Minerals: Gold, silver, base metals
Location: West coast of Sumbawa Island, Indonesia, in Taliwang Regency, West Sumbawa Regency
Area: 31,204 ha
Status: Exploration drilling
Ownership: 90% interest held by Southern Arc

Although the Taliwang property hosts a number of prospects, Southern Arc has focused on two main targets: 1) Lemonga and 2) Jereweh (see prospects map). The company has also carried out preliminary scout drilling on the Ramit prospect and detailed surface prospecting on Semoan-Reboya. Taliwang is located in an excellent location, about 15 km to the north of Newmont's world-class Batu Hijau porphyry copper-gold mine.

1. Lemonga Epithermal Vein System
The Lemonga prospect is a large system, consisting of at least five epithermal veins. Southern Arc has completed two drilling programs on the prospect. Related assay work involving, 56 holes and 5,655.5m of coring in the second phase alone, was completed by the end of July 2006. Compilation of data and preliminary interpretation leading to an estimation of a global ore resource at Lemonga continues. Trenching and sampling to determine extents in the vein system at Lemonga were halted in November 2006. Highlights of final assay results and geochemistry for the Phase 2 drilling program are described in more detail in the Lemonga Prospect Activities page.

2. Jereweh J3 Prospect
Geological field activities during the first half of 2007 focused on continued surface evaluation and scout drilling of the historical Jereweh J3 Prospect on the southern part of the Taliwang property. Activities included grid establishment, detailed geologic mapping, trenching and outcrop channel sampling. Outcrop sampling of jasperoid and veining material returned encouraging assay results. Assays of the subsequent scout drilling, however, returned only a low tenor of Au-Ag from the jasperoid drill intersections and drilling was terminated. See Jereweh Prospect Activities page for a more detailed discussion.

3. Ramit Prospect
See Ramit Prospect Activities page.

4. Semoan-Reboya Prospect
See Semoan-Reboya Activities page.

Contract of Work
Southern Arc started negotiations with the Indonesian government for its first Contract of Work (CoW) for the Taliwang property.  The first meeting was held between the joint government team and the company in the administrative city of Taliwang on April 28. See News Release No. 08-07 for more details. Since then three other meetings were held in Jakarta, Mataram, Surabaya and Bali to iron out the terms presented in the draft CoW document that had been submitted previously by the company. An agreement was reached in principle between the Company and the central, provinical and regency governments on all CoW terms.  The CoW negotiations regarding Southern Arc's Taliwang property had reached a stage where the CoW manuscripts had been finalized and initialled by both negotiating team leaders.

Subsequently, on January 12, 2009 Indonesia enacted a new mining law. This effectively put an end to the Contract of Work regime pursuant to which Southern Arc had been operating since 2004. The enactment of the new mining law ended this process and replaced it with a permit licensing system.

In order for the law to take effect, the government will issue significant implementing regulations, which will be drafted with input from all concerned industry parties. Both the Department of Energy & Mineral Resources (ESDM) minister and department senior staff have indicated that they have set a self-imposed goal of 3 to 4 months from when the new law was enacted to draft these regulations.

At this time, Southern Arc is making the transition from the CoW application to the new permit licensing system. The company is currently obtaining letters (Statements of Facts) from the West Nusa Tenggara governor (for the West Lombok property) and the West Sumbawa regent (for the Taliwang property). The company will submit the statements of fact along with the initialled Taliwang CoW manuscript to the ESDM in order to obtain confirmation from the ESDM that the company's projects including West Lombok, Taliwang and the other KPs will transition automatically into a new mining business license (IUP). Normally, under the terms of the new mining law all new projects must go to public tender to obtain an IUP, however Southern Arc's CoW applications and KPs would be automatically transitioned into IUPs.

Local Infrastructure
Taliwang is easily accessible over paved roads from either Sumbawa Besa, where there is a domestic airport, or from Lombok Island via a ferry terminal that traverses the Alas Strait at Poto Tano. The Batu Hijau mine, lcated close by, can also be reached from Taliwang by paved road. Most of the property is accessible by roads although some of the areas within the prospects can only be reached by foot tracks to minimize environmental impacts in the area. The town of Taliwang hosts Southern Arc’s exploration activities on the property.