Archipelago Resources updates financial model on Toka Tindung gold project
Friday, December 3 2004 - 03:23 AM WIB
Archipelago Resources plc is pleased to announce that as part of the Technical Due Diligence Review being undertaken by AMC Consultants for a syndicate of Australian banks contemplating the provision of debt finance for the Company's Toka Tindung Gold Project, Archipelago has updated its financial model for presentation to the banks.
The financial model is based on a resource of 1.75M ozs AuEq defined by 158kms of drilling as reported in Snowden's Competent Persons Report in the Company's Admission Document. All capital and operating costs have been reviewed and where appropriate are based on acquisition costs, recent quotes and tender prices.
Subject to project financing and the project proceeding to development, the financial model indicates the following parameters based on a gold price of US$420/oz:-
Resource: 1.75M ozs AuEq
Capital Cost: US$49m
Mine Life: 6 years
Throughput: 1.5 to 1.7M t/yr
Production (average for first 5 years): 162,000 ozs AuEq/yr
Total ounces recovered: 900,000 ozs AuEq
Net Present Value (8% discount after tax): US$62m
Internal Rate of Return (after tax): 40%
Cash Operating Cost: US$267/oz
Annual Operating Surplus (after tax average over first 5 years): US$25.5m
Earnings Per Share (indicative): 16 pence per share (fully diluted for project development capital raising)
These numbers are considered preliminary but indicate a financially robust project and are based on all data currently available. Subject to favourable review by the banks, the Company looks forward to receipt of a conditional term sheet for the provision of debt finance. The Company anticipates raising the balance of project development capital by way of a placement early in the New Year. There is also great exploration potential, likely leading to extensions of mine life.
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 85% owner of the Toka Tindung Gold Project in Sulawesi), Vietnam (as majority party in the Cam Thuy/Ba Thuoc joint venture with Vimico a Vietnamese Government mining company) and the Philippines (as 100% option holders over the Corplex tenements). (end of release)