Vale won?t proceed with East Elang property agreement

By Ruli Setiawan

Canadian junior miner Southern Arc Minerals Inc. announced Thursday that Vale International S.A. has notified the company that it will not be proceeding with a potential joint venture at Southern Arc?s East Elang property on Indonesia?s Sumbawa Island, as contemplated by the option and joint venture agreement signed by the parties on October 3, 2010.

?Southern Arc and Vale have proceeded with the best of intentions, engaging with local communities and undertaking early reconnaissance of the East Elang property,? said John Proust, Chairman & CEO of Southern Arc. ?Unfortunately, repeated extensions to the Indonesian forestry moratorium have continued to delay the start of exploration at this property. While we are clearly disappointed with Vale?s decision, we understand the company?s need to refocus its exploration dollars elsewhere.?

The 9,670 hectare East Elang property is located immediately adjacent to Newmont?s Elang copper-gold porphyry deposit. Southern Arc will continue to look for opportunities to advance the property and bring value to Southern Arc shareholders.

Southern Arc has not been able to carry out exploration work at the concession amid the Indonesian government?s forestry moratorium policy that would expire in 2017. The company has been seeking for an extension of its current exploration permit, set to expire in 2018, due to the forestry moratorium.

Editing by Reiner Simanjuntak