Southern Arc’s IR slip-up

A typo delayed an enthusiastic reaction to big news from Southern Arc Minerals (SA-V) West Lombok copper-gold property in Indonesia.

Instead, the operator of www.321gold.com is taking the credit for the stocks activity on the TSX Venture Exchange.

Southern Arc shares have nearly doubled since May 10 when the company issued flawed drill results from its Selodong target, but the stock closed just a penny higher that day.

Bob Moriarty noticed the error and followed up with a column on his Web site titled, Southern Arc strikes gold and nobody noticed.

Today Southern Arc shares jumped 41.5% on a volume of nearly 4.4 million shares to $1.50. The share price rose from to $1.06 from 78 on May 11 when the column and the correction came out.

Moriarty claims 98% of the market response was due to his column, not to the clarifying press release that he advised Southern Arc to issue.

No one reads press releases anyway, Moriarty says.

He says his site gets between 50,000 and 80,000 hits a day.

Moriarty says the flawed press release is the perfect example of how to confuse something simple and be punished for it.

Their stock was down 10% on Thursday (May 10) before recovering when a few people read (the release) a little more carefully, Moriarty says.

The actual outcome for Southern Arcs first drill hole within the Selodong Intrusive Complex at West Lombok was a 442.2-metre intersection averaging 0.28% copper and 0.42 gram gold per tonne.

The hole was 476 metres deep and the intersection was between 33.8 metres and 476 metres.

In the first press release, Southern Arc reported that the intersection averaged 0.28% copper and 0.42 gram gold per tonne from 442.0 metres (33.8 to 476 metres).

The word from should have said for and changed the meaning.

Southern Arc also reported a 166.2-metre high-grade sulphide zone grading 0.52% copper and 0.85 gram gold per tonne, including 105 metres grading 0.6% copper and 1.04 grams gold per tonne. The high-grade mineralization was found between the depths of 33.8 metres and 200 metres.

The hole was drilled northeast at an inclination of 65 degrees with the goal of extending mineralization previously intersected by Newmont Mining (NEM-N), which explored the property before to Southern Arc.

The company intersected a non-mineralized late-stage dyke for the first 33.8 metres, followed by a high-grade copper gold mineralization hosted within an early phase of mineralized quartz-diorite.

Another problem with the press release is that it wasnt clear on which property the hole was drilled. It was described as the first hole on the Selodong Intrusive Complex which can only be found after perusing each of Southern Arcs project descriptions.

Moriarty says the first press release was confusing even if Southern Arc hadnt used the wrong word.

Its not clear where it was or what it was, he says. And it was a company-making hole.

West Lombok is 18.4 sq. km and is located along the southwest peninsula of Lombok Island, Indonesia. Southern Arc acquired the property in late 2005 after Newmont let go of it. Newmont did nearly 8,000 metres worth of diamond drilling in the Selodong area during the 1990s. According to Newmonts historical results, 35 of 52 drill holes intersected intervals of copper-gold mineralized diorite-porphyry and volcanics.

Southern Arc began drilling Selodong in April and used Newmonts historical results in its drill plan.

The company began its exploration program for West Lombok in May 2006. There are three other prospect areas on the property, which are complex vein systems: the Pelangan, Simba and Bising prospects.

Southern Arc president and CEO John Proust was unavailable for comment.