Arc updates drilling results from E. Java gold project

(Jakarta, 28 June 2010)--Arc Exploration Limited is pleased to announce the results of two holes that were recently completed on its Buluroto Prospect at Trenggalek in East Java. These holes are part of the current 5,000 m scout drilling program that is testing multiple epithermal targets identified on the Company?s 30,044 hectare Exploration IUP area. Buluroto is located about 0.8 km west of Sentul Prospect, where ARX has previously reported encouraging gold intersections of up to 17 g/t Au from scout drilling.

Buluroto Results
The Buluroto Prospect is defined at surface by a 100-120 m long and 10-15 m wide gossanous breccia zone developed near the confluence of two narrow quartz veins (see Figure below). Previous trenching on this breccia has returned up to 10 m at 12.7 g/t Au and 96 g/t Ag in channel samples. Shallow diamond drilling of the breccia by a previous explorer returned an intercept of 11.9 m at 4.9 g/t Au in oxidised sulphidic breccia.

The two holes drilled by ARX test the breccia zone below the base of oxidation and have intersected the target at about 50 m and 90 m below surface, respectively. These holes returned gold intercepts of 7.2 m at 0.63 g/t Au from 48.8 m down-hole (TRDD 23) and 24.55 m at 0.51 g/t Au from 138.55 m down-hole (TRDD 25). The gold intercept in the deeper hole, TRDD 25 also returned elevated copper and molybdenum results of 24.55 m at 0.21% Cu & 16 ppm Mo, including narrow individual intercepts of up to 1.12% Cu & 82 ppm Mo.

The intercepts were obtained in silicified, sulphidic hydrothermal breccia and peripheral quartz stockwork developed on the contact of a clay-pyrite altered andesite-dacite intrusion and volcaniclastic rocks. The deeper intersection is associated with pyrite-chalcopyrite mineralisation in a silicified breccia zone that appears to be increasing in thickness and intensity with depth.

Potential for a gold-copper system
The mineralised intercept in TRDD 25 is unlike any other intercept previously reported from Trenggalek. In the opinion of the Company the results are encouraging because they highlight potential for porphyry-related gold-copper mineralisation in the project area. Trenggalek is located about 250 km west of the Tujuh Bukit gold-copper project where deep drilling by Intrepid Mines has confirmed the presence of a potentially large porphyry and high-sulphidation gold-copper system in the same belt of volcanic rocks that comprise the Southern Mountains of East Java.

Petrological work will be undertaken to evaluate the nature of the mineralization and further drilling is planned to test the potential for strengthening gold-copper mineralization in the breccia at depth and for the presence of a deeper mineralized intrusion.

The Company has three projects. Trenggalek, in East Java, the subject of this announcement, Bima in East Sumbawa, and a Strategic Affiance with the Anglo American group in Papua. (end of release)