Release: 50 workers now on site preparing construction phase of Archipelago's N. Sulawesi mine

(London JULY 20, 2004)AIM-listed Archipelago Resources has over 50 workers already on site preparing for the construction phase of its targeted 160,000 ounce per annum Toka Tindung open pit gold mine project in North Sulawesi, Indonesia. The company is confident that due diligence studies will be completed by prospective project financiers in coming months with pre-strip mining operations beginning in February next year leading to production in November 2005, said chief executive Mr Colin Loosemore addressing shareholders at the annual meeting at which all resolutions were passed.

Processing plant, including primary crusher and ball mills, has been acquired from Barrick Gold?s El Tambo operation in Chile and was now ready for shipment, he said. Recently completed non-destructive testwork confirmed the equipment to be in ?excellent mechanical condition.? Altogether, equipment totalling 1,200 tonnes has been moved from El Tambo.

Archipelago is currently engaged in ongoing talks with a syndicate of banks who have expressed interest in financing the project. Mr Loosemore stated that the company felt confident regarding the project?s $US46m. capital cost estimate.

Toka Tindung has a total resource of 1.75m ounces of gold equivalent of which 961,000 ounces are mineable at a grade of 3.9g/t. Mr Loosemore told shareholders he expected cash operating costs to be US$234 per ounce, giving a post-tax surplus of US$23m per annum and pay-back over two years at a gold price of US$390/oz. An initial mine life of five years has been placed on the project, excluding exploration potential.

A development camp and laboratory have already been constructed.

The excellent exploration potential of the project area will be quickly tested, Mr. Loosemore stated. A prime target is Sinter Barat, 3kms away of the Toka Tindung open pit, which looked very promising with high gold grades already recovered from outcrop. ?Drilling will tell us if mineralisation continues below the vein outcrop.?

Archipelago has recently broadened its exploration base with applications for two exploration licenses in North Vietnam covering two large fold structures with strong gold anomalies characteristic of Carlin and possible Telfer type deposits. The outcome of these applications would not be known for six months, said Mr Loosemore. ?The area was previously targeted by a major and should we get the ground, the least we have is a very exciting exploration play indeed?, he added.(end of release)

Further Info: Colin Loosemore, Managing Director, Archipelago Resources Plc. Tel: 00-618-9364-8301

Ron Marshman/John Greenhalgh, City of London PR Limited. Tel: 020-7628-5518