TIDMAR.
RNS Number : 3681W
Archipelago Resources PLC
30 January 2012
30 January 2012
AIM: AR.
Archipelago Resources plc
("Archipelago" or "the Company")
Updated resource and reserve estimates for Archipelago
Archipelago is pleased to announce a material increase in
mineral resource and ore reserve estimates at its Toka Tindung Mine
in North Sulawesi, Indonesia. The Company also provides an update
on operations.
HIGHLIGHTS
Highlights include the following:
Resource & reserve upgrade for Toka Tindung Mine
-- The resource has increased to 52.6Mt @ 1.53 g/t Au for 2.58M
contained oz Au (and 3.7 g/t Ag for 6.14M contained oz Ag) from
15Mt @ 3.4g/t Au for 1.7M contained oz Au (and 8 g/t Ag for 4M
contained oz Ag);
-- the proven and probable ore reserve has increased to 27.6Mt @
1.7g/t Au for 1.47M contained oz Au (and 4.3 g/t Ag for 3.79M
contained oz Ag) from 7.62Mt @ 3.7g/t Au for 920k contained oz Au
(and 8.9 g/t Ag for 2.18M contained oz Ag);
-- excluding silver as gold equivalent ounces, contained gold
resources have increased by 52%; with ore reserves increasing by
60%;
-- the increase in ore reserves supports extending the mine life
from six to nine years (with additional stockpile processing
extended from two to seven years);
-- 'life of mine' planning indicates average production of circa
160,000 Au Eq oz for the next six years at a head grade of no less
than 2.89 g/t Au; and
-- drilling and modelling continues, with further increases to resource estimates likely.
Operational update
-- In line with Q4 guidance for the 2011 calendar year, the Toka
Tindung Mine produced 61,191 contained Au Eq oz at a cost of US$579
per oz; and
-- Archipelago expects to produce between 135,000 and 145,000 Au
Eq oz for the 2012 calendar year, at a cash cost of between US$540
and US$590 per oz.
To view the full Reserve & Resource Update announcement,
including the full tables and graphs, please download the following
pdf document:
http://www.rns-pdf.londonstockexchange.com/rns/3681W_-2012-1-30.pdf
COMMENT & CONFERENCE CALL
Comment
Mr Marcus Engelbrecht, Managing Director and CEO commented:
"The increase in Toka Tindung's resource and reserve, and the
extension of 'life of mine', are considerable achievements for
Archipelago, with the Company sustaining robust grade and
production levels at a relatively low cash cost, during a period of
appreciating gold prices. This will support strong cash flow
generation for Archipelago, providing the platform to pursue growth
opportunities at Toka Tindung and elsewhere."
Conference call - 9am London, UK time Monday 30(th) January
Archipelago will host a conference call today at 9am (London, UK
time) to update investors and analysts on its reserve and resource
upgrade. 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: 177638#
FURTHER DETAILS
Resource & reserve upgrade for Toka Tindung Mine
Archipelago's Toka Tindung Mine consists of two projects located
near processing infrastructure: Toka Tindung and Batupangah. The
later incorporates the four satellite pits of Pajajaran, Araren,
Blambangan and Kopra Extended (comprising the deposits of Kopra,
Semut Barat, Jipang and Bone).
With the objective of optimising existing and nearby mineralised
deposits for production, Archipelago expanded drilling efforts at
the Toka Tindung Mine from Q2 2011. On an initial spend of circa
US$9 million, Archipelago has now finalised a JORC compliant
resource and reserve for these deposits; resulting in significant
increases to mineral estimates. A summary of the updated JORC
compliant resource and reserve is set out below in Table A.
Table A: Summary of Toka Tindung Mine Resource & Reserve as
at 31 December 2011
RESOURCE (INCLUSIVE
OF ORE RESERVE)
----------------------------------------- ------- ---------- ----------
Category Tonnes Grade Contained Grade Contained Contained
Au Ag Au Eq
'000 (g/t) Au '000 (g/t) Ag '000 Oz '000
----------- ------- ------- ---------- ------- ---------- ----------
Measured 19,500 1.45 910 3.40 2,100 940
Indicated 25,600 1.51 1,240 3.80 3,080 1,300
Inferred 7,400 1.81 430 4.00 960 450
=========== ======= ======= ========== ======= ========== ==========
TOTAL 52,600 1.53 2,580 3.70 6,140 2,690
----------- ------- ------- ---------- ------- ---------- ----------
ORE RESERVES
-------------------- ------- ---------- ------- ---------- ----------
Category Tonnes Grade Contained Grade Contained Contained
Au Ag Au Eq
'000 (g/t) Au '000 (g/t) Ag '000 Oz '000
----------- ------- ------- ---------- ------- ---------- ----------
Proven 16,800 1.50 790 3.50 1,910 830
Probable 10,800 1.90 680 5.40 1,880 710
=========== ======= ======= ========== ======= ========== ==========
TOTAL 27,600 1.70 1,470 4.30 3,790 1,540
----------- ------- ------- ---------- ------- ---------- ----------
The full JORC compliant statement is contained below in the
APPENDIX to this release (inclusive of key assumptions).
