Kalimantan Gold Corporation Limited ("KLG” or the "Company") is
pleased to announce that it has today signed a non-binding letter
of intent (“LOI”) with Tigers Realm Copper Pty Ltd. (“Tigers”), a
private Australian corporation within the Tigers Realm Group of
companies, to purchase Tigers’ interest in the Beutong copper-gold
project, Sumatra, Indonesia (“Beutong”). The consideration for this
acquisition will be the issue of 171,407,156 KLG common shares
(“Consideration Shares”) and 14,675,000 KLG share purchase
warrants.
Highlights
- Agreement reached to acquire Tigers’
interest in the Beutong Copper-Gold Project, Sumatra,
Indonesia
- Beutong’s Mineral Resource on a 100%
basis comprises:
- Measured and Indicated Resources of
93Mt at 0.61% Cu, 0.13ppm Au, 1.97ppm Ag and 97ppm Mo (0.3% Cu
Reporting Cut) for contained metal of 1,241MIbs copper, 373koz
gold, 5,698koz silver and 20MIbs molybdenum (0.3% Cu Reporting
Cut); and
- Inferred Resources of 418Mt at 0.45%
Cu, 0.13ppm Au, 1.11ppm Ag and 129ppm Mo (0.3% Cu Reporting Cut)
for contained metal of 4,092MIbs copper, 1,746koz gold, 14,903koz
silver and 112MIbs molybdenum (0.3% Cu Reporting Cut).
- Beutong’s Mineral Resource on a
relevant attributable 40% interest basis comprises:
- Measured and Indicated Resources of
38Mt at 0.61% Cu, 0.13ppm Au, 1.97ppm Ag and 97ppm Mo (0.3% Cu
Reporting Cut) for contained metal of 496MIbs copper, 149koz gold,
2,279koz silver and 8MIbs molybdenum (0.3% Cu Reporting Cut);
and
- Inferred Resources of 167Mt at 0.45%
Cu, 0.13ppm Au, 1.11ppm Ag and 129ppm Mo (0.3% Cu Reporting Cut)
for contained metal of 1,637MIbs copper, 698koz gold, 5,961koz
silver and 45MIbs molybdenum (0.3% Cu Reporting Cut).
- Complementary asset combination.
Small-medium scale, near surface copper opportunity at KLG’s
Beruang Kanan with potential to be the starter project, a large
copper-gold growth option at Beutong, and a highly prospective
copper and gold exploration portfolio
- Highly experienced resource industry
CEO Tony Manini to join KLG as Deputy Chairman and CEO
- Extensive project evaluation, mine
development and financing capability and experience available to
KLG team
- Establishes a strong copper and gold
portfolio close to key growth markets in the Asian region
- Diversifies shareholder base and
expands funding options for KLG
- Capital raising of at least US$3
million to fund ongoing drilling and studies. Consistent news flow
anticipated
Faldi Ismail, the current Deputy Chairman and CEO of KLG stated,
“The acquisition of Beutong, combined with the Company’s own KSK
copper Mineral Resource and its Jelai gold prospect creates a
quality portfolio of pre-development copper and gold assets all
located within Indonesia. All three projects have significant
growth potential and their combination will create a platform upon
which to continue to build a significant regional Asian focused
copper-gold business. We are looking forward to working with Tony
in our efforts to raise the necessary funding to progress the
Company’s projects. It is expected that the combination of projects
and a team with a strong track record in developing projects in
Asia / Pacific will be well supported by investors”.
LOI Overview
The principal terms of the LOI provide that during a 20 day due
diligence period (“Due Diligence Period“) the parties will
negotiate a definitive agreement pursuant to which KLG will
purchase the Optionholder (defined in next section) a wholly owned
subsidiary of Tigers which holds Tigers’ interest in Beutong. The
consideration for this acquisition will be the issue of 171,407,156
KLG common shares (“Consideration Shares”) and 14,675,000 KLG share
purchase warrants, such that the weighted average exercise price of
the warrants is the same as the current weighted average exercise
price per KLG option being, C$0.09 (“Consideration Warrants”). On
completion of this acquisition KLG will issue the Consideration
Shares and Consideration Warrants to Tigers which will procure the
distribution of the Consideration Shares to the shareholders in the
ultimate parent company of Tigers being Tigers Realm Metals Pty Ltd
(“TRM Parent”) on a pro-rata basis and the Consideration Warrants
to TRM Parent’s option holders on a pro-rata basis.
