Exploration activities at Southern Arc’s Indonesian properties, including West Lombok and Sabalong, are returning encouraging results.  1

Drilling at its flagship West Lombok property has been focused on the Pelangan prospect which hosts epithermal gold mineralization and the Selodong prospect’s porphyry copper-gold mineralization. One drill hole in the north Belikat target to test new porphyry mineralization returned 83 metres @ 0.33 grams/tonne gold and 0.08% copper from 285 metres, including 43.5 metres @ 0.41 grams/tonne gold and 0.08% copper from 306 metres.

Ten shallow drill holes have been completed since January along the Tanjung-Jati target in Pelangan, with highlights of 1.4 metres @ 9.3 grams/tonne gold from 50.5 metres, and 2 metres @ 5.84 grams/tonne gold and 2.2 grams/tonne silver from 11.7 metres.

Southern Arc is now testing the Kayu Putih target at Pelangan, to the north of Jati, and once this is completed a review of results and sampling will identify where drill rigs need to be redeployed.

Southern Arc’s chairman John Proust says there are several gold-rich copper porphyry and epithermal gold vein prospects at the prospect yet to be updated. “Pelangan is an outstanding property covering a 13km-long, northwest tending structural corridor of mineralization and alteration.”

The company carried out extensive exploration at Pelangan between 2006 and 2007, after acquiring the prospect from Newmont Mines in 2005.

Pelangan is about a 90 minute drive from the provincial capital of Mataram, which is serviced by a modern airport. Logging and local government roads also provide good access throughout the property.

At the Sabalong property on Sumbawa Island, which is a joint venture with Vale SA, two diamond drill holes covering 1342 metres have been completed. No significant assays have been returned but a third hole is being planned to target potential porphyry copper-gold mineralization below the lithocap.

The Sabalong project covers 9950 hectares in the Miocene volcanic belt of the Sunda-Banda Arc, in 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.

Southern Arc acquired Sabalong in April 2007 and then entered into a joint venture with the world’s second largest metals and mining company, Vale SA. Vale will fully fund the advancement of Sabalong through to and including the completion of a bankable feasibility study.