Archipelago selects Rothschild to raise financing for N. Sulawesi gold project

UK gold miner Archipelago Resources plc announced on Thursday that it has granted N.M. Rothschild & Sons (Australia) Limited an Exclusive Financing Mandate and accepted an Indicative Term Sheet regarding the provision of debt finance and hedging facilities to facilitate development of the Company?s 85% owned Toka Tindung Gold Project in North Sulawesi.

According to the company, Rothschild was appointed based upon its extensive cross border and in-country project finance experience. The terms of the finance proposal are that US$35M will be provided by way of debt finance together with a US$4M cost overrun facility.

"Together with the recently completed and previously announced placing at the value of GBP7,893,630 the facility will provide funding sufficient for the Company to undertake construction of the Toka Tindung Gold Project leading to production at an average annualised rate of 160,000 ounces (ozs) of gold equivalent per annum commencing in mid 2006," said the company.

The Indicative Term Sheet contains a number of pre-conditions to finance including completion of legal and financial due diligence and documentation, the obtaining of necessary operating permits and an obligation to hedge approximately 50% of initially planned gold production.

Recruiting and pre-production activities have already commenced at site in anticipation of an imminent start to development and construction activities. The Toka Tindung Gold Project has a resource of 1.75M ozs of gold equivalent, of which at least 0.9M ozs will initially be mineable by open pit. The project has an initial mine life of 6 years.

Archipelago has 85 percent stake in Toka Tindung gold project. (alex)