INVESTOR NEWSLETTER ISSUE N°1
JANUARY 2013
Kalimantan Gold
HIGHLIGHTS
1. A REVIEW OF KSK CoW 2012
• Activity review
2. DRILL PROGRAM
• Completed 12,895 M
• 2 x LF 130 Long Year rigs
capable of 1800 M
• 2 x Delineation rigs
3. FIELD GEOLOGY PROGRAM
• 7 target prospects mapped
• 8 more prospects
scheduled
• 17 field geologist assigned
4. CORPORATE SOCIAL While we were waiting for
RESPONSIBILTY
• YTS working in 21 Dayak
villages.
• Mercury capture program
Kalimantan Gold News 2013
A REVIEW OF 2012
Dear Investor
We have initiated these to suspension pending the release
newsletters because of the many of the remaining forestry permits.
requests we get from you for more
In April and May mobilization
detailed information about what
commenced in earnest with
we are doing on site. In future
the building of our base camp
newsletters we will take a deep dive
at Marinyoi. This required the
into our onsite operations, focusing
construction of a jetty at Tumbang
on details of particular activities. Manggu, a river crossing about
As the New Year gets 70 km south of the Marinyoi base
underway, we would like to give camp. The AS350 B3 Squirrel
you an update on our KSK CoW – Eurocopter helicopter was
progress and activities in 2012. We mobilized and flown from Papua
via Manado to our site arriving on
had an excellent year and we are
confident 2013 will be even better. 21 April. The B3 can lift 900 kg
our Forestry Permit, the beginning
of 2012 was spent building our
supply base and core sheds near
Palangka Raya at KM 37. We
reviewed and updated all our
digital data and plotted all GIS
data. We recovered our old core
from the field, re-boxed it and
completed Magsus and pulp data
collection for the old core. We Hangar at Marinyoi for Helicopter
rebuilt and tested our two small
rigs to be used for definition drilling giving us the ability to move all
in preparation for mobilization. We rigs by helicopter. The deep rigs
also completed and won all our old are broken down into packages
tax cases originating from 2007. for moving, the largest of which is
the engine and control panel that
We received our phase one
weighs 700 kg.
Borrow–and-Use Forestry permit
(Pinjam Pakai) in mid March for We negotiated access to our
an area totalling 7,422 hectares base camp through a forestry
of the KSK CoW. The remaining concession owned by a logging
53,581 ha of the CoW was put in company PT Dwima. We also
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 INVESTOR NEWSLETTER ISSUE N°1 JANUARY 2013

had to negotiate the use of the

land for the base camp owned
by indigenous landholders. The
Marinyoi base camp area is
completely uninhabited and very
remote. From Marinyoi to Beruang
Drill camps is a distance of 30
km, which is only accessible by
helicopter.

Typical access road river crossing.

Rather than cutting down any

trees in this area we purchased
legal timber from government
certified timber suppliers 200km
south of us and trucked the timber
to site.

Map

getting used to the safety boots

Marinyoi Base Camp
We also started recruiting
labour from the surrounding
villages further south. They are
provided with a medical check-up
before starting. All new hires are
given rigorous safety inductions
and medical checks. About 25%
of the staff that have the medical
check-up are found to be unfit
largely due to Hepatitis or TBC.
About 60% of our field crews
have never worked for a company
before ~ some have difficulty
and gear mandatory on site having
spent their life moving freely
through the forests barefooted.
We started training for some of
the skilled roles such as Helicopter
Load Supervisors and Fire Crews.
We established our Emergency
Medical facilities working with
SOS Medika, our medical support First Medical Centre
specialists. All our staff are covered ceremonies at the base camp for
by Medical and Life insurance our safety and success.
which provides more cover
than the state based Jamsostek After very long prayers and
subscriptions. We carried out anointings we asked the priest
customary Dayak religious and priestess what they prayed

