Pelangan Gold Prospect
2006 – 2007 Phase 1 Drilling Program and Previous Work

The Pelangan Gold Prospect is located approximately 1.5 hours' drive on good roads from Nusa Tenggara Barat's capital, Mataram. It lies on the northwest end of a 13-km long, northwest-trending structural corridor of mineralization and alteration within which also lie the Selodong gold/copper porphyry prospect at the south end and the Mencanggah epithermal/porphyry district in the centre of the corridor. Both are also targets of Southern Arc's on-going exploration of the West Lombok Property.

The Pelangan Gold Prospect includes five large and complex quartz vein systems: Kayu Putih, Raja, Ratu, Tanjung-Jati and Lala veins. The hitherto unknown Lala Vein was discovered by Southern Arc in June 2006. Initial exploration activities on the Pelangan Gold Prospect through into March 2007 focused on scout drilling, surface mapping and ground CSAMT surveying at Kayu Putih, Ratu, Raja/Lala and Tanjung, along with semi-detailed geological mapping and outcrop channel sampling in East Pelangan.

A shallow scout (Phase 1), 50-hole drilling program was started in June 2006 and completed in early March the following year. Surface mapping at Pelangan and the drilling program have defined extensive, structurally controlled, gold-mineralized breccia zones occurring over an area of 3 by 2 km. These include the Tanjung-Jati, Kayu Putih, Raja, and Lala zones (see various Pelangan Gold Prospects maps). Southern Arc's geologists have applied the field nomenclature "Mineralized Structural Breccias", or MSBs, to these targets.

The Pelangan Gold Prospect is open to the south and east where additional mineralized breccias have been identified and surface exploration is on-going.

Village water supply

As part of Southern Arc's CSR activities the company in the period July to August 2007 had an opportunity to complete the work of providing a piped water supply to the village of Tembowong.

During the drilling of hole QDG-04, a strongly artesian aquifer was encountered, which forced the drillers to abandon the hole because the water pressure was too high to be able to force the coring barrel down. The water column rose to a height of 0.5 metres above the hole collar.

It was the dry season (period between monsoons) and the river nearby had dried up, with Tembowong villagers, mainly women and girls, having to walk many kilometres every day for drinking and household water and for bathing. The water aquifer continued to surge above the drill collar and as a result the company decided to provide what would be a constant water supply to the village, no matter the season. The water from the aquifer passed tests carried out by local and provincial health authorities.

Community water supply system provided by Southern Arc to
the residents of Tembowong Hamlet, Pelangan.

After gaining permission in writing for an easement for the water line (1400 m) to pass across landowners' plots, the water has been directed to public tap stands and a communal large open storage tank. This frees up considerable precious time each day for girls to concentrate on their schooling instead of carrying water for the family, and adult women can similarly pursue other economic activities during time otherwise formerly used for carrying water. The water can also be used to irrigate household vegetable plots, thereby contributing to better family nutrition and perhaps produce excess vegetables, which can be sold at local markets for added family incomes.

Gawa Bongor

Gawa Bongor is a potential mineralized target that was located in March 2008 [see map]. The area is located 1 km north of the Lala MSB and about 1.3 km east-northeast of Kayu Putih. Reconnaissance mapping was carried out in the area during collection of structural data for an external consultant to carry out a structural study of the Pelangan Gold Prospect related to a new drilling program on the prospect. Two continuous 5-m channel samples collected from malachite-azurite stained diorite porphyry reported a combined intersection of encouraging copper and zinc mineralization. Further consideration of this new target is warranted. Additional mapping is on-going.

Scout (Phase 1) Drilling

A shallow, 50-hole scout (Phase 1) geo-drilling program was started in June 2006 and completed in the first quarter of 2007. Surface mapping at Pelangan defined extensive, structurally controlled, gold-mineralized breccia zones occurring over an area of 3 by 2 km. These included the Tanjung-Jati, Kayu Putih, Raja, Ratu, and Lala zones (see various Pelangan Gold Prospects maps).

Kayu Putih MSB

The Kayu Putih Mineralized Structural Breccia zone is situated in the northern area of the Pelangan Gold Prospect. Zones of potentially significant gold mineralization were intersected in 9 of the 14 scout drill holes assayed within the Kayu Putih MSB.