Archipelago's targeted drilling campaign has produced
significant increases in the resource and reserve at the Toka
Tindung Mine. The resource has increased to 52.6Mt @ 1.53 g/t Au
for 2.58M contained oz Au (and 3.7 g/t Ag for 6.14M contained oz
Ag) from 15Mt @ 3.4g/t Au for 1.7M contained oz Au (and 8 g/t Ag
for 4M contained oz Ag). The proven and probable ore reserve has
increased to 27.6Mt @ 1.7g/t Au for 1.47M contained oz Au (and 4.3
g/t for 3.79M contained oz Ag) from 7.62Mt @ 3.7g/t Au for 920k
contained oz Au (and 8.9 g/t Ag for 218M contained oz Ag);
Resource estimates for the Toka Tindung and Kopra Extended pits
have also marginally increased since the Company's announcement of
13 December 2011.
Overall, the updated analysis indicates estimated contained gold
resource and reserve increases of 52% and 60% respectively for the
Toka Tindung Mine (excluding silver as gold equivalent ounces).
In this regard, please refer to Table B (in the pdf download
http://www.rns-pdf.londonstockexchange.com/rns/3681W_-2012-1-30.pdf
for a comparison of prior and revised resources. Amongst other
trends, this demonstrates the scale of adjustment to the total
proven and probable ore reserve. Based on current assumptions,
Archipelago has extended the 'life of mine' from six to nine years
(with additional stockpile processing extended from two to seven
years).
The updated JORC resource and reserve has been prepared using a
gold price of US$1,150 per oz; and a silver price of US$25 per oz.
The JORC compliant reserve grade is adjusted to 1.7 g/t. However,
the Company's current 'life of mine' planning is based on average
annual production of circa 160,000 Au Eq oz for the next six years,
at a head grade of not less than 2.89 g/t.
The Company is continuing drilling and assay analysis across the
Toka Tindung Mine, which will support a further review of
Archipelago's resource and reserve estimates.
Operational update
For the 2011 calendar year, the Company is also pleased to
announce the Toka Tindung Mine produced 61,191 contained Au Eq oz
(excluding Ag as Au Eq oz) at a cost of US$579 per ounce. This was
in line with Q4 guidance. For the 2012 year, the Company expects to
produce between 135,000 and 145,000 Au Eq oz, at a cash cost of
between US$540 and US$590 per oz.
Competent Person Statement
The information in this report that relates to the Resource,
mineral exploration results, together with any related assessments
and interpretations, have been verified by and approved for release
by Mr. Graeme Fleming B App Sc (Geol), MAusIMM, a qualified
geologist and full-time consultant for PT. Tambang Tondano
Nusajaya, a subsidiary of Archipelago Resources Plc. The
information in this report that relates to Ore Reserves is based on
information compiled by Dean Pontin, a full time employee of PT.
Tambang Tondano Nusajaya. Mr. Fleming and Mr. Pontin are Members of
the Australasian Institute of Mining and Metallurgy and have
sufficient experience relevant to the style of mineralization and
type of deposit under consideration to qualify as Competent Persons
as defined in the 2004 Edition of the JORC Code. Mr. Fleming and
Mr. Pontin consent to the inclusion of the information contained in
this report in the form and context in which it appears.
Further information:
Matthew Salthouse Klara Kaczmarek
VP Investor Relations & Corporate Ambrian Partners Ltd
Affairs Tel : +44 20 7634 4700
Archipelago Resources Plc
Tel : +65 6535 3419
----------------------------------- ----------------------------------
Bobby Morse/James Strong Gerry Beaney/David Hignell
Buchanan Grant Thornton Corporate Finance
Tel : +44 20 7466 5000 Tel : +44 20 7383 5100
----------------------------------- ----------------------------------
Glossary of Terms
Ag Silver
------ ---------------------------------------------------------
Au Gold
------ ---------------------------------------------------------
g/t Grams per tonnes
------ ---------------------------------------------------------
JORC The 2004 Australasian Code for Reporting of Exploration
Results, Mineral Resources & Ore Reserves
------ ---------------------------------------------------------
k Thousand
------ ---------------------------------------------------------
M Million
------ ---------------------------------------------------------
oz Troy ounces
------ ---------------------------------------------------------
t Tonnes
------ ---------------------------------------------------------
US$ United States Dollars
------ ---------------------------------------------------------
% Percentage
------ ---------------------------------------------------------
The following terms have the meaning given to them by JORC:
Competent Person, Indicated, Inferred, Measured, Ore Reserve,
Resource, Reserve.
