Oxiana Limited has completed its obligation to spend US$2.5 million in initial exploration at Kalimantan Gold"s Central Kalimantan prospect.

By mid January, Oxiana must advise Kalimantan Gold whether it will exercise its options to take a stake in the project.

The agreement covers Kalimantan Gold's 941sqkm Contract of Work area in Central Kalimantan and initially committed Oxiana to spend the funds on data compilation and drilling 12 deep holes over a period of 12-18 months.

Oxiana will then have the option to elect to earn a 40% stake by the completion of a pre-feasibility study and a 66.67% stake by the completion of a bankable feasibility study. By this time it will have spent an estimated US$37.5 million.

Oxiana geologists reviewed a decade of Kalimantan Gold's exploration data relating to the Contract of Work area.

This detailed geological, geochemical and geophysical review and assessment delineated three key areas of porphyry-related mineralization in the Beruang Kanan prospect area as well as quality drill targets at the Beruang Tengah, Baroi and Mansur prospects.

To date 16 holes for 5980 metres of diamond drilling have been completed. While the geology and alteration observed confirm porphyry-style mineralization, significant volumes of drilling assays are still outstanding.

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