The Kayu Putih MSB comprises two intersecting mineralized structures with east-west and northwest trends, over an area of about 800 by 400 metres. The east-west oriented structure at Kayu Putih is inferred to be hosted within 'en-echelon ramp-structures', which can be associated with high-grade mineralization. At the Kayu Putih MSB the en-echelon ramp-structures are developed between major, mineralized northwest trending structures that parallel the dominant 320 degree orientation, which hosts numerous mineralized structural breccias and porphyry occurrences within the West Lombok Property.

Southern Arc completed 17 shallow drill holes drilled on a north-south grid orientation at angles between 55 degree to 60 degree dip with variable spacing between holes (see maps page for location map). The deepest mineralized intercept occurs at 59 metres vertically below surface and most intersections occur below the base of complete oxidation. Dips of the structures varied between 60° to 80°. The majority of drill holes were drilled perpendicular to the mineralized structures. Drilling at Kayu Putih was spaced between 50 to 100 metre intervals.

Five of the drill holes at Kayu Putih were to test W to NW CSAMT linear structures and lateral extensions of previous high grade drill intersections. Click here to view Kayu Putih MSB drill hole sections.

Highlights of the Phase 1 Kayu Putih drill hole intervals include:

Drill hole KDG003:                   3 m @ 4.1 g/t Au
                        (including:       1 m @ 5.9 g/t Au)

Drill hole KDG004:                   11.4 m @ 9.6 g/t Au & 47 g/t Ag
                        (including:       1 m @ 71 g/t Au & 182 g/t Ag)

Drill hole KDG012:                   11.1 m @ 3.1 g/t Au & 8 g/t Ag
                        (including:       2.55 m @ 9 g/t Au & 16 g/t Ag)

                                              4.1 m @ 5.9 g/t Au & 9 g/t Ag
                        (including:       1.1 m @ 18.1 g/t Au / 25 g/t Ag)

Drill hole KDG013:                   5 m @ 4.2 g/t Au & 15 g/t Ag
                        (including:       1.4 m @ 9.8 g/t Au & 21 g/t Ag)

Click here for all the Kayu Putih MSB scout drilling statistics.

Before the geo-drilling started, a CSAMT geophysical survey was completed at Kayu Putih for a total of 5,900 line-metres. Resistivity readings were taken at 20 m intervals along north-south oriented lines.

Preliminary interpretation of the CSAMT sections showed a positive correlation with surface quartz veining and silicification. A strong resistivity feature was also indicated immediately south and parallel to the main east-west Kayu Putih mineralized structure (see Kayu Putih Geology & Preliminary CSMAT Resistivity Anomaly map on the Pelangan Gold Prospect Maps page). A geologist consultant provided quality control, and interpretation of collected data was provided by contractor EGI. The geo-drilling program at Kayu Putih was completed in early August 2006 with a total of 13 shallow drill holes completed (KDG002 to KDG013) ahead of schedule with an average daily rate of 24.4 m.

Drill holes KDG001 to KDG005, KDG008 and KDG010 (see Kayu Putih Preliminary Geological Interpretation Map with Geo-Dill Hole Locations on Maps page) targeted the main ENE to NE trending quartz vein body at Kayu Putih. All holes successfully intersected targeted quartz vein zones of variable thickness, (between 1 to 12 m) and vein density from the hanging-wall side of the structure, indicating a variable moderate to steeply north-dipping structure.

Drill holes KDG006 and KDG007 were drilled from the south side of the structure to the north to test the foot-wall of the main quartz body and check for parallel vein zones. Broad zones of intensely argillic altered volcanics were intersected with narrow-localized silicic zones confirming the orientation of the main quartz bearing structures.

KDG009, KDG011, KDG012, and KDG013 were targeted to test the main discontinuously exposed NW trending quartz vein zone on the eastern side of Kayu Putih. Drill holes were located to target NW--NE quartz vein intersections in this area. Broad zones of quartz veining were successfully intersected at these locations.

Veining and silicification seen at the surface appears to be consistent to depths intersected by the scout drilling program; generally between 2 m and 40 m vertically below surface. Variable levels of oxidation were encountered in the quartz vein zones from completely oxidized to fresh, though vein intercepts occur predominantly below the base of complete oxidation.

All of inferred mineralization from drill core intercepts corresponds with quartz veining and strongly silica ± clay altered, variably sulfide mineralized zones. Quartz veining represents intense multi-episode silicic alteration focused into fracture zones within volcanic lapilli-tuff breccias. Vein zones occur as variable density sheeted to stockwork zones with localized hydrothermal breccias. Individual vein zones can be over 10 m wide. Quartz textures vary from very fine-grained to coarse-grained saccharoidal, with localized weakly developed banding. Quartz veins exhibit irregular cross-cutting relationships and variability in sulfide content. The coarse-grained saccharoidal variety, generally hosting more fine-grained disseminated dark sulfides, is inferred to be copper and silver sulfosalt minerals.

