Underwhelming drill results at the Sabalong copper joint venture on Indonesia’s Sumbawa Island have prompted one of the JV partners to pull out of the project.

Southern Arc Minerals and Vale SA completed three diamond drill holes totalling 1811 metres to test potential porphyry intrusive targets defined by geophysical surveys. Drilling intersected weakly altered intrusions and volcanics, with no significant porphyry copper mineralization, prompting Vale to elect not to proceed to the second phase of exploration and withdraw from the Sabalong project altogether. Vale was scheduled to fully fund a bankable feasibility study for the project.

Southern Arc now owns a 100% interest in Sabalong and is proceeding with a drill program to test epithermal gold vein targets in the Toyang prospect. These targets were defined in historical exploration between 1986 and 2011 by Newmont, Rio Tinto Zinc and the company.

The project covers 9950 hectares in the Miocene volcanic belt of the Sunda-Banda Arc, in the Nusa Tengarra Barat province, south-southeast of the administrative city Sumbawa Besar. The region also hosts Newmont’s Elang copper-gold porphyry deposit and Batu Hijau copper-gold mine.

A 2000 metre program has been designed to test the upper parts of the Toyang quartz vein system. Toyang hosts three main mineralized zones which have returned encouraging drill intersections such as 8 metres @ 11.50 grams/tonne gold and 32 metres @ 3.5 grams/tonne gold, from shallow scout drilling in 1997.

Southern Arc believes these drill intersections are indicative of the potential in the area. More recent surface channel sampling by Southern Arc has confirmed the levels of mineralization discovered earlier with surface channel sampling results including 4 metres @ 7.23 grams/tonne gold, 4 metres @ 6.79 grams/tonne gold and 10 metres @ 5.91 grams/tonne gold.

Vale remains a committed partner at the East Elang project, of which it can earn a 75% interest in by advancing the property to a bankable feasibility study (BFS). Phase one of the BFS would require a minimum expenditure of US$1.2 million within 12 months of the permit for the property being issued.

Southern Arc was granted a mining business licence (IUP) for East Elang in December 2009. The property is considered highly prospective due to its location and results from aerial surveys, however exploration has been deferred pending reclassification of the its forestry status. The company has applied to have the IUP suspended and back-dated to allow enough time for evaluation of the property once the reclassification is issued.

www.southernarcminerals.com

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