Archipelago begins construction activities at N. Sulawesi gold project

UK gold miner Archipelago Resources plc announced Tuesday that it had commenced construction activities at its 85 percent owned Toka Tindung Gold Project in North Sulawesi.

?Operations and construction camps are already established together with a laboratory and road construction and earthworks have already commenced. In total approximately 190 people are already engaged at site together with numerous consultants in Perth,? the company said in a statement.

Archipelago said it would finalise plans to ship to Indonesia the gold processing plant and equipment that it acquired from Barrick's El Tambo gold project in Chile last year.

?This equipment is already packaged for shipment and is expected to arrive in Indonesia in the fourth quarter of this year,? Archipelago said.

According to the statement, the project is attractively located close to the coast, well serviced by mostly bitumen roads and fibre optic communications and only 45kms from the Provincial Capital Manado and its domestic and international airport.

The Toka Tindung gold project has a resource of 1.75 million ounces (ozs) of gold equivalent, of which at least 900,000 ozs will initially be mineable by open pit. The project is targeted to produce 160,000 ozs per annum for an initial 6 year mine life commencing in mid 2006.

Archipelago has accepted an Indicative Term Sheet from N.M. Rothschild & Sons (Australia) for the provision of debt finance and hedging facilities to facilitate development of the project. The terms of the proposal are that US$35 million will be by way of debt finance together with a $4 million cost overrun facility. (Robert)