3rd Quarter Results

VANCOUVER, British Columbia--(BUSINESS WIRE)--

Kalimantan’s Third Quarter Results 2014

The unaudited Interim Consolidated Financial Statements and the management discussion and analysis (the “MD&A”) of Kalimantan Gold Corporation Limited (the “Company” or “KLG”) for the third quarter ended September 30, 2014, are available for viewing on www.sedar.com and www.kalimantan.com.

The Company incurred a comprehensive loss for the nine months ended September 30, 2014, of $493,900 (2013 –$131,579). Management fees related to being the operator of joint ventures and correlated with the magnitude of the gross exploration expenditures funded by our joint venture partners and our continuance as operator. During the nine-month periods ended September 30, 2014 and 2013, the Company earned management fees of $47,388 and $548,710 respectively. As a consequence of the loss of income, the Company has since slowed or curtailed many of its discretionary expenses in 2014, and this overall trend can be seen across-the-board in the nine-month period ended September 30, 2014 compared to the 2013 comparative period.

The Company began the current fiscal quarter with $696,776 in cash. Operating activities used $359,075 in cash; investing activities used $38 in cash; and the Company recorded $3,118 of unrealized foreign exchange gains on cash balances, to end the third quarter with $340,781 in cash.

The highlights of the third quarter and up to November 26, 2014, include:

• The Company announced on November 26, 2014, that it has 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”). A technical report compliant with NI 43-101 to support the Beutong Mineral Resource will be published on Sedar and announced by January 9, 2015. Highlights of the proposed acquisition include:

• Agreement reached to acquire Tigers' interest in Beutong;
• 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; and
• Capital raising of at least US$3 million to fund ongoing drilling and studies.

• The Company has filed a NI 43-101 compliant technical report supporting the independently estimated maiden resource for the Main Zone of the Beruang Kanan (“BKM”) prospect within the Company’s 100% held KSK Contract of Work project, in Kalimantan, Indonesia. The report is titled “Beruang Kanan Main Zone, Kalimantan Indonesia: 2014 Resource Estimate Report”, prepared by Duncan Hackman (B.App.Sc., MSc, MAIG) of Hackman and Associates Pty. Ltd. with an effective date of September 30, 2014. Mr. Hackman is an independent consulting geologist based in Perth, Australia. He has wide international experience in mining and mineral exploration and has completed numerous mineral resource estimates on copper deposits. He is a member of the Australian Institute of Geoscientists and an Independent Qualified Person within the meaning of NI 43-101. Highlights of the NI 43-101 report include:
  • Inferred Resource of 47 million tonnes averaging 0.6% Cu or 621,700,000 pounds of copper (reporting cut 0.2% Cu);
  • Mineral Resource estimate is only for the Main Zone, a portion of the Beruang Kanan mineralized area and is based on assays from 74 diamond drill core holes that were drilled from 1998 to 2007 and then from 2012 to 2013;
  • The Mineral Resource is contained within a near-surface, shallow-dipping and strongly mineralized system, that extends over an area of 1000m (N-S) and 950m (E-W) with depth extents ranging from surface to between 100m and 450m below surface (top to bottom). The mineralization remains open in several directions; and
  • Other priority targets in the BKM project area have been identified at Beruang Kanan South, Beruang Kanan West, Beruang Kanan Polymetallic North, Beruang Kanan Polymetallic South and the Low Zone prospects; each within 1.5km of the BKM Inferred Mineral Resource.
• The Company is in discussions with the Government of Indonesia to amend the KSK Contract of Work. The six points being discussed include, 1) royalties; 2) size of CoW in Exploration vs. Production; 3) domestic processing; 4) divestment obligations; 5) State Revenues; and 6) prioritize the use of local manpower and local products. Continued progress is being made and we are encouraged by our discussions with the Indonesian Government; and
• Numerous discussions with both foreign and Indonesian companies are progressing positively, with site visits conducted on the Company's KSK and Jelai Izin Usaha Pertambangan (“Jelai IUP”) projects to date.

