Krakatoa ups C. Sulawesi gold exploration footprint by 203%

By Romel S. Gurky

ASX-listed firm Krakatoa Resources Limited announced on Wednesday that the company, via its wholly owned Indonesian subsidiary PT. Bumi Pratama, has signed a Memorandum of Understanding (MOU) for the acquisition of 80 percent of the shares in PT. Rio Jaya Persada.

Rio Jaya holds two granted and highly prospective gold exploration licenses, namely:
? IUP 188.45/0517/DESDM/2013 covering an area of 9,000 ha and with validity through June 30, 2016; and
? IUP 188.45/0581/DESDM/2013 covering an area of 5,627 ha and with validity through June 30, 2016.

The two exploration licenses are strategically located in close proximity to the company?s existing Donggala Project in Central Sulawesi, held by the company?s 80% owned subsidiary PT. Dana Ramakala. The acquisition of the two exploration licenses increases the Krakatoa foot print in Central Sulawesi by 203% to 21,827ha, one of Indonesia?s most sought after and emerging gold exploration provinces.

Commenting on the northern license (adjacent to the existing Donggala IUP), Brian Varndell, non-executive technical director stated ?This acquisition consolidates the ground position over all the prospective structural targets within this northern part of the peninsular. Orientation geochemical soil sampling is now possible over all of these main structures that have been noted to shed fresh alluvial ?wire gold? into some of the river systems. The southern IUP will be the subject of ongoing routine initial investigation.?

Under the MOU, Krakatoa has the exclusive right, for a period of 18 months, to acquire an 80% interest in PT. Rio Jaya Persada through:
? Payment of Rp600,000,000 (~AUD$55,996) within 15 working days after the MOU is signed (paid);
? Subject to successful due diligence and early stage exploration, payment of Rp2,400,000,000 (~AUD$223,985)

Should Krakatoa elect not to proceed with acquisition, the payment of Rp600,000,000 is refundable.

Editing by Johannes Simbolon