Southern Arc Minerals Inc.
TSX VENTURE : SA

Southern Arc Minerals Inc.

August 22, 2007 08:30 ET

Southern Arc Minerals Provides Information on Short-Term Investment

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 22, 2007) - Southern Arc Minerals Inc. (the "Company" or "Southern Arc") (TSX VENTURE:SA) provides the following information on the impact of the recent events and uncertainty in global credit markets on its cash holdings. Company cash holdings are approximately $2.25 million of which approximately $1.4 million is invested in Canadian asset-backed commercial paper ("ABCP"). This ABCP is rated by Dominion Bond Rating Service ("DBRS") as R1-High, which is the highest possible rating for commercial paper, and consists of "Series A Notes" held with Coventree Capital Group Inc. ("Coventree") sponsored funds.

The notes were purchased on July 20, 2007 on recommendation of the Company's bank, HSBC Bank Canada, and matured on August 17, 2007. However, the notes were not paid out and remain outstanding. The Company will continue to monitor the situation with HSBC Bank Canada and Coventree.

Coventree has publicly stated that this situation has been caused by a disruption in the liquidity for Canadian ABCP rather than the creditworthiness of the underlying assets and the notes continue to be rated R1-High.

The Company believes that this liquidity issue with ABCP will not disrupt its business operations. Southern Arc has $850,000 of available cash and is continuing its exploration program on the porphyry occurrences within the Selodong Intrusive Complex in Indonesia as planned.

On behalf of the Board of Southern Arc Minerals Inc.

John Proust, President and CEO

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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