On November 20, 2012, Southern Arc announced that the forestry permit required to conduct drilling on the property, known as a Pinjam Pakai (borrow to use) permit, had been received. While awaiting receipt of the permit Southern Arc worked closely with SRK Consulting (Canada) Inc., an internationally renowned, independent consulting service to major, intermediate and junior mining and exploration companies, and prepared a detailed drill program for epithermal gold targets within the Pelangan and Mencanggah prospects, with the objective of completing a National Instrument 43-101 compliant resource estimate for portions of the property by mid-2013.
On December 13, 2012, Southern Arc announced that it was commencing drilling at West Lombok, with a near-term focus on epithermal gold-bearing structural breccias in the Mencanggah prospect. Southern Arc mobilized three drill rigs to the Bising target and initiated a Phase 2 drill program to infill and expand the zones of mineralization adjacent to wide mineralized intercepts identified with Phase 1 drilling. Southern Arc has now completed 11 Phase 2 holes at Bising (1,375.6 metres, Table 1). The results continue to demonstrate the consistency and width of mineralization at the Bising target, with wide intervals averaging greater than 1 g/t gold mineralization intersected in a large proportion of the drill holes.
Highlight Phase 2 drilling intercepts include:
MCG041 66.8 m @ 0.66 g/t gold and 2.4 g/t silver from 20.0 m including 22.9 m @ 1.16 g/t gold and 2.7 g/t silver from 22.0 mMCG042 53.2 m @ 1.04 g/t gold and 1.4 g/t silver from 16.0 m including 1.0 m @ 9.67 g/t gold and 0.8 g/t silver from 32.2 m and 0.30 m @ 10.2 g/t gold and 61.3 g/t silver from 46.3 mMCG043 42.4 m @ 0.51 g/t gold and 1.1 g/t silver from 20.7 m including 10.1 m @ 1.0 g/t gold and 1.9 g/t silver from 39.0 mMCG044 58.15 m @ 0.61 g/t gold from 87.85 m including 11.0 m @ 1.3 g/t gold from 104.6 m and 7.5 m @ 1.1 g/t gold from 123.0 m
The extensive width (up to 66 metres width in surface outcrop) of the main Bising epithermal body is inferred to result from the intersection of geological structures: a major west-northwest trending fault intersected by several north-northwest trending faults, the latter of which form the dominant gold mineralized trend in the West Lombok district. Drill holes in Phase 1 exploration were located at 100 m drill spacings to test the main Bising epithermal structural body, its extensions, and intersections with the several crossing faults.
With this initial program of Phase 2 exploration complete at Bising the rigs were mobilized to the Tibu Serai target in the Mencanggah prospect. Surface channel samples at the Tibu Serai target have returned the highest-grade mineralization on the property to date. Southern Arc has completed seven drill holes (1,124.2 metres) targeting down-dip extensions from elevated rock-chip gold geochemistry in multiple veins that exhibit low silver-to-gold ratios.
Once all assay results are received, Southern Arc's exploration team and Board of Directors will review results from Bising and Tibu Serai and determine the Company's next steps to advance the West Lombok project.
East Elang Property (Sumbawa Island)
The East Elang property is located adjacent to Newmont's Elang copper-gold deposit. Aerial photography and lithographical studies suggest that the Elang mineralized structure may extend onto Southern Arc's East Elang property. While the property is considered highly prospective due to its location and results from aerial surveys, exploration has been deferred pending reclassification of the property's forestry status and issuance of the appropriate permits. Application has been made to the Regency authorities for suspension (back-dated for two years) of the mining business license ("IUP") until the reclassification process has been completed, ensuring that Southern Arc and Vale have adequate time to evaluate the property once exploration commences. Company field activities continue to focus on CSR engagement at the village and sub-district levels.