Southern Arc First Quarter Financial Results and Projects Update

Southern Arc Minerals (TSX VENTURE:SA)(OTCQX:SOACF) ("Southern Arc" or "the
Company") today announced the results of its first quarter ended September 30,
2011, along with an update on exploration activities at 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.


RECENT EVENTS



--  Completed evaluation of the Waterfall target (27 holes), Mencanggah
    prospect, West Lombok project 
--  Completed drilling of 8 holes at the Bising target, Mencanggah prospect,
    West Lombok project 
--  Re-focused drilling activities on the West Lombok project to areas
    without forestry designation, due to an ongoing delay in receiving the
    required forestry borrow/use ("Pinjam/Pakai") permit 
--  Completed airborne geophysical survey of the West Lombok project; data
    are being modeled and interpreted in conjunction with geological and
    geochemistry database 
--  Engaged SRK Consulting (Canada) Inc. to complete an NI 43-101 technical
    report for the West Lombok project, including resource estimates for
    Pelangan and Mencanggah prospects 
--  Completed 11,197 metres of drilling on the Sabalong project, with
    results of Phase 1 porphyry exploration program expected in early Q1-
    2012 
--  Commenced trading on the OTCQX International on December 7, 2011 under
    the symbol "SOACF", with the objective of increasing exposure in the
    United States and providing improved liquidity and transparency for
    shareholders 
--  Appointed Mohammed Al-Shahwani, CEO of Qatar Mining Company, to the
    Board of Directors



EXPLORATION UPDATE AND OUTLOOK

West Lombok Project

On December 29, 2011, Southern Arc announced the decision to focus its near-term
drilling activities on targets within areas without forestry designation.
Following issuance of its mining business license (IUP) in January 2011,
Southern Arc initiated the forestry permit process to allow advanced exploration
activities on its West Lombok project. As described in the press release issued
on August 26, 2010, approximately 1.1% of the West Lombok property is designated
Protected Forest (no open-pit mining allowed; underground mining allowed with
the appropriate forestry permits), 55.1% is designated Production Forest
(open-pit and underground mining allowed with the appropriate forestry permits)
and 43.8% has no forestry designation (no restriction on mining activities).


Since the property had been clear-cut logged in the 1990s, Southern Arc decided
to proceed with exploration activities, with strong local government support and
encouragement, while waiting for issuance of its forestry borrow/use permit,
known as a Pinjam/Pakai permit. The Company has recently engaged new legal
counsel in Indonesia and has been advised to adopt a more conservative stance
with respect to activities within property areas still subject to forestry
designations, independent of the fact that there are no longer any forested
areas on the West Lombok property. Southern Arc will focus its drilling
activities on areas with epithermal gold mineralization on the northwest of the
property until the Company receives the Pinjam/Pakai permit. Two rigs have been
relocated to the Jati and Tanjung targets on the Pelangan prospect, where
previous exploration identified a continuous 1.5km-long mineralized epithermal
breccia, hosting at least one high-grade lode structure.


Exploration activities on West Lombok in 2011 have focused on Phase 2
exploration at the Pelangan prospect and Phase 1 exploration at the Mencanggah
prospect. Initial activities on Mencanggah focused on the Waterfall target,
where Southern Arc has completed 27 holes for a total of 6,634 metres of
drilling. Results from the first holes were released in November, with nine of
the ten completed holes encountering gold mineralization. Results from the
remaining holes are expected to be released in early January.


Southern Arc has also completed eight holes on the Bising target on the
Mencanggah prospect. Bising showed very high grades in rock saw channel samples
including 7.1m @ 53.5 g/t gold and 5.0m @ 12.2 g/t gold. Results from the eight
holes are expected in late January.


Southern Arc completed 6,643 metres of drilling in 35 holes at the Pelangan
prospect earlier in 2011, and results from all holes have been released
(www.SEDAR.com). Drilling to date has confirmed the Company's geological model
for the prospect and identified three high-grade shoots that will be explored
further with the next phase of drilling.


Surface mapping has continued on the West Lombok property and the team has to
date identified 16km of mineralized structural breccias ("MSBs") on the
Mencanggah prospect with an additional 5km of epithermal structural breccias
("ESBs") with geochemical testing underway to determine mineralization, and 5km
of MSBs on the Pelangan prospect with an additional 4.6km of ESBs.


Southern Arc has also 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. The results of the survey are being modeled and
interpreted in conjunction with the Company's geological and geochemistry
database to identify porphyry targets that will be drill tested in the next
phase of exploration.


All of this exploration data will be included in an independent National
Instrument 43-101 ("NI 43-101") technical report for the property that will
include resource estimates for both the Pelangan and Mencanggah prospects.
Southern Arc has engaged SRK Consulting (Canada) Inc. ("SRK") to complete the NI
43-101 report. SRK visited the property, first in 2008 and again in December
2011, to review the Company's sampling and logging procedures and found the
Company's practices to be of industry standard and well implemented. Southern
Arc will continue to work closely with SRK as exploration proceeds. While
completion of the technical report and resource estimates was targeted for the
end of Q2-2012, more exploration and drilling data are required. The timing of
the report and resource estimates is contingent on Southern Arc's ability to
resume full-scale exploration upon receipt of the Pinjam/Pakai permit.


Sabalong Project

The Sabalong property is being advanced in partnership with a wholly-owned
subsidiary of Vale S.A. ("Vale") under an option and joint venture agreement.
Southern Arc is managing the exploration program and Vale is funding all project
expenditures. Vale has completed its US$1 million Phase 1 funding obligations
and has the option to fund US$2 million in Phase 2 expenditures within two
years. Mapping and surveying activities at the Sabalong property have defined a
number of potential porphyry intrusive targets. Southern Arc commenced drilling
in October 2011 and has one rig at site to drill three deep holes, with one
completed to date and a second hole nearing completion. Drilling results from
all three holes will be released in early Q1-2012.


