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.” [ref] 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 [/ref]
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.
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14 comments
Is there anyone at home?
Hi. Are you still in?
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/
Hi Elias. What do you think about this?
http://www.shareprophets.com/index.php?s=search&q=klg
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
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.
Hi Elias. Any plans for a further interview with the team at KLG to follow-up the initial results from KSK?
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:
Engineering and Mining Journal, Global Business Report
http://www.gbreports.com/admin/reports/Indonesia_Mining2012.pdf
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.
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:
http://www.investegate.co.uk/Article.aspx?id=20121002070000Z6183
First set of results out for the Jelai project
http://www.investegate.co.uk/Article.aspx?id=20120917070000Z3817
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
According the above article and the update from Gerald Cheyne I guess we can expect results next week.
Great update. Bullish about the next few months. Good previous intersections derisk the Jelai Gold project.