Southern Arc increases stakes in Lombok and Sumbawa properties
Friday, May 18 2012 - 12:14 AM WIB
"Recognizing the geological potential of the West Lombok and Taliwang projects, Southern Arc has increased its interest to 90% and secured the support of the local government at both projects as a 10% equity partner," said Dr. Mike Andrews, President of Southern Arc. "This emphasizes our vision of the great potential for both epithermal gold and copper-gold porphyry mineralization at both projects."
Southern Arc has simplified the ownership structure and increased its equity interest in the projects through the acquisition of additional shares in PT Indotan Lombok Barat Bangkit (West Lombok project) and PT Indotan Sumbawa Barat (Taliwang project) from its Indonesian partner, PT Permata Puri Mega ("PT PPM"). In consideration for transferring its 5% interest in both projects to Southern Arc, PT PPM will receive US$1,500,000 and 2,250,000 Southern Arc shares, subject to TSX Venture Exchange acceptance.
West Lombok Property
Southern Arc now holds 90% of PT Indotan Lombok Barat Bangkit, the Indonesian subsidiary that holds a mining business license ("IUP") to explore the West Lombok property. The remaining 10% is held by the local West Lombok Regency Government under a Cooperation Agreement forged in December 2010. Having the local regency as an equity partner creates a synergistic and mutually beneficial relationship, ensuring government support for the project and long-term benefits for local communities as the project advances.
The West Lombok project covers a 13km by 7km structural corridor of mineralization and alteration hosting porphyry copper-gold, high sulphidation gold-copper and epithermal gold deposits. Two of the prospects on the property host a combined proven strike length of more than 21 kilometres of mineralized epithermal breccias, with individual bodies ranging in thickness from 2 to 66 metres, with a strike length of up to 1,000 metres and a vertical extent of greater than 300 metres. Southern Arc has completed more than 22,000 metres of drilling to date focused on the epithermal gold mineralization, confirming high-grade events typical of epithermal boiling zones and identifying several high-grade shoots. In addition, the Company has completed an airborne geophysical survey of the West Lombok project at 50-metre line spacings to define both near-surface and buried copper-gold porphyry targets, identifying 17 porphyry targets on the property. A number of the targets have already had a limited amount of drill testing that demonstrated host zones of high-grade gold-rich porphyry copper mineralization, supporting the outcome of the prospectivity analysis.
Exploration on the property is currently focused on areas with epithermal gold mineralization in the northwest section of the property and areas with copper-gold porphyry mineralization in the southeast of the property, outside of the area designed as "production forest," while Southern Arc awaits issuance of its Pinjam/Pakai (borrow to use) forestry permit. Permitting is progressing as expected, and Southern Arc will continue to update the market of any material events at the property.
Taliwang Property
Southern Arc also increased its holding to 90% in PT Indotan Sumbawa Barat, the Indonesian subsidiary holding the Taliwang IUP. As a result of the recently completed Cooperation Agreement, the West Sumbawa Regency Government holds the remaining 10% in the property, ensuring collaboration and support as the project advances.
Located adjacent to Newmont's world-class Batu Hijau copper-gold mine, the Taliwang property covers 31,200 hectares prospective for gold, silver and copper mineralization. Exploration to date at Taliwang has identified a gold-silver bearing epithermal vein system in which 56 drill holes have confirmed both lateral and vertical persistence of the mineralized structures, near-surface copper-gold porphyry targets with associated surface high-sulphidation epithermal signatures, and sedimentary gold-hosted targets.(ends)