quarterly activities report · 2011. 10. 4. · page 3 of 7 epithermal quartz veins, including 1.9...

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September 2011 Quarter Activities Report ABOUT ARC EXPLORATION LIMITED Formed in 1983, Arc Exploration Limited (ASX Code: ARX) is an Australian listed gold company focused on exploration in Indonesia. The Company has a 95% joint venture interest in two projects with PT Sumber Mineral Nusantara. These are the Trenggalek tenement located in East Java and the Bima tenement located in East Sumbawa. Both projects lie on the Sunda-Banda magmatic arc and are prospective for high-grade epithermal gold-silver vein deposits and porphyry copper-gold deposits. In association with Anglo American Group, the Company is exploring for large porphyry copper/gold deposits in Papua. Arc Exploration Limited ABN 48 002 678 640 Suite 1502, Level 15 Tower B 799 Pacific Highway Chatswood NSW 2067 AUSTRALIA Tel: + 61 2 9419 8044 Email: [email protected] www.arcexploration.com.au Exploration - Indonesia Soil and rock sampling, mapping and test-pitting were carried at Upper Jombok and Paces prospects during the quarter at Trenggalek in East Java. Gold-arsenic soil anomalies were highlighted at both prospects and follow-up surface sampling returned up to 16.5 g/t gold at Upper Jombok and 13.3 g/t gold at Paces from quartz vein float samples. The high-grade gold vein float shedding from colluvium at Upper Jombok is probably derived from quartz vein sources in the Paces area. There is potential at Paces for a shallow bulk tonnage gold target associated with narrow high-grade veins and stockwork. No field exploration was undertaken at Bima in East Sumbawa during the quarter following civil unrest reported in February. With the support of the local government authorities, the Company undertook an intensive program of public meetings to explain its exploration activities to the local communities. This process is ongoing with the intention of recommencing uninterrupted field activity in the December quarter. However the Company cannot be definitive on dates at this stage. The process of conversion and granting of two additional IUPs has been finalised under the ARX – Anglo Strategic Alliance bringing the total alliance tenement holdings in West Papua to 3 IUP’s covering nearly 3,000 km 2 . Corporate The Company’s Financial Report for the Half Year ended 30 June 2011 was completed and released on 6 September 2011. At the end of this quarter the Company holds a cash balance in excess of A$6.5 million which is sufficient to fund the Company’s planned exploration programme through the next 12 months. For personal use only

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  • September 2011 Quarter Activities Report

    ABOUT ARC EXPLORATION LIMITED Formed in 1983, Arc Exploration Limited (ASX Code: ARX) is an Australian listed gold company focused on exploration in Indonesia. The Company has a 95% joint venture interest in two projects with PT Sumber Mineral Nusantara. These are the Trenggalek tenement located in East Java and the Bima tenement located in East Sumbawa. Both projects lie on the Sunda-Banda magmatic arc and are prospective for high-grade epithermal gold-silver vein deposits and porphyry copper-gold deposits. In association with Anglo American Group, the Company is exploring for large porphyry copper/gold deposits in Papua. Arc Exploration Limited ABN 48 002 678 640 Suite 1502, Level 15 Tower B 799 Pacific Highway Chatswood NSW 2067 AUSTRALIA Tel: + 61 2 9419 8044 Email: [email protected] www.arcexploration.com.au

    Exploration - Indonesia • Soil and rock sampling, mapping and test-pitting were carried at

    Upper Jombok and Paces prospects during the quarter at Trenggalek in East Java. Gold-arsenic soil anomalies were highlighted at both prospects and follow-up surface sampling returned up to 16.5 g/t gold at Upper Jombok and 13.3 g/t gold at Paces from quartz vein float samples. The high-grade gold vein float shedding from colluvium at Upper Jombok is probably derived from quartz vein sources in the Paces area. There is potential at Paces for a shallow bulk tonnage gold target associated with narrow high-grade veins and stockwork.

    • No field exploration was undertaken at Bima in East Sumbawa during the quarter following civil unrest reported in February. With the support of the local government authorities, the Company undertook an intensive program of public meetings to explain its exploration activities to the local communities. This process is ongoing with the intention of recommencing uninterrupted field activity in the December quarter. However the Company cannot be definitive on dates at this stage.