Completion of the transaction will be subject to satisfaction of
a number of conditions, including, but not limited to receipt of
applicable regulatory approvals and KLG completing a concurrent
equity placement for gross proceeds of not less than US$3 million
at a price to be determined in the context of the market and as
agreed by the parties (“Capital Raising”). The Capital Raising is
subject to compliance with applicable securities laws and to
receipt of regulatory approval. The Company reserves the right to
increase the size of the Capital Raising.
It is intended that the proceeds of the Capital Raising will be
used to fund the Company’s next phase of infill and expansion
drilling and metallurgical studies at KLG’s existing Beruang Kanan
prospect within the Company’s KSK Contract of Work in Kalimantan,
Indonesia and on finalizing conversion of the Beutong Izin Usaha
Pertambangan (“IUP”) from an exploration IUP to an exploitation
IUP, as well as for general working capital purposes.
TRM Parent will lend KLG the funds required to fund KLG’s 50%
share of due diligence and transaction related costs and expenses
on the basis of an interest free loan only repayable from the
proceeds of the Capital Raising (“Due Diligence Loan”).
Separate to the Due Diligence Loan, TRM Parent will also provide
KLG with a US$250,000 interest free loan (“TRM Parent Loan”) upon
the completion of various conditions precedent by the end of the
Due Diligence Period. The TRM Parent Loan will be used to fund the
ongoing operating expenses of KLG and its subsidiaries in order to
sustain operations at the same level as existed during the Due
Diligence Period. The TRM Parent Loan will be repayable in cash
from the proceeds of the Capital Raising, and, subject to
regulatory approval, in KLG shares if the Capital Raising is not
completed.
On closing the acquisition, current TRM Parent director Tony
Manini will be appointed as the Deputy Chairman and Chief Executive
Officer of KLG in place of Faldi Ismail who will remain as a
director of KLG. Current director of KLG Stephen Hughes will become
the VP Exploration and Mansur Geiger will become VP Indonesia for
KLG. Mr Manini’s remuneration level and conditions will be
determined according to industry standards and market
conditions.
Tony Manini has over 28 years industry experience including 14
years with Rio Tinto and 9 years at Oxiana/OZ Minerals where he was
a founding member and senior executive. Tony is a founding member
of the Tigers Realm Group, a co-founder of EMR Capital and
executive chairman of Tigers Realm Coal. He has a significant
exploration discovery record and a long and successful operating
background in Asia. The Tigers Realm Group is widely known and
strongly supported in mining and metals markets globally and has
raised more than A$150 million for exploration and development
funding in the past five years.
Beutong Overview
The Beutong Project is located within the Beutong IUP located in
Aceh in Indonesia, some 60 kilometres inland from the coastal city
of Meulaboh on the island of Sumatra.
The Beutong IUP is held by PT Emas Mineral Murni (“PT EMM”), a
company registered in Indonesia. PT EMM is owned 80% by Beutong
Resources Pte Ltd. (“BR”), a company registered in Singapore.
Tigers wholly owned subsidiary, Tigers Copper Singapore No. 1 Pte
Ltd (“Optionholder’) owns 50% of the shares of BR (for an effective
40% interest in the Beutong IUP). Pursuant to an option joint
venture agreement the Optionholder can increase its shareholding in
BR to 100% by completing expenditure and development milestones so
that it can ultimately hold an effective 80% interest in the
Beutong IUP.
