Proactiveinvestors is a leading multi-media news organisation, investor portal and events management business with offices in New York, Sydney, Toronto, Frankfurt and London.
Thursday, 13 December 2012
Southern Arc Minerals starts long-awaited drilling at West Lombok, to sell Taliwang after strategic review
Southern Arc Minerals (CVE:SA) (OTCQX:SOACF) has concluded its strategic review, and finally announced Thursday the start of drilling at its West Lombok property in Indonesia, along with a sale of its Taliwang project.
No other details were provided on the conditional Taliwang agreement, other than that offer was subject to certain conditions being met by the buyer, with details to be announced when the sale is finalized.
The Taliwang project is located next to Newmont's Batu Hijau copper-gold mine, and exploration so far has found a gold-silver bearing epithermal vein system.
The sale was agreed as part of the company's strategic review of its portfolio of Indonesian assets. The review was presented to Southern Arc's board earlier this month, with the recommended strategy approved.
Along with the Taliwang sale, the company has decided to proceed with the staged drilling program for its main West Lombok property as announced last month, with periodic review by the board.
"This narrowing of strategy enables Southern Arc to dedicate resources in the near-term to advancement of our flagship West Lombok property," said chairman and CEO, John Proust. "At the same time, with streamlined operations we can conserve the company's treasury, a key asset currently standing at $18 million, while also considering other options to broaden the company's portfolio, both inside and outside of Indonesia."
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.
In November, the junior explorer received the required forestry permit, known as a Pinjam Pakai permit, to resume full scale exploration at the asset. 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 now started this drilling program, beginning with phase A exploration at the Bising target, after which results will be presented to the board with an updated strategy for more drilling. It has found 17 near-surface and buried copper-gold porphyry targets on the property.
Southern Arc still aims to have an NI 43-101 compliant resource estimate for portions of the property by the middle of next year. Over the coming months, it said it will consider joint venture options for advancing "potentially large-scale porphyry mineralization" on West Lombok.
The strategic review by the company has also concluded that it will retain its "no-cost" joint venture interest in the East Elang project with partner Vale (NYSE:VALE). The property is located next to Newmont's (NYSE:NEM) Elang copper-gold deposit, which is reported to host an estimated 25 million ounces of gold and 16 billion pounds of copper.
Southern Arc has said that while East Elang is considered "highly prospective", exploration has been deferred pending reclassification of the asset's forestry status. Under the joint venture, Vale must fund all costs through to completion of a bankable feasibility study on the project in order to earn a 75 per cent stake.
The junior gold and copper explorer has also decided to relinquish the Sabalong project in Indonesia, after recently assuming a 100 per cent interest in the property 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 exploration.
Southern Arc proceeded to complete a shallow drill program at the property, and reported in October that the drilling failed to show any increase in grade or width with depth, and did not extend the mineralization laterally.
The company said Thursday it remains open to considering new gold-focused opportunities in Indonesia, as well as to advanced stage projects in other countries.