Archipelago secures $55m loan from Indonesian bank
Acquires more stake at Toka Tindung gold project
Thursday, January 13 2011 - 12:47 AM WIB
The company did not reveal the name of the bank.
The loan has a maturity date of nine months from the initial facility's agreement date and an interest rate of 5.5% per annum with interest payable every 3 months, the company said.
Upon maturity of the initial 9 month facility above, a second loan facility of US$55m will be available if required to refinance the initial facility, the key terms of which are as follows: Maturity date of 4 years after the agreement date of the second loan facility; an interest rate of 5.75% per annum with interest payable every 3 months, it said.
Both loan facilities will have a facility fee and an administration fee payable within 5 days of the respective agreement date.
"Management are of the opinion that these terms are considered financially competitive and generally commensurate with industry loans of this type," the firm said.
Revenue protection is required in the form of put options intended to provide a floor price of circa US$900/oz for approximately 100,000 ounces of gold in total over the life of the loan. All of the Company?s production will remain exposed to any increases in the gold price.
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. It will be in production by the end of March 2011 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 and the processing plant is nearing completion and undergoing pipe and cable installation. In addition the company will spend US$30m, the majority of which will be funded from operational cash flow, on an exploration program to be undertaken over the next two years following up the Company's many prospective exploration targets.
Archipelago has Tuesday acquired an additional 10% interest in the Toka Tindung gold project from the 15% Indonesian minority interest holders PT Austindo Nusantara Jaya and The Estate of Julius Tahija, taking Archipelago?s total interest in the project from 85% to 95%, with the remaining 5% interest purchased by Archipelago?s major shareholder Rajawali Corpora in accordance with Indonesian local ownership regulations.
The acquisition of the 10% and 5% interests have been approved by the Indonesian government, according to the firm.
The 15% interest was free carried and has been purchased for the sum of US$6.8 million, of which approximately $4.53 million will be paid by Archipelago for its 10% interest and approximately US$2.27 million will be paid by Rajawali for its 5% interest.
Rajawali Corpora has controlled 52 percent shares of Archipelago Resources. Rajawali Corpora is controlled by businessman Peter Sondakh. (denny)