Ratu MSB

The AD 175 drill rig was subsequently moved from Kayu Putih to the Ratu MSB in early August 2006. Phase one scout drilling at the Ratu Vein was completed in September with seven holes completed for a total of 544.35m drilled.

Five holes were drilled at the Ratu Zone. These drill holes targeted extensions below high-grade surface rock-float at the Ratu MSB, but failed to intersect major structures. The large volume of locally high-grade material located at the Ratu MSB is now believed to be derived from the Tanjung MSB. Narrow mineralized drill intercepts recorded at the Ratu MSB are related to "horse-tail" splay structures developed between the Raja and Tanjung MSBs. Click here to view Ratu MSB drill hole sections.

Highlights of drill hole intervals at Ratu include:

Drill hole QDG04:                      3.7 m @ 2.3 g/t Au
                        (including:       1.4 m @ 4.9 g/t Au)

                                              4.3 m @ 2.1 g/t Au & 10 g/t Ag
                        (including:       2.5 m @ 3.2 g/t Au & 16 g/t Ag)

Drill hole QDG06:                     1.0 m @ 7.36 g/t Au & 186 g/t Ag

Click here for all the Ratu MSB scout drilling statistics.

Drilling at Ratu did not achieve expected results as mineralization below surface was not representative of the large volumes of mineralized float seen at the surface. It is now believed that the large volume of mineralized material had slumped off the south-eastern section of the Tanjung Vein. Quartz veins that were intercepted at Ratu are now inferred to be part of a 'horse-tail' splay structure that developed at the junction area of the central Raja and Tanjung veins.

Tanjung-Jati MSB

The Tanjung-Jati MSB is located in the western region of the Pelangan Gold Prospect. Zones of potentially significant gold mineralization were intersected in eight of the 13 drill holes completed within the Tanjung-Jati MSB. The Phase 1 scout drilling program at the Tanjung-Jati MRB was started in November 2006 and was completed by the end of December. A total of eight holes were drilled (TDG-01 to TDG-08) at Tunjung and five holes (JDG01 to JDG05) at Jati were completed.

The Tanjung-Jati MSB comprises a 1.5-km long northwest trending structure divided by a central split to form Jati to the west and Tanjung to the east. The northwest trend of Tanjung-Jati parallels the dominant 320° orientation.

At surface, the mineralized structural breccias exhibit a 'pinch and swell' character with zones up to 20 metres in width. Shallow drilling along the strike length of the zone confirmed continuity to depths of around 50 metres with locally high-grade intercepts (see Tanjung-Jati maps on maps page).

All drill holes during this program were made at inclinations between 55 degrees to 60 degrees, and spaced at intervals ranging between 50 to 230 metres along strike, confirming a vertical to sub-vertical dip on the structural breccias. Most of the mineralization was intercepted below the base of surface oxidation.

The program to the end of February 2007 confirmed the presence of mineralized zones with locally high grade intercepts. Sub-surface intercepts are up to 15 metres wide showing good continuity along strike. Future infill and deeper drilling will seek to locate more high-grade mineralization as significant areas along strike, which also host high grade surface samples, have yet to be drilled. Drilling intercepts received so far are generally comparable in magnitude to previous outcrop sampling.

Zones of potentially significant gold mineralization have been intersected in 8 of 13 drill holes completed within the Tanjung-Jati MSB. Click here to view Tanjung MSB drill hole sections and click here to view Jati MSB drill hole sections. Highlights of drill hole intervals include:

Drill hole TDG01:                     18.45 m @ 1.1 g/t Au & 4 g/t Ag;
                        (including:       1.6 m @ 4.1 g/t Au & 3 g/t Ag)

Drill hole TDG02:                     10.5 m @ 13.4 g/t Au & 8 g/t Ag;
                        (including:       2.3 m @ 47.9 g/t Au & 24 g/t Ag)

Drill hole TDG03:                     8.6 m @ 2.7 g/t Au / 4 g/t Ag;
                        (including:       2.95 m @ 6.1 g/t Au / 9 g/t Ag)

Drill hole TDG06:                     4.6 m @ 3.1 g/t Au & 10 g/t Ag;
                        (including:       1.45 m @ 5.5 g/t Au & 10 g/t Ag)

