancy, PT GMT Indonesia, which has been contracted to assess the prospect areas for exploration potential prior to their inclusion in a formal joint venture agreement between KGC and the Jhoswa Group. KGC can elect to enter into the joint venture once the assessment phase has been completed.

Under the joint venture, KGC will establish a 100% owned subsidiary to carry out mining services (PT PMA) within six months. PT PMA will sign a mining services agreement for each prospect and will be required to fund 100% of the costs of work programs for the prospects with the objective of establishing a commercially viable coal resource in each case.

KGC would then be entitled to 80% of all proceeds of coal sales less agreed expenses and any other specified items, with 5% of the projects being allocated as a royalty to PT GMT for its role as project manager and technical advisor on the project.

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 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 KSK COW copper-gold porphyry prospects in Central Kalimantan.(alex)