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Historic Epithermal Vein Complex with Porphyry Overprinting

Wonogiri Project Activities

Prior to being granted the IUPs for Karangtengah and Tirtomoyo properties in early January 2010, Southern Arc had been granted the Karangtengah KP in the Wonogiri project in July 2008 and in August commenced activities on the property, although some initial prospecting was carried out by one of the company's consultants in late 2007. The consultants observed in the area high-sulfidation epithermal mineralization telescoping over a previous porphyry Cu-Au event, somewhat analogous to the Selodong Prospect in the company's West Lombok Property. Subsequently, the Tirtomoyo KP was granted to the company in November 2008.

Preliminary company activities started with initial socialization meetings with local government and community leaders on August 20, 2008 at the regency and village levels, followed by a mandate from the local populace and governmental authorities to commence exploration activities. Work started nearly immediately with regional reconnaissance sampling and mapping. Current activities at Wonogiri include regional stream BLEG and rock chip sampling programs.

Recent Activities

Local socialization meetings at the village and sub-district levels are planned for mid-February on the Tirtomoyo property, with a presentation of the company's exploration plans and related matters.  With the subsequent endorsement by the local government and communities Southern Arc will commence a regional geochemistry and mapping program.

Earlier exploration activities in September 2008 focused on a regional, first-pass BLEG/stream sediment sampling program, and evaluation of small-scale local mining activities throughout the district. In October 2008, two more days were spent completing the BLEG/stream sediment sampling program and a total of 116 BLEG/SS, 81 RC, 28 RF and 2 CH samples were submitted for assaying. Subsequently, the properties were put on care and maintenance.

Preliminary field observations indicate the area is underlain by a sequence of massive to columnar jointed andesite and dacite lava, volcanic breccia, ash to lapilli tuff, siltstone, and sandstone units, later intruded by phyric andesite and diorite stocks/dykes.   Quartz base metal sulfide veins (0.3 to 1.2 m width) mined by local artisan miners are noted as fissure-filling along NE and NW trending structures. Veins are typically open-spaced with crustiform, colloform to massive textures, with 1% to 3% disseminated sulfide (pyrite-chalcopyrite-sphalerite-galena-chalcocite-covellite) hosted mainly by lava and volcanic breccia lithologies.