Archipelago reports N. Sulawesi gold mine progress
Monday, July 25 2011 - 07:56 AM WIB
Archipelago is pleased to announced that its 95% owned Toka Tindung Gold Project ("the Project") in North Sulawesi Indonesia is now operating at 65% of design throughput and gold production following successful commissioning of the processing plant and completion of the initial stage of production ramp-up.
Mining has now commenced as planned at Pajajaran, the second open pit to be developed at Toka Tindung, to the south of the main Toka Tindung pit.
As announced in the Annual Report, production for calendar year 2011 is on track for approximately 80,000 ounces of gold equivalent.
Initial materials handling issues with near surface clay rich ore have now been largely overcome and larger width and higher grade blocks of harder ore are now being encountered in the pit and full production remains on schedule for the fourth quarter of 2011.
As also previously announced, the Company's cash production cost is estimated to average US$487/oz over the first 6 years of the Project's life.
The majority of the US$15m Working Capital Facility drawn down in March 2011 remains unused, with US$13m of cash currently in the bank.
The Company has no committed hedging, but as a condition of its project finance facility it is obliged to hedge circa 100,000 ounces by means of put options at a floor price of circa US$900/oz. These will provide some downside protection but without capping the upside.
Exploration drilling remains focused on extensions to mineralisation around the planned open pits and a further drilling results progress announcement is anticipated soon.
Archipelago is a mining company listed on the AIM market of the London Stock Exchange. The Company's principal activities are gold mining and exploration in Indonesia (as 95% owner of the producing Toka Tindung Gold Project in North Sulawesi, Indonesia), Vietnam (as majority party in the Pac Lang and Cam Thuy/Ba Thuoc joint ventures with VINACOMIN a Vietnamese Government mining company) and the Philippines (via entitlement to not less than an 80% interest in exploration company Corplex).
The Toka Tindung Gold Project has a current resource of 1.7 million ounces of gold equivalent of which 1.1 million ozs will be extracted by way of open pit mining at a targeted annual average production rate of 160,000 ozs of AuEq is targeted for the first 6 years of an initial 8 year project life. (end of excerpt)