Kuta Mineralized System

Up to 2006 Southern Arc carried out exploration work on the Kuta Mineralized System (KMS) that entailed outcrop channel sampling, orientation soil sampling and mapping of vein extensions, work which was started in 2004.

Infill and extensions of a 300m by 200m zone, previously defined in November 2005 as a greater than 30ppm Au soil anomaly, was undertaken at Gunung Tinggang (Ngolang-Smoka) the following month. The soil anomaly, open to the south and west, is associated with NW trending, vuggy quartz-limonite veins (max. 120 cm) and stockworking hosted by argillized andesite and dacitic volcanics. Previous outcrop sampling had returned values to a peak of 1.2 g/t Au.

Some 43 soil auger samples were collected along E-W grid lines at 50m spacings to cover possible extensions of the Au anomalous veins and stockwork.

Click here to view Ngolang and Jumbul drill hole sections.

A helicopter-borne magnetic survey was carried out by Southern Arc with the survey completed in mid-May 2005. A total 2,175 line-km were flown over Lombok (including the East Lombok property) by contractor EGI under supervision by an independent consultant geophysicist. Flight line spacing was 400 metres over the two areas on Lombok with certain areas detailed with 200-m in-fill lines. Lines were flown north-south with east-west tie lines at 2,000 m and 1,000m respectively.

Southern Arc's field programs on the East Lombok property to June 2005 comprised of regional drainage sampling programs, which identified 21 mineralised anomalies. Subsequently, work was started to evaluate each anomaly, one by one. Field crews undertook detailed mapping, outcrop channel sampling, ridge and spur bedrock sampling and petrological studies, supplemented by carrying out costean as well as ground geophysical surveys, and the completion of the heli-mag geophysical survey. Furthermore, a scout-level diamond drilling program was carried out on some of the prospects on the East Lombok property, notably the Kuta Mineralised Zone (KMS), to evaluate the properties and determine if more detailed exploration activities were warranted.

Geological mapping and geochemical results within the East Lombok property confirmed the presence of anomalous gold, silver and base metals from low sulfidation epithermal and high sulfidation epithermal mineralized systems. Prospecting identified the presence of a possible alteration lithocap, which with peripheral base-metal quartz veins at Lentek and the presence of low sulfidation epithermal chalcedonic veining are all indicators of the potential for subsurface porphyry Cu-Au systems. Exploration by Newmont (Clode 2002) within the Lombok area noted that alteration lithocaps are commonly above mineralized intrusions or above known or untested porphyry Cu-Au systems.

Magnetic Anomaly Checking

Six magnetic anomaly areas within the central potion of the property were ground truthed in October 2005. Most of the anomalies are related to fresh andesite or diorite porphyry intrusives. A magnetic "high" complex at the Montong Sampah anomaly immediately west of the KMS coinciding with moderate gold stream geochemistry appears to be related to weakly mineralized meta-volcanics.

From 16 rock chip samples assayed the highest value reported was 0.12 g/t Au, with other elements all of low tenor.

Based on surface mapping and geochemistry, along with lithostructural studies and airborne magnetic surveys, only the central portion of the property is considered to have low potential for the discovery of economic mineralization and is unlikely to be a target for further activities and is therefore considered as inactive.

Scout-level diamond drilling program was carried out on some of the prospects within the Kuta Mineralised Zone (KMS), to evaluate the prospect (see Maps page for drillhole locations and geochemical assay results). More detailed exploration activities consequently were warranted.

Hence, in October 2005 infill bedrock sampling and trenching at KMS was completed. A total of 205 bedrock samples and two trenches (39 metres length) realizing 14 CH samples were completed. Trenching failed to intersect any significant alteration or mineralization. However, preliminary assays of KMS bedrock samples outlined an anomalous (greater than 30 ppb) gold zone of 200m by 300m in the area between Ngolang and Semoka.