Kalimantan Gold Corporation Limited (TSX VENTURE:KLG)(AIM:KLG) has provided an update on the option to joint venture agreement announced on December 2, 2010.
Jelai Gold Project
As announced on December 2, 2010 the Company signed a binding letter of intention ("LOI") with Tigers Realm Minerals Pty Ltd. ("Tigers"), an Australian based, privately owned resources company, whereby Tigers may earn up to a 70% interest in the Company's Jelai Gold Project by meeting certain project expenditure obligations and completing a bankable feasibility study ("BFS").
Tigers has completed its due diligence and on February 16, 2011 the Company and Tigers executed a definitive option agreement (the "Deed"). The Deed remains conditional upon the term of the Izin Usaha Pertambangan granted by Bupati Bulungan of the Republic of Indonesia in respect of land near the village of Tenggiling in the Regency of Bulungan, Province of East Kalimantan ("IUP") being extended to at least June 2, 2015 and forestry permits being granted as necessary to enable the on ground activities to be conducted. Both the IUP revision and forestry permits are expected to be in hand shortly. Tigers can incrementally earn up to a 70% interest in the Jelai Project by spending US$6,000,000 by June 2, 2015, with the first US$2,000,000 by June 30, 2012 being an obligation. If Tigers doesn't complete the BFS by the IUP expiry date, its interest earned in Jelai will convert to a royalty capped at two times its investment in the Jelai project.
Source: Kalimantan Gold Corporation Limited