Kalimantan Gold says drilling results a success, plans to drill more

Canadian listed mining firm Kalimantan Gold Corporation Limited said on Thursday the results of its recently completed 9 hole diamond drill program on the Main Zone of the Beruang Kanan of its Contract of Work (``CoW'') in Central Kalimantan determined that the defined mineralized area of Beruang Kanan was more than 16 square kilometers.

According to the company?s statement, the Main Zone is only one of five identified mineralized source areas at Beruang. To date, said the company, more than 38 porphyry and porphyry-related copper and/or gold prospects had been defined in the CoW and only a few of these anomalies in the southern part of the CoW, including the Beruang area, have undergone any detailed exploration.

Management considered the recent drill program a ?definite technical success?.

The company also said the fundamental value of the CoW had been significantly increased by the recognition and verification of the existence of a porphyry copper province, confirmed by the interest of major mining companies and visiting independent consultants.

?The sheer size of the mineralized area, combined with the knowledge that the geophysical and drill hole data strongly indicate that the source of the mineralization in the Main Zone is at about 300 meters deep, leads us to conclude that it is quite reasonable to expect that we may find higher grade mineralization, including either gold or molybdenum credits associated with this source intrusion in the Main Zone, at depth,? said Tim Scott, the company?s president..

Scott said Kalimantan Gold would l look to raise additional equity financing to drill this deep target that is beyond the depth capacity of our own diamond drill. He added that a discovery of higher grade mineralization at depth would have the potential to make the lower grade zones already discovered at surface economic.

Scott said sampling of the Southern Polymetallic Zone, another of the five Beruang Kanan zones, had shown high grade mineralization on surface of up to 3 percent copper, 35 percent zinc, 26 percent lead, 1 gram per tonne gold and 3440 grams per tonne silver.

Meanwhile, Kalimantan Gold had also closed the non-brokered private placement financing for proceeds of US$175,000 with Kalimantan Investment Corporation, The company's major shareholder, purchased $71,000 and an individual investor purchased $104,000.

The 875,000 common shares issued are subject to a British Columbia Securities Act hold period until September 26, 2002

The company said some of the proceeds from this current private placement would be used to immediately commence preparations for a two hole diamond drill program in this Beruang Kanan zones.(alex)