    • The process of conversion and granting of two additional IUPs has

    been finalised under the ARX – Anglo Strategic Alliance bringing the total alliance tenement holdings in West Papua to 3 IUP’s covering nearly 3,000 km2.

    Corporate • The Company’s Financial Report for the Half Year ended 30 June

    2011 was completed and released on 6 September 2011.

    • At the end of this quarter the Company holds a cash balance in excess of A$6.5 million which is sufficient to fund the Company’s planned exploration programme through the next 12 months.

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    PROJECT ACTIVITY – INDONESIA ARX is exploring for gold, silver and base metal deposits along Indonesia’s highly prospective magmatic arcs and associated terranes. The primary exploration targets are high-grade epithermal gold-silver veins and bulk tonnage porphyry-related gold-base metal deposits. Java Trenggalek Project, East Java (ARX – 95%) The Company operates a joint venture with P.T. Sumber Mineral Nusantara, which holds the Trenggalek Exploration IUP license covering an area of 30,044 ha (~300 km2) in the Southern Mountains of East Java. The Trenggalek IUP is prospective for island arc-style epithermal and porphyry-related gold and base metal deposits. Trenggalek is located about 250 km west of Intrepid Mines Ltd’s Tujuh Bukit Project. Late last year, Intrepid announced a maiden inferred resource estimate of 500 Mt at 0.4% Cu (~2 Mt copper) & 0.5 g/t gold (~8 Moz gold) in the Tumpangpitu porphyry gold-copper sulphide deposit at Tujuh Bukit. This is in addition to a shallow oxide gold-silver resource of 94 Mt at 0.66 g/t Au (~2 Moz gold) & 26 g/t Ag (~79 Moz silver) they announced earlier in 2010. Gold mineralisation found at Trenggalek to-date occurs in intermediate-sulphidation epithermal vein systems associated with hydrothermal breccias and silica cappings. These are hosted in a thick package of volcaniclastic rocks and intercalated limestones which have been intruded in multiple stages by volcanic plugs and domes of varying composition (basaltic andesite to rhyodacite). The IUP area is also prospective for replacement-style gold mineralisation in limestone and possibly for deeper seated porphyry-related copper-gold targets, similar to Tujuh Bukit.

    No further drilling was conducted during the quarter following completion of 1,429 m in eight holes in the last quarter. The results of these holes were reported in the last quarter and confirmed the presence of disseminated gold mineralisation in breccias and silicified limestone (“jasperoid”) at Suruh and Timahan prospects. The results of the previous work have been assessed and further drilling is planned at Suruh and Sentul Prospects. A number of proposed drill targets lie within production forest areas owned by the Indonesian Department of Forestry. The Company is now waiting for the signing of an extension to its forestry access permit, before drilling is resumed on these prospects. None of the key Trenggalek prospects lie within areas of the protected forest classification. Grid soil sampling, test-pitting and rock sampling were carried out on the Upper Jombok and Paces prospects during the quarter. These prospects are located in the northern part of the IUP, to the northeast and east of the Kojan Prospect, respectively. Scout drilling at Kojan last year produced several significant gold-silver intercepts in

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    epithermal quartz veins, including 1.9 m at 11.3 g/t Au & 293 g/t Ag within a composite intersection of 6.6 m at 4.9 g/t Au & 149 g/t Ag from 62.4 m down-hole in TRDD035. Upper Jombok Prospect The occurrence of high-grade vein float shedding from perched colluvium at Upper Jombok has been reported in previous announcements. Soil sampling completed at Upper Jombok during the quarter has highlighted a +500 m long arcuate shaped arsenic anomaly (>25 ppm As) directly over the perched colluvium. Within this there is a discrete 100 m by 200 m zone of elevated gold and arsenic soil geochemistry (>0.05 ppm Au; >50 ppm As). Eleven test-pits were excavated within the coincident gold-arsenic soil anomaly during the quarter. Six of the test-pits intersected strongly oxidised bedrock of thinly veined, chloritic sandstone and/or andesite beneath a

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    Exploration expenditure at Trenggalek during the quarter totalled A$326,982.

