Killara Resources to acquire Gapura gold project in W. Kalimantan

By Harri Roy Gunawan

Australia-listed Killara Resources Ltd said that it was executing a Memorandum of Understanding in which the company can acquire a 75 percent equity interest in the Gapura gold project in West Kalimantan.

The company said in a statement obtained on Monday that Gapura gold project covers an area of about 9,100 ha in West Kalimantan that includes the prospective Semitau Complex metamorphic rocks, which are known to be the host rocks for a number of gold occurrences in the area.

The company further explained that alluvial and primary gold occurs on and in close proximity to the concession area, with local miners previously active in producing gold from alluvial deposits in the area, particularly in the central-northern portion of the concession within the Quaternary alluvium deposits found flanking major rivers. Sample data provided by the vendor indicates gold values of up to 38.6 g/t within rocks collected from the concession area. It is believed that the mineralization is hosted within pyritic shales and quartz-pyrite veins in the area.

Killara plans to mobilize a field team to the Gapura gold project within seven days to begin community liaison and an initial field program to define and sample areas of primary mineralization and to validate geological information provided by the vendor.

?Success in this work would lead to more detailed mapping and sampling designed to identify areas for subsequent drill testing,? Killara said.

After completing a six month due diligence program Killara has the option to make a series of payments entitling the company to a 75 percent equity interest for a total outlay of US$8.5million, the company said.

Editing by Reiner Simanjuntak