Jelai Mineralization Expanding for Kalimantan Gold

Jelai Mineralization Expanding for Kalimantan Gold

Wednesday, August 20th 2008

Kalimantan Gold Corporation Limited continues to achieve success in its drilling at the 100%-owned Jelai gold project in East Kalimantan, Indonesia where 56 holes, totaling 4,468 metres have been drilled over the past year up until July 10, 2008.

Latest results from the drilling include intercepts such as:

– Hole 38 reporting 15 metres @ 4.9 grammes of gold per tonne (“gpt”), including 5.4 metres @ 11.74 gpt. – Hole 26 encountered 5.6 gpt gold over an interval of 5.2 metres, including 17.33 gpt gold over 1.20 metres.

– Hole 27 encountered 2.15 gpt gold over an interval of 5.95 metres including 10.30 gpt gold over 0.65 metres in the Sembawang vein.

In all, 1,268 drill core samples have been analyzed. The location and the orientation of the mineralized structures continues to be outlined by the drilling and results to date show the mineralization contains significant gold intercepts. In some areas the veins are known to pinch and swell, which is typical of the veining in low sulfidation epithermal gold systems.

The Jelai mineralization is hosted in quartz veins and silicified breccias within generally north-south trending fault structures. Most of the Kalimantan Gold holes have intersected these mineralized structures at shallow levels in the near surface oxidized zone, following up on 26 drill holes completed by previous explorers.

Since April, drilling at Jelai has focused on the Lipan vein system where results include 1.3 metres @ 8.4 gpt (Hole 24) and 3.1 metres @ 5.8 gpt (Hole 1). The Lipan Vein is a complex structure with multiple parallel veins and the drilling will allow the structures and mineralized zones to be accurately correlated.

Kalimantan Gold’s technical adviser, Dr Peter Pollard, recently visited the property and concluded that the mineralized structures being intersected are most representative of the upper levels of a low sulphidation epithermal gold system and that deeper drilling is required to intersect the potentially higher grade sections of the system. “Dr Pollard has highlighted the similarity between Jelai veins and gold grades and those at North Queensland Metals Limited’s Pajingo gold mine in northeastern Australia which has produced around 2.3 million ounces to date.”

Commenting on the immediate programme going forward President and CEO Rahman Connelly states that, “Our two scout drill rigs will continue to define the near-surface expressions of the structures, whilst the two larger capacity drill rigs, presently on site, will focus on intersecting the gold bearing veins at depth.”

A number of mineralization phases have been identified in the drilling to date, with mineralization occurring as a series of shoots contained within essentially contiguous structures. The higher grade areas encountered are associated with colloform-crustiform banded quartz veins and vein breccias with banded sulfides. Adularia is noted in a number of core sections. Adularia can be an indicator of fluid boiling and precious metal deposition. The host rocks include a sequence of andesitic lava and fragmentals with late-stage dacite and rhyodacite intrusive. The alteration around the veins comprises intense argillic (clay-pyrite) alteration adjacent to the silicified veins enveloped by propylitic alteration. Kalimantan Gold geologists are using the various characteristics described above as vectors to define new potential gold shoots in other vein structures, untested by drilling to date.

Shallow and deep drilling is currently being systematically conducted on two of the vein systems (the Mewet Vein and the Central Sembawang Vein) with the goal of obtaining an independent estimate of resources by the final quarter of this year. Added Rahman Connelly: “Drilling will continue on the two vein systems to understand the greater size potential of the Jelai project.”

All data, as disclosed in this press release, has been verified by Brett Dennis Gunter, the Company’s Qualified Person for the Jelai Project. Mr. Gunter, who acts as a technical consultant to the Company, is a geologist with over 10 years experience in epithermal gold systems and is a member of the AusIMM.

Kalimantan Gold Corporation Limited is a junior exploration company listed on both the TSX Venture Exchange in Canada and on AIM. The Company is focused on gold, coal and copper prospects in Indonesia and has exploration rights in three areas: the Jelai epithermal gold prospect in East Kalimantan, five coal prospects, also in East Kalimantan and porphyry copper and gold prospects in Central Kalimantan.

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