Archipelago buys processing plant for N. Sulawesi gold project

UK-based Archipelago Resources Plc said Tuesday it had secured the rights to acquire the crushing and grinding sections of the El Tambo gold processing plant owned by Barrick Gold Corporations in Chile for its Toka Tindung gold project in North Sulawesi.

?Plant dismantling will commence this month (February) with machinery transported to a coastal port for refurbishment. Following confirmation of project financing, the machinery will be shipped to Indonesia and re-erected at Toka Tindung Gold Project in Sulawesi,? Archipelago in a statement.

According to Archipelago, Arlington Group plc, also a British firm, will undertake the dismantling, transportation and refurbishment of the gold processing equipment before selling them to Archipelago?s Indonesian subsidiary.

?Arlington has agreed to acquire up to ?4 million of mining equipment to be on-sold to Archipelago. The consideration Arlington will receive on on-sale will total up to ?5 million,? Archipelago said.

Archipelago also said preliminary negotiations were also underway with Barrick regarding the acquisition of other sections of the El Tambo gold processing plant.

Archipelago added that it had planned to commence gold production from the Toka Tindung project next year.

Last February, Archipelago purchased the Toka Tindung project from Australian Aurora Gold for a deferred consideration contingent on the development of a commercial mining operation. The project is located 35 km North East of Manado, the provincial capital of North Sulawesi.

Aurora has estimated that the project contains 15.4 million tons of ore with average grades of 3.4 grams per ton of gold and 8 grams per ton of silver.

Archipelago now has 85 percent of the Toka Tindung project, while Austindo Mining Corporation holds another 15 percent. (Robert)