A unique window of opportunity
Following the 10-year exodus of junior mining companies from Indonesia after the 1997 Asian economic crisis, Southern Arc management saw a unique window of opportunity. Acting quickly with a regionally-experienced team, Southern Arc became the first Canadian junior exploration company since 1997 to establish a significant exploration presence in Indonesia. We are now advancing several key projects, all overseen by top technical management.
Exceptional expertise for a proven mineral environment
With decades of experience in Indonesian exploration and mining, Southern Arc’s management and directors provide an outstanding blend of experience and expertise for the company’s objectives. Our management and directors bring to the company a long record of achievements in international exploration, development, mining, engineering, finance, acquisitions and administration. Indonesia has numerous large mineral deposits which include the Batu Hijau mine on Sumbawa Island and the Grasberg Mine in Papua, the world’s largest gold mine and the third largest copper mine. In 2004, it was estimated to have reserves of 46 million ounces of gold. In 2007, the Grasberg Mine produced about 943,590,000 pounds of copper and 320,000 oz of gold.
Strategy and objectives
Our key exploration region is the renowned Sunda-Banda mineral arc stretching across the islands of southern Indonesia. Employing a systematic approach to the evaluation of mineral targets, particularly on the islands of Sumatra, Java, Lombok, and Sumbawa, our goal is to become the premier mineral exploration and development company in Indonesia.
Project overview
Southern Arc has currently assembled a portfolio of five projects on the islands of Lombok and Sumbawa. Sumbawa island hosts Newmont Mining's world-class Batu Hijau mine, which adjoins Southern Arc's Taliwang property immediately to the south. The Batu Hijau Mine has a reported reserve of 1 billion tons containing 0.49% copper and 0.39 g/ton gold. In 2006 the mine produced 435,000 oz of gold and 435 million pounds of copper. Much of Southern Arc's ground was previously explored by Newmont until it was obliged to relinquish assets to focus on development of the Batu Hijau Mine.
Key project: West Lombok
The Company’s current focus is on the West Lombok property, which is a high-grade, gold-rich copper porphyry and epithermal vein complex within a 18,483-ha area of western Lombok Island. West Lombok hosts a major NW-SE trending structural feature extending approximately 13 km long by 7 km wide. This zone hosts copper-gold porphyry mineralization in the southeast, high-grade epithermal gold mineralization in the northwest, and transitional mineralization in between.
Contract of Work Negotiations
Southern Arc started negotiations with the Indonesian government for its first Contract of Work (CoW) for the Taliwang property. The first meeting was held between the joint government team and the company in the administrative city of Taliwang on April 28. See News Release No. 08-07 for more details. Since then three other meetings were held in Jakarta, Mataram, Surabaya and Bali to iron out the terms presented in the draft CoW document that had been submitted previously by the company. An agreement was reached in principle between the Company and the central, provinical and regency governments on all CoW terms. A final meeting between the negotiating parties, comprising other CoW negotiating companies in addition to Southern Arc, was to be held in Jakarta on July 21 for final clarification and to complete the paperwork, after which the ministry will submit the CoW to the Indonesian parliament for ratification and enactment. However, a new director-general of mineral, coal and geothermal was appointed and sworn in on that day, hence the meeting has had to be postponed to early September.
Financing
Following a recent $11.3 million financing, Southern Arc is well funded for its current objectives. As at the middle of June 2008, the Company’s cash position stood at CAD$9.3 million.
