Oxiana preparing to drill Kalimantan Gold porphyry copper gold targets

Vancouver-based junior mineral explorer Kalimantan Gold Corporation Limited announced Monday that Australian mining firm Oxiana Limited has confirmed the potential for discovering significant new copper gold deposits in Indonesia as part of its recently signed option deed with Kalimantan Gold Corporation Limited.

In setting out its first work programme under the agreement Oxiana reports that the Kalimantan Gold copper gold project in Central Kalimantan showed "significant scale and intensity of mineralisation" and that the work programme was now set up to test a number of targets in the most efficient and timely manner, Kalimantan Gold said.

Kalimantan Gold CEO Rahman Connelly said Oxiana is now setting up for an intensive period of research and drill testing on the project. "During the year they will be focusing on our three primary prospects, Beruang, Mansur and Baroi and initial results from the review programme already look extremely encouraging," he said.

The agreement covers Kalimantan Gold's 941 km(2) Contract of Work (KSK CoW) in Central Kalimantan and initially commits Oxiana to spending US$2.5 million on data compilation and drilling 12 deep holes over a period of 12-18 months. Oxiana will then have the option of earning 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.

The work programme involves taking each prospect in turn - initially Beruang, followed by Mansur and then Baroi - and carrying out a thorough review and reinterpretation of data in a full 3-D environment. The work will include extensive re-logging, re-mapping and re-processing of geophysical data in order to better define new drill targets.

Oxiana has advised that programme planning for Beruang will be completed by mid March with drill rig mobilization to follow shortly after. In addition to working on the three immediate target prospects, Oxiana will also review all the other significant prospects and anomalies identified on the KSK CoW, with drilling to follow if appropriate.(alex)