WEST LOMBOK PROJECT
Minerals: Gold, silver, copper
In December 2014 Southern Arc entered into a joint venture to advance the West Lombok project to small-scale production. PT Genesis Sumber Energi can earn a 25% interest in the project by completing an environmental impact study and a feasibility study for small-scale underground gold mines and processing plants. PT GSE must also convert the exploration permit into an exploitation permit, thereby securing tenure on the property for a further 20 years. PT GSE recently commissioned a similar mining venture at the Taliwang project, at which Southern Arc holds a 5% NSR
The West Lombok property covers a 13-km long by 7-km wide northwest trending structural corridor of mineralization and alteration hosting three main prospects: the Pelangan epithermal gold prospect, the Mencanggah epithermal/porphyry district, and the Selodong porphyry intrusive complex. Southern Arc has completed more than 40,000 metres of drilling to date on the property.
Between 1985 and 1996, Newmont Mines established the presence of porphyry mineralization to the south of the property, but did not appreciate the full extent of gold mineralization because the property was still covered by primary rainforest. Exploration activities ceased in 1996 because of Newmont's focus on development of the Batu Hijau porphyry Cu-Au deposit. In the late 1990s the property was clear-cut logged by Indonesian forestry companies.
Following issuance of its mining business license (IUP) in January 2011, Southern Arc initiated the forestry permit process to allow for advanced exploration activities on its West Lombok project. Approximately 1.1% of the West Lombok property is designated Protected Forest (no open-pit mining allowed; underground mining allowed with the appropriate forestry permit), 55.1% is designated Production Forest (open-pit and underground mining allowed with the appropriate forestry permit) and 43.8% has no forestry designation (no restriction on mining activities).
During 2012, while awaiting issuance of the Pinjam Pakai permit, Southern Arc drilled targets outside of forestry designation areas to the northwest of the property on the Pelangan prospect and to the southeast of the property on the Selodong prospect. Southern Arc announced receipt of the forestry permit on November 20, and on December 13, 2012 announced that the Company has commenced drilling again in the main parts of the property, with the objective of completing enough infill drilling to complete a National Instrument 43-101 compliant resource estimate for portions of the property.
As part of its commitment to corporate social responsibility and support for the community initiatives, in 2011 Southern Arc relinquished 8,377 ha to be designated as the "People's Mining Area” for exploitation by the local communities through artisan mining activities.
Infrastructure and Facilities
West Lombok is characterized by rolling grassland hills and is easily accessible by paved and tar-sealed roads. It is located approximately 90 minutes' drive from the provincial capital of Mataram and an international airport. A network of logging and local government roads provides good access throughout the region. A base camp for drilling operations has been established near the village of Selodong, complete with core facilities and supporting infrastructure with the capacity to house exploration personnel.
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