Killara updates Indonesia gold, coal projects

The following is an excerpt from Killara Resources Limited taken from quarterly report ended 31 December 2011 released on Tuesday.

Belu Manganese Project (KRA 80%)
The Belu Manganese Project (?Belu?) is located approximately 35km east of Atambua, the capital of Belu Regency, West Timor, Republic of Indonesia. The project consists of three concessions (IUP?s) covering a combined area of 5,934 hectares in a region of known manganese mineralisation.

Geological mapping and surface / rock chip sampling completed by Killara identified two broad target zones potentially prospective for primary manganese mineralisation. A ground based geophysical survey consisting of widely spaced dipole-dipole IP traverses commenced in mid October 2011, however failure of the geophysical equipment delayed the program until mid November 2011.

Two survey lines were completed across Target 2, however delays in securing access to the northern concession and the impending wet season resulted in the suspension of the survey in late November 2011 before the survey lines to test Target I could be completed.

Killara?s contract geophysicist, Graham Elliott, reviewed the data from the survey lines completed across Target 2, concluding that the dipole - dipole IP defined a generally conductive and weakly chargeable response, however there was no evidence of extensive manganese mineralisation.

The Company is reviewing its options with regard to the most appropriate method for testing the Target I area, however no field based exploration would be expected until the end of the wet season.

West Papua
Killara has executed Letter of Offer agreements (?LOO?s?) with an Indonesian company to acquire an interest in two coal concessions in the West Papua Province of the Republic of Indonesia. The LOO?s provide in principle agreement on commercial terms under which Killara can acquire a 65% equity interest in the concessions, with vendor payments linked to project specific milestones.

The two coal concessions are contiguous, cover a combined area of about 48,600ha and cover a geological sequence which is known to be coal bearing in other parts of the sedimentary basin.

Full commercial terms of the acquisition are to be formally documented in Memorandums of Understanding (?MOU?s?) which are being prepared by the Company?s legal representative. Details of the transaction and the coal concessions will be reported once the MOU?s have been executed.

Ora Banda Gold Project (KRA 100%)
The tenements that make up the Windanya Project, being Prospecting Licences 24/4028 to 4031 inclusive, expired during the course of the quarter.

Field activities are being planned to test targets defined on the Orinda Project and the Christmas Reef Project. No field work was completed during the December 2011 quarter.

Indonesian Project Pipeline
Killara has been, and continues to be, offered a range of resource projects for potential acquisition and / or joint venture throughout the Republic of Indonesia. Projects being evaluated cover a range of commodities including coal, precious metals and manganese.

Evaluation of these opportunities is ongoing and shareholders will be advised should a transaction progress to a more formal stage of negotiation.

Corporate
Killara has appointed Darren Misquitta, one of the Company?s Indonesian based Executives, to the Board as an Executive Director, greatly enhancing Killara?s presence in Indonesia. Misquitta, previously Killara?s General Manager Asia Pacific and a founding Director of Killara Resources Pty Ltd, brings over 10 years commercial and banking experience working in a variety of capacities. He has studied extensively through Europe, working closely with major financial institutions on risk management policies and international finance, and has also spent time in China studying Chinese Commercial Law.

Further to the appointment of Misquitta to the board, Robert Kipp and Matthew Driscoll will move to Non Executive Director positions, effective as of 1 January 2012, with continued responsibility over specific internal projects.

Killara has further enhanced its Indonesian executive team with the appointment of Ridwan Zachrie to the position of Chief Executive Officer of the Company?s wholly owned Indonesian subsidiary, PT Killara Resources. Ridwan Zachrie holds a Bachelor of Law, Master of Law and Master of Science in Economics from the London School of Economics and Political Science (LSE), has had roles with a range of banks and financial institutions within Indonesia and was in the Indonesian Ministry of Foreign Affairs for 10 years (postings in the United Kingdom and New Zealand). Ridwan Zachrie was previously the Managing Director of Recapital Advisors, one of the leading Investment Banking groups in the region. He is currently a Chief Advisor to the Indonesian Commission for the Supervision of Business Competition, Chairman of the Indonesian Association of Risk Management Practitioners, Member of the American Chamber of Commerce, Commissioner of PT Asuransi Jiwa Recapital, Commissioner of PT Recapital Securities and Member of the Risk Committee for PT Berau Coal Energy Tbk.

As at 31 December 2011 the Company had a cash balance of $2.8 million and as at 28 January 2012 the Top 20 shareholders held approximately 56% of the capital of the Company. (end of excerpt)