Southern Arc seeks partner for W. Lombok copper, gold project

By Alexander Ginting

Canadian junior mining firm Southern Arc Minerals is seeking partnership to fund and advance its copper, and gold property in Lombok, West Nusa Tenggara after it booked a C$35 million write-down on the asset.

Southern Arc said in a report released earlier this week that the strategy was implemented to reduce capital requirement for the company while still retain upside for shareholders.

The company did not give detail about the funds required to accelerate exploration and development of the project.

According to the company?s presentation, the project as of June 2013 has inferred reserves of 1.5 million ounces of gold and 400 million pounds of copper.

Southern Arc achieved significant progress at its West Lombok project over the last year. Following receipt of the required permit at the end of November 2012, Southern Arc immediately commenced exploration to collect drilling data for the project's first resource estimate. In July 2013 the company published an inferred resource estimate for the project, outlining substantial gold and copper resources with potential for expansion.

Despite completing a National Instrument 43-101 compliant inferred resource estimate for the West Lombok project, Southern Arc's market capitalization, like many of its peers, was not impacted. With the backdrop of a challenging market for junior mining companies, Southern Arc's management has determined that it is prudent to write down the West Lombok project at this time. ?Management continues to believe that West Lombok holds great potential; the write down of West Lombok reflects management's interpretation of IFRS as it relates to impairing assets in a timely fashion,? the company said.

The company holds 90 percent stake in the project.

Southern Arc is also in the process of selling its Taliwang property in Sumabawa island, also in West Nusa Tenggara for US$3.5 million after prior effort to sell the asset for $500 million and 15 million shares of the buyer failed.

The company?s other copper and gold project is East Elang property, also in Sumbawa island, where exploration works has been halted as most to the concession area is located in primary forest. The company is requesting the Ministry of Forestry to reclassify the area.

Editing by Reiner Simanjuntak