Asset Highlights
- Large scale copper-gold-molybdenum
resource with a high grade core and potential for significant
additional upside
- The Beutong IUP covers two porphyry
copper-gold-molybdenum prospects - West and East Porphyries and the
Beutong Skarn (copper-gold)
- Excellent infrastructure exists with
major road, grid power and a port located nearby
Figure 1: Location of the Beutong Project, Indonesia Beutong
Mineral ResourcesTo view Figure 1, click onto the following
link:
http://www.fscwire.com/sites/default/files/NR/792/4898_kalimantannov262014002.gif
Beutong contains copper-gold porphyry and skarn mineralisation
with a Mineral Resource prepared by Duncan Hackman, an independent
Qualified Person within the meaning of NI 43-101 for the purposes
of Mineral Resource estimates, effective November 2014. The Mineral
Resource estimate (covering the 1,500m strike extent and the 200 to
500m width of the porphyry system and 600m by 50m skarn body to the
north of the porphyry) is presented in the tables below on a 100%
basis and on a 40% basis.
Mineral Resources for the Beutong mineralization have been
estimated in conformity with generally accepted CIM “Estimation of
Mineral Resource and Mineral Reserves Best Practices” Guidelines.
In the opinion of Duncan Hackman, the block model Mineral Resource
estimate and resource classification reported herein are a
reasonable representation of the copper Mineral Resources found in
the defined area of the Beutong mineralization. Mineral Resources
are not Mineral Reserves and do not have demonstrated economic
viability. There is no certainty that all or any part of the
Mineral Resource will be converted into Mineral Reserve.
Computational discrepancies in the table and the body of the
Release are the result of rounding.
Beutong 2014 Resource Estimate (100% Basis) - Report at
0.3% Cu Lower Cut Classification (NI 43-101)
Mineralisation Tonnes (Mt) Grade
Metal Cu (%) Au
(ppm) Ag (ppm) Mo (ppm) Cu
(Mlb) Au (kOz) Ag (kOz)
Mo (Mlb) Measured East Porphyry 34 0.66 0.13 1.74 90 494 137
1,901 7 Indicated East Porphyry 52 0.56 0.1 1.53 110 646 176 2,563
13 Skarn 7 0.7 0.28 5.84 8 101 59 1,234 0 Measured Total 34
0.66 0.13 1.74 90 494 137 1,901 7 Indicated Total 59 0.58 0.12 2.01
99 747 236 3,797 13
Total 93 0.61
0.13 1.97 97 1,241 373
5,698 20 Inferred East Porphyry 80 0.52 0.1 2.24 139
904 251 5,753 24 West Porphyry 326 0.43 0.14 0.77 128 3,064 1,443
8,101 86 Outer East Porphyry 6 0.36 0.06 1.1 153 46 12 209 2 Outer
West Porphyry 1 0.37 0.11 1.06 45 11 5 49 0 Skarn 5 0.64
0.24 5.22 10 66 36 791 0 Inferred Total 418 0.45 0.13 1.11 129
4,092 1,746 14,903 112
Beutong
2014 Resource Estimate (net attributable 40% basis) - Report at
0.3% Cu Lower Cut Classification (NI 43-101)
Mineralisation Tonnes (Mt) Grade Metal
Cu (%) Au (ppm) Ag (ppm)
Mo (ppm) Cu (Mlb) Au (kOz) Ag (kOz)
Mo (Mlb) Measured East Porphyry 14 0.66 0.13 1.74 90 198 55
760 3 Indicated East Porphyry 21 0.56 0.1 1.53 110 258 70 1,025 5
Skarn 3 0.7 0.28 5.84 8 41 24 494 0 Measured Total 14 0.66
0.13 1.74 90 198 55 760 3 Indicated Total 24 0.58 0.12 2.01 99 299
94 1,519 5
Total 38 0.61 0.13
1.97 97 496 149 2,279 8
Inferred East Porphyry 32 0.52 0.1 2.24 139 362 100 2,301 10 West
Porphyry 130 0.43 0.14 0.77 128 1,226 577 3,240 34 Outer East
Porphyry 2 0.36 0.06 1.1 153 19 5 84 1 Outer West Porphyry 0 0.37
0.11 1.06 45 4 2 20 0 Skarn 2 0.64 0.24 5.22 10 26 14 316 0
Inferred Total 167 0.45 0.13 1.11 129 1,637 698 5,961 45
Qualified Person
Duncan Hackman (B. App. Sc., MSc., MAIG) of Hackman &
Associates Pty Ltd (Australia) is the independent Qualified Person
within the meaning of NI 43-101 for the purposes of Mineral
Resource estimates contained within this press release. Data
disclosed in this press release have been reviewed and verified by
TRM’s qualified person, Stephen Hughes, P. Geo, an Employee of
Tigers Realm Group, director of KLG and a Qualified Person within
the meaning of NI 43-101.