East Elang Project

The East Elang property is located adjacent to Newmont's Elang copper-gold
deposit (25 Moz gold, 16 Blb copper, Newmont February 2011 press release).
Aerial photography and lithographical studies suggest that the Elang mineralized
structure extends onto Southern Arc's East Elang property. The East Elang
property is being advanced in partnership with Vale under an option and joint
venture agreement whereby Southern Arc is managing the exploration program and
Vale is funding all project expenditures. Southern Arc expects to initiate
surface exploration on the property in 2012, at which point Vale will begin its
Phase 1 US$1.2 million funding obligations.


Taliwang Project

Southern Arc and Newcrest Mining have reached a heads of agreement and are
working toward completion of a joint venture agreement to explore the Taliwang
project whereby Newcrest funds all project expenditures and Southern Arc manages
the exploration program. Located adjacent to Newmont's world-class Batu Hijau
copper-gold mine, the Taliwang property covers 31,200 hectares prospective for
gold, silver and copper mineralization. Exploration to date has identified a
gold-silver bearing epithermal vein system in which 56 drill holes have
confirmed both lateral and vertical persistence of the mineralized structures,
near-surface porphyry copper-gold targets with associated surface
high-sulphidation epithermal signatures, and sedimentary gold-hosted targets.
Surface exploration activities during 2011 have focused on detailed lithological
and alteration mapping of epithermal and porphyry prospect areas, as well as
clay spectral analysis studies. Phase 2 drilling is planned for 2012.


Other Projects

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


RESULTS OF OPERATIONS

During the three-month period ended September 30, 2011, the Company had a loss
of $285,270 compared to a loss of $3,099,764 for the three-month period ended
September 30, 2010. Significant fluctuations occurred in the following
categories:




a.  Stock-based compensation of $98,270 (2010: $2,665,816) decreased as a
    result of fewer stock options granted during the period. Stock-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 stock-based compensation, the fair value
    of the Company's stock and the risk-free interest rate.

b.  Foreign exchange gain of $341,462 was realized during the three-month
    period ended September 30, 2011 (2010: $15,371) due to the effect the
    fluctuation of the US$/CDN$ exchange rate had on the Canadian equivalent
    of the Company's holdings and transactions in its US$ bank balance and
    US$ payable balance.

c.  Interest income of $91,339 was realized during the three-month period
    ended September 30, 2011 (2010: $nil).

d.  Management fees increased to $141,000 compared to $100,500 in 2010.

e.  Office and miscellaneous expense increased to $221,960 (2010: $60,340)
    as a result of higher levels of activity, including increased
    administrative charges from a related party.

f.  Professional fees of $66,778 (2010: $159,314) decreased as a result of
    decreased financing activity for the period.

g.  Property investigation costs of $nil were expensed during the period
    ended September 30, 2011 (2010: $74,302).

h.  Travel expenses of $48,700 (2010: $12,813) increased as a result of
    increased activity during the period.

i.  During the three-month period ended September 30, 2011, the Company
    invested $3,322,226 cash (2010: $430,432) on exploration properties and
    $82,281 on property, plant and equipment (2010: $nil).

j.  During the three-month period ended September 30, 2011, the Company
    received $432,861 of exploration advances and spent $238,834 on
    exploration activities related to its joint venture on the Sabalong and
    East Elang properties (2010: $nil).



The following table provides a brief summary of the Company's financial
operations. For more detailed information, refer to the financial statements.


SUMMARY OF QUARTERLY RESULTS



----------------------------------------------------------------------------
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                     September 30,      June 30,     March 31,  December 31,
                              2011          2011          2011          2010
----------------------------------------------------------------------------
                                                                            
Total assets         $  63,112,036 $  63,311,011 $  50,617,532 $  25,002,393
Exploration                                                                 
 properties             26,345,975    23,401,805    24,216,140    23,195,375
Working capital                                                             
 (deficit)              34,173,553    37,352,881    24,018,795     (530,251)
Net loss                 (285,270)   (1,224,222)   (1,815,241)     (444,126)
Basic and diluted                                                           
 loss per share             (0.00)        (0.01)        (0.02)        (0.01)
----------------------------------------------------------------------------
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                     September 30,      June 30,     March 31,  December 31,
                              2010      2010 (1)      2010 (1)      2009 (1)
----------------------------------------------------------------------------
                                                                            
Total assets         $  24,538,433 $  24,898,967 $  22,910,770 $  23,434,431
Exploration                                                                 
 properties             22,769,384    22,410,416    20,626,421    20,318,136
Working capital                                                             
 (deficit)               (323,688)       479,631       758,642     1,652,957
Net loss               (3,099,764)     (542,816)     (392,176)      (90,028)
Basic and diluted                                                           
 loss per share             (0.04)        (0.01)        (0.01)        (0.00)
----------------------------------------------------------------------------
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 (1) Prepared in accordance with CA GAAP                               



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 with an
aggressive exploration, acquisition and growth strategy. The Company's portfolio
includes four exploration projects with epithermal gold and gold-copper porphyry
prospects on the Lombok and Sumbawa islands in Indonesia, three of which are
being advanced in partnership with major mining companies Vale and Newcrest. 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. More information is
available at www.southernarcminerals.com or by emailing
[e-mail].


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 18
years of international mineral exploration experience throughout Southeast and
Central Asia and Australia. During this time he has held such positions as Chief
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.