Drill hole TDG07:                     18.45 m @ 1 g/t Au & 7 g/t Ag;
                        (including:       1.2 m @ 6.6 g/t Au & 4 g/t Ag)

Drill hole JDG03:                      9.2 m @ 5.9 g/t Au & 11 g/t Ag;
                        (including:       1.25 m @ 24.9 g/t Au & 7 g/t Ag);
                                              9.05 m @ 1.6 g/t Au & 10 g/t Ag;
                        (including:       1.75 m @ 6.1 g/t Au & 28 g/t Ag)

Click here for all the Tanjung MSB scout drilling statistics and click here for all the Jati MSB scout drilling statistics.

Raja MSB

The Raja MSB is located within the southern part of the Pelangan Gold Prospect. Phase 1 scout drilling at Raja was completed in November 2006. Click here to view Raja MSB drill hole sections. Zones of significant gold/silver mineralization were intersected in a number of drill holes as follows:

Drill hole RDG01:                     10.7 m @ 2.9 g/t Au & 20 g/t Ag
                        (including:       4.7 m @ 5.8 g/t Au & 27 g/t Ag)
                                              3.45 m @ 4.1 g/t Au & 64 g/t Ag
                         (including:      1.1 m @ 7.6 g/t Au from 63.2 m)

Drill hole RDG02:                     6.1 m @ 2.4 g/t Au & 17 g/t Ag
                        (including:       3.5 m @ 3.8 g/t Au & 26 g/t Ag)

Drill hole RDG03:                     6.3 m @ 2.5 g/t Au / 81 g/t Au
                        (including:       1.6 m @ 5.7 g/t Au / 50 g/t Ag)
                                              12.1 m @ 2.3 g/t Au & 16 g/t Ag
                        (including:       3.15 m @ 4.8  g/t Au & 22 g/t Ag)

Drill hole RDG04:                     9.5 m @ 6.2 g/t Au & 41 g/t Ag
                        (including:       3.05 m @ 14.2 g/t Au & 61 g/t Ag)

Drill hole RDG05:                     22.95 m @ 4.1 g/t Au & 17 g/t Ag
                        (including:       2.25 m @ 14.6 g/t Au & 10 g/t Ag
                        and                 1 m @ 21.4 g/t Au & 23 g/t Ag)

Drill hole RDG06:                     16.1 m @ 2.7 g/t Au & 23 g/t Ag
                        (including:       5.7 m @ 5.2 g/t Au & 30 g/t Ag)

Drill hole RDG07:                     11.3 m @ 2.8 g/t Au / 22 g/t Ag
                        (including:       1.6 m @ 6.6 g/t Au / 38 g/t Ag)
                                              19.75 m @ 4.6 g/t Au & 28 g/t Ag
                        (including:       2.5 m @ 5.5 g/t Au & 28 g/t Ag
                        and                 3.9 m @ 13.5 g/t Au & 22 g/t Ag
                        and                 4.6 m @ 3.6 g/t Au & 24 g/t Ag)

Drill hole RDG08:                     13.1 m @ 1.3 g/t Au & 15 g/t Ag
                        (including:       1.85 m @ 2.5 g/t Au & 16 g/t Ag
                        and                 1.7 m @ 2.6 g/t Au & 27 g/t Ag)

Drill hole RDG12:                     22 m @ 1 g/t Au & 14 g/t Ag
                        (including:       3.8 m @ 2.3 g/t Au & 13 g/t Ag)

Click here for all the Raja MSB scout drilling statistics.

Lala MSB

As part of the exercise to refine a subsequent Lala scout drilling program, re-mapping and sampling of the possible sub-parallel to parallel vein structures at Lala was started earlier on in the program. Outcrop sampling in the program of the western extension of the Lala Vein (see Lala and Raja Vein Geochemistry map) and along strike extensions of the Raja Vein resulted in the submission of 96 rock chip samples (2 m to 3 m intervals) for assaying during July 2006. Veins were described as "...moderately oxidized, with relic sulfide cores (tellurides??), fine-grained to coarse-grained saccharoidal with localized hydrothermal brecciation and banding, with widths of 1.5 m to 4.0 m...."