About Kalimantan Gold Corporation Limited
Kalimantan Gold Corporation Limited is a junior exploration
company listed on both the TSX Venture Exchange in Canada and on
the AIM market in London. The Company has two exploration projects
in Kalimantan, Indonesia: the 100% owned Jelai epithermal gold
project in East Kalimantan and the 100% owned KSK Contract of Work
in Central Kalimantan. A NI 43-101 Mineral Resource of 47 million
tonnes averaging 0.60% Cu for 622 million pounds of copper (0.2% Cu
cut-off) has been estimated at the Main Zone of the Beruang Kanan
("BKM") prospect within the KSK Contract of work and the tenement
shows potential for multiple porphyry copper and gold prospects.
For further information please visit www.kalimantan.com
ON BEHALF OF THE BOARD OF DIRECTORS
For further information please contact:
Faldi IsmailDeputy Chairman and CEO, Kalimantan
GoldMobile: +61 (0) 423 206 324Email:
faldi.ismail@kalimantan.comGerald CheyneDirector Corporate
DevelopmentTelephone: +44 (0) 2077311806Mobile: +44 (0)
7717473168Email: gerald.cheyne@kalimantan.comVSA Capital
LimitedAndrew Raca / Justin McKeeganTelephone: +44 20 3005 5004
/ +44 20 3005 5009Email: araca@vsacapital.comKalimantan Gold's
Nominated AdviserRFC Ambrian LimitedAndrew Thomson / Trinity
McIntyreTelephone: +61 8 9480 2500Email:
andrew.thomson@rfcambrian.com / trinity.mcintyre@rfcambrian.com
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
This news release contains forward-looking statements that are
based on the Company’s current expectations and estimates.
Forward-looking statements are frequently characterized by words
such as “plan”, “expect”, “project”, “intend”, “believe”,
“anticipate”, “estimate”, “suggest”, “indicate” and other similar
words or statements that certain events or conditions “may” or
“will” occur. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors that could cause
actual events or results to differ materially from estimated or
anticipated events or results implied or expressed in such
forward-looking statements. Such factors include, among others: the
actual results of current exploration activities; conclusions of
economic evaluations; changes in project parameters as plans
continue to be refined; possible variations in ore grade or
recovery rates; accidents, labour disputes and other risks of the
mining industry; delays in obtaining governmental approvals or
financing; and fluctuations in metal prices. There may be other
factors that cause actions, events or results not to be as
anticipated, estimated or intended. Any forward-looking statement
speaks only as of the date on which it is made and, except as may
be required by applicable securities laws, the Company disclaims
any intent or obligation to update any forward-looking statement,
whether as a result of new information, future events or results or
otherwise. Forward-looking statements are not guarantees of future
performance and accordingly undue reliance should not be put on
such statements due to the inherent uncertainty therein.
Faldi IsmailDeputy Chairman and CEO, Kalimantan
GoldMobile: +61 (0) 423 206 324Email:
faldi.ismail@kalimantan.comorGerald CheyneDirector Corporate
DevelopmentTelephone: +44 (0) 2077311806Mobile: +44 (0)
7717473168Email: gerald.cheyne@kalimantan.comorVSA Capital
LimitedAndrew Raca / Justin McKeeganTelephone: +44 20 3005 5004
/ +44 20 3005 5009Email: araca@vsacapital.comorKalimantan Gold's
Nominated AdviserRFC Ambrian LimitedAndrew Thomson / Trinity
McIntyreTelephone: +61 8 9480 2500Email:
andrew.thomson@rfcambrian.com / trinity.mcintyre@rfcambrian.com