Release: Arc Exploration: Extension of Anglo American Strategic Alliance

(17, June 2009)--Arc Exploration Limited (ARX) is pleased to announce the extension of the Company?s Strategic Alliance (?Alliance?) with PT Minorco Services Indonesia (?Minorco?) of the Anglo American Group (?Anglo?) in Papua and West Papua to May 2011.

The focus of the Alliance with Anglo is to explore for large copper-gold porphyry deposits in the Provinces of Papua and West Papua in Indonesia.

Key elements of the Alliance are summarised as follows:
? Anglo will sole fund exploration expenditure through to the first decision to mine and has an initial 80% interest in projects while ARX retains a 20% interest;

? ARX is carried (not free carried) through to a Decision to Mine at which time ARX becomes liable to repay 10% of exploration and predevelopment costs out of its share of project proceeds (non-recourse to ARX);

? If following completion of a Feasibility Study, Anglo makes a Decision to Mine then a Joint Venture shall be formed and each of Anglo and ARX shall participate (and fund capital expenditure) according to their 80/20 project interests. ARX dilutes if it does not contribute;

? In the event that a resource of less than one million tonnes of contained copper equivalent or 1 million ounces of gold is identified, then Anglo may not offer any interest in the resource to a third party without first making an offer to ARX either that such project revert to ARX on an 80/20 basis (with ARX holding 80%) or that 100% be transferred to ARX with Anglo retaining a 2% NSR;

Together with Anglo, ARX believes that the Provinces of Papua and West Papua are highly prospective for large copper gold porphyry deposits. The Alliance has the potential to add very significant value to ARX and it looks forward to continuing to work with Anglo in this regard.

The Aisasjur Project in West Papua comprises 3 granted KP tenements and 2 KP applications which are currently the key asset of the Alliance. The granted Aisasjur Project tenements cover a total area of 60,896 hectares located within the Birds Head area of West Papua which is geologically very similar to the Central Papuan belt which hosts the world class Grasberg and Ertsberg deposits.

Anglo propose to undertake an aeromagnetic survey of the entire project area during the course of 2009 with the objective of defining further drill targets. (end of release)