Archipelago reports lower Q1 gold output on heavy rainfall

By Puspita Maylana Devi

LSX-listed Archipelago Resources Plc said that output at its Toka Tindung gold mine in North Sulawesi in the first quarter of this year was slightly lower compared to the same period of last year due to the heavy rainfall during the period. The company, however, said it was on track to meet full-year production target.

The company said in a statement obtained Wednesday that production declined to 31,575 Au Eq oz from 32,189 Au Eq oz.

?Production at Archipelago's Toka Tindung Mine is subject to seasonal variation, with adverse weather patterns having most impact during the first three months of the calendar year,? the company said. In this regard, significant rainfall was reported across the North Sulawesi region during first quarter of 2013, with a total of 1,324.5mm of rain being recorded at the site over the period (which was circa 20 percent higher than for first quarter of 2012).

Despite these challenging weather conditions, the company maintained that production levels were substantially in line with output reported for first quarter of 2012. ?This was largely due to the company continuing to source higher grade ore from the Kopra and Pajajaran deposits (in addition to the on-going blending of ore recovered from the main Toka pit),?

For first quarter of 2013, the processing plant operated slightly below nameplate capacity on a quarter by quarter basis, primarily due to the metallurgical nature of ore from the southern deposits. The company expects recovery rates to improve, with the recently installed oxygen plant expected to have a positive impact on recovery rates for the remainder of the year.

Overall, the Toka Tindung Mine operated broadly in line with mine planning for first quarter of 2013 and remains on track to achieve full year production targets.

Archipelago expects production to continue to build during the course of the year, as drier weather conditions prevail; especially during the second half of 2013. In this regard, the company is maintaining the full-year 2013 production guidance of 140,000 to 155,000 Au Eq oz. Full year cash cost guidance is also maintained at between $620 and $680 per Au oz (net of Ag credits and royalties).

Archipelago said it has appointed Charles Knight as General Manager - Operations. Knight has over 35 years' experience in senior management roles across the resources and industrial sectors.

Prior to joining Archipelago, Knight was an executive director with 333 Consulting, where he was responsible for overseeing a range of productivity improvement initiatives in the mining industry; working on projects for Newcrest Mining, Straits Resources, Resolute Mining, Iluka Resources and OceanaGold (amongst others). In addition to his resource industry credentials, Knight also has extensive South East Asian managerial experience, having held senior roles in Indonesia, Singapore and Malaysia.

Table: First quarter production performance:

Category	Q1 2013	Q1 2012
Ore Mined (T)	498,272	654,768
Waste Mined (T)	2,901,526	3,690,547
Total Mined (T)	3,399,798	4,345,315
Ore Processed	401,912	427,859
Strip Ratio	5.82	5.64
Head Grade for Au (g/t)	2.56	2.33
Head Grade for Ag (g/t)	6.05	4.97
Process Recovery Rate (%)	90.30%	91.20%
Gold Ounces Produced (Eq oz)	1 31,575	32,189

Editing by Reiner Simanjuntak