A Technical Report compliant with NI 43-101 will be published on Sedar within 45 days and will be available from the Company’s website.

HIGHLIGHTS

Inferred Resource of 47 million tonnes averaging 0.6% Cu or 621,700,000 pounds of copper.
Mineral Resource estimate is only for the Main Zone, a portion of the Beruang Kanan mineralized area and is based on assays from 74 diamond drill core holes that were drilled from 1998 to 2007 and then from 2012 to 2013.
The Mineral Resource is contained within a near-surface, shallow-dipping and strongly mineralized system, that extends over an area of 1000m (N-S) and 950m (E-W) with depth extents ranging from surface to between 100m and 350m below surface (top to bottom). The mineralization remains open in several directions.
Other priority targets in the BKM project area have been identified at Beruang Kanan South (BKS), Beruang Kanan West (BKW) and BKZ Polymetallic (BKZ) prospects; each within 1.5km of the BKM Inferred Mineral Resource.
KLG’s CEO Faldi Ismail commented: "The BKM independent Inferred maiden Mineral Resource estimate for the Company’s flagship Beruang Kanan copper project is an important milestone which gives the Board, potential partners and shareholders confirmation of BKM’s potential. The Board is further encouraged by the fact that the BKM mineralization is high grade near-surface with a relatively shallow dipping nature, and drilling in 2013 and desktop work confirmed the potential for additional resources to both the west and south. The Board remains committed to drill testing these further areas and developing the BKM Copper Project with a view to fast tracking the project through to an early development option."

Mineral Resource Estimate

Table 1 – Beruang Kanan Main Zone – July 2014 Inferred Mineral Resource (NI 43-101)*
Reporting cut
(Cu %)
Tonnes
(‘000)
Cu Grade
(Cu %)
Contained Cu
(‘000 tonnes)
0.2 47,000 0.6 280
0.5 24,000 0.8 190
0.7 12,000 1.0 120
Notes:
Mineral Resources for the Beruang Kanan mineralization have been estimated in conformity with generally accepted CIM "Estimation of Mineral Resource and Mineral Reserves Best Practices" Guidelines. In the opinion of Duncan Hackman, the block model resource estimate and resource classification reported herein are a reasonable representation of the copper mineral resources found in the defined area of the Beruang Kanan mineralization. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resource will be converted into Mineral Reserve. Computational discrepancies in the table and the body of the Release are the result of rounding.

Methodology

The Mineral Resource estimate incorporated data from KLG’s drilling programs in 1998 through to 2007 coupled with the August 2012 to July 2013 drilling campaign funded by a former partner, which totals 74 drill holes for 24,774 metres of diamond core. Most drill holes at BKM are widely spaced, with collars generally from 100 to 200 meters apart along 100m spaced section lines. Mr. Hackman verified components of the exploration activities and mineralization features during a site visit conducted between the 4th and 6th September 2014.

The 2014 resource model covers the 1,100m north-south strike extent and 950m width of the BKM vein style mineralized system. Mineralization crops out to the west, is closed-off by drilling to the north and has some potential to be extended to the east. Three deep holes under the main zones have failed to intersect significant copper mineralization, however the depth repetition of mineralization has not been fully tested. There are indications from the structural interpretation that repeat systems at depth and proximal to the BKM zone may exist.

Copper mineralization occurs as covellite and chalcocite replacement of pyrite, in veins and as chalcopyrite within quartz veins and fracture fill. The copper is of likely hypogene origin. Veins and mineralization are hosted in both blocky fractured volcanics and sediments, mainly in the south of the prospect and, in strongly sheared and tectonically milled breccias related to thrusting mainly in the central and northern sections of the prospect. Intense advanced argillic alteration exists throughout the prospect.

The Beruang Kanan resource model is underpinned by data from 74 diamond drill holes (24,774m). Modeled copper mineralization has been intercepted in 749 nominal 3m intervals (2,158m). Topographic control is achieved through the use of a highly detailed LIDAR generated surface to which all drill hole collar coordinates comply. Sample data was composited to 3m intervals and flagged by domains defined from copper assay grades and directed by the H&A structural interpretation. Three passes of inverse distance squared methodology were employed to interpolate grades within domains into a sub-blocked model (parent block size of 25mE x 25mN x 10mRL). High grade copper assays were included in the interpolation with limits to their area of influence applied. The Mineral Resource estimate has been classified based on data density, data quality and reliability, confidence in the geological interpretation and confidence in the copper grade modeling and interpolation.

At a 0.2% copper reporting cut, total contained copper in the Inferred Mineral Resource category is estimated to be 47 million tonnes averaging 0.6% Cu or 621,700,000 pounds of copper. The Mineral Resource is contained within a near-surface, shallow-dipping and strongly mineralized system, which remains open in several directions.

The limits of the BKM Inferred Mineral Resource are defined partially on the basis of the drilling, mapping and sampling campaigns. Pending funding, Stage II infill and expansion drilling will focus on the southern BKM area, where higher grade mineralization has been confirmed in drill holes BK57 & 58 (22.5m @ 1.27% Cu and 33m @ 2.28% Cu, respectively, and drilled to a depth of 300.4m and 300.0m respectively). In addition, the Company intends to initiate comprehensive metallurgical test work and associated studies on the defined Mineral Resource. Stage II drilling and related studies are intended to improve geological confidence so as to upgrade Inferred Mineral Resources to Measured & Indicated Mineral Resources and enable KLG to complete a preliminary economic assessment on BKM.

Exploration Potential

Other priority targets in the BKM project area have been identified at Beruang Kanan South (BKS), Beruang Kanan West (BKW) and BKZ Polymetallic (BKZ) prospects; each within 1.5km of the BKM Inferred Mineral Resource. Geologic observations during field mapping and geochemical data from drill core and / or surface rock chip samples indicate near surface and similar style copper mineralization to BKM. Targets and proposed drilling include:

BKS prospect: Drill hole KBK-28 (151.30m deep) intersected 10.5m @ 0.88% Cu from 14.5 meters depth and rock chips assayed up to 17.6% Cu. Drill hole KBK-28 also intersected high grade gold mineralization from 11.5m, returning 3m @ 11.52g/t Au, (including 1.5m @ 21.7g/t Au). Four holes are proposed, each to a depth of 75m.
BKW prospect: A coincident copper in rock chip and soil anomaly measuring 1,700m by 1,000m, with rock chips returning up to 0.80% Cu. Six holes are proposed, each to a depth of 75m.
BKZ Polymetallic prospect: Drill hole BKZ-1 (123.1m deep) tested outcropping massive sulphide style mineralization and intersected 16m @ 5.75% Zn, 2.78% Pb, 0.64g/t Au, 57.5g/t Ag and 0.16% Cu (including 6m @ 11.63% Zn, 5.99% Pb, 0.71g/t Au, 98g/t Ag and 0.32% Cu). The 2014 grid-based soil sampling program defined a 400m by 200m anomalous zone of Pb-Zn soil geochemistry, which has not been drill tested. Eight holes are proposed, each to a depth of 75m.