Southern Arc inks Indonesian deal with Newmont

Vancouver – A newly inked agreement with Newmont Mining (NMC-T, NEM-N) sets the stage for Southern Arc Minerals (SA-V) to expand its existing exploration holdings on Lombok Island, immediately west of an island that hosts Newmont’s Batu Hijau copper-gold mine.

Southern Arc’s deal with an Indonesian unit of Newmont covers an 8,860-hectare property contiguous with the junior’s existing Lombok Island exploration license. Newmont retains a 2% royalty on any mineral production from the block, along with a right of first refusal should Southern Arc seek a partner for potential future development.

Previous work by the senior gold company was focused on testing precious metal and porphyry copper-style targets. Several of these were drill-tested, but no work has been done on the property since 1998.

Among the more promising areas is Selodong, where 34 shallow and four deep diamond drill-holes tested a number of separate targets. Values ranged from 0.22 gram to 1.07 grams gold per tonne, and 0.07% to 0.57% copper, with associated minor molybdenum.

Selected near-surface drill results from Selodong include: 82.1 metres of 0.74 gram gold and 0.49% copper; 52.3 metres of 1.07 grams gold and 0.57% copper; 123.2 meters of 0.56 gram gold and 0.35% copper; and 336.4 metres of 0.55 gram gold and 0.25% copper.

The Mencanggah area covers widespread high-sulphidation epithermal quartz veins up to 10 metres wide. Sampling returned high-grade gold values (up to 250 grams) in one area, and up to 11 grams in another. At least five separate drainage gold anomalies with extensive boulder float remain to be tested, along with various other geophysical and geochemical anomalies.

The Pelangan area is also viewed as prospective for high-sulphidation, epithermal gold mineralization. Previous scout drilling in several areas returned positive results, including 9 metres of 9.76 grams gold, 5 metres of 5.11 grams, and 7 metres of 15.9 grams.

Southern Arc intends to combine its expanded Lombok Island holdings into the Eastern Block and Western Block, and select the best targets for follow-up exploration, including drilling by year-end. The company’s goal is to become a predominant junior company focused on south-central Indonesia.