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Friday, 30 November 2012
Southern Arc Minerals posts $18 mln in working capital, continues strategic review
Southern Arc Minerals (CVE:SA) (OTCQX: SOACF), which recently announced a strategic review of its Indonesian assets, announced Friday its first quarter results, finishing the period with $18 million of working capital.
Earlier this month, the junior explorer said it had received the required forestry permit, known as a Pinjam Pakai permit, to resume full scale exploration at its West Lombok property. While waiting for the permit for the last year, the company worked closely with SRK Consulting to prepare a detailed drill program for epithermal gold targets within its Pelangan and Mencanggah prospects.
The company has since, however, postponed any further exploration at West Lombok pending completion of the strategic review.
As at the end of the quarter, on September 30, the company had total assets of $60.23 million. It also narrowed its comprehensive loss to around $0.76 million, from a loss of $4.3 million at the end of the previous quarter.
The company's main West Lombok project covers a 13 by 7 km structural corridor of mineralization hosting porphyry copper-gold and epithermal gold deposits. The two main epithermal prospects on the property, Pelangan and Mencanggah, cover broad areas of 4 by 5 km and 6.5 by 4.5 km, respectively.
Southern Arc has drilled 22,243.3 metres so far on epithermal gold mineralization, "confirming high-grade events typical of epithermal boiling zones and identifying several high-grade shoots", it said.
The explorer has also wrapped up an airborne geophysical survey of the project, to define both near-surface and buried copper-gold porphyry targets. The results of the survey led to the identification of 17 porphyry targets on the property, a number of which have already had a limited amount of drill testing.
This year, while waiting on the permit to resume full-scale exploration, Southern Arc also drilled a total of 3,501 metres in areas with no forestry desgination in the northwest section of the property, and in the southeast part. Surface mapping and channel sampling also took place, with the company finding "encouraging results" from rock chip channel samples.
In May, Southern Arc increased its interest in the project from 85 to 90 per cent through the acquisition of additional shares in PT Indotan Lombok Barat Bangkit, the subsidiary that holds the mining business license to explore the property.
Southern Arc has a portfolio of projects in Indonesia aside from West Lombok, including the East Elang project next to Newmont's (NYSE:NEM) Elang copper-gold deposit, in which Vale (NYSE:VALE) remains a partner, and the Taliwang property next to Newmont's Batu Hijau copper-gold mine.
At the East Elang project, the company said that while the property is considered "highly prospective", exploration has been deferred pending reclassification of the asset's forestry status.
At Taliwang, where exploration so far has found a gold-silver bearing epithermal vein system, the company does not have any exploration activities planned at this time, and is assessing its options for the property, including a possible sale or joint venture.
The company also recently assumed a 100 per cent interest in its Sabalong property in Indonesia following Vale's decision to withdraw from their partnership at the site. With phase 1 exploration complete, Vale decided not to proceed to phase 2 and withdrew from the Sabalong project.
Southern Arc proceeded to complete a shallow drill program at the property targeting gold mineralization for a total of 1,036 metres in six holes. It reported in October that the drilling failed to show any increase in grade or width with depth, and did not extend the mineralization laterally.
No follow up drilling has been planned at this time, with the company now considering future options for the property. The drill work by Southern Arc was done based on what it called "encouraging" historical surface and subsurface work at the property by Newmont, Rio Tinto Zinc, and the company itself.
During the three months that ended September 30, it posted a loss of $757,053, compared to a loss of $285,270 in the same period of 2011. This was a result of a foreign exchange loss, compared to a gain a year ago, as well as increased managment fees.
In the latest quarter, the company said it invested $1.56 million on exploration, down from $3.3 million a year ago.