Oxiana pulls out form Kalimantan Gold's copper, gold prospect

Vancouver-based exploration firm Kalimantan Gold Corporation Limited announced on Wednesday that ASX-listed mining firm Oxiana Ltd had pulled out from Central Kalimantan copper, gold project following a review of work conducted in 2007 at the company's KSK Contract of Work.

Under the deal signed in 2006, Oxiana had right to acquire stake at the project after spending US$2.5 million to explore the project.

"Oxiana considers that its 2007 exploration program during which it spent US$2.5 million drilling 16 holes over 6,000 metres, adequately tested the four highest ranked copper prospects currently known within the KSK COW and failed to indicate the presence of a shallow style economic porphyry deposit," Kalimantan Gold said.

Commenting on Oxiana's decision, Kalimantan Gold's CEO, Rahman Connelly said, "Whilst its disappointing to see the caliber of an Oxiana walk, our own geologists retain confidence in the copper potential of the KSK COW and for this reason the Board has commissioned an independent report from Dr. Peter Pollard, a leading expert, who has consulted to most of the world's major copper projects. His report, to be completed by the end of January, will form the basis of a data package to be provided to two major mining companies that have already confirmed their interest to review data should Oxiana not proceed."

The company also said it would step-up the drilling program at Jelai epithermal gold prospect in East Kalimantan, where it planned to have 3 drill rigs working 24/7 by early 2008.

The company also expected to be able to complete acquisition of its first coal concession in East Kalimantan in the first quarter of 2008.(alex)