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Thursday, 11 July 2013
Southern Arc unveils first resource for West Lombok with expansion potential in sight
Southern Arc Minerals (CVE:SA)(OTCQX:SOACF) has released its much-anticipated NI 43-101 compliant resource estimate for its West Lombok property in Indonesia, saying the report confirms the company's model for a multi-pit project. The announcement follows news late last month that Southern Arc is taking a large stake in Eagle Hill Exploration as part of its strategy to diversify its assets beyond Indonesia.
The West Lombok estimate, conducted by SRK Consulting Canada, shows an inferred resource totalling 1.49 million ounces of gold, 1.82 million ounces of silver and 397.3 million pounds of copper from three open-pittable epithermal gold deposits and one porphyry copper deposit.
"This maiden resource estimate for West Lombok confirms Southern Arc's model for a multi-pit project on a number of epithermal gold deposits on the property and enhances the area's potential for bulk tonnage porphyry copper-gold mineralization," said the company's president and COO, Dr. Mike Andrews, in a statement on Thursday. "
The mineral estimate reported here is based on drilling at only four locations in the 13 km by 7 km mineralized belt. Both Southern Arc and SRK feel the resource estimate could be expanded and upgraded with additional exploration."
The three gold deposits - Raja, Bising and Tibu Serai - are estimated to hold 11.78 million tonnes averaging 1.5 grams per tonne (g/t) gold, for contained metal of 567,820 ounces of the yellow metal, with an additional 1.82 million ounces of silver hailing from the Raja deposit.
Meanwhile, the Selodong porphyry copper mineralization is estimated to contain 66.75 million tonnes averaging 0.43 g/t gold and 0.27% copper for 922,800 ounces of gold and 397.3 million pounds. The company said all the resources reported have been constrained by Whittle optimized open pit shells.
Southern Arc, and the previous operator of the project, Newmont Mining, have completed more than 55,000 metres of diamond core drilling on the three main prospects at the property - Pelangan, Mencanggah and Selodong - since 1996. Of these holes, 99 were included in the current resource report, with the rest either exploratory holes or focused on different targets accross the asset.
The Canadian junior explorer takes note of the fact that West Lombok hosts several other mineral occurrences, and only a small portion of the "favourable ground" has been drill tested to date, according to its statement.
The SRK report is further proof of this assertion, as it reads: "The West Lombok Property hosts at least four separate mineral deposits within a 10-km strike length. Both epithermal gold and porphyry copper-gold deposits have been identified and a large portion of the property still remains to be explored in detail.
"All deposits identified so far are still open along strike and at depth and further drilling could discover additional mineralization, especially at Raja where the possibility of finding mineralization that could be amenable to underground mining seems very good."
Late last year, the company implemented a strategy to pursue advanced-stage gold projects in new jurisdictions, after conducting a strategic review of its assets. Its priority was also to proceed with drilling at West Lombok, its flagship property, as it moved toward its resource estimate announced today.
"This resource estimate represents a major milestone for Southern Arc and demonstrates that the West Lombok property holds significant potential on both the epithermal and porphyry fronts," said chairman and CEO John Proust. "With this resource estimate in hand, we are now in a position to advance substantive conversation with potential partners to fund and advance the West Lombok property."
Shares of Southern Arc were halted immediately prior to the news released this morning, and resumed trading shortly after the announcement. Its shares were trading up at 12 cents in early trading Thursday.