First-pass mapping and sampling were completed in February 2007 over the Lala MSB, which parallels the Raja MSB 350 metres to the east. Mapping defined a series of mineralized structures oriented between north-northwest and east-west over a 1 km strike. Mineralized structure exposures are comprised of outcrops up to 15 m in width in the southern zone, but generally are limited to discontinuous sub-crops to the central and northern zones. Preliminary assay results from 163 rock-chip samples collected during the program showed consistently high grades along the length of the Lala MSB. The average gold result from 163 rock-chips was 1.6 g/t Au with a peak result of 51 g/t Au (see Lala maps).

Hand Trenching

Selective hand trenching over the Raja-Ratu veins was completed during May 2006. Three of a five planned trenches were excavated for a total length of 28 m. Trenches were excavated to a depth of 2.5 m, but no in situ vein material was encountered, only vein subcrop, or talus regolith. This is a good example of justification for the usage of the smaller geo-drilling rig.

Rock Saw Channel Sampling



Rock saw outcrop channel samples were collected at 29 locations along the Pelangan veins in May 2006, including further twin sampling of old Newmont channel samples at Kayu Putih and Tanjung veins, together with sites along the Raja Vein.

Rock chip samples were collected from new exposures at Tanjung, Ratu and south of the Kayu Putih vein. Samples were mostly composite chip samples of widths to a maximum of 3 m across strike of the main vein bodies, and 5 m composites across wall rock alteration.

East Pelangan Gold Prospecting

First-pass mapping and sampling continued during November 2006 east of the Pelangan Gold Prospect at Montong Bagek and Lendang Guar (see West Lombok Project Active Exploration Areas map on Maps Page).

Montong Bagek is located in the upper tributaries of the Rajumas River, approximately 1 km east of the Raja Vein. Steeply dipping quartz vein lenses occur along ridges and spurs with exposed dimensions up to 20 m by 3 m. Dominant vein orientations include northwest; northeast; and east-west trends. Veining comprises multi-phase quartz breccia and stockworks.

Lendang Guar is located approximately 3 km northeast of the Raja Vein. Mapping defined a series of north-south to north-northeast trending quartz veins, traceable up to 500 m along strike with vein widths to 3 m. Quartz veins display typical 'high-level' low sulfidation textures including banded cryptocrystalline quartz.

South Pelangan Gold Prospecting

Several days in October 2006 were spent carrying out geologic mapping and sampling in the upper tributaries of the Raju Mas River toward the Lendang Guar area (see maps on maps page). Mapping outlined a large diorite body intruding the andesite volcanic and volcaniclastic pile. Narrow structural features (veins, shears and fault zones) up to 2 metres in width, often with associated argillic alteration were noted in stream traverses. Individual veins are described as banded to vughy, with an abundance of sulfides (pyrite >> enargite?), with predominate NW and subordinate NE and E trends.

Preliminary assay results of rock chip samples collected showed generally moderate to strong gold anomalism. Of the 66 samples, 10 returned Au values greater than 0.5 g/t Au and 8 returned greater than 1 g/t Au (max. 2.58 g/t Au/79 g/t Ag/0.48% Cu/365 g/t Mo, from a site approximately 500 m southeast of the Lala Vein).

Pelangan Vein Geochemistry and Petrological Study

In October 2006 a study was commenced to relate Pelangan surface and down-hole geochemistry with vein textures to gain a better understanding of mineralization paragenesis. Certain statistical analytical functions, the most pertinent being mean values and correlation coefficients, were applied to treat the geochemical data from the various prospects. Eleven elements were used in the analysis: Au, Ag, As, Sb, Te, Se, Bi, Mo, Cu, Pb, and Zn. Comparisons were made between sample populations of the various prospects, both surface and down-hole, as well as between populations falling within selected geological and/or geometrical parameters of the same prospect (for instance, Kayu Putih samples hosted by east-west structures versus those hosted by NW structures). Although such breakdowns may lead to small populations and questionable statistical validity, it was felt that with some geological input the study could indicate broad geochemical trends or vectors to aid further exploration.

In conjunction with the above, drill core textures, in particular those of Au-Ag anomalous quartz ± sulfide veins were studied and geochemistry compared. Notes were taken along with copious numbers of macro-photos highlighting various aspects of lithology, alteration, mineralogy, brecciation, and vein textures with particular emphasis placed on paragenesis and apparent changes in mineralizing fluid chemistry. Twenty-seven drill holes from three vein structures (up to hole RDG-07), were initially included in the study. The photos and descriptions provided an initial framework to base a photographic catalogue of all pertinent geological features found (and yet to be found) within the Pelangan Gold Prospect area. Photos of all previous petrology samples taken from the drill core were included along with a summary of each from the received SKM petrology report.