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Kalimantan Gold: Indonesian Drilling Progressing Well

Friday, Aug 03 2012 by
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Kalimantan Gold Indonesian Drilling Progressing Well

  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.” [1]

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?

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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.

 


[1] Kalimantan Gold has the value kickers to shine, 3rd Jul 2012, 4:34 pm by Ian Lyall, Proactive Investors, http://www.proactiveinvestors.co.uk/companies/news/45872/kalimantan-gold-has-the-value-kickers-to-shine-45872.html


Disclaimer:  

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.


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Kalimantan Gold Corporation Limited is a Canada-based exploration-stage company. The Company is engaged in the business of acquiring and exploring mineral properties in Kalimantan, Indonesia. The Company has two principal areas of interest: the KSK Contract of Work (the KSK CoW) in Central Kalimantan with multiple porphyry copper and gold prospects and the Jelai epithermal gold prospect in East Kalimantan. The holder of the KSK CoW is PT Kalimantan Surya Kencana (KSK). The holder of the Jelai Izin Usaha Pertambangan (IUP) is PT Jelai Cahaya Minerals (JCM). more »

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VSA Capital Group Plc is a United kingdom-based company holding company. VSA Capital Group plc is an international investment banking and institutional broking Company headquartered in London. Via its subsidiary, VSA Capital Limited, the Company provides corporate finance, broking, research, sales and capital raising capabilities to companies in the natural resources sectors; Oil & Gas, Mining, Agriculture and Timber. The Company is the holding company for VSA Capital Limited and Third Quad Securities Limited. The Company and its subsidiaries principal activity is that of consultants to the natural resources sector, providing corporate finance advice, arranging equity finance and undertaking investor relations activities. more »

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14 Comments on this Article show/hide all

R Warwick 31st Jul '12 1 of 14
3

Great update. Bullish about the next few months. Good previous intersections derisk the Jelai Gold project.

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R Warwick 25th Aug '12 2 of 14
1

According the above article and the update from Gerald Cheyne I guess we can expect results next week.

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Elias Jones 8th Sep '12 3 of 14
1

Dear R Warwick,
Thanks for the feedback. I would agree that the project is de-risked compared to a lot of exploration activity around the world. 36,000 meters of drilling had taken place before this copper and gold campaign and were the reason following due diligence as to why Tigers Realm and Freeport wanted to get involved. The deep drills on the KSK are obviously the big ones, but with the results of around 60 holes to come it’s going to be interesting all round, with the shallow providing a bankable insurance.
Best regards,
Elias

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Elias Jones 17th Sep '12 4 of 14
1

First set of results out for the Jelai project

http://www.investegate.co.uk/Article.aspx?id=20120917070000Z3817

New Gold-Silver Intersections at the Jelai Project

Highlights

New holes along the Mewet Vein confirm down-dip continuity of moderate grade gold-silver mineralization to depths greater than 120m below surface

Intersections include:

MEW6500-01 5.5m @ 2.73g/t Au & 6.3g/t Ag

Including 3.1m @ 4.02g/t Au & 10.2g/t Ag
Including 0.6m @ 12.8g/t Au & 40.1g/t Ag

MEW6600-01 4.7m @ 1.72g/t Au & 18.4g/t Ag
MEW6600-02 2.9m @ 5.16g/t Au & 12.3g/t Ag

Including 1.5m @ 8.43g/t Au & 21.7g/t Ag

New Gold-Silver Intersections at the Jelai Project

Kalimantan Gold Corporation

 

Kalimantan Gold Corporation (“KLG”) is pleased to announce new gold-silver results returned from recent drilling by Tigers Realm Metals (“TRM”) as part of their first stage exploration activities on the Jelai Epithermal Project. The northwest quadrant of the Jelai IUP license hosts at least three discrete, sub-parallel, north-south trending epithermal structures, the Mewet, Sembawang and Nyabi vein systems.

A program of 11 holes (all drilled towards the East), for 3,129.4m of drilling, has been completed. Drill holes targeted high grade shoots at deeper levels of the epithermal gold - silver vein systems at north Mewet, north Sembawang, south Sembawang and along the untested central and southern extensions of the Nyabi vein system.

