East Elang Project Activities

Updated: 141209

Southern Arc started to carry out preliminary exploration and geological and mineral work activities on the East Elang property in June 2006. This has included carrying out an evaluation study of the property including a lithostructural interpretation and an extensive review of all data acquired through previous exploration, including data provided to Southern Arc by Newmont. An aeromagnetic survey of the property is planned in the future. Socialization programs are under way. Following completion of analyses of the existing data, including previous semi-detailed mapping and sampling of drainage anomalies, early prospect evaluation work and mapping of possible Newmont Elang discovery structural mineralization extensions onto the East Elang property started on May 8, 2008. The regent of Sumbawa issued an IUP for East Elang to Southern Arc on December 17, 2009.

Most Recent Activities

A base camp for staging exploration was established at Lawin (see map) in preparation for supporting a full exploration team, which was fielded on May 8, 2008. In due course, a secondary base camp is being established in the south of the property while at Air Panas. The main field program initially has focused on surface prospecting, mapping and sampling.

During May 2008 East Elang exploration activities concentrated on regional drainage sampling in the northern part of the property, with a total of 12 BLEG/SS and 9 RF samples (see map). BLEG sample density ranged from 0.3 to 1.1 km². This work of limited reconnaissance traverses, supported by remote sensing and aerial sorties, confirm extensions of the adjoining Elang-Dodo porphyry Cu-Au footprint onto Southern Arc's East Elang property.

Three helipads were established at Lantung, Lawin and Air Panas in 2008.  Each helipad is 15 by 15 m in area with appropriate windsocks, designated skid landing site and a maximum helicopter approach angle of 15 degrees related to surrounding vegetation and topography.

Previous Activities

Early in 2008 the vice president of exploration spent a day traveling to the villages of Ropang and Lawin to check on access to the property, and subsequently held socialization meetings with local officials, village heads and other interested local parties were completed.

Previously, in 2007, airborne geophysical data provided to Southern Arc by Newmont was analyzed by consultant geophysicist Nigel Hungerford, FAusIMM, ASEG to establish whether the same or similar geophysical responses from Newmont's Elang discovery are repeated on the East Elang property. Newmont flew two generations of aeromagnetic surveys over the property and their adjacent ground including Elang in 1991 (400 to 1000 m N-S flight lines) and 1993 (200 m E-W flight lines).

In his findings, Hungerford noted that Newmont’s Elang discovery sits at the intersection of obvious NNW and NNE magnetic lineaments. Similar linear directions extend through the East Elang property, although less obviously pronounced. The WNW structures interpreted in a previous lithostructural study carried out by Southern Arc are not readily apparent, however this might be a result of the wide spacing of the N-S flight lines and the lack of resolution of sub-parallel structures to the closer spaced E-W flight lines. Circular magnetic features with subdued magnetic responses (about 600nT) derived from secondary magnetite alteration as those at Elang were noted in two locations within the property (see Aeromagnetic RTP Map on maps page). One in the SW corner lies at the intersection of NNW and NE linears, but might be directly or indirectly influenced by topography. Another broader magnetic anomaly occurs on the eastern property boundary and is inferred to be an alteration aureole to a large intrusive body.

An initial socialization program consisting of meetings with local government officials, village heads and elders, NGOs, religious leaders, and others was undertaken in May 2006 as part of the preliminary general survey program of the East Elang property.

Time was spent to undertake the socialization program at East Elang, following preliminary meetings with the regent and associated staff. The rationale for the program is that it is the first part of a on-going educational and co-involvement program, whereby the company is in discussions with local government officials, village heads and elders, NGOs, religious leaders, and others in explaining the activities of the company, the difference between exploration and exploitation (a common mistake), permitting, etc. This is particularly important in this era of regional autonomy, with the company establishing a bond/relationship with the local community and in the short term making it easier for the company to undertake field activities unhindered by misconceptions in the local community and in government.

At each of the meetings company personnel supported by a representative of the provincial Mines Department spent two to three hours talking to 40 to 50 interested parties. Questions asked by the local people included:

1. The issue of exploitation and related social development of local people.
2. Health and safety issues relating to working with the Company.
3. Wages and benefits in working with the Company.
4. Land compensation relating to the Company's exploration activities.
5. Status of previous and current exploration licenses.
6. When the Company will commence field exploration activities.

Overall the feedback from the meetings was very encouraging, which bodes well for future exploration activities.

Historical Activities

Earliest reports of precious mineral occurrences in the district began in 1910 when a military soldier noted quartz-pyrite veining near Dodo Hill (Brouwer, 1943). Van Rheden (1914) visited the area in 1912 and noted base metal mineralization.

Newmont undertook regional drainage sampling of the area, as part of a larger regional survey during 1986 to 1988. From this work a number of anomalous areas were defined including the Air Panas Anomaly to the south of the property, which is not an extension of the mineralization of Newmont’s Elang discovery.

Air Panas Anomaly

Initial drainage sampling on the Air Panas anomaly reported BLEG anomalies of 24.2ppb Au/13.5ppb Ag and 6.07ppb Au/13.5ppb Ag. No anomalies were returned from -80* fraction or pan concentrates. Upstream of reported anomalies there were occurrences of banded quartz-sulfide veining hosted by argillically altered andesite breccia. Rock chip samples from outcrops returned 0.83 g/t Au/34.0 g/t Ag/0.93ppm Hg and 3.6 g/t Au/310 g/t Ag/0.75ppm Hg.

A large alteration system was mapped in the river bed of the Air Panas drainage. Numerous but narrow quartz veins were mapped in siliceous and argillized zones. Veins are hosted in a bedded sequence of predominantly polymictic pebble and boulder conglomerates, thin sandstone and siltstone units with minor andesitic lavas and airfall pyroclastics. Argillic alteration is confined to the selvedges of vein and stockwork systems, whereas propylitic alteration is ubiquitous.

Mineralization is controlled by three structural sets. The most characteristic is the east-west set with abundant sooty pyrite, poddy colloform chalcedonic quartz containing cinnabar. A 300-330 degree set is the possible conjugate set; often sheeted vein sets or stockworks are noted in the apex of the two vein sets. Less common are N-S structures with similar mineralogy to the other two sets.

Hot spring activity is observed several kilometers to the south where crystalline calcite is being deposited with algal material.

Assessment: Follow-up sampling and mapping (1:5,000 scale) of streams and tributaries returned anomalous -80# values of 30-1,050 ppb Au, whilst BLEG values were of low tenor. An exception was in Air Panas, directly downstream of known outcropping mineralization, which returned a value of 24.2 ppb Au.

Rock chip sampling of quartz-sulfide veins from a large alteration system reported values of up to 3.0 g/t Au, with significant amounts of silver and arsenic (maximum 2 percent), along with high levels of antimony and mercury. High level epithermal mineralization with a distinct signature level was postulated.

Some narrow veins within major structures gave high gold values. Other erratically mineralized intersections of up to 1.0 m @ 7.0 g/t Au were also reported. Infill BLEG samples and -80 mesh values were all of low order and Newmont determined the area had only limited potential. Hence, it was relinquished during the 4th relinquishment in 1999. Subsequently, during the period 2004 to 2005, Newmont discovered the huge, high-grade copper-gold porphyry in its Block IV property immediately adjacent to Southern Arc's East Elang property. Remote sensing studies (Landsat imagery and aerial photography) show the controlling NNE trending mineralized structural corridor extends well onto the East Elang property acquired by Southern Arc, and hence why Southern Arc set to acquire this property.