Archipelago to involve Indonesian investor to get N. Sulawesi gold project moving
Thursday, June 11 2009 - 11:21 PM WIB
?In order to build on existing National Government relations, Archipelago is seeking the corporate involvement of a prominent Indonesian investor as it believes this would be positive for both the Company and the Toka Tindung project,? the company said on Thursday without giving further detail.
The company had been trying for years to get necessary permits to get its project moving, but thus far it failed to win support from North Sulawesi Governor.
"We are confident that Toka Tindung, which is demonstrably environmentally sound, will have a very positive impact on the prevailing unemployment and economic circumstances in North Sulawesi, and we continue to seek to convince the Governor of the project's merits,? it said.
Provided unanimous political support and project financing are secured by the third quarter of 2009, production at Toka Tindung would be expected to commence in the second half of 2010, at an average annualised rate of 160,000oz gold equivalent for the first six years of the initial 8? year project life, it said.
?Whilst the delay to project development has added to the overall development costs, there has been a strong rise in the gold price during this period and the Company has not been required to enter into any forward sales contracts, a standard requirement for financing most new gold projects. In addition, the cancellation and postponement of many new mining projects around the world has reduced demand for construction material and skilled labour. As a result, Archipelago may achieve some savings in construction and pre-production costs at Toka Tindung which are currently estimated to be US$65m.? (alex)