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Elias Jones 6th Oct '12 5 of 14
1

Kalimantan Gold has now regained control of the Jelai Gold epithermal gold project located in East Kalimantan, Indonesia after Tigers a private enterprise decided to pursue other resource options. The Jelai project area has a lot of exploration left to be carried out and KLG are currently analysing the drill results and discussing the project with a number of other interested parties and will update us once done. Commenting on the Jeali update Faldi Ismail stated:



“While we enjoyed working with the TRM team I understand TRM's priorities and wish to withdraw from its Option Deed. However, now that the Jelai prospect reverts to being wholly owned by KLG, we will be reviewing the best way of taking the Jelai prospect forward once conclusions have been reached following the review of the drill results. We are currently in discussions with a number of parties that have expressed interest in the project”.


http://www.investegate.co.uk/Article.aspx?id=20121002070000Z6183

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Elias Jones 6th Oct '12 6 of 14
2

I touched base with Faldi Ismail the CEO yesterday and he is hoping to get the first set of results and a thorough KSK update in a few weeks time at the end of October. The KSK Copper project is operated and fully funded by mining major Freeport and is currently very active and in my personal opinion it’s all very much still to play for and I await the first set of deep results with great interest.

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Elias Jones 14th Oct '12 7 of 14
5

I have come across an excellent report on mining in Indonesia which is definitely worth a read if anyone is interested.

With the mining sector already contributing close to 7% of the Indonesia’s GDP (around 2% directly through KLG JV partner Freeport), the Government has designated the mining sector as one of its cornerstones in the ambitious effort of making Indonesia one of the 10 largest economies in the world!

There is long way to go before attracting serious new mining investment in Indonesia and this report helps set the scene and provides a very good bases research including the 2009 Mining Law. The 35 page Engineering and Mining Journal report also contains on page 13 a contribution from the Kalimantan Gold Vice President of Exploration Mansur Geiger:


Over the past 15 years, Mansur Geiger and his company Kalimantan Gold have been working to develop their flagship asset, the KSK copper project. “Initially, the land concession was 124,000 hectares; however, due to the fact that it a sixth-generation CoW signed in 1997, the property was reduced to 60,000 hectares. Since then, Kalimantan Gold has identified numerous mineral occurrences and has drilled approximately 40,000 m of primarily shallow drill holes. Having spent $18 million on exploration, the company has identified five copper mineral prospects throughout the concession,” said Geiger.

As an indication of the concession’s rich mineral potential, a subsidiary of Freeport-McMoRan entered into a joint venture with Kalimantan Gold at KSK. Expressing his satisfaction at working with the multinational company, Geiger said: “Kalimantan Gold could not have found a better partner for this project than Freeport. There are not many companies that possess the experience and knowledge of Freeport when it comes to mining. Initially, I had talked to Freeport 20 years ago and they were not interested in anything outside of Grasberg. However, Freeport’s mentality has changed over the years; they are now interested in exploring for concessions that they believe possess substantial upside potential; they see this with KSK.”


Engineering and Mining Journal, Global Business Report
http://www.gbreports.com/admin/reports/Indonesia_Mining2012.pdf

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Stompy Jones 4th Nov '12 8 of 14
1

Hi Elias. Any plans for a further interview with the team at KLG to follow-up the initial results from KSK?

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Elias Jones 4th Nov '12 9 of 14
3

Hi Stompy, no plans for another Q&A at this moment, not much more they could say at this stage it’s about the RNS they release with results, which is what matters now really. KLG management are usually really good at responding to investor Qs if you have any direct ones you would like a response to.  Unfortunately Tigers walked away from the Jelai project and the first set of KsK Copper results were also on the disappointing side. The saving grace is that the subsidiary of Freeport is going to continue sole funding the project and it looks like there is plenty still going on.  Based on the first set of results in my opinion they would not be strong enough to suggest production stage. But in exploration who knows what the next set will bring, but with recent results the risk has increased considerably.

Having completed sole funding exploration to $7,000,000, SK LLC has notified KLG that SK LLC has elected to continue to sole fund all remaining exploration and feasibility study expenditure under the Earn-In Agreement, subject to SK LLC’s right to withdraw from the Joint Venture in accordance with the terms of the Agreement. “We have reached an historic milestone in the life of this project now that SK LLC has exercised its option to continue sole funding during the Feasibility Study period," said Faldi Ismail, CEO of KLG.

