Vancouver, B.C.: Southern Arc Minerals Inc. (TSX Venture: SA) is pleased to announce that, subject to regulatory acceptance, it has agreed to acquire a wholly owned subsidiary of Indotan Inc ("Indotan”) and the name Indotan Inc.. This agreement was prompted by the introduction of the new mining law in Indonesia, enacted earlier this year. Since March, 2005 Southern Arc has been conducting exploration on two of its Indonesian properties, one on Lombok and one on Sumbawa, pursuant to powers of attorney granted by Indotan as holder of the related contract of work applications. The powers of attorney refer specifically to contracts of work which have been replaced with IUP mining licenses by the new mining law announced earlier this year. By acquiring the Indotan name and the subsidiary company Southern Arc' will have direct control over the applications for the IUP's on Lombok and Sumbawa in Indonesia.

In consideration for the assignment of the rights to the applications, the acquisition of the subsidiary and the name Indotan Inc., Southern Arc will issue 3.5 million common shares to the parent company subject to two options in favour of Southern Arc. The first option will entitle Southern Arc to acquire 1.5 million of these shares at a price of $0.90 per common share within a period of 18 months. The second option will entitle Southern Arc to acquire 0.5 million of these shares at a price of $0.50 per common share within a period of 8 months. All of the shares to be issued by Southern Arc will be subject to a four month statutory hold period. In place of the existing 1% NSR's on both the Sumbawa and Lombok Properties, Southern Arc will grant a 2% NSR on the Sumbawa property and a 1% NSR on the Lombok Property, as those applications were originally described in March, 2005. In the case of the Lombok Property, the NSR does not apply to the Block 1 property (which encompasses all of Selodong, Mencanggah, and Pelangan prospects) acquired by Southern Arc from Newmont in January, 2006.

On behalf of the Board of 
Southern Arc Minerals Inc.


"John Proust”

President and CEO

Southern Arc Minerals Inc.
Suite 1500, Box 1078, 885 West Georgia Street, Vancouver, BC V6C 3E8 Canada
Telephone: (604) 676-5241 Fax: (604) 676-5246

The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved or disapproved of the contents of this press release. Neither the TSX Venture Exchange nor its Regulation Services Provider (as such term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release

Head Office
Southern Arc Minerals Inc.
Suite 650
669 Howe St
Vancouver, BC Canada V6C 0B4
Telephone: +1-778-725-1490
Fax: +1-604-428-1124

 

Investor Relations
John Proust,
Chairman & CEO
Telephone: +1-778-725-1482

E-mail
info@SouthernArcMinerals.com