    Lower Jombok

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    West Nusa Tenggara Bima Project – East Sumbawa (ARX – 95%) The Company operates another joint venture with P.T. Sumber Mineral Nusantara, the Bima Exploration IUP license covering an area of 24,980 hectares (~250 km2) in East Sumbawa, West Nusa Tenggara Province. The Bima Project is located about 230 km east of Newmont’s Batu Hijau porphyry copper-gold deposit and lies on the same segment of the Sunda-Banda magmatic arc. This highly prospective terrane is underlain by Early Miocene to Pliocene intermediate-felsic volcanic and volcaniclastic rocks, fossiliferous limestone and high-level intrusions. Targets identified at Bima are gold and base metal-rich intermediate-sulphidation epithermal veins (Kowo), disseminated gold in silicified limestone (Soro) and gold-rich high-sulphidation lithocaps (Baku), all of which may be related to deeper porphyry copper-gold targets. Previously reported trench results of 38 m at 2.88 g/t Au (including 2 m at 35.4 g/t Au) at Soro and 86 m at 2.78 g/t Au (including 4 m at 34.3 g/t Au) at Baku highlight the prospectivity of the Bima Area. No field exploration activity was undertaken at Bima during the quarter. This follows the occurrence of civil disturbances in the Bima district earlier in the year. With the support of the local government authorities, the Company completed an intensive series of meetings at the villages throughout the IUP area to further explain the Company’s exploration plans and address any concerns of local people on the potential impacts of mineral exploration. The majority of these meetings were positively received, nevertheless the Company feels it is prudent to engage in some further dialogue with some groups of local villagers prior to re-commencing field work. We hope to complete this early in the December quarter with the aim of minimising the risk of disruption to our planned activities as we move forward. When activities resume the Company will initially carry out further prospecting, soil sampling and trenching on the main gold targets already identified. Once we are satisfied that local support remains strong, we will then mobilise a drill rig or rigs to undertake scout drilling, initially at the Baku and Soro prospects and the market will be informed accordingly. Exploration expenditure at Bima during the quarter totalled A$108,199.

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    Papua Anglo Strategic Alliance (ARX – 20%) The Company holds a 20% interest in a Strategic Alliance with Anglo American to explore for copper-gold deposits in Papua and West Papua Provinces. Following the conversion process, two new IUP titles have now been finalised and granted to the Strategic Alliance under the Indonesian IUP tenement system in West Papua Province. Each new IUP has an area of 1,000 km2 and as a result the Alliance now holds 3 IUP’s covering nearly 3,000 km2 of highly prospective ground in the region which also hosts Grasberg - Indonesia’s largest porphyry copper-gold deposit.

    Qualified Persons

    The information in this report that relates to Exploration Results is based on information compiled by Mr John Carlile, who is a Fellow of the Australian Institute of Mining and Metallurgy, and Mr Brad Wake, who is a member of the Australian Institute of Geoscientists. Mr Carlile and Mr Wake have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.’ Mr. Carlile and Mr. Wake are full time employees of Arc Exploration Limited and consent to the inclusion in this report of the matters based on their information in the form and context in which it appears.

    Sampling and Sample Analysis

    Results relating to geochemical samples reported herewith are derived from soil and rock samples. Sampling is entirely supervised by the Company’s project geologists. Commercial geochemical standards are routinely inserted into the sample batches for quality control. Samples are securely packaged, batched, and then transported under supervision to the Intertek Laboratory in Jakarta. At the laboratory, the samples are prepared by crushing and pulverizing the entire sample. Gold is assayed by 50 g charge Fire Assay with an AAS finish. Silver, copper, lead and zinc are tested by either multi-acid digestion/AAS finish or a Multi-element ICP analysis package. Arsenic, antimony and molybdenum are tested by either pressed pellet XRF or a Multi-element ICP analysis package.

    This report is dated 4 October 2011. For further information please contact: Andrew J. Cooke Company Secretary Tel: + 61 2 9419 8044 Email: [email protected]

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    Table: Upper Jombok and Paces Prospects Significant Rock Chip Results

    UPPER JOMBOK Trench ID

    Sample ID Au g/t

    Ag g/t

    As ppm

    Sb ppm

    Chip samples taken across quartz veinlets in altered bedrock exposed in base of test-pits TPX004 CX2007 0.02