Archipelago announces expiry of loan mandate

UK mining firm Archipelago Resources Plc advised on Monday that the mandate entered into with a group of prospective loan providers as announced on 5th January 2010, expired on 28th February thereby releasing it from any obligations to proceed with the proposed facility including hedging by way of the purchase of expensive put options.

On 26th February 2010 the Company announced the completion of a successful placing to shareholders and institutional investors, raising equity funding of GBP30m towards the cost of construction of the Company's 85% owned Toka Tindung Gold Project in North Sulawesi, Indonesia, together with plans for raising the balance of the construction costs in due course.

The Company remains debt free and as a result of the equity raising is in a strong position going forward, it said.

The Toka Tindung Gold Project has a resource of 1.75M ozs of gold equivalent, of which at least 1.1M ozs will initially be mineable by open pit. When in operation, the Project will produce at an average annualised production rate of 160,000 ounces of gold equivalent per annum for at least 6 years together with an additional 2 years processing lower grade stockpiles. The Company's pits are currently designed at a very conservative US$600/oz gold price and as a result the Company is confident that with further exploration and sustained gold prices it will be able to substantially extend the life of the Project.(alex)