Kalimantan Gold News 2013 www.kalimantan.com

 INVESTOR NEWSLETTER ISSUE N°1 JANUARY 2013
for “Higher wages!” they replied
grinning.
We immediately started our
baseline environmental studies
and water sampling from the
rivers. We were surprised by some
Stream Sampling at Beruang Kanan
extremely acid results (ph3.5) from
one river in Beruang Kanan caused
by naturally occurring very high
sulphidation rocks. We opened our
two other main drill camps and
established weather stations in all
three locations.
We completed our first drill
pads and drilling commenced May
28 ~ a day to be commemorated!
Shortly after this our first field
geology program started with soil
grids, soil samples, rock chips and
mapping at Low Zone. We built
and set up our core logging facility
at Marinyoi. In the meantime,
at our supply base and sample
preparation facilities at KM 37,
The Sample Prep Lab
we built our core-sheds to receive
core from Marinyoi and set up the
Sample Preparation Laboratory to
process the core in preparation
Kalimantan Gold News 2013
for being assayed in Jakarta by
Geoessay, with checks done by
Intertek. This was completed mid
June.
By the end of June all four
rigs were mobilized and drilling.
We had issues with our helicopter
support, as the provider struggled
to get the paperwork right and
all the required permits to fly. The
sample preparation lab was in full
operation by this time.
First Core Sheds at KM 37
Chalcopyrite and covelite veins
Porphry related quartz stockwork veining.
July brought the Islamic month
of fasting ~ Ramadan ~ which
didn’t slow us down at all. Our
offices in Palangka Raya had
become too small for the new scale
of operations, so we identified new
offices and began to prepare them.
Drilling and field survey were now
in full swing, with the core lab at
Marinyoi and prep lab at KM 37 all
working in unison.
Regent visits Drill Locations
The Bupati (Regent) of Gunung
Mas visited our site by helicopter
in August to inspect our field
operations. He was extremely
pleased that we were employing
and providing opportunities
to 300 local villagers. He was
Beruang Drill Camp Alpha.
impressed with the health and
safety processes and the very high
quality camp facilities and food. By
this time all the drivers of vehicles
and trucks had received defensive
driver training and weekly
safety meetings for all staff were
underway. August brought huge
forest fires. It is the time of year
that Dayaks burn land to clear the
forest for planting. We lost several
days flying because of the dense
smoke and reduced visibility.
Also in August we had a
workshop with 14 NGO’s to
explain in detail what we were
doing and to see how we could
www.kalimantan.com
 INVESTOR NEWSLETTER ISSUE N°1 JANUARY 2013
Orphans open the office
work together with them in Central
Kalimantan. We moved into our
new office by having a small
celebration where we invited a
local orphanage to come and eat
at the office.
Our new office
We converted our old office
into a mess for our field staff as
they transit Palangka Raya on their
way to base camp. We also closed
our old mess in September, as the
lease expired. In September on
site, we were building walkways
between our drill pads. These
wooden walkways ensure that
the drill crews are safe and don’t
get lost. The wooden steps and
Stay on the tracks or get lost!
Kalimantan Gold News 2013
platforms are covered with chicken affected our river-crossings further
wire so that they are not slippery in downstream.
the wet. We installed hot water and
Our consulting geologist John
air conditioning at the Marinyoi
Allen arrived in November and
base camp. We had our drilling
began his review of all core drilled
operations audited by a third-party
to date. This required many weeks
drilling specialist for safety and
at KM 37, as each piece of core
performance. Not many changes
was reviewed. Many samples
were suggested other than carrying
were taken for thin sections and
more spares for the smaller drill
rigs. We finished making our safety
and helicopter safety videos for
new recruits.
A SOS medic went missing
at Beruang Tengah for 24 hours,
after walking away from a drill
camp and deliberately leaving a
walkway. All camps were stood
down and the Emergency Search
and Rescue process activated. A
command centre was immediately
Drill pads
Core Logging Hall at Marinyoi
established in Palangka Raya to
coordinate all activities and log
reports at 5-minute intervals.
The medic was eventually found
in a river gully. He had become
disorientated and lost direction. The drill pads and campsites are immediately
After walking for a long while, replanted & regreened after use.
he followed his training, found a
river where he could drink and petrographic studies. The results
remained in one location. will be used to build our geological
models at Beruang Kanan and
By October we had spent US$7
Beruang Tengah. Subsequent initial
million and our partner committed
indications are that Beruang Kanan
to continue to sole fund the project.
is a Volcanogenic Hosted Massive
Our average monthly expenditure
Sulfide (VHMS) style submarine
had now reached US$1.6 million
deposit, potentially related to a
per month. The Indonesian Tax
deep porphyry source.
Office requested a visit to our sites
to audit activities. The rainy season We initiated a media campaign
arrived, putting out all fires but in Indonesia to try to help with
causing flooding in the rivers that obtaining our Forestry Permits.
www.kalimantan.com
 INVESTOR NEWSLETTER ISSUE N°1 JANUARY 2013

