Vale International S.A. has notified Southern Arc Minerals that it will not be proceeding with a potential joint venture at Southern Arc’s East Elang property in Indonesia. The joint venture was contemplated by an option and JV agreement signed on October 3, 2010.

“Southern Arc and Vale have proceeded with the best of intentions, engaging with local communities and undertaking early reconnaissance of the East Elang property,” said Southern Arc chairman and CEO John Proust.

“Unfortunately, repeated extensions to the Indonesian forestry moratorium have continued to delay the start of exploration at this property. While we are clearly disappointed with Vale’s decision, we understand the company’s need to refocus its exploration dollars elsewhere.”

The 9670 hectare East Elang property is immediately adjacent to Newmont’s Elang copper-gold porphyry deposit.

Southern Arc will continue to look for opportunities to advance the property and bring value to its shareholders.

Southern Arc is a Canadian mineral exploration company focused on gold and copper-gold exploration. The company is advancing two properties in Indonesia - West Lombok, a resource-stage property with several gold rich copper porphyry and epithermal gold vein prospects, and East Elang. Southern Arc also holds an investment in Oban Mining Corporation, which is advancing the Windfall Lake Gold Project in Quebec, Canada, and has applied for 80 prospecting rights licenses in Northern Japan in an area with known gold occurrences and a history of mining.

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