Southern Arc Minerals has substantially trimmed September quarter losses compared to the previous quarter, finishing with working capital of $8.1 million. It continues to advance discussions for a potential partnership or outright sale of its West Lombok property and is also focusing on directing cash toward buying new high-quality projects in stable regions.
For the three months to September 30, Southern Arc reported a $1.52 million loss, compared to a $41.9 million loss in the June quarter, when it booked a $35 million write down against West Lombok. Total assets at quarter’s end were $16.68 million, while working capital totalled $8.1 million and was sitting at $7.6 million as of November 26.
Since releasing a high-yield potential resource estimate for West Lombok earlier in 2013, the company has maintained low activity while seeking funding partners and moving to acquiring new assets. “Southern Arc remains confident it will find a suitable arrangement,” said a statement amid “a challenging market and decreased valuations for junior mining companies.”
West Lombok covers a 13km-long by 7km-wide corridor of mineralization and alteration hosting porphyry copper-gold and epithermal gold deposits. The two main epithermal prospects, Pelangan and Mencanggah, cover broad areas of 4km by 5km and 6.5km by 4.5km, respectively, hosting numerous structurally-controlled silica ledges variably overprinted by high-grade quartz veins and breccias.
Southern Arc has completed 26,477 metres of drilling on epithermal gold mineralization in the Pelangan and Mencanggah prospects, confirming broad zones of low-grade mineralization throughout, high-grade events typical of epithermal boiling zones and several high-grade shoots. At the Selodong porphyry copper-gold intrusive complex, Southern Arc has completed 20,046 metres of drilling with most drill holes intersecting broad significant copper-gold mineralization zones.
During the September quarter, Southern Arc also renegotiated the purchase and sale of its Taliwang project whereby an individual will purchase Taliwang in exchange for US$3.5 million of which a non-refundable US$100,000 has been received. Taliwang is classified an asset held for sale pending transaction completion.
Meanwhile, at its other Indonesian property at East Elang, Southern Arc held an option agreement with PT Vale Indonesia Tbk, although there are no plans to begin exploration until Jakarta’s forestry moratorium is lifted and the project can be reclassified. Southern Arc said Vale officials say they remain committed to its option to earn an interest.