Southern Arc Minerals Inc.

Southern Arc Minerals is currently exploring six mineral properties located on Java, Lombok and Sumbawa islands along the southern arc of islands that form southern Indonesia.

A key part of our exploration strategy is to focus on the mineral-rich Sunda-Band [southern] magmatic arc (see Magmatic Arc Map). Spanning the islands of Sumatra, Java, Bali, Lombok, Sumbawa, Flores and Wetar, this feature hosts several “elephant-sized” porphyry copper-gold deposits, some of which, such as the Batu Hijau Mine and the Grasberg Mine, are being exploited. We believe the Sunda-Banda arc remains relatively unexplored and will host more world-class mineral deposits.

[Click here to see full-sized map]

Island arc terrains through the Pacific Rim are host to some of the world's most significant copper-gold porphyry-related deposits and epithermal gold deposits. More specifically, within the Miocene-aged island chain of Indonesia are massive copper-gold deposits. In addition to copper-gold, the geological region is prospective for low and high sulphidation epithermal mineralization. One example is Newcrest’s Gosowong mine in Sulawesi , which has been expanding mineral resources to 3.2 million oz Au. On its northwest extension at Kencana, the company reported in 2007 a measured and indicated resource of 700,000 tonnes grading of 41 g/t Au.

Thus far, Southern Arc has concentrated on acquiring and exploring areas that have had some previously conducted preliminary and up-to-advanced exploration. Southern Arc has also focused its activities in areas with above-average levels of established infrastructure. Although parts of Indonesia are infrastructure challenged, Southern Arc’s main projects are largely road accessible and within what can be described as low to only moderately challenging exploration environments.

Southern Arc is currently exploring areas within the islands of Java, Lombok and Sumbawa (red boxed areas on the map) . Its current principal project is the West Lombok Property, which hosts both epithermal gold mineralization at Pelangan and Mencanggah, and a large complex of copper-gold porphyry style mineralization at Selodong. The company is currently applying for two IUPs on its West Lombok and Taliwang blocks, having already been awarded IUPs for its East Elang, Sabalong, Karangtengah and Tirtomoyo properties. After the enactment of the new mining law no 4/2009 on January 12, 2009, IUPs, which are a form of business mining licenses, have replaced the Contract of Work regime under which mining activites were formerly carried out in Indonesia.

Grasberg Mine

Geologically, Indonesia is very well endowed with world-class mineral deposits. Freeport McMoRan’s 2.8 billion ton Grasberg mine in Papua is 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.

Batu Hijau Mine

Newmont’s Batu Hijau copper-gold mine, on Sumbawa Island, immediately to the south of Southern Arc's Taliwang property, produced 435,000 ounces of gold and 435 million pounds of copper in 2006. The mine has a reported reserve of 1 billion tons containing 0.49% copper and 0.39 g/ton gold.

Further to the east on Sumbawa, Newmont has been carrying out exploration work on the Elang discovery, now rumoured to have a 1.8 billion-ton resource. Southern Arc controls the 9,670-ha East Elang property adjacent to Elang.

Martabe Gold Project

Australia’s Oxiana was approved to go ahead with the Martabe gold and silver project in the Indonesian province of North Sumatra. Average annual total cash costs of production were estimated at US$270/oz. The Martabe DFS was based on the single Purnama deposit which has an initially identified mine life of 9 years with annual production of 200,000 oz of gold and 2,000,000 oz of silver. Two other adjacent deposits, Baskari and Pelangi, plus primary gold potential at depth and other un-explored areas of Oxiana’s tenement represent significant upside potential. The total resource base at Martabe is estimated at 5.8 million oz gold and 60.0 million oz of silver including 4.4 million oz at the Purnama deposit and 1.4 million oz at the Baskara and Pelangi deposits. At Purnama, there are probable reserves of 2.3 million oz gold and 30.1 million oz of silver. In May 2008, Oxiana merged with Zinifex to become OZ Minerals. As the world's economic situation worsened and the demand for mineral resources decreased significantly, the struggling OZ Minerals has been forced to sell its Sumatran Martabe gold and silver project even as it had been planned to be brought into production by the end of 2009. The company agreed to sell the Martabe project to China Sci-Tech, listed in Hong Kong.

Projects