TIDMAR.
RNS Number : 4425I
Archipelago Resources PLC
25 July 2012
25 July 2012
AIM: AR.
Archipelago Resources plc
("Archipelago" or "the Company")
Half year production report for Archipelago and management
update
Archipelago is today pleased to release its half year production
results for the Toka Tindung Mine in North Sulawesi, Indonesia for
the period ended 30 June 2012 ("H1 2012"). This comes ahead of the
Company's unaudited interim financial results for H1 2012, which
are expected to be released on 30 August 2012.
HIGHLIGHTS
-- H1 2012 production was 60,386 Au Eq oz.
-- Mining and processing was broadly in line with expectations,
with the Company reporting a strip ratio of 6:1, average gold
equivalent head grade of 2.44 g/t and plant recovery rate of
90.6%.
-- Planning continues to indicate increased production rates for
the second half, with mining scheduled for the higher grade
satellite deposits at Kopra and Pajajaran (where modelling
indicates average in situ ore grades of 4.54 g/t and 4.48 g/t
respectively for the next 6 months).
-- Full year production guidance is maintained at 135,000 to 145,000 Au Eq oz.
-- The Company is increasing cash cost guidance for the full
year of between $580 to $640 per Au oz, on account of industry wide
input cost pressures.
-- Archipelago welcomes Mr Les Kwasik as Chief Operating Officer
for the Toka Tindung Mine, with immediate effect.
CONFERENCE CALL
Conference call - 9:30am London, UK time Wednesday 25(th)
July
Archipelago will host a conference call today at 9:30am (London,
UK time) to update investors and analysts on its half year
production report. Participants may join the call by dialling one
of the following numbers, approximately 10 minutes before the start
of the call.
From UK: (toll free) 0800 368
1895
From Australia: (toll free) 1800 190
490
From US: (toll free) 1866 928
6049
From Canada: (toll free) 1866 561
8617
From rest of world: +44 20 3140 0693
Participant pass
code: 506503#
COMMENT
Commenting on the results, Mr Marcus Engelbrecht, Managing
Director and CEO, said:
"Archipelago's Toka Tindung Mine has been in production for only
15 months (including commissioning) and has produced over 121,000
Au Eq oz. Production for the first half of 2012 demonstrates that
Toka Tindung continues to operate in line with our expectations.
The Company looks forward to robust production for the second half
of 2012 with operations to benefit from additional mining in the
high grade Pajajaran and Kopra deposits."
DETAILS
Production Update
For H1 2012, Archipelago provides the following production
results:
Figure 1: Year to Date Production Results
Ore Mined (T) 1,262,714 608,946 654,768
Waste Mined (T) 7,572,790 3,882,243 3,690,547
--------------------------------- ---------
Total Mined (T) 8,836,504 4,491,189 4,345,315
--------------------------------- --------- --------- ---------
Ore Processed 888,184 460,325 427,859
Strip Ratio 6.00 6.38 5.64
--------------------------------- --------- --------- ---------
2.29 2.24 2.33
Head Grade for Au (g/t) 6.86 8.68 4.98
Head Grade for Ag (g/t)
Process Recovery Rate (%) 90.60 89.94 91.20
--------------------------------- --------- --------- ---------
Gold Ounces Produced (Eq oz) 60,386 28,197 32,189
--------------------------------- --------- --------- ---------
The H1 2012 average head grade for gold equivalent ounces was
2.44 g/t.
The results were broadly in line with the Company's expectation
for the year to date. The strip ratio was slightly higher for the
second quarter, due to some delays in accessing the higher grade
ore at Toka Tindung's satellite deposits (with the ratio forecast
to trend down over the remainder of the year as further mining is
scheduled in these areas).
For the remainder of the year, mine planning continues to
indicate higher rates of production; with Archipelago maintaining
full year guidance of 135,000 to 145,000 Au Eq oz. In this regard,
production has been robust for the month to date, with encouraging
head grades being sustained.
In addition to material sourced from the main Toka Tindung pit,
the Company will increase mining activities at the high grade
Pajajaran satellite deposit (with modelling indicating an average
in situ ore grade of 4.48 g/t Au for mining scheduled for the next
6 months).
In the second half of the year, the Company will also commence
activities at the higher grade Kopra deposit; where planning
indicates mining of in situ ore at an average grade of 4.54 g/t.
This ore is near surface and will result in lower average strip
ratios.
H1 2012 cash costs were $753 per Au oz, with Archipelago
forecasting relatively lower cash costs for the second half as
output continues to ramp up, grades increase and stripping ratios
decrease.
The Company is updating full year cash cost guidance to a range
of $580 to $640 per Au oz. This adjustment is primarily due to
higher input costs for fuel and consumables, with labour costs also
slightly higher than forecast.
Cost inflation is being widely reported across the sector; and
the Company has implemented a number of initiatives to improve
productivity and reduce costs. Previously announced plant
efficiency measures are also on track, with these expected to
contribute to higher production rates and lower per ounce costs
over the second half of this year.
Momentum from Archipelago's first full year of production will
continue to support future growth (with the Company's life of mine
forecasting average production of circa 160,000 Au Eq oz for the
next 6 years).
Management Update
The Board is pleased to announce the appointment of Mr Les
Kwasik as Chief Operating Officer - Toka Tindung Mine. Mr Kwasik's
appointment is with immediate effect.
Mr Kwasik has over 35 years' experience in the mining industry,
having worked in various general management, operational and
strategic roles. Most recently, Mr Kwasik was Chief Operating
Officer for Maple Minerals Corporation, managing major mining
projects in Canada and Mexico. He has also held senior roles with
NESMA Company, Inter Invest Mining Corporation, Carbones de
Columbia SA and INCO Corporation (now VALE). Mr Kwasik has a
Bachelor of Science degree, specialising in Industrial
Engineering.
Mr Dave Morrison, formerly in this role, has left Archipelago to
pursue other ventures. The Board of Directors wish to thank him for
his significant contribution during development of the Toka Tindung
Mine.
FURTHER INFORMATION
Archipelago Resources plc:
(VP Investor Relations & Corporate
Affairs)
Matthew Salthouse +65 6535 3419
Canaccord Genuity Limited:
(Joint Broker)
Rob Collins
Andrew Chubb +44 20 7523 8000
Liberum Capital Limited:
(Joint Broker)
Michael Rawlinson
Christopher Kololian +44 20 3100 2000
Grant Thornton Corporate Finance:
(Nomad)
Gerry Beaney
David Hignell +44 20 7383 5100
Buchanan:
(Public Relations Consultants)
Bobby Morse
James Strong
Gordon Poole +44 20 7466 5000
ABOUT ARCHIPELAGO
Archipelago is a producing mining company listed on the AIM
market of the London Stock Exchange. Archipelago's vision is to
grow into a respected and regionally dominant mid-cap gold
producer, managing a portfolio of gold mines and delivering
significant value and returns for our shareholders. Archipelago's
principal activities are gold mining and exploration in Indonesia
(as the 95% owner of the producing Toka Tindung Gold Mine in North
Sulawesi, Indonesia). Archipelago is also advancing exploration
projects in Vietnam and the Philippines. In 2012, Archipelago
expects to produce between 135,000 and 145,000 gold equivalent
ounces at a cash cost of between US$580 and US$640 per ounce.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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