VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 21, 2011) - As announced on December 13, 2010, Kalimantan Gold Corporation Limited (the "Company") (News - Market indication)(AIM:KLG) signed a non-binding term sheet (the "Term Sheet") with a major copper mining company (the "Major") in relation to its KSK Contract of Work copper project (the "KSK CoW") in Kalimantan, Indonesia. Pursuant to the Term Sheet the Major can earn a 51% joint venture interest in the KSK CoW by expending US$7 million on a substantial exploration program over three years and then a further 24% (total 75%) by sole funding the completion of a feasibility study. Further details on the terms are contained in the Company's previous announcement.

The Company has now delivered most required documentation in relation to the due diligence being undertaken by the Major and there have been no obstacles identified to date. The binding agreement setting out transaction terms and structure is also well underway to completion. However, to accommodate the relatively large volume of due diligence materials, the Company has agreed with the Major to increase the Major's due diligence period to 90 days from 60 days, so that it now extends to March 8, 2011. Within the later of 15 days after signing the binding agreement or written approval of the TSX Venture Exchange the Major would subscribe to a C$350,000 private placement in the Company priced in the context of the market at that time.

The Major is also well advanced in its preparations to rapidly mobilise a drilling team to commence testing the major porphyry copper targets the Company has identified on the KSK CoW. 

The main focus of the exploration program will be drill testing the deeper porphyry copper targets that have been identified on the KSK CoW. Recent advanced inversion modeling identified numerous massive deep seated magnetic bodies below extensive surface geochemical anomalies and existing drill holes where copper mineralization was present. The three highest priority targets identified are the Beruang Tengah, Beruang Kanan and Tambang Huoi prospects, which are all expected to be drill tested in the first year of the program. Previous drilling results at Beruang Kanan have included intersections of 167 meters at 0.59% copper from 4.5 meters, 79 meters at 0.89% copper from 6.5 meters and 102 meters at 0.62% copper from 3 meters. Further details on the inversion modeling and identified targets are contained in technical reports on the Company's website at www.kalimantan.com. 

RFC Corporate Finance Ltd acts as KLG's Nominated Adviser for the purposes of its AIM listing, contact Stuart Laing, ph: +618 9480 2506 or email: stuartl@rfc.com.au.

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.