Oxiana completes initial phase of exploration on Kalimantan copper-gold prospect

Vancouver-based junior exploration firm Kalimantan Gold Corporation Limited (KGC) reported on Monday that Australian mining firm Oxiana Limited has completed its obligation to spend US$2,500,000 on KGC?s copper-gold prospect in Kalimantan.

Under the option deal Oxiana must deliver comprehensive report on the results of this initial program to KGC within the next 30 days and within 30 days after that Oxiana must deliver Kalimantan notice whether it plans to exercise its option right.

The option deed covers Kalimantan Gold's 941 km2 Contract of Work in Central Kalimantan and initially committed Oxiana to spend US$2.5 million on data compilation and drilling 12 deep holes over a period of 12-18 months. Oxiana will have the option to elect to earn a 40% stake by the completion of a pre-feasibility study and 66.67% stake by the completion of a bankable feasibility study. By this time it will have spent an estimated US$37.5 million.

Oxiana geologists reviewed a decade of KGC exploration data relating to the KSK COW. This detailed geological, geochemical and geophysical review and assessment delineated three key areas of porphyry-related mineralization in the Beruang Kanan prospect area as well as quality drill targets at the Beruang Tengah, Baroi and Mansur prospects. Work programs completed to date encompass geological mapping, reprocessing of geophysical and geochemical data and drill testing. Reconnaissance exploration was conducted on other anomalous areas on the KSK COW to determine potential and delineate additional targets.

To date 16 holes for 5,980 metres of diamond drilling have been completed. While the geology and alteration observed confirm porphyry style mineralisation, significant volumes of drilling assays are still outstanding. (alex)