We obtained security clearance for our gravity and

high-resolution magnetic survey that will use a
specially rebuilt DC3 that flies at very low altitudes
of 60 m above ground level. We also had a 3-day
training workshop to train our eight Community
Relations staff. We also started an in-depth review
of our Baroi copper gold, base metal prospect data.
By now we were flying on average 110 hours
a month moving about 500 passengers and 200
tonnes per month. Our field employees peaked at
267 on site.
In November we also completed a high
resolutions laser LIDAR topographic survey over
25,000 ha to define geological structure in all KSK
primary prospects, including:Beruang Tengah,
Beruang Kanan, Tumbang Hoi, Rinjen, Focus 1,
Mamuring, Baroi, and Mansur.
A safety inspector from the USA arrived in
December to carry out a full Health & Safety audit
of all operations. The two LF 130 Long Year super
rigs that are capable of drilling to 1,800 m or 1
mile arrived in Indonesia from Australia.

Drilling Program

Two Duralite drill rigs provided by Pontill

have been utilized on the deep porphyry copper
program, and two smaller Jackro rigs have been
assigned to the Beruang Kanan near-surface
LIDAR Survey Coverage
delineation drilling program. Nine deep holes
have been completed.

Kalimantan Gold News 2013 www.kalimantan.com

 INVESTOR NEWSLETTER ISSUE N°1 JANUARY 2013

Drilling Results

Planned Current
Hole ID Rig Type Date Started Date Completed Remarks
Depth Date

BTD05-01 Deep 1200 23-05-2012 28-05-2012 97.3 Stopped

BTD05-02 Deep 1200 06-06-2012 13-08-2012 1389 Completed

BKD01-01 Deep 1200 07-06-2012 30-08-2012 1169.5 Completed

BK030-01 Definition 300 03-07-2012 29-07-2012 301 Completed

BK029-01 Definition 300 06-07-2012 01-08-2012 300 Completed

BK032-01 Definition 300 03-08-2012 23-08-2012 300.5 Completed

BK031-01 Definition 300 05-08-2012 23-08-2012 300.2 Completed

BKD02-01 Deep 1000 12-08-2012 27-08-2012 377.8 Stopped

BTD06-01 Deep 1200 30-12-2012 24-09-2012 1281 Completed/ Assay Pending

BK033-01 Definition 300 31-08-2012 21-09-2012 282.1 Stopped

BK034-01 Definition 300 31-08-2012 17-09-2012 300.7 Completed/ Assay Pending

BKD02-02 Deep 1200 05-08-2012 18-10-2012 1200 Completed/ Assay Pending

BK035-01 Definition 300 27-09-2012 14-10-2012 300 Completed/ Assay Pending

BK036-01 Definition 300 23-09-2012 12-10-2012 300.2 Completed/ Assay Pending

BK037-01 Definition 300 19-10-2012 07-11-2012 300.4 Completed/ Assay Pending

BK038-01 Definition 300 16-10-2012 02-11-2012 300.8 Completed/ Assay Pending

BKD03-01 Deep 1200 26-10-2012 13-12-2012 1147.9 Completed/ Assay Pending

BTD07-01 Deep 1200 30-10-2012 12-12-2012 1140.5 Completed/ Assay Pending

BK040-01 Definition 300 07-11-2012 29-11-2012 300.4 Completed/ Assay Pending

BK039-01 Definition 300 10-11-2012 25-11-2012 300.7 Completed/ Assay Pending

BK041-01 Definition 300 05-12-2012 19-12-2012 300.1 Completed/ Assay Pending

BK042-01 Definition 300 05-12-2012 18-12-2012 300 Completed/ Assay Pending

BTD08-01 Deep 1200 19-12-2012 940.50 In Progress

BK043-01 Definition 300 22-12-2012 07-01-2013 300.90 Completed/ Assay Pending

BK044-01 Definition 300 22-12-2012 06-01-2013 301.30 Completed/ Assay Pending

BKD03-02 Deep 600 24-12-2012 752.40 In Progress

BK045-01 Definition 300 13-01-2012 23-01-2013 301.00 Completed/ Assay Pending

BK044-02 Definition 300 12-01-2012 23-01-2013 301.30 Completed/ Assay Pending

14,887.5

Kalimantan Gold News 2013 www.kalimantan.com

 INVESTOR NEWSLETTER ISSUE N°1 JANUARY 2013
Drilling Locations Of The Two Duralite/Deep Drill Rigs At The Ksk Copper Project
Delineation Drilling
The operation of the two
shallow drill rigs belonging to KSK
has been focused on the central
mineralized zone of Beruang
Kanan. Eighteen holes have been
completed.
This drilling continues to
test the strong silica clay pyrite
altered volcanic breccia that
contains chalcopyrite and covellite
mineralization in strongly sheared
and silica flooded zones with
irregular white quartz veining.
Field Geology Programs
As part of a campaign to
investigate all areas of interest in
a systematic manner, field geology
programs have been initiated.
Seven target prospects have been
mapped and sampled and another
eight are scheduled. The programs
include follow-up sampling, grid
soil sampling, and geological
