Kalimantan Gold Corporation (KGC) will acquire the remaining 25% interest in the Contract of Work (COW) for the KSK copper-gold porphry deposits in Central Kalimantan, Indonesia.

KGC has entered into a Letter of Intent with Kalimantan Investment Corporation (KIC) to indirectly acquire the interest. The holder of the contract is PT Kalimantan Surya Kencana (KSK) that is 75% owned by Indokal Limited, a wholly owned subsidiary of KGC, and 25% owned by PT Pancaran Cahaya Kahaya (PCK), a wholly owned subsidiary of KIC.

On December 18, 2006 KGC and Oxiana finalized an Option Deed that grants Oxiana an option to earn an indirect incorporated joint venture interest of up to 66.67% in the KSK COW. In the initial period Oxiana will sole fund an initial program of $2.5 million in expenditures within a maximum of 18 months from the date of the Option Deed. Within 60 days after completion of the initial period Oxiana must deliver a notice of exercise to KGC or forfeit all interest in the KSK COW.

Oxiana geologists have reviewed a decade of KGC exploration data relating to the KSK COW. This detailed geological, geochemical and geophysical review and assessment has delineated three key areas of porphyry-related mineralization in the Beruang Kanan prospect area for further evaluation. Similar review and evaluation also identified quality drill targets at the Beruang Tengah, Baroi and Mansur prospects.

Work programs completed to date encompass geological mapping, reprocessing of geophysical and geochemical data and drill testing. Reconnaissance exploration was conducted on other anomalous areas on the KSK COW to determine potential and delineate additional targets.

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rconnelly@ozemail.com.au

Nick@nickcottam.com