Archipelago reports N. Sulawesi gold mine progress
Monday, September 14 2009 - 07:59 AM WIB
Archipelago Resources Plc ("Archipelago" or "the Company") holds an 85% interest in its flagship Toka Tindung Gold Project in North Sulawesi, Indonesia ("the Project"). The Project has a defined resource of 1.7m ounces (oz) gold equivalent of which 1.1m oz will initially be mineable by open pit. The Company's objective remains early development of this Project.
In March 2008, the Director General of the Ministry of Energy and Mineral Resources (ESDM) issued Decrees advising that the Project's revised environmental impact statements (AMDAL's) had been approved in accordance with Regulation 27 1999 Articles 19 and 20. In addition, the Decrees approved the CoW's respectively entering (TTN) and re-entering (MSM) the Construction Phase necessary to complete development of the Project. On 20 April 2009, the Ministry of Energy, Minerals & Resources approved an extension of the MSM Construction Phase until 5 March 2010. The Construction Phase approval for PT Tambang Tondano Nusajaya is still current.
Subject to unanimous political support and project financing, production is targeted for late 2010 at an average annual rate of 160,000 oz/annum gold equivalent over the first 6 years of the initial 8 year project life. Given the excellent exploration potential existing at Toka Tindung and encouraging initial exploration results reported in January 2007, the Company is confident of extending the project life beyond 8 years.
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%.
On 24 February 2009, the Company announced that it had placed 104m shares at 9 pence per share with investment funds managed by Baker Steel Funds ("Baker Steel") giving Baker Steel a 40% interest in the Company. The capital raised was used to repay a loan facility and provide working capital for the Company. In addition, Baker Steel was granted options to acquire up to 85,000,000 shares in the Company exercisable at a price of 12 pence per share.
Events since the Balance Sheet Date
On 10 August 2009, the Company announced that prominent Indonesian company, PT Rajawali Corporation ("Rajawali"), an existing shareholder, had agreed to purchase 85,000,000 share options ("Options") and 26,505,800 shares ("Shares") in the Company from Baker Steel Funds ("Baker Steel"). Furthermore, Rajawali advised the Company that it had elected to exercise all of the Options purchased at the exercise price of 12 pence per share and accordingly, the Company which was already debt free and had working capital of GBP1.9 million, received an additional GBP10.2 million.
Following exercise of the Options, the Company now has 391,019,334 shares in issue of which Rajawali hold 117,305,800 and Baker Steel hold 97,466,867 representing 30% and 24.9% respectively of the issued capital of the Company, with a further 8 beneficial shareholders with holdings of greater than 2% representing in aggregate an additional 29.7%.
The Board is very supportive of this major investment in the Company by a strong and respected local company. Board representation is proposed and Rajawali will be entitled to participate in any future issues of new shares by the Company to the extent of its pro rata interest.
The Company is confident that with the support of Rajawali, it will secure regional support for the development of the Toka Tindung Gold Project, secure appropriate project financing and re-commence construction. Rajawali has made clear its intention that the Project be brought into production as a matter of priority. The Company understands that Rajawali will also be supportive of the Company acquiring additional gold project assets in due course.
Other than as already announced, there has not been any other matter or circumstance that has arisen since 30 June 2009 which has significantly affected, or may significantly affect, the operations or state of affairs of the Company. (end of excerpt)