Archipelago secures $15m loan for N. Sulawesi gold mine

London-listed mining firm Archipelago Resources Plc announced Friday that it has accepted a $15m subordinated loan facility from a prominent international bank. The loan will be used to provide working capital including that required in relation to commissioning and early production from the Toka Tindung Gold Project in North Sulawesi, in which the company has a 95% interest.

The Loan Facility's agreement date is today and the key terms are as follow:
? Term - 2.75 years; subject to right of early repayment;
? Interest rate - 7.5%, reducing to 6.5% after 6 consecutive months of more than 10,000 ounces of production, with the interest paid quarterly, commencing 31st January 2012.

In addition, the company has agreed that all gold and silver produced from the Project will be sold to the bank on commercially competitive terms with reference to the spot gold and silver prices on the day of sale. The Offtake Agreement will run for the duration of the loan plus 3 months thereafter.

The Toka Tindung Gold Project has a resource of 1.7 million ounces of which 1.1m will be minable by way of open pit mining. The plant has commenced commissioning and is targeted to produce 110,000 ozs of gold equivalent in calendar year 2011, with an annual average production of 160,000 ozs of gold equivalent over the first 6 years of the initial 8 year project life. Mining has been underway since the third quarter of 2010. In addition the Company will spend $30m on an exploration program to be undertaken over the next two years. (romel)