VANCOUVER, BRITISH COLUMBIA–(Marketwired – May 30, 2013) – Southern Arc Minerals (TSX VENTURE:SA)(OTCQX:SOACF) (“Southern Arc” or “the Company”) today announced the results of its third quarter ended March 31, 2013, along with an update on its portfolio of projects. Details of the Company’s financial results are described in the unaudited condensed consolidated interim financial statements and Management’s Discussion and Analysis (“MD&A”), which will be available on the Company’s website at www.southernarcminerals.com and on SEDAR at www.sedar.com. All amounts are in Canadian dollars unless otherwise stated.

EXPLORATION UPDATE AND OUTLOOK

At the end of 2012 Southern Arc’s Board of Directors conducted a strategic review of the Company’s projects and exploration strategy. The Board ranked the Company’s projects and considered the best strategy to protect and promote shareholder value. On December 13, 2012, Southern Arc announced the Board’s decision to: proceed with drilling at the West Lombok project; retain the Company’s no-cost joint venture interest in the East Elang project; sell the Taliwang project, subject to certain conditions; relinquish the Sabalong project; and actively pursue new advanced-stage, gold-focused opportunities within Indonesia and other countries. This narrowed focus enabled Southern Arc to dedicate resources in the near-term to advancement of the West Lombok project while retaining the financial flexibility to consider new opportunities.

Following the Board’s decision, Southern Arc commenced exploration in the Mencanggah prospect focused on epithermal gold-bearing structural breccias. Since mid-December 2012, Southern Arc has drilled 14 holes at the Bising target and 16 holes at the Tibu Serai target. With this phase of drilling complete, Southern Arc now has enough data to complete a preliminary National Instrument 43-101 compliant resource estimate for portions of the property. Since December 2011, Southern Arc has worked closely with SRK Consulting (Canada) Inc. (“SRK”), an internationally renowned, independent consulting service to major, intermediate and junior mining and exploration companies. SRK helped to prepare the drill program for epithermal gold targets within the Pelangan and Mencanggah prospects and has been reviewing the data throughout the drilling process. Southern Arc expects to have a technical report by mid-2013 that provides an inferred resource estimate for the property incorporating epithermal-gold mineralization from parts of the Raja target (Pelangan prospect), Bising and Tibu Serai targets (Mencanggah prospect), as well as porphyry copper-gold mineralization from the Selodong prospect. The report will also include SRK’s recommendations for additional drilling for both resource upgrade and expansion, which will help to focus next steps for the project.

Recent results have demonstrated the prospectivity of the Mencanggah prospect, and many targets with high-grade surface results remain untested at Mencanggah and other parts of the property. While awaiting results of the resource estimate, Southern Arc’s exploration team will continue to work with SRK to plan next steps at the property, which may include engineering and metallurgical studies.

West Lombok Property (Lombok Island)

The West Lombok project covers a 13-km long by 7-km wide structural corridor of mineralization and alteration hosting porphyry copper-gold and epithermal gold deposits. The two main epithermal prospects on the property, Pelangan and Mencanggah, cover broad areas of 4 km by 5 km and 6.5 km by 4.5 km, respectively, that host numerous structurally-controlled silica ledges variably overprinted by high-grade quartz veins and breccias. Individual tabular ledge bodies range in thickness from 2 to 66 metres, with a strike length of up to 1,000 metres and a vertical extent of greater than 300 metres. Southern Arc has completed 26,477 metres of drilling to date on epithermal gold mineralization in the Pelangan and Mencanggah prospects, confirming broad zones of low-grade mineralization throughout the property, high-grade events typical of epithermal boiling zones and several high-grade shoots. At the Selodong porphyry copper-gold intrusive complex in the southeastern end of the property, Southern Arc has completed 20,046 metres of drilling to date with the majority of drill holes intersecting broad zones of significant copper-gold mineralization. In 2011, the Company completed an airborne geophysical survey of the West Lombok project at 50-metre spacings to define both near-surface and buried copper-gold porphyry targets. Industry experts including Dr. Steve Garwin, Southern Arc’s Senior Technical Advisor, modelled and interpreted the results of the survey in conjunction with the Company’s geological and geochemistry database, and identified 17 porphyry targets on the property. A number of these targets have already had a limited amount of drill testing and demonstrated zones hosting high-grade gold-rich porphyry copper mineralization, supporting the outcome of the prospectivity analysis.

On November 20, 2012, Southern Arc announced that the forestry permit required to conduct drilling on the property, known as a Pinjam Pakai (borrow to use) permit, had been received. On December 13, 2012, Southern Arc announced that it was commencing drilling at West Lombok, with a near-term focus on epithermal gold-bearing structural breccias in the Mencanggah prospect. Southern Arc mobilized three drill rigs to the Bising target and initiated a Phase 2 drill program to infill and expand the zones of mineralization adjacent to wide mineralized intercepts identified with Phase 1 drilling. Southern Arc completed 11 Phase 2 holes at Bising (1,375.6 metres, Table 1). Based on those results, the Company drilled three additional holes (423.0 metres, Table 1) to test an inferred plunge to higher-grade mineralization and infill in a 200-metre wide gap between previous drill holes MCG031 and MCG032 to test for continuity of mineralization.