 

KSK Copper Project Achieves Significant Milestone
Highlights:
• Surya Kencana LLC elects to continue to sole fund exploration and feasibility
• 5,418m of drilling currently completed with an additional 2,373m in progress. Results include:
- BK031-01: 28.9m @ 0.61% Cu, 0.06g/t Au, 1.27 g/t Ag from 16m
- BK032-01: 60.6m @ 0.74% Cu, 0.02g/t Au, 0.67g/t Ag from 14.8m
• 675 Rock Chip and 730 soil samples collected
Sole Funding Election by SK LLC
http://www.investegate.co.uk/Article.aspx?id=20121029070000Z9879

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Elias Jones 28th May '13 10 of 14
2

Touched base with Gerald and from what I can gather KLG are very busy drilling and all is currently progressing as planned. Recently KLG were granted an extension to the forestry permit, meaning Freeport, through its subsidiary can drill all the priority targets including the Baroi , Mansur and Tambung Hoi, KLG are hoping to issue a further drilling update shortly.

Holders will also be expecting a preliminary resource estimate for Beruang Kanan which will include data from some broad intervals of significant copper mineralization at the Beruang Kanan Prospect, including, BK034-01: 60.1m @ 1.03% Cu, from 171.6m and BK038-01: 67.5m @ 0.63% Cu, from 66.8m.

Freeport through a subsidiary completed the initial period of the KSK Agreement by sole funding exploration of $7,000,000 by early October 2012. They then chose to sole fund all remaining exploration and feasibility study expenditure under the KSK Agreement and as a results a substantial drilling and exploration project at the KSK CoW of up to $16,200,000 for 2013 is happening.

The May 2013 newsletter PDF link below gives a description of all the activities undertaken in the 2013 work Kalimantan Gold KSK work program, including detail on core logging, sample preparation and assays, where the value of the metal is determined in the Jakarta laboratory.

Some reference sources:

May Kalimantan Gold Newsletter
http://www.kalimantan.com/i/pdf/KLG_NL3R9.pdf

KSK Copper Project - High Grade Drilling Results and Major 2013 Drill Program Underway
http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail.html?announcementId=11493091

Kalimantan Gold Fiscal 2012 Results
http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail.html?announcementId=11564791

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Stompy Jones 3rd Jun '13 11 of 14

Hi Elias. What do you think about this?

http://www.shareprophets.com/index.php?s=search&q=klg

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Elias Jones 10th Jun '13 12 of 14

Kalimantan have this morning announced their latest set of results

KSK Copper Project Update

Highlights:

Definition drilling continues to intersect significant copper mineralization at the Beruang Kanan Prospect, including:
BK044-01 18.7 meters 1.22% Cu, from surface
BK044-02 21.0 meters @ 1.57% Cu, from 4 meters
BK045-01 20.4 meters @ 2.65% Cu, from 1.4 meters
BK046-01 85.1 meters @ 0.54% Cu, from 6 meters
Including 31.8 meters @ 0.74% Cu, from 47.5 meters
BK048-01 15 meters @ 1.21% Cu, from 4.5 meters
BK050-01 16.0 meters @1.03% Cu, from 0.6 meters

http://www.investegate.co.uk/kalimantan/bus/ksk-copper-project-update/20130610070000Z7542/


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Stompy Jones 12th Jan 13 of 14

Hi. Are you still in?

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Stompy Jones 15th Jan 14 of 14

Is there anyone at home?

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About Elias Jones

Elias Jones

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I invest in sectors that are of interest to me and tend to look for the penny share AIM companies that have the transformational potential, which also tend to be by nature high risk investments, some come off some fail. One key aspect of investing for me is the approachability, quality and integrity of management, once I fear those have gone or if the fundamental aspects take a nose dive, that’s usually it for me regardless of asset/future potential. I only invest in a clutch of firms and usually keep an eye on a few other potential firms which I may add at some stage. I don’t mind waiting around if there is potential, I still keep my Marconi certificate to remind me of what can happen, and to the day kick myself for not snapping up Next at 18p many moons ago when I was so close to buying! more »



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