SOUTHERN ARC RECEIVES NEW EXPLORATION LICENSE OVER EX-NEWMONT/RTZ PROSPECTS ON SUMBAWA ISLAND
News Release No. 07-12
Vancouver, B.C.: Southern Arc Minerals Inc. (TSX Venture: SA) is pleased to announce the granting of a new exploration license (Kuasa Pertambangan, "KP") to the company, through its locally-controlled Indonesian entity, over part of West Sumbawa Island (Figure 1), West Nusa Tenggara Province. The Sabalong KP area (9,950 ha) was previously explored by Newmont (1986 to 1992) and Rio Tinto Zinc (1993 to 1998) under fourth and sixth generation Contracts of Work. The KP license issued by the Sumbawa regency is valid for twelve months and can be extended for a further 12 months as part of the General Survey conditions of the license.
Previous exploration in the KP area by Newmont reported Au-Ag anomalous drainages from four contiguous catchment areas. Subsequent follow-up ground traverses identified extensive hydrothermal alteration of intermediate pyroclastics and intrusive rocks, hosting high-sulfidation epithermal quartz veins. Rock chip assays reported a maximum tenor of 0.77 g/t Au and 260 g/t Ag. The area was dropped afterwards as part of mandatory relinquishments that form part of the conditions of the Contract of Work. Rio Tinto Zinc (RTZ) subsequently acquired the KP area, as well as other ex-Newmont blocks, as part of a 543,200 ha Contract of Work area. Initial reconnaissance sampling by RTZ reconfirmed Newmont's Au-Ag anomalous catchment areas, along with delineation of potential carbonate-replacement and base metal mineralization further to the east. Additional prospect evaluation work defined an area of 3.0 by 2.0 km of phyllic alteration assemblages, hosting zones of residual silica and enargite-bearing quartz veins typical of high-sulfidation epithermal systems. Subsequent diamond drilling reported (Dalimunthe and Stevadji, 1998) an encouraging intersection of 32m @ 3.5 g/t Au from drill hole SL-18.
The Company intends to commence preliminary exploration activities later in the quarter, with personnel seconded from its Taliwang and Flores projects. Initial ground activities will focus on evaluation of historical prospect and anomaly areas, along with routine socialization meetings.
The acquisition of the KP area is part of the Company's strategy to remain focused on actively exploring the south-central Indonesia Sunda Banda magmatic arc, host to Newmont's Batu Hijau porphyry Cu-Au deposit which as of the December 31, 2005 had stated reserves of 12.55 M oz of gold and 11.47 billion pounds of copper.
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