Non-binding letter of intent with Tigers:

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 Tigers Copper Singapore No. 1 Pte Ltd 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 (“KSK CoW”) 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 of 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. Beutong Project details, including details of its Mineral Resource, may be found in the KLG announcement dated November 26, 2014 regarding the execution of the LOI with Tigers and in the Company’s Management Discussion and Analysis for the nine-months ended September 30, 2014, published on SEDAR.com and available from the Company’s website.

Jelai IUP:

The Company has been in discussions with a number of major mineral companies regarding a potential joint venture or similar arrangement in respect of its 100% owned Jelai IUP. These discussions are continuing and some site visits have already been undertaken. Meanwhile, the Jelai IUP is on care-and-maintenance to conserve cash, until such time as a way forward can be found.

KSK CoW:

The Company has recently applied to the Ministry of Energy and Mineral Resources to recognize a suspension in operations (a hiatus of activities) until further notice as allowable and outlined in clause 23.3.(ii) of the KSK CoW. The KSK CoW is officially in its 4th year of existence following a number of previously granted suspensions (the KSK CoW has been granted for a minimum of 38 years). The Company has applied for the current suspension for two reasons, the first being that Surya Kencana LLC (“SK LLC”), who was funding operations withdrew from the joint venture agreement with SK LLC, a wholly-owned subsidiary of Freeport-McMoRan Exploration Corporation in January 2014 and secondly that the Company is waiting on the renewal of its forestry working permits (Ijin Pinjam Pakai Kawasan Hutan, or IPPKH) allowing it to work within production and protected forest. The Company has also applied to extend the recognized exploration period of the KSK CoW for a year (to April 2015) as allowable and outlined under Article 23.3(ii) of the KSK CoW. These requests are considered and granted at the discretion of the Ministry. The KSK CoW is in good standing regarding meeting expenditure social and environmental commitments and the Company is of the belief that the Ministry will look favorably upon their requests and grant both the suspension of activities and extension of exploration period. The Company is also of the opinion that there is no reason that their permit to work within a production forest will not be renewed for a further 2 year period.

Liquidity:

Management believes that the Company does not have sufficient financial resources to maintain its core activities over the next 12 months and therefore, the Company will need to seek additional equity financing. The Company’s ability to continue on a going concern basis beyond the next twelve months depends on its ability to successfully raise additional financing for continued operations and for the necessary capital expenditures required to achieve planned principal operations. While the Company has been successful in the past in obtaining financing, there is no assurance that it will be able to obtain adequate financing in the future or that such financing will be on terms acceptable to the Company. These material uncertainties cast significant doubt upon the Company’s ability to continue as a going concern.

In light of the above, the Company intends to conduct a capital raising of up to US$3 million, to be priced in the context of the market at the time, as a condition precedent to completing the acquisition of the Beutong project. Should this be successful, it is expected this would alleviate the near term liquidity concerns of the Company.

Qualified Person:

Technical data disclosed in this news release have been reviewed and verified by Stephen Hughes, P. Geo, a director of KLG and a Qualified Person within the meaning of NI 43-101.

-Ends-

Faldi Ismail

Deputy Chairman and CEO, Kalimantan Gold

Mobile: [phone]

Email: [e-mail]

Gerald Cheyne

Director Corporate Development

Telephone: [phone]

Mobile: [phone]

Email: [e-mail]

VSA Capital Limited

Andrew Raca / Justin McKeegan

Telephone: [phone]

Email: [e-mail]

KLG's Nominated Adviser

RFC Ambrian Limited

Andrew Thomson / Trinity McIntyre

Telephone: [phone]

Email: [e-mail] / [e-mail]

About Kalimantan Gold

Kalimantan Gold Corporation Limited is a junior exploration company listed on both the TSX Venture Exchange in Canada and on AIM in London. The Company has two exploration projects in Kalimantan, Indonesia: the Jelai epithermal gold project in East Kalimantan and the KSK Contract of Work in Central Kalimantan with potential for multiple porphyry copper and gold prospects. For further information please visit www.kalimantan.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.

Category Code: QRT

Sequence Number: 442709

Time of Receipt (offset from UTC): 20141127T175553+0000