Trenggalek Project – East Java (95%)

Located in the Southern Mountains of East Java Province, Trenggalek is in one of the most promising project areas for potential gold and copper discoveries. The total area of the Exploration IUP tenement is about 300 square-kilometres and covers highly prospective Oligo-Miocene and younger volcanosedimentary rocks in part of the Sunda-Banda Arc.

Since 2006, Arc has identified multiple epithermal gold targets and has more recently recognized the potential for large gold-copper porphyry systems.

There are several prospects already identified in this large and prospective areas.such as Sentul, Kojan, Buluroto and Sumber Bening.

Early scout drilling by Arc demonstrated the presence of a substantial epithermal gold-vein field with potential for multiple gold resources within the IUP. Some drill-holes intersected narrow high-grade intervals within broader low grade intercepts at several prospects, including:

Sentul – Veins are up to 10-15 m wide and have greater than 10 km collective strike length. The veins host locally high-grade intervals. Highlights include: 2.0 m at 17.2 g/t Au & 13 g/t Ag within an intersection of 9.6 m at 4.5 g/t Au & 8 g/t Ag from 111.3 m in hole TRDD-4.

Kojan – Contains multiple parallel veins up to 5 m wide having a collective strike length of several kilometres, and notably high silver grades. Highlights include: 1.9 m at 11.3 g/t Au & 293 g/t Ag within an intersection of 6.6 m at 4.9 g/t Au & 149 g/t Ag from 62.4 m in hole TRDD-35.

Buluroto – Potential for near surface gold and possibly gold-copper in mineralised breccia (e.g. 27 m at 0.49 g/t Au & 0.19% Cu in TRDD-25) developed at the intersection of two epithermal veins. A porphyry-style gold-copper system may occur at depth or adjacent to the breccia. Highlights include: 2.0 m at 8.7 g/t Au & 48 g/t Ag within an intersection of 13.7 m at 3.2 g/t Au & 60 g/t Ag/t from 13.4 m in hole TRDD-37.

The Southern Mountains of East Java is also host to the large Tumpangpitu porphyry copper-gold deposit located in the Tujuh Bukit district, about 200 kilometers to the east of the Trenggalek project area. Our early investigation of the porphyry potential of the Trenggalek IUP area indicates that it contains similar rocks and geological setting to Tujuh Bukit.

One of the attractions of Trenggalek is that large tracts remain substantially underexplored. We estimate that only 50% of our 30,000 square-kilometre tenement area has been prospected and mapped, leaving substantial potential for new prospects to be identified.

Work on porphyry targeting within the IUP commenced in 2010 and has continued in earnest with our joint venture partner, Anglo American, since 2012. Several major prospects have been identified as the result of flying an airborne magnetics & radiometrics survey over the entire IUP and followed up with ground prospecting and surface geochemical sampling. The joint venture has commenced with scout drilling on several of these prospects and the initial results have confirmed the presence of large porphyry-related alteration systems containing associated gold and copper anomalism.

This work is at an early stage and further work is planned.