Southern Arc's W. Lombok drilling activity delayed due to local unrest

Vancouver-based metal exploration firm Southern Arc Minerals said on Tuesday that it has halted drilling activities at its West Lombok project while the company works with local authorities and community leaders to resolve local unrest.

?We will not let these recent events interfere with our objective of exploring and developing the West Lombok project to create value for local communities, the government of Indonesia and Southern Arc shareholders,? said John Proust, Southern Arc?s CEO.

?Southern Arc will work with community leaders and government officials to find a long-term solution to these challenges. Clearly we need a multifaceted solution that involves enhanced security, comprehensive community engagement to increase local awareness, and collaboration with local authorities and community leaders to bring stability and security to the region,? John added.

The company is already working with the drilling contractor to replace the damaged equipment and believes full-scale drilling could resume in September. With five rigs drilling at both Pelangan and Mencanggah, Southern Arc anticipates drilling an average of 6,000 meters a month at the West Lombok project, with the objective of completing compliant resource estimates in the first half of 2012.

Southern Arc has engaged a number of experts in security and Indonesian affairs to conduct a thorough analysis of both demonstrations and update the company?s security plan to ensure its workforce and equipment are protected. Southern Arc remains committed to the region and its workforce, and will take the steps necessary to prevent further disruptions to its exploration program, the company said.

On August 8, a group of demonstrators arrived at Southern Arc?s Mencanggah property and set fire to three drill rigs before proceeding to its Pelangan property, where an additional five rigs were damaged. No one was injured, and all of our employees and contractors are safe and accounted for. The West Lombok project was subject to a similar demonstration in May 2011, and based on that event, the company had hired both police and army representatives to provide additional security for its workers and to protect Southern Arc?s property. Faced with a large group of armed intruders, security personnel focused on the safety of Southern Arc?s employees and contractors.

Since receiving its mining business license in January 2011, Southern Arc has proactively engaged with local communities to discuss its exploration and development plans and address questions and concerns. The company offers extensive employment and training programs and employs approximately 400 people from local communities. Southern Arc believes the demonstrations have been organized by a fringe group of individuals who are participating in illegal mining activities in the region outside of Southern Arc?s properties. (romel)