Arc Exploration reports Indonesian mining ops

The following is an edited excerpt from Australian mining firm Arc Exploration Limited quarterly report released on Tuesday.

ARX is exploring for gold, silver and base metal deposits along Indonesia?s highly prospective magmatic arcs and associated terranes. The primary exploration targets are high-grade epithermal gold-silver veins and bulk tonnage porphyry-related gold-base metal deposits.

Java

Trenggalek Project, East Java
The Company has a joint venture with P.T. Sumber Mineral Nusantara, which holds the Trenggalek Exploration IUP license covering an area of 30,044 ha (~300 km2) in the Southern Mountains of East Java.

Gold mineralisation at Trenggalek occurs in epithermal quartz vein systems associated with hydrothermal breccias and silica cappings hosted by a package of volcanic rocks and limestone. The area is also prospective for replacement-style gold mineralisation in silicified limestone (?jasperoid?) and possibly deeper porphyry-related copper-gold targets.

The potential for major gold-copper deposits in East Java is highlighted by the discovery made by Intrepid Mines of a large oxide gold (2.4 million-ounce gold) and deeper porphyry gold-copper (25 million-ounce gold, 15 billion-pounds copper) resources at their Tujuh Bukit Project.

Exploration activity focussed on prospecting in areas outside of the production forest and resulted in two new prospects being identified on the western side of the tenement.

Consultation continued with the Indonesian Ministry of Forestry for the renewal of the forestry use permit (?Pinjam Pakai?).

Sumber Bening
Sumber Bening lies within a 4km circular feature highlighted by PALSAR satellite imagery comprising elevated terrain with a radial and annular drainage pattern on the western side of the IUP. Within this feature an extensive area (+2-km by 1-km) of silica-clay-pyrite alteration with localised pods of vughy silica-hematite-pyrite alteration centred on quartz-eye bearing volcaniclastic rocks and rhyodacite porphyry intrusions occurs.

Initial grab sampling of altered rock boulders and outcrops returned assays of up to 0.14 ppm gold and anomalous gold-pathfinder elements that include bismuth (up to 1410 ppm Bi), copper (up to 277 pm Cu) and molybdenum (up to 37 ppm Mo). The extent of the alteration and the coincident geochemical association in vughy silica and clay-pyrite altered quartz-eye porphyry rocks are particularly encouraging and may represent an alteration lithocap over buried mineralised porphyry intrusions.

Systematic surface geochemical sampling and possibly ground geophysics are proposed to further evaluate this new porphyry target.

Bogoran
Bogoran lies on major structural lineaments highlighted by PALSAR satellite imagery that extend along the eastern side of Timahan Prospect and into the area where scout drilling was conducted in 2011.

Initial grab sampling from float and outcrops produced elevated gold in silicified limestone and in narrow epithermal quartz veins cutting andesite porphyry. Thirty-seven of 60 rock samples returned gold assays ranging from 0.1 to 2.96 g/t gold (average 0.43 g/t gold). One grab sample taken from a 20 cm wide banded quartz-limonite vein returned a gold result of 23.3 g/t gold.

Two jasperoid zones measuring 400 m by 20 m and 200 m by 80 m occur at the northern end of the prospect and several narrow zones of NE- and NNW-trending quartz veining up to 500 m long occur in andesite on the southern and eastern sides of the prospect. The host structures may coalesce into broader zones of mineralisation that have bulk tonnage potential.

Further surface work is in progress to better define the potential for bulk tonnage and high grade gold targets.

Exploration expenditure at Trenggalek during the quarter totalled A$163,863.

West Nusa Tenggara

Bima Project ? East Sumbawa
The Company operates another joint venture with P.T. Sumber Mineral Nusantara (P.T. SMN). The Bima Exploration IUP license covers an area of 24,980 hectares (~250 km2) in East Sumbawa, West Nusa Tenggara.

The Bima Project is located about 230 km east of Newmont?s Batu Hijau porphyry copper-gold deposit and lies on the same segment of the Sunda-Banda magmatic arc. Targets identified at Bima are gold and base metal-rich intermediate-sulphidation epithermal veins, disseminated gold in silicified limestone, and gold-rich high-sulphidation lithocaps hosted in a package of volcanic and sedimentary rocks that may be related to deeper porphyry copper-gold targets.

During the quarter the Company recommenced limited exploration activity comprising regional geochemical sampling and further soil sampling and trenching at Soro Prospect.

The decision to recommence field work followed the positive response received from the local communities and Government authorities after a series of community liaison meetings that were held over the course of the previous two quarters at all of the major villages within the IUP.

Exploration activities were subsequently halted at the end of the quarter due to anti-mining demonstrations at the port of Sape. The demonstrators stated that they opposed all mining and demanded the revocation of P.T. SMN?s exploration licence. The demonstrators blockaded the port and a police action to re-open the port on the 24th December 2011 resulted in two reported fatalities.

The Company was formally advised on 31st December 2011 that the Exploration IUP licence held by P.T. SMN had been temporarily suspended for one year effective from 23rd December 2011.

P.T. SMN remains in full compliance with all legal, regulatory and licence requirements and will continue to seek resolution of the current situation.

Papua

Strategic Alliance ? Anglo American
The Company holds a 20% interest in a Strategic Alliance with Anglo American PLC (Anglo) to explore for copper-gold deposits in Papua and West Papua provinces. The Alliance currently holds three Exploration IUP?s covering nearly 3,000 km2 at the centre of the Bird?s Head peninsula in West Papua Province. These lie over highly prospective ground in the region which also hosts Grasberg - Indonesia?s largest porphyry copper-gold deposit.

Anglo is responsible for managing and funding all exploration activities for the Alliance and is advancing preparations to fly an airborne magnetics and radiometrics survey. The objective of this survey is to generate new prospects.

Processing of a forestry use permit (?Pinjam Pakai?) is in progress for the three IUP?s in West Papua. (end of edited excerpt)