Release: Archipelago: Purchase of put options providing gold floor price certainty for the Toka Tindung gold project

December 5, 2005 ? Archipelago Resources plc ("the Company") is pleased to announce that it has purchased 'put options' to the extent of 300,000 ozs of gold, equating to 33% of current project reserves. Put options give the holder the right to elect to sell gold at a predetermined price in the future.

Of these put options, 83% (250,000 ozs) will expire on 26 April 2006 and until such time will provide a guaranteed floor price of US$460/oz for forward sales which are required as a condition of the previously announced project financing facility being arranged by N.M. Rothschild and Sons (Australia) Limited ("Rothschild"). During the period ending 26 April 2006, the Company will be able to forward sell at the prevailing spot gold price if it is higher than the US$460/oz minimum floor price provided by the put options.

The remaining 17% (50,000 ozs) of the put options will expire on various dates over the first 2 years of production. These options are intended to ensure that gold produced in those years of the project for spot rather than forward sales, will achieve a minimum price of US$440/oz, with the Company again able to sell at the then prevailing spot price if it is higher than the US$440/oz minimum floor price provided by the put options.

These transactions which protect US$137m of project revenue have cost the Company US$2m. The Company may re-finance the put options by way of a discount on the price received for future forward sales of gold in certain circumstances. The put options provide considerable protection against the effects of a substantial fall in the gold price, one of the largest variables affecting a metal mining project like Toka Tindung and thereby constitute insurance to revenues necessary to support the debt financing for the project. This opportunity to cost effectively put interim hedging in place became available to the Company as a result of the recent rise in the gold price to the US$500/oz level.

The Toka Tindung Gold Project has a resource of 1.75M ounces (ozs) of gold equivalent, of which at least 0.9M ozs will initially be mineable by open pit. The project is targeted to produce an average 160,000 ozs per annum for the initial 5 years of the current 6 year mine life commencing in late 2006.

Archipelago is a mining company listed on the AIM market of the London Stock Exchange. The Company's principal activities are gold mining and exploration in Indonesia (as 85% owner of the Toka Tindung Gold Project in Sulawesi), Vietnam (as majority party in the Cam Thuy/Ba Thuoc joint venture with Vimico a Vietnamese Government mining company) and the Philippines (as option holder over a 100% interest in the Corplex tenements). (end of release)