Southern Arc Second 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 second quarter ended December 31,
2012, 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.


FINANCIAL SNAPSHOT



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                                    December 31, 2012         June 30, 2012 
                                 -------------------------------------------
Total assets                        $      54,333,738      $     60,884,512 
Exploration properties                     35,612,324            37,430,624 
Working capital                            17,208,413            21,035,112 
Comprehensive loss                         (5,929,570)           (4,312,411)
Basic and diluted loss per share                (0.05)                (0.04)
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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 remain open to considering new gold-focused opportunities within
Indonesia and advanced-stage projects in other countries. This narrowed focus
enables 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.


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 24,743.1 metres of drilling to date on epithermal gold mineralization,
confirming high-grade events typical of epithermal boiling zones and identifying
several high-grade shoots. Southern Arc has completed more than 17,800 metres of
drilling to date at the Selodong porphyry copper-gold intrusive complex in the
southeastern end of the property, 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. While awaiting receipt of the permit Southern Arc
worked closely with SRK Consulting (Canada) Inc., an internationally renowned,
independent consulting service to major, intermediate and junior mining and
exploration companies, and prepared a detailed drill program for epithermal gold
targets within the Pelangan and Mencanggah prospects, with the objective of
completing a National Instrument 43-101 compliant resource estimate for portions
of the property by mid-2013.


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 has now completed 11 Phase 2 holes at Bising
(1,375.6 metres, Table 1). The results continue to demonstrate the consistency
and width of mineralization at the Bising target, with wide intervals averaging
greater than 1 g/t gold mineralization intersected in a large proportion of the
drill holes. 


Highlight Phase 2 drilling intercepts include:



MCG041  66.8 m @ 0.66 g/t gold and 2.4 g/t silver from 20.0 m               
        including 22.9 m @ 1.16 g/t gold and 2.7 g/t silver from 22.0 m     
                                                                            
MCG042  53.2 m @ 1.04 g/t gold and 1.4 g/t silver from 16.0 m               
        including 1.0 m @ 9.67 g/t gold and 0.8 g/t silver from 32.2 m      
        and 0.30 m @ 10.2 g/t gold and 61.3 g/t silver from 46.3 m          
                                                                            
MCG043  42.4 m @ 0.51 g/t gold and 1.1 g/t silver from 20.7 m               
        including 10.1 m @ 1.0 g/t gold and 1.9 g/t silver from 39.0 m      
                                                                            
MCG044  58.15 m @ 0.61 g/t gold from 87.85 m                                
        including 11.0 m @ 1.3 g/t gold from 104.6 m                        
        and 7.5 m @ 1.1 g/t gold from 123.0 m                               



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. Drill holes in Phase 1
exploration were located at 100 m drill spacings to test the main Bising
epithermal structural body, its extensions, and intersections with the several
crossing faults. 


With this initial program of Phase 2 exploration complete at Bising the rigs
were mobilized to the Tibu Serai target in the Mencanggah prospect. Surface
channel samples at the Tibu Serai target have returned the highest-grade
mineralization on the property to date. Southern Arc has completed seven drill
holes (1,124.2 metres) targeting down-dip extensions from elevated rock-chip
gold geochemistry in multiple veins that exhibit low silver-to-gold ratios. 


Once all assay results are received, Southern Arc's exploration team and Board
of Directors will review results from Bising and Tibu Serai and determine the
Company's next steps to advance the West Lombok project. 


East Elang Property (Sumbawa Island)

The East Elang property is located adjacent to Newmont's Elang copper-gold
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.
Application has been made to the Regency authorities 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. Company field
activities continue to focus on CSR engagement at the village and sub-district
levels.


Under the terms of the October 2010 option and joint venture agreement, 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. 


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 SIX MONTHS ENDED DECEMBER 31, 2012

During the six-month period ended December 31, 2012, the Company had a loss of
$5,929,570 compared to loss of $1,855,119 for the comparable period ended
December 31, 2011. Significant fluctuations incurred in the following
categories:




a.  Share-based compensation of $228,353 (2011: $554,918) 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. 
    
b.  Consulting fees of $nil (2011: $41,493) decreased as no consultants were
    engaged during the period. 
    
c.  Foreign exchange loss of $63,947 was realized during the period ended
    December 31, 2012 (2011: $392,113 gain) primarily due to the effect the
    fluctuation of the $US/$CAD exchange rate had on the Canadian equivalent
    of the Company's holdings and transactions in its US$ bank balance and
    US$ payables balance. 
    
d.  Management fees increased to $419,500 compared to $282,000 in 2011 and
    are discussed in detail in the Related Parties section. 
    
e.  Office and miscellaneous expenses decreased to $431,890 (2011: $573,231)
    as a result of lower levels of corporate activities. 
    
f.  Professional fees of $169,505 (2011: $221,268) decreased as a result of
    lower corporate legal activity during the period. 
    
g.  Travel expenses of $23,502 (2011: $104,674) decreased as a result of
    reduced executive travel during the period. 
    
h.  Interest income of $97,234 was realized during the six-month period
    ended December 31, 2012 (2011: $147,017). 
    
i.  During the six-month period ended December 31, 2012, the Company
    invested $4,078,112 cash (2011: $6,747,557) on exploration properties
    and $nil on property, plant and equipment (2011: $196,592). 
    
j.  During the six-month period ended December 31, 2012, the Company wrote
    down the value of the Sabalong property to $nil and recognized a
    $1,192,789 impairment provision. 
    
k.  During the six-month period ended December 31, 2012, the Company
    recognized a $3,348,260 impairment provision against its book value of
    the Taliwang property. 
    
l.  In 2012 the company recorded an impairment loss of $7,086 on equipment.
    Under other items in 2011, the Company recorded its share of the equity
    loss of Nickel Oil & Gas of $52,289 and recorded an impairment charge
    related to Nickel of $305,582. 



SUMMARY OF QUARTERLY RESULTS



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                  December 31,  September 30,       June 30,      March 31, 
                          2012           2012           2012           2012 
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Total assets    $   54,333,738  $  60,321,920  $  60,884,512  $  62,872,227 
Exploration                                                                 
 properties         35,612,324     38,808,405     37,430,624     35,680,748 
Working capital     17,208,413     19,027,865     21,035,112     22,901,030 
Net loss            (5,172,518)      (757,053)    (1,184,372)    (1,272,920)
Basic and                                                                   
 diluted loss                                                               
 per share               (0.05)         (0.01)         (0.01)         (0.01)
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To view Table 1, please visit the following link:
http://media3.marketwire.com/docs/sa228-Table1.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
[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 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. 


FOR FURTHER INFORMATION PLEASE CONTACT: 
Southern Arc Minerals Inc.
Rhylin Bailie
Vice President, Communications & Investor Relations
604-676-5241
[e-mail]
www.southernarcminerals.com