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

A key part of the Company's exploration strategy is to focus on the mineral-rich Sunda-Banda [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 currently being exploited.  The company believes the Sunda-Banda arc remains relatively unexplored and will host more world-class mineral deposits.

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Island arc terrains along 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 porphyry deposits. In addition to copper-gold porphyry style mineralization, 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 on which there have been some preliminary and up-to-advanced exploration carried out previously. 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.

At this time Southern Arc is exploring areas within the islands of Lombok and Sumbawa . The company's principal project is the West Lombok Property, which hosts both epithermal gold-silver mineralization at Pelangan and Mencanggah, and at least one large complex of copper-gold porphyry style mineralization at Selodong. The company has already been awarded IUPs for all its 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 2010, the Grasberg Mine produced about 1.22 billion pounds of copper and 1.79 million 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 737,000 ounces of gold and 542 million pounds of copper in 2010. 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 to complete its scoping study on the Elang discovery. This property is immediately adjacent to Southern Arc's East 9,670-ha Elang property. Newmont announced it will resume its scoping study, including more drilling, on its Elang discovery in 2011 to improve confidence in and possibly expand the consolidated 25 million ounces of gold and 16 billion pounds copper target (based on a third-party JORC-compliant resource estimate effective June 2010).

Martabe Gold Project

The resource base of the world-class Martabe Gold and Silver Project, located in North Sumatra Province,  has continued to grow and is currently at 6.5 million ounces of gold and 66 million ounces of silver according to G-Resources, the company constructing the project. The Martabe Project, discovered in 1999, lies in a substantial area of a highly mineralised district with potential for further gold and gold-copper deposits. The project started construction in July 2008 and is expected to be completed in 2011.

Southern Arc Projects

The company has a portfolio of four properties, previously held by Newmont, on the islands of Lombok and Sumbawa, all under Mining Business Licences (IUPs). The Taliwang, Sabalong and East Elang properties currently have JVs with major mining companies (Vale and Newcrest) carrying Southern Arc to bankable feasibility study on these three properties.

West Lombok, Southern Arc’s primary asset, has district scale potential with drill-proven, high-grade, gold-rich copper porphyry and epithermal vein systems on the Pelangan, Mencanggah and Selodong prospects.

Shallow, Phase 1 drilling on the Pelangan epithermal gold prospect confirmed continuous zones of Au-Ag epithermal mineralization up to 900 m long and a bonanza gold episode. Phase 2 diamond drilling at Pelangan resumed in late March, and over the following 12 months Southern Arc will carry out at least 15,000 m of Phase 2 and infill resource drilling of the mineral structural breccias (MSB), leading to a NI 43-101 compliant resource status. This will involve aggressive drill targeting of "bonanza" style ore shoots.

Surface sampling at Mencanggah identified more than 16 km of epithermal Au-Ag mineralization overprinting advanced argillic alteration and silica ledges. Epithermal gold targets are drill-ready. Phase 1 and Phase 2 drilling programs of defined MSB targets involving at least 9,500 m of drilling are getting under way using three drilling rigs. Information gained from drilling together with spectral analyses of surface rock alteration will also assist in the targeting of porphyries inferred to exist below the advanced argillic capping.

Furthermore, another 1,500 m of additional diamond drilling of other MSB structures in West Lombok will be carried out together with preliminary metallurgical and geotechnical test work.

Seven of 14 potential porphyry targets at Selodong have already been drill tested by Southern Arc. An identified high-grade porphyry intrusive phase returned ore-grade intervals including 166.2 m @ 0.52% Cu and 0.85 g/t Au. Ongoing work in 2011 will seek to identify and drill test more of the high-grade intrusive phase with about 3,500 m of drilling.