Kalimantan Gold’s Half-Year Results 2014

Vancouver, British Columbia (FSCwire) - The unaudited Interim Consolidated Financial Statements and the management discussion and analysis (the “MD&A”) of Kalimantan Gold Corporation Limited (the “Company” or “KLG”) for the half-year ended June 30, 2014, are available for viewing on www.sedar.com or www.kalimantan.com.

The Company incurred a comprehensive loss for the half-year period ended June 30, 2014, of $234,495 (June 30, 2013 – profit of $113,467). Surya Kencana LLC (“SK LLC”), a wholly-owned subsidiary of Freeport-McMoRan Exploration Corporation funded a total of $1,400,140 of the PT Kalimantan Surya Kencana (“KSK”) Contract of Work (the “KSK CoW”) exploration expenses in the half-year ended June 30, 3014, prior to their withdrawal from the joint venture agreement effective January 31, 2014.

The Company began the current fiscal half-year with $973,464 in cash. Operating activities used $423,010 in cash; investing activities contributed $145,108 in cash and included $271 in recovery of equipment, and included funding received for reclamation of $120,000; and the Company recorded $1,214 of unrealized foreign exchange gain on cash balances, to end the half-year with $696,776 in cash.

The Company has two principal areas of interest: the KSK CoW in Central Kalimantan with multiple porphyry copper and gold prospects and the Jelai epithermal gold prospect in East Kalimantan.

The holder of the KSK CoW is KSK. KLG holds 100% of the shares of Indokal. KSK is owned 75% by Indokal and 25% by PCK. Indokal owns 100% of PCK. The KSK CoW was granted April 28, 1997 between the Republic of Indonesia and KSK as a 6th generation CoW. The terms of the KSK CoW define several periods under which work done on the KSK CoW will fall. The Company has made the required submissions to the government to extend the Exploration Period for a further one year term beyond April 28, 2014. This request has been received by the Ministry of Mines and the formal extension letter is expected soon. The period following Exploration is the Feasibility Study Period which runs for not less than two years, is extendable, and provides time to complete studies and identify the mining area.

The holder of the Jelai Izin Usaha Pertambangan (“IUP”) is PT Jelai Cahaya Minerals (“JCM”). A wholly-owned subsidiary of the Company, KLG Singapore Private Limited (“KLG SING”) holds 99.3% of the shares of JCM. The remaining 0.7% continues to be held for the benefit of KLG by the same two nominee shareholders who previously held 100% of JCM.


The highlights of the half-year and up to August 27, 2014, include:

- KLG regained 100% Control of its' KSK CoW, and more importantly the Company's prospective Beruang Kanan Project (BKP);

- Activities during the half-year focused on data compilation, quality assurance and quality control and prospect evaluations. Much of the focus was on the four prospects located within BKP, namely BK Main (“BKM”) (Cu-Ag), BK South (“BKS”) (Cu-Au), BK West (BKW”) (Cu-Pb-Zn) and the most northerly BKZ Polymetallic (Pb-Zn-Ag-Au-Cu) prospect;

- Analysis of the final results of an airborne gravity survey over the KSK CoW has identified over 15 geophysical targets, of which five are considered high priority and are coincident with surface geochemical anomalies. The most prominent gravity target is at BKP, characterized by a 4.5km "banana shaped" gravity high that encompasses BKW and BKM. The soil anomaly at BKM is multi-element and measures approximately 1,200 metres north to south by up to 1,000 metres east-west, and is characterized by strong copper values in soils of up to 1,380ppm;

- To date, drilling at BKM has confirmed high grade copper mineralization located on at least two different stratigraphic horizons. The first occurs at surface and dips shallowly eastward and the second occurs at 150 metres depth. Mineralization and alteration styles are typical of those associated with VHMS systems; however there are similarities to high sulphidation and "Manto-type" deposits. The system has not been closed off and remains open in all directions;

- BKP is now recognized as a new emerging copper district in central Kalimantan and BKM is considered the Company's most advanced-stage exploration project;

- A desktop evaluation of the BKZ Polymetallic prospect (<800m from BKM) was completed during the half-year, where three shallow holes intersected moderate to strong VHMS-style lead-zinc mineralization. A 900m by 650m grid-based soil sampling program was completed over the known BKZ Pb-Zn-Ag-Au-Cu showings, and a total 145 soils collected and analyzed. Assays show a north-south oriented anomalous zone of Pb-Zn in soils, which has not been drill tested. KLG plans to test the area with 1-2 scout holes, to test the continuity of the mineralization intersected in DDH’s BKZ1, 2 and 3;

