Kalimantan Gold (LON:KLG) the junior exploration company primarily focused on Indonesian gold and copper is currently involved with the largest drilling and exploration programme in its history alongside two experienced JV partners in, Tigers Realm Metals on the Jelai gold project in East Kalimantan and a wholly owned subsidiary of Freeport-McMoRan Exploration Corporation on its KSK CoW copper project located in Central Kalimantan.
The Jelai Gold project, which is 100% owned by Kalimantan Gold consists of 12 prospects, and has been the subject of considerable work, especially in tracking the results of the previous owner Indochina Goldfields. One of the prospects, the Mewet, is at an advanced exploration stage and has the potential to yield a major epithermal gold deposit, which the company compares in scale to the Vera Nancy mine in Australia, which has produced 2.3 million ounces to date. Tigers Realm Minerals, who in return for meeting certain project expenditure obligations and completing a bankable feasibility study, may earn up to 70% interest in Kalimantan Gold’s Jelai Gold Project.
The KSK CoW comprises of 38 mineral prospects, several of which are touted as potentially world class copper-gold porphyry deposits. Prior to the joint venture agreement with a wholly owned subsidiary of Freeport-McMoRan, Kalimantan Gold had spent a total of $16.4 million on 36,000 metres of drilling with the results analysed as a part of the JV due diligence process. The current programme is testing the deeper section and aiming to define a near-surface deposit which will, with various funding and percentage terms ratchet allow Freeport to earn up to 75% ownership by sole funding the operations up to the completion of a feasibility study. Faldi Ismail, the Kalimantan Gold CEO in a recent interview with Proactive Investors estimated that KSK the CoW will have a defined near-surface resource in 12 to 18 months’ time, going on to add “Things can change along the way. If we get some very good results on these deep holes, things will change very quickly. If we get 100 million tonnes at 0.8 or 0.9 per cent copper that’s worth quite a bit on the balance sheet.” 
Back in May, Gerald Cheyne, the Kalimantan Gold Director of Corporate Development participated in the Kalimantan Gold Director Interview Q2 FY12 and has now taken time out to provide an update on the appointment of VSA Capital Limited as Kalimantan Gold’s corporate broker and a progress update on the two KLG active drilling projects in Indonesia.
Q1. Kalimantan have recently appointed VSA Capital Limited as its corporate broker, what were the reasons behind this change and can KLG expect to attract new investors as a result?
We decided that KLG had reached a stage where we would benefit from a broker with in-house mining skills and mining analysts: VSA Capital Limited met these needs being a specialist mining and oil and gas broker and offering bespoke services to its clients. Shortly after being appointed, VSA organised a week’s roadshow in late June taking us around their clients; in addition to updating existing shareholders and investors we met and presented to a range of new investors, mostly private client brokers. We plan to follow up this roadshow with VSA organising a further series the next being late autumn or early 2013. VSA will also update their initial analyst’s cover note with a more detailed appraisal in due course.
Q2. How are the two drilling campaigns progressing in Indonesia? How many holes have been drilled to date and when can shareholders expect some results?
The drilling in Indonesia is progressing well. At KSK, 2 deep holes are now at ~1,000m with a targeted depth of between 1,200m to 1,500m. Delineation drilling at Beruang Kanan began early July with 29 holes planned, each to a depth of about 200m to 300m. We anticipate the first drill results will be available September/October but this date may move depending upon decisions taken our JV partner.
Drilling at Jelai is progressing well with the aim of drilling 27 holes by May 2013. Holes are being drilled to a depth of about 200m to 300m with 8 holes now complete. We anticipate our JV partner Tigers releasing drill information in batches of 5 holes, with the first announcement being made in August.
Gerald, thanks for the update, and I look forward to the results in due course.
Ticker code: KLG, Shares in issue: 171.41m, Current SP: 6.25p, Market Cap: £10.71m, 52 Wk Low: 3.25p, 52 Wk High: 7.20p
The interviewer holds shares in Kalimantan Gold.
This content has been created for information purposes only, and is NOT, in any way, a recommendation to invest. This communication is a snapshot of a certain aspect of a discussed business at a moment in time, and is merely a basic starting point for research. The article/thread has been created with honesty and integrity in mind and is based on publically available information sourced in relation to the title, such as from, RNS announcements, published reports, management comments, analyst reports, media coverage etc. To this extent the author who has written the piece in good faith accepts no liability for the accuracy of the information and urges all readers to verify the content independently. Please note that the value of investments may fall or rise and you may not get back the amount originally invested, or in some cases your investment may be wiped off altogether. When investing, bear in mind that past performance is not a guide to future performance and that qualified independent financial advice should be sought before buying or selling shares. The Author of this article may hold shares in the companies discussed.