Good things come to those who wait.
That will have been your thinking if you have held shares in Kalimantan Gold (KLG) since it listed in 1996 on the TSX. KLG has seen some changes in the 'River of Diamonds' - the literal translation of 'Kalimantan' or 'Indonesian Borneo', as Westerners call the country this company operates in.
KLG sat out the exodus of mining companies and capital from Indonesia following the Bre X scandal, in which a Canadian company set up a huge scam based on a mineral prospect in Indonesia. Now KLG is seeing capital and confidence return to Indonesia, following the replacement of a centralising military dictatorship by a decentralising democratic government, and the rising prices of minerals and commodities breathe more life into the Indonesian economy. During the long wait the company built up good community relationships and a large land position in Central and Eastern Kalimantan.
On the other hand it is no wonder that KLG was exploring for so long, the region is underdeveloped and remote, and the targets are big - six copper-gold porphyry deposits and more recently an epithermal gold-silver deposit. (Terry Leach, one of the company's advisors, thinks they may have discovered a new porphyry province.)
Kalimantan Gold has just completed its largest fundraising by a mile, issuing 13.27 million shares at 20 cents with a full warrant at 30 cents exercisable until August 2008. This fundraising almost all of which was sourced in London, netted the company nearly C$2.5 million- some of the proceeds will be used to fund a secondary listing on AIM, while most of it will be ploughed into projects. Broadly speaking, London is a better home for Asian mining projects than Vancouver, and if any of KLG's big porphyry targets move towards becoming joint ventures, London will be the place for KLG to raise some serious money to fund their part of a deal.
KLG has seven projects on their balance sheet with a large proportion of their funds currently directed at the 100 % owned Jalai Mewet Prospect. Jalai Mewet is a former Invanhoe Mines epithermal gold-silver prospect that was dropped by Ivanhoe in the late 1990's as they headed for the exit. Ivanhoe drilled 10% of the Mewet vein system, identifying 11 major veins and several splays. The alteration is steeply dipping and the width of the veins varies between 2m-8m whilst the length ranges from 250m to 1000m. KLG are now preparing for a 4000 metre diamond drill programme at Jalai Mewet over a cumulative 2km strike length with the intention of identifying a gold resource. Drill intersects from Ivanhoe days can be seen here.
Beyond Jalai Mewet, KLG has six porphyry targets, which are part of a 75% owned KSK (Contract of Work) in Central Kalimantan. Focus since 2002 has centred on the Baroi Prospect, a porphyry copper-gold-silver target. Interested was stimulated in Baroi after KLG carried out an extensive geological mapping and near surface sampling and shallow drilling which came up with some very high grade samples, including 85.5 meters at 2.9% copper, 1.85% zinc, 70.1 grams per tonne (gpt) silver and 0.22 gpt gold. KLG followed up with an induced polarisation survey, which identified a large conductive anomaly at depth. In the first half of this year, KLG drilled four 600m deep holes in the far eastern zone (FEZ) - assays have been returned on three of the four holes and none of these cores penetrated the targeted porphyry (which KLG think is deeper still) but they did hit some interesting intersects including 12m at 2.17% copper, 0.5% zinc and 48gpt silver.
Because of the sheer size and depth of the copper gold porphyry targets, combined with remoteness and country risk, KLG have been talking with possible joint venture partners about funding, developing and earning into the projects. This seems a logical move; especially as the Jalai Mewet (epithermal) gold-silver prospect on its own is a big enough project to keep a company of this size busy for some considerable time. For a small company, Kalimantan Gold certainly has a diverse range of projects - and any one of these projects could be a company maker in its own right.
Persistence and patience may yet pay off.