jv with kalimantan Oxiana joins forces with Kalimantan in the...

jv with kalimantan Oxiana joins forces with Kalimantan in the hunt for Indonesian copper
TSX Venture Exchange
and AIM
Symbol: "KLG"

VANCOUVER, Dec. 18 /CNW/ - Kalimantan Gold Corporation Limited (TSX V and
AIM: KLG) is pleased to announce that it has finalized its option deed with
Australian copper and gold mining company, Oxiana Ltd. Previously announced as
a Heads of Agreement in October, the option deed grants Oxiana an option to
earn up to a total interest of 66.67% in the KSK Contract of Work. The
agreement is designed to advance exploration at Kalimantan's copper gold
prospects in Central Kalimantan, Indonesia which both parties agree has the
potential to produce a world class deposit.
"This is an excellent deal for ourselves and for Oxiana," commented
Kalimantan Gold ("KGC") CEO Rahman Connelly. "At a time when global demand for
copper shows no sign of abating, it's an opportunity for us to pool our
resources and confirm what could turn out to be one of the world's most
significant new deposits."
The option covers three key prospects, Baroi, Beruang and Mansur, which
form part of KGC's 941km2 holding in Central Kalimantan. Under the agreement,
Oxiana will initially spend US$2.5 million to include the drilling of 12 deep
holes over a period of 12-18 months. If it elects to proceed, Oxiana will then
have the option of earning a 40% stake by the completion of a pre-feasibility
study and a 66.67% stake by the completion of a bankable feasibility study, by
which time it will have spent an estimated US$37.5 million.
Should any of the projects proceed to mine development, the Deed allows
for Oxiana to provide significant funding assistance for KGC to fund its one
third share of mine development finance. If KGC cannot raise sufficient funds
at the development stage, Oxiana will pay its share of the equity as a loan
taken out at agreed commercial terms. "This could enable KGC to achieve its
objective of owning a one third share in a world class copper mine," said
Connelly.
KGC began working on the project in 1996, since when it has spent around
US$12 million, drilling 70 holes, totalling 12,309 metres in the process. Of
critical importance has been the company's extensive community programmes
which are aimed at strengthening the quality of governance and well-being in
the areas close to where exploration is taking place. "It's about capacity
building," added Connelly. "We work with local communities to help them
improve their living standards but also to improve their management skills
when playing a part in projects like ours'."

Kalimantan Gold is a junior exploration company listed on both the TSX
Venture Exchange in Canada and on AIM. The company is focused on copper and
gold in Indonesia and has exploration rights in two areas: the Jelai-Mewet
epithermal gold prospects in East Kalimantan and the copper-gold porphyry
prospects in Central Kalimantan.

Oxiana is an international mining and exploration company listed on the
Australian Stock Exchange. With a market capitalization of around A$4 billion,
Oxiana owns and operates the Sepon gold and copper mines in Laos, the Golden
Grove base and precious metals operation in Western Australia and is
developing the Prominent Hill copper-gold mine in South Australia. The company
is also exploring in Australia, Asia and the Pacific.

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adequacy or the accuracy of this release.