- KLG has engaged Mr. Duncan Hackman to complete a National Instrument 43-101 (“NI 43-101”) compliant maiden resource estimate for its flagship BKM Prospect. Mr. Hackman (B.App.Sc., MSc, MAIG) is an independent consulting geologist based in Perth, Australia. He has wide international experience in mining and mineral exploration and has completed numerous mineral resource estimates on copper deposits. He is a member of the Australian Institute of Geoscientists and an Independent Qualified Person within the meaning of NI 43-101; and

- Numerous discussions with both foreign and Indonesian companies are progressing positively, with site visits conducted on the Company's KSK and Jelai IUP projects to date. Notably, with the withdrawal of SK LLC effective January 31, 2014, talks have begun with a number of Indonesian groups who had previously expressed interest in the KSK CoW during 2013. The Board continues to have discussions with these parties, and others, to discuss possible partnerships and ways forward.


The NI 43-101 compliant resource report on the BKM Prospect will incorporate data from KLG’s 2012-13 Phase 1 drilling program as well as historic drilling completed on the project during the 1998 - 2001 and the 2007 campaigns, totaling more than 19,000 meters. It is expected that the report will be completed in the second half of 2014.

The BKM Prospect is located within the BKP area in the KSK CoW, which covers an area of 620 square kilometers in Central Kalimantan, Borneo. Approximately $55 million has been incurred in exploration expenditures on the KSK CoW including 60,000 metres of drilling. About $33 million was spent during 2012 - 2013 that resulted in:

- over 30,000 metres of deep and delineation drilling;

- 28,000 samples analysed;

- 4,762 line kilometers of airborne geophysical surveys; and

- high resolution LIDAR imaging over 24,363 ha.

Drilling at the BKM Prospect has confirmed a shallow dipping zone of copper mineralization over a strike length of up to 1,100m, is up to 450m wide and varies from 20m to 90m in thickness. Mineralization is dominated by covellite and chalcopyrite in sheared and altered volcaniclastic rock types and hydrothermal breccias.


All data, as disclosed in this press release, has been reviewed and verified by the Company's Qualified Person for the KSK Project, Dr. Peter Pollard, who is a Member of the Australasian Institute of Mining and Metallurgy (Chartered Professional). Dr Pollard acts as a technical consultant to KLG and has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity he is undertaking to qualify as a Competent Person under the JORC Code and a Qualified Person within the meaning of NI 43-101.

-Ends-



Faldi Ismail
Deputy Chairman and CEO, Kalimantan Gold
Mobile: +61 (0) 423 206 324
Email: faldi.ismail@kalimantan.com

Gerald Cheyne
Director Corporate Development
Telephone: +44 (0) 2077311806
Mobile: +44 (0) 7717473168
Email: gerald.cheyne@kalimantan.com

VSA Capital Limited
Andrew Raca / Justin McKeegan
Telephone: +44 20 3005 5004 / +44 20 3005 5009
Email: araca@vsacapital.com

Kalimantan Gold's Nominated Adviser
RFC Ambrian Limited
Andrew Thomson / Trinity McIntyre
Telephone: +61 8 9480 2500
Email: andrew.thomson@rfcambrian.com / trinity.mcintyre@rfcambrian.com



About Kalimantan Gold Corporation Limited

Kalimantan Gold Corporation Limited is a junior exploration company listed on both the TSX Venture Exchange in Canada and on AIM in London. The Company has two exploration projects in Kalimantan, Indonesia: the Jelai epithermal gold project in East Kalimantan and the KSK Contract of Work in Central Kalimantan with potential for multiple porphyry copper and gold prospects. For further information please visit www.kalimantan.com


Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This news release contains forward-looking statements that are based on the Company’s current expectations and estimates. Forward-looking statements are frequently characterized by words such as “plan”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”, “suggest”, “indicate” and other similar words or statements that certain events or conditions “may” or “will” occur. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause actual events or results to differ materially from estimated or anticipated events or results implied or expressed in such forward-looking statements. Such factors include, among others: the actual results of current exploration activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; possible variations in ore grade or recovery rates; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing; and fluctuations in metal prices. There may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein.



