The company said that the drilling failed to show any increase in grade or width with depth, and did not extend the mineralization laterally.
No follow up drilling has been planned at this time, with the company now considering future options for the property.
The drill work by Southern Arc was done based on what it called "encouraging" historical surface and subsurface work at the property by Newmont, Rio Tinto Zinc, and the company itself.
It tested a number of mineralized zones within the upper parts of the Toyang epithermal gold vein system. The company drilled six holes for a total of over 1,000 metres, with the aim of reconfirming historical drill intercepts from Rio Tinto and checking lateral extensions of this mineralization, as well as testing for the subsurface potential.
"While a number of the holes revealed mineralized intervals similar in scale and tenor to historical RTZ (Rio Tinto Zinc) results, Southern Arc's drilling failed to demonstrate any increase in grade or width with depth, and did not establish lateral extension of the mineralization," it said in a statement.
Drill intercepts of note were 75.9 metres at 0.70 grams per tonne (g/t) gold and 3.8 g/t silver, including 1.0 metre at 18.4 g/t gold and 35.0 g/t silver.
Hole DDG03 also hit 33.5 metres at 0.53 g/t gold and 4.4 g/t silver, including 0.6 metres at 3.7 g/t gold and 10.3 g/t silver, while hole DDH04 returned 2.05 metres at 1.21 g/t gold and 4.5 g/t silver.
The Canadian mineral exploration company's portfolio includes four exploration projects with epithermal gold and copper-gold porphyry prospects on the Lombok and Sumbawa islands in Indonesia, one of which is being advanced in partnership with Vale(NYSE:VALE).
Its key asset is its West Lombok project, with "several" gold-rich copper porphyry and epithermal gold vein prospects.
In July, Southern gained a 100 per cent interest in Sabalong following Vale's decision to withdraw from their partnership at the site.
The two companies completed three diamond drill holes at the property to test potential porphry targets that had been defined by geological surveys, which intersected "weakly altered intrusions and volcanics with no significant porphyry copper mineralization", Southern Arc said.
With phase 1 exploration complete, Vale decided not to proceed to phase 2 and withdrew from the Sabalong project.
Meanwhile, Vale remains a partner at the East Elang project, in which Vale can earn a 75 per cent interest by advancing the property to bankable feasibility study, with a minium phase 1 expense of US$1.2 million within one year from the date on which Southern Arc gets a permit from the Minister of Forestry.
Southern Arc was granted a mining business license for East Elang in December 2009, but exploration has been deferred at the site pending reclassification of the property's forestry status.
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