The extensive width (up to 66 metres width in surface outcrop) of the main Bising epithermal body is inferred to result from the intersection of geological structures: a major west-northwest trending fault intersected by several north-northwest trending faults, the latter of which form the dominant gold mineralized trend in the West Lombok district. Phase 2 drilling at the Bising target has demonstrated the consistency and width of mineralization in the area, with a large proportion of the drill holes intersecting wide intervals averaging greater than 1 g/t gold mineralization. Particularly encouraging is the result from MCG057, which confirmed continuity between other wide > 1 g/t gold intervals intersected to the west (MCG030, 041, 042, 028) and east (MCG032) of this location.

Highlight Phase 2 drilling intercepts from the Bising target include:

In 2013 Southern Arc also commenced Phase 1 drilling at the Tibu Serai target in the Mencanggah prospect, where surface channel samples have returned the highest-grade mineralization on the property to date. Tibu Serai comprises a 2 km by 2 km area at the northern end of the Mencanggah prospect and hosts numerous northwest and north-northwest trending linear gold mineralized structures. The majority of these well-exposed mineralized zones have been systematically channel sampled and have returned numerous highly gold-anomalous intervals. Highlight channel samples include 7.1 m @ 53.53 g/t gold, 2.25 m @ 12.13 g/t gold, 0.6 m @ 69.0 g/t gold and 2.0 m @ 9.8 g/t gold. Southern Arc initially drilled seven widely spaced shallow holes (1,124.2 metres, Table 3) targeting down-dip extensions from high-grade surface channel samples. The results confirmed the down-dip continuity of mineralization below surface but tested only a fraction of the strike of the mineralized breccias at Tibu Serai. Drillhole MCG055 was particularly encouraging, as this mineralization lies adjacent to an inferred major cross-cutting structural break evidenced from the magnetic survey data and mapped outcrop patterns. Southern Arc’s exploration team believes this major structural break may be influencing higher gold grades in its proximity, and drilled nine further holes (1,273.0 metres, Table 3) to test extensions of this high-grade intercept. Eight of the holes successfully encountered mineralization, demonstrating continuity of mineralization along strike and at depth. Results showed localized development of high-grade shoot zones which remain open and will require further drilling to quantify, and also gave strong encouragement for drill testing of numerous other untested high-grade surface anomalies within Mencanggah and Pelangan. Highlight intercepts from Phase 1 drilling at the Tibu Serai target include:

In March 2013, Southern Arc also drilled two holes (1,197.7 m, Table 2) to test deep porphyry targets beneath the Mencanggah lithocap. The holes were targeting modeled magnetic geophysical anomalies underlying the Tibu Serai area. Neither hole encountered significant porphyry-style mineralization, instead intersecting magnetite rich diorite and volcanics, respectively. Southern Arc remains very optimistic about porphyry copper exploration on the property. Areas in the Selodong prospect where previous drilling encountered gold-rich high-grade porphyry drill intersections have similar geophysical signatures to other porphyry targets on the property. Porphyry deposits often occur in clusters, and numerous porphyry targets remain to be drill tested beneath the lithocaps at Mencanggah, Pelangan and Selodong.

East Elang Property (Sumbawa Island)

The East Elang property is located adjacent to Newmont’s Elang-Dodo property, which hosts a large copper-gold porphyry deposit. Aerial photography and lithographical studies suggest that the Elang mineralized structure may extend onto Southern Arc’s East Elang property. While the property is considered highly prospective due to its location and results from aerial surveys, exploration has been deferred pending reclassification of the property’s forestry status and issuance of the appropriate permits.

Under the terms of the October 2010 option and joint venture agreement, the property will be advanced in partnership with Vale, whereby Vale can earn a 75% interest in the East Elang property by advancing the property to bankable feasibility study with a minimum Phase 1 expenditure of US$1.2 million within one year from the date on which Southern Arc receives a Ministry of Forestry Pinjam Pakai permit for the property. Southern Arc has not yet applied for the Pinjam Pakai permit because the majority of the East Elang property, including the most prospective areas, is designated as primary forest and subject to a moratorium on exploration and mining activities. In May 2013 the Indonesian government extended the moratorium to May 2015. As a result, there can be only very limited exploration activity on the property until either a reclassification is granted or the moratorium is lifted. Southern Arc has requested a reclassification of the property’s forestry status and has also applied for suspension (back-dated for two years) of the mining business license (“IUP”) until the reclassification process has been completed, ensuring that Southern Arc and Vale have adequate time to evaluate the property once exploration commences. In the interim, Company field activities continue to focus on CSR engagement at the village and sub-district levels.

Other properties

Southern Arc is actively pursuing a number of acquisition and partnership opportunities, both within Indonesia and in other countries, with the objective of adding value for shareholders by expanding the Company’s project portfolio.

