LONDON (ShareCast) - Kalimantan Gold sank to a new low as Oxiana decided not to spend more cash on the firm’s KSK Contract of Work in Central Kalimantan, Indonesia.

Oxiana said it will not be exercising its option under the option deed, originally signed between the companies in December 2006.

It spent $2.5m drilling 16 holes over 6,000 metres in 2007 which it feels adequately tested the four highest ranked copper prospects currently known within the KSK COW.

The program failed to indicate the presence of a shallow style economic porphyry deposit.

"Whilst it’s disappointing to see the caliber of an Oxiana walk, our own geologists retain confidence in the copper potential of the KSK COW,” said Kalimantan boss Rahman Connelly.

The company has commissioned an independent report from leading expert Dr Peter Pollard, which is expected to ready by the end of January.

This will form the basis of a data package to be provided to two major mining companies that have already confirmed their interest to review data should Oxiana not proceed.

• News Channel