mapping. The field geology has
generated data to support defining
additional drill hole targeting in the
prospects.
Kalimantan Gold News 2013
These programs have
produced a total of 1,243 soil, 50
stream sediments, and 1,292 rock
chip samples.
Two meter silica and silica-clay alteration zone
with pyrite veins.
Lab Facility for Preparation of Samples
The core sampling facility
and sample prep lab commenced
operation in early July. To date, a
total of 8,818 samples have been
sent to Tangkiling preparation
laboratory and 9,279 pulps have
been sent to Geoassay analytical
laboratory in Cikarang, Jakarta,
Intertek Jakarta and Sucofindo
Kuala Kencana, Timika.
Assays are carried out in
Jakarta by PT. Geoassay, with
sample checks by PT Intertek (ISO
certified). Both labs include routine
Canadian Certified Reference
Materials (CCRM), in-house
standards, and blank samples
are inserted with each sample
submission. Low level analysis of
gold in rocks and soils was carried
out by 50 g fire assay fusion with
AAS finish, and base metals were
determined by triple acid digestion
and ICP-OES finish.
Corporate Social Responsibility (CSR)
Program
Yayasan Tambuhak Sinta (YTS)
is working in 21 Dayak villages,
located along the Kahayan River,
just outside of the KSK concession
area. YTS’s program is focused on
strengthening governance in the
area, and is helping communities
take greater responsibility for their
own development agenda through
participatory planning, institution
strengthening and economic
development.
Pig husbandry training
This initiative enables
communities to engage more
effectively with local government in
order to access improved services
and programs in education,
health, infrastructure and economic
livelihoods.
YTS provides training and
technical assistance to improve
www.kalimantan.com
 INVESTOR NEWSLETTER ISSUE N°1 JANUARY 2013

• Village Institutional INVESTOR NEWSLETTER

Development
• Kalimantan Kids Club -- a
scholarship program
• Information & Communication
Media and Events
The YTS CSR budget for the KSK
CoW has been increased to a total
of $521,000 for 2013.
Investor Newsletter is a
monthly newsletter of
PT. Kalimantan Surya Kencana,
a mineral exploration company
affiliated with Kalimantan Gold
Corporation.

Mercury use in small-scale gold mining
the capabilities of villagers in
growing crops, raising animals,
and managing local resources. In
2012, this support concentrated on
vegetables, fish, pigs and rubber.
In collaboration with the
local credit union, YTS provided
training on savings, credit, and
small business development. By
joining the credit union, people
establish savings accounts and can
access credit for their household or
business.
At district level, YTS has a
two-year program to improve
the capacity of district staff to
improve their annual planning
and budgeting mechanism. This
will result in delivering better
support programs and services to
communities.
The YTS Community
Development Program accounted
for 4% of expenditure and includes:
• Village Development Planning
• Village Development Fund &
Technical Support for Economic
Livelihoods
PUBLISHED BY
YTS Mercury Capture Program PT. Kalimantan Surya Kencana
The benefits of distributing Jl. Rajawali VII, Srikandi III,
recycling equipment to small scale No. 100, Bukit Tunggal,
gold mining communities are Palangka Raya 73112
immediate and wide-reaching: Kalimantan Tengah
providing economic, health, and Indonesia
environmental benefits for the
mercury users themselves, as well
as the surrounding communities. Contact
Each piece of equipment we newsletter@kalimantan.com
provide can improve the well-
www.kalimantan.com
being of hundreds of people. www.borneomercury.com
In addition to providing www.tambuhaksinta.com
retorts and condensers, YTS is
also demonstrating mercury-free
processing techniques to miners,
and spreading awareness about
the dangers of mercury pollution
through a widespread health-
awareness campaign.
In 2012, interventions were
performed in six major towns,
fifteen villages, and eight remote
field sites. Over the course of the
year, YTS distributed one hundred
and twelve retorts and installed
eighty-seven condenser systems.
Our equipment is now recycling
more than one thousand kilograms
of mercury each month.

Kalimantan Gold News 2013 www.kalimantan.com