Archipelago provides update on N. Sulawesi gold project
Friday, September 15 2006 - 01:37 AM WIB
The Company's 85% owned Toka Tindung Gold Project in Sulawesi, Indonesia has a defined resource of 1.7m ounces (oz) gold equivalent of which 0.9m oz will initially be mineable by open pit.
Construction work has started with the focus being on civil earthworks during the current dry season. One dam is nearing completion, two others are under construction with a fourth soon to commence. Civils contractor Leighton Construction Indonesia recently shipped an additional fleet of mining equipment to site as part of its progressive build up of machinery, initially for civils work followed by commencement of mining next year.
Contractor Bakrie Constructions has established a concrete batch plant at site and the pouring of foundations will commence on 18 September 2006. The first shipment of processing equipment will depart from Chile on 1 October 2006 and the project remains on schedule for production in the third quarter of 2007 at an average 160,000 oz/annum gold equivalent over the first 5 years of the initial 6 year project life. Given the excellent exploration potential existing at Toka Tindung, the Company is confident of extending the mine life beyond 6 years.
All land purchases necessary to commence production have been completed ahead of schedule and a 7km road has been constructed from the mine site to the coast where a jetty will be constructed in preparation for the delivery of bulk goods required for construction and operations.
A drilling program is scheduled to commence in October 2006 aimed, in part, at extending the currently known westerly limits of mineralization in the Toka Tindung pit to assist with final design of the starter pit.
As previously reported, a number of operating permits remain to be issued before production can commence in 2007. However on the basis of advice from government authorities the Company considers that it is on track to receive these permits in coming months, consistent with our current development timetable.
The Company now has over 150 people employed and contracted at site and this number is expected to increase to 1,200 during the peak of construction next year and settle at about 600 when in production.
Mining at Toka Tindung will be by way of five open pits with processing through a centralised plant. The mineralogy of the Toka Tindung deposits is simple with indicated gold recoveries of approximately 94%.
During the half year to 30 June 2006, the Company placed 37,780,050 shares to raise US$27,831,807. The proceeds of this equity raising, together with the US$42.5m syndicated debt facility provided by Investec Bank (Australia) Limited(previously N.M. Rothschild & Sons (Australia) Limited), will be used by the Company to undertake construction of the Toka Tindung Gold Project.(end of excerpt)