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED MARCH 31, 2013

During the nine-month period ended March 31, 2013, the Company had a loss of $6,457,199 compared to loss of $3,128,038 for the nine-month period ended March 31, 2012. Significant fluctuations incurred in the following categories:

1. Share-based compensation of $294,060 (2012: $837,053) decreased as a result of fewer share options granted during the period. Share-based compensation expense is accounted for at fair value as determined by the Black-Scholes Option Pricing Model using estimates that are believed to approximate the volatility of the trading price of the Company’s stock, the expected lives of awards of share-based compensation, the fair value of the Company’s stock and risk-free interest rate.
2. Consulting fees of $nil (2012: $333,573) were paid as no consultants were engaged during the period.
3. Foreign exchange gain of $6,718 was lower during the period ended March 31, 2013 (2012: $473,267 gain) primarily due to lower US$ balances and reduced fluctuation of the US$/CDN$ exchange rate and the net effect on the CDN$ equivalent of the Company’s holdings and transactions in its US$ bank balance and US$ payables balance.
4. Management fees decreased to $622,000 from $635,140 in 2012 and are discussed in detail in the Related Parties section.
5. Office and miscellaneous expenses decreased to $595,455 (2012: $694.968) as a result of lower levels of corporate activities.
6. Professional fees of $236,203 (2012: $434,670) decreased as a result of lower corporate legal activity during the period.
7. Travel expenses of $40,749 (2012: $172,967) decreased as a result of reduced executive travel during the period.
8. Interest income of $135,782 (2012: $217,710) decreased during period due to lower cash balances.
9. The Company invested $5,586,044 cash (2012: $10,288,639) on exploration properties and $2,445 on property, plant and equipment (2012: $206,090).
10. The Company wrote down the value of the Sabalong property to $nil and recognized a $1,192,789 impairment provision.
11. The Company recognized a $3,348,260 impairment provision against its book value of the Taliwang property.
12. In 2013 the Company recorded an impairment loss of $7,086 on equipment. Under other items in 2012, the Company recorded its share of the equity loss of Nickel of $52,289 and recorded an impairment charge related to Nickel of $305,582.

Click here to view Drill Results Tables – http://media3.marketwire.com/docs/sa530_T1-3.pdf.

On behalf of the Board of Southern Arc Minerals Inc.

John Proust, Chairman & CEO, Director

About Southern Arc

Southern Arc Minerals Inc. is a Canadian mineral exploration company focused on gold and copper-gold exploration. The Company’s key exploration property is its West Lombok project, with several gold-rich copper porphyry and epithermal gold vein prospects. Southern Arc is listed on the TSX Venture Exchange under the symbol SA and on the OTCQX International under the symbol SOACF. More information is available at www.southernarcminerals.com or by emailing info@southernarcminerals.com.

Forward-looking Statements

This news release contains forward-looking statements relating to expected or anticipated future events and operations, timing of projects and anticipated results that are forward-looking in nature and, as a result, are subject to certain risks and uncertainties, such as general economic, market and business conditions, the regulatory process and actions, technical issues, new legislation, competitive and general economic factors and conditions, the uncertainties resulting from potential delays or changes in plans, the occurrence of unexpected events, and the company’s capability to execute and implement future plans. Actual results achieved may vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. There is no representation by the company that actual results achieved during the forecast period will be the same in whole or in part as that forecast.

Qualified Person

The technical information in this document has been reviewed by Southern Arc’s Chief Geologist, Andrew Rowe, B. App. Sc. Geology, MAusIMM. Mr. Rowe has over 20 years of international mineral exploration experience throughout Southeast and Central Asia and Australia. During this time he has held such positions as Principal Geologist – Feasibility Studies, Senior Geologist and Consulting Geologist. The technical information in this document has also been reviewed by Southern Arc’s President & Chief Operating Officer, Dr. Mike Andrews, PhD, FAusIMM, who has sufficient experience relevant to the style of mineralization under consideration and qualifies as a Qualified Person as defined by National Instrument 43-101.

The drill program and sampling protocol is managed by Southern Arc under the supervision of Andrew Rowe. The diamond drill holes are drilled at PQ, HQ and NQ sizes depending on hole depth and core recovery to date has averaged better than 98.0%. Half core is cut by rock saw and is generally sampled using nominal 1-metre intervals; however, sample intervals are varied according to geological contacts and have ranged between 0.2 to 2.5 metres in length. Three quality control samples (one blank and two standards) are inserted into each batch of 40 samples. The half core samples are securely transported from the project site to the Intertek Testing Services (“ITS”) sample preparation laboratory in Sumbawa Besar via private truck hired by Southern Arc. Sample pulps are then sent to the ITS Jakarta laboratory by ITS. Gold is analysed by fire assay with AAS finish and a four-acid digestion with ICP-MS finish is used to analyse a full suite of elements including silver and base metals. ITS is one of the world’s largest product and commodity testing, inspection and certification organizations. The Jakarta laboratory is ISO 17025 accredited and employs a Laboratory Information Management System for sample tracking, quality control and reporting.