Kalimantan Gold proceeding with equity financing

Canadian junior miner Kalimantan Gold Corporation Limited said Wednesday it is proceeding with a non-brokered private placement financing of up to C$2,750,000.

The company said proceeds of the placement would be primarily used, together with funds on hand, to finance the Company's ongoing exploration programs on the Baroi Far East Zone (FEZ) copper-silver-gold porphyry deposit in Kalimantan.

The company's significant shareholder has indicated it may participate in the private placement.

The company said FEZ displayed six important geologic signatures that are associated with major porphyry deposits throughout the world. Surface samples were highly mineralized but the terrain made testing some areas too difficult. Thus the company conducted an initial 12-hole shallow (up to 80 meters depth) scout diamond-drilling program that was, upon success, expanded to a total of 22 holes.

Drilling of a minimum of 6 holes to depths of 300 meters is now underway to test the mineralized copper-silver-gold porphyry intrusion, plus the potential for a structurally hosted massive sulphide deposit. Subject to the results of this program the company will proceed with a further program of deep drilling of 600 - 800 meter holes.

The company also said part of the funds raised will be used to secure additional exploration areas in Kalimantan upon which a considerable amount of previous work has already been carried out by past explorers, including major mining companies. The company said it would likely seek joint venture partners to explore these new projects. (alex)