KALIMANTAN GOLD CORPORATION LIMITED
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
(unaudited -- expressed in United States dollars)

                                                   June 30,   December 31,
                                                      2014           2013
ASSETS
Current assets
  Cash                                            $696,776       $973,464
  Government deposit                                36,816         36,110
  Trade and other receivables                       61,506        268,460
                                                   795,098      1,278,034
Non-current assets
  Security deposit                                  21,405         21,186
  Equipment                                        173,396        244,964
                                                  $989,899     $1,544,184

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
  Trade and other payables                        $300,552       $706,658
  Provision for employee service entitlements            -        178,059
  Provision for community development              120,000              -
                                                   420,552        884,717
Non-current liabilities
  Provision for employee service entitlements       24,375              -
  Provision for reclamation                        120,000              -
                                                   144,375              -
                                                   564,927        884,717
Shareholders' equity
  Share capital                                  1,674,842       1,674,842
  Equity reserves                               25,675,245      25,675,245
  Deficit                                      (26,925,115)     26,690,620)
                                                   424,972         659,467
                                                  $989,899      $1,544,184

KALIMANTAN GOLD CORPORATION LIMITED
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE LOSS
(unaudited -- expressed in United States dollars)

For the three months ended For the six months ended
June 30,
2014 June 30,
2013 June 30,
2014 June 30,
2013

Expenses
Accounting and audit $2,856 $2,125 $3,616 $3,006
Consultants 55,468 88,970 112,248 184,448
Directors fees (9,000) 9,000 3,500 23,000
Exploration and evaluation expenditures, net (27,616) (7,372) 82,155 8,187
Investor relations 533 728 1,187 9,450
Legal 3,506 17,322 5,941 37,388
Management fees - (249,301) (47,388) (469,116)
Office and administrative services 1,239 2,675 11,247 4,177
Telephone and facsimile 455 1,016 635 1,950
Transfer agent, filing and exchange fees 35,962 33,178 58,393 60,368
Travel and accommodation 141 14,446 141 23,759
63,544 (87,213) 231,675 (113,383)

Other items
Foreign exchange gain (loss) 7,070 1,034 (3,629) (177)
Gain on sale of equipment 462 - 462 -
Interest income 169 69 347 261
7,701 1,103 (2,820) 84
Profit (loss) and comprehensive profit (loss) $(55,843) $88,316 $(234,495) $113,467
Basic and diluted profit (loss) per common share $(0.00) $0.00 $(0.00) $0.00
Weighted average number of shares outstanding 171,407,156 171,407,156 171,407,156 171,407,156



KALIMANTAN GOLD CORPORATION LIMITED
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
(unaudited -- expressed in United States dollars)

For the six months ended
June 30,
2014 June 30,
2013
Cash provided from (used for):

Operating activities
Profit (loss) for the period $(234,495) $113,467
Adjustment for non-cash items:
Depreciation 71,297 26,757
Gain on sale of equipment (462) -
Unrealized foreign exchange gain (320) (5,003)
Changes in non-cash working capital:
Provision for employee service entitlements (179,878) -
Provision for community development 120,000 -
Trade and other receivables 206,954 282,786
Trade and other payables (406,106) (1,800,012)
(423,010) (1,382,005)
Investing activities
Purchase of equipment - (360,310)
Recovery of equipment 271 104,969
Provision for employee service entitlements 24,375 (859)
Provision for reclamation 120,000 -
Proceeds on sale of equipment 462 -
145,108 (256,200)

Unrealized foreign exchange gain on cash 1,214 5,036
Increase / (decrease) in cash (276,688) (1,633,169)
Cash, beginning of the period 973,464 3,058,382
Cash, end of the period $696,776 $1,425,213


KALIMANTAN GOLD CORPORATION LIMITED
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY
(unaudited -- expressed in United States dollars)

Number of
shares Amount Equity reserves Deficit Total
Balance, January 1, 2013
171,407,156 $1,674,842 $25,438,612 $(26,364,815) $748,639
Profit (loss) and comprehensive profit
(loss) for the period - - - 113,467 113,467
Balance, June 30, 2013 171,407,156 $1,674,842 $25,438,612 $(26,251,348) $862,106

Number of
shares Amount Equity reserves Deficit Total
Balance, January 1, 2014 171,407,156 1,674,842 25,675,245 (26,690,620) 659,467
Loss and comprehensive loss
for the period - - - (234,495) (234,495)
Balance, June 30, 2014
171,407,156 $1,674,842 $25,675,245 $(26,925,115) $424,972