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Arc Exploration has high hopes drilling with Anglo American at Trenggalek Indonesia

Last updated: 13:57 19 Mar 2014 AEDT, First published: 14:57 19 Mar 2014 AEDT

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Arc Exploration (ASX: ARX) has restarted drilling at the Singgahan Prospect of its Trenggalek Project in East Java, Indonesia, on a recently identified porphyry copper-gold target.

Drilling is fully funded by joint venture partner Anglo American, which is earning a 51% interest in the project.  This provides a clue as to potential prospectivity of the project.

The first hole will test part of a large coincident copper-gold-molybdenum anomaly highlighted in grid-soil and benching results obtained over an altered and quartz-magnetite-sulphide/limonite stockworked diorite intrusion.

Initial benching results at Singgahan returned broad anomalous intercepts in weathered bedrock including 40 metres at 0.045ppm gold, 386ppm copper & 4ppm molybdenum and 100m at 0.063ppm gold, 276ppm copper & 5ppm molybdenum.

The large surface geochemical anomaly highlighted at Singgahan provides further encouragement for the possible existence of a porphyry system in the project area, which will be tested in the current phase of drilling.

It is located about 5 kilometres east of the Jerambah Prospect, where results obtained from the 1,022 metres diamond hole completed late last year were interpreted to indicate the weaker mineralised margins of a possible porphyry system.

“Drilling started several days ago at the Singgahan Prospect, where recently reported soil sampling and benching results have revealed a large coherent gold-copper-molybdenum anomaly over an altered diorite intrusion with evidence of porphyry style mineralisation,” managing director Dr Jeffrey Malaihollo said.

“This continues the new phase of exploration with our JV partner, Anglo American, which is testing for porphyry copper-gold systems associated with geophysical anomalies detected beneath large near-surface alteration features.

“Further interpretative and field work is also underway over other prospects with the aim of firming up a pipeline of other targets for drill testing.”

Trenggalek IUP


The Trenggalek Project is an Exploration IUP tenement covering about 300 square kilometres in the same arc segment that hosts the giant Tumpangpitu porphyry gold-copper deposit in the Southern Mountains of East Java.

The project has excellent infrastructure with a network of sealed to graded roads traversing almost all of the tenement area.

Arc’s first drill hole at the project intersected extensive hydrothermal alteration and pyrite mineralisation at the Jerambah Prospect, which is located about 2 kilometres southwest of the Buluroto epithermal gold-breccia prospect on the southern side of the Trenggalek tenement.

This was interpreted to be on the margin of a possible porphyry system.

Previous drilling at Buluroto returned narrow epithermal gold intercepts that included 2 metres at 8.7 g/t gold in TRDD032.

Copper sulphide mineralisation in silicified breccia was intersected in another hole, TRDD025, returning a broad gold-copper-molybdenum intercept of 24.5m at 0.51g/t gold, 0.21% copper and 16 ppm Mo from 138.5 metres depth - providing indications of the deeper porphyry potential at Trenggalek.

The subsequent discovery of a large high-sulphidation epithermal alteration system centred on quartz-feldspar porphyry intrusions at Sumber Bening Prospect, located on the western side the Trenggalek tenement, provided further evidence for porphyry potential on the Trenggalek tenement.

TRDD054 at the Jerambah Prospect had intersected disseminated pyrite mineralisation (<1-5%) throughout the hole with local traces of base metal sulphides.

The hole is interpreted to have intersected the weaker mineralised margins of a potential copper-gold system.

Exploration activities at Trenggalek are currently managed by Arc but fully funded by Anglo American under a farm-in agreement reached in December 2012.    

Anglo American has the right to earn 51% interest in the project by sole funding US$ 10 million before 1 October 2016.

After spending US$ 10 million, Anglo American can move from 51% to 75% by sole funding an additional US$ 10 million.

On reaching 75%, Anglo American will free carry Arc for its remaining 20% through completion of a Pre-Feasibility Study.

PT. Sumber Mineral Nusantara holds the remaining 5% of Trenggalek.

Analysis

We believe this could be Anglo American's only Indonesian project at present which it farmed in to, providing a clue as to the regard it holds for a potential large scale discovery at Trenggalek.

News flow should start to hot up in the next month with drilling results.

The new drilling program at Arc Exploration’s Trenggalek targets a copper-gold-molybdenum anomaly that has evidence of porphyry style mineralisation.

Arc is very lightly capitalised at $5.5 million and over $2 million in cash; it would not take alot by way of results for its share price and valuation to take flight.

 

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