-----------------------------------------------------------------
About Archipelago
Archipelago is a mining company listed on the AIM market of the
London Stock Exchange. 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$540 and US$590 per ounce.
APPENDIX
Mineral Resource & Ore Reserve Statement for the
Toka Tindung & Batupangah Projects as at 31 December
2011
Grade Contained oz
--------------------
Deposit Category Tonnes Au Ag Au Ag Au Eq
oz oz
'000 g/t g/t M M oz M
---------------- ----------- ------- ----- ----- ----- ----- ------
Toka Tindung Measured 18,900 1.38 3.1 0.84 1.87 0.88
Indicated 20,000 0.93 1.9 0.60 1.24 0.62
Inferred 4,600 0.98 1.3 0.14 0.20 0.15
Total 43,500 1.13 2.4 1.59 3.30 1.65
---------------------------- ------- ----- ----- ----- ----- ------
Kopra Extended Measured
Indicated 1,800 3.51 8.0 0.20 0.44 0.21
Inferred 2,100 3.20 9.0 0.21 0.59 0.22
Total 3,900 3.34 8.5 0.41 1.03 0.43
---------------------------- ------- ----- ----- ----- ----- ------
Pajajaran Measured
Indicated 1,300 4.40 18.0 0.19 0.76 0.20
Inferred 200 3.70 12.0 0.02 0.07 0.02
Total 1,500 4.40 17.0 0.21 0.82 0.23
---------------------------- ------- ----- ----- ----- ----- ------
Blambangan Measured 600 3.70 13.0 0.07 0.23 0.07
Indicated 1,200 3.60 14.0 0.13 0.52 0.14
Inferred 200 2.90 9.0 0.02 0.05 0.02
Total 1,900 3.60 13.0 0.22 0.78 0.23
---------------------------- ------- ----- ----- ----- ----- ------
Araren Measured
Indicated 1,300 2.90 3.0 0.13 0.13 0.13
Inferred 400 2.80 3.0 0.03 0.04 0.03
---------------------------- ------- ----- ----- ----- ----- ------
Total 1,700 2.80 3.0 0.16 0.17 0.16
---------------------------- ------- ----- ----- ----- ----- ------
Stockpiles Subtotal 200 1.10 2.7 0.01 0.02 0.01
---------------- ----------- ------- ----- ----- ----- ----- ------
All Deposits Measured 19,500 1.45 3.4 0.91 2.10 0.94
----------------
Indicated 25,600 1.51 3.8 1.24 3.08 1.30
Inferred 7,400 1.81 4.0 0.43 0.95 0.44
---------------------------- ------- ----- ----- ----- ----- ------
Total 52,600 1.53 3.7 2.58 6.14 2.69
---------------------------- ------- ----- ----- ----- ----- ------
Grade Contained Oz
--------------------
Deposit Category Tonnes Au Ag Au Ag Au Eq
'000 oz M oz M Oz M
-------------- ---------- ------- ---- ----- ----- ----- ------
Toka Tindung Proved 16,300 1.4 3.3 0.74 1.70 0.77
Probable 7,100 1.0 2.4 0.23 0.56 0.24
Total 23,400 1.3 3.0 0.97 2.26 1.01
------------------------- ------- ---- ----- ----- ----- ------
Pajajaren Proved 0 0.0 0.0 0.00 0.00 0
Probable 1,000 4.7 20.6 0.15 0.66 0.16
Total 1,000 4.7 20.6 0.15 0.66 0.16
------------------------- ------- ---- ----- ----- ----- ------
Araren Proved 0 0.0 0.0 0.00 0.00 0
Probable 800 3.2 2.6 0.08 0.06 0.08
Total 800 3.2 2.6 0.08 0.06 0.08
------------------------- ------- ---- ----- ----- ----- ------
Blambangan Proved 500 3.3 11.9 0.06 0.21 0.06
Probable 1,000 3.3 13.0 0.10 0.40 0.11
Total 1,500 3.3 12.6 0.16 0.61 0.17
------------------------- ------- ---- ----- ----- ----- ------
Kopra Proved 0 0.0 0.0 0.00 0.00 0
Extended Probable 800 4.1 7.1 0.11 0.19 0.11
Total 800 4.1 7.1 0.11 0.19 0.11
------------------------- ------- ---- ----- ----- ----- ------
Stockpiles Subtotal 200 1.1 2.7 0.01 0.02 0.01
-------------- ---------- ------- ---- ----- ----- ----- ------
Proved 16,800 1.5 3.5 0.79 1.91 0.83
Probable 10,700 1.9 5.4 0.67 1.86 0.7
Total 27,600 1.7 4.3 1.47 3.79 1.54
------------------------- ------- ---- ----- ----- ----- ------
Notes
The Company owns 95% of the Toka Tindung Mine (and therefore 95%
of the deposit identified above). Some rounding of figures may
cause numbers not to add correctly. Cut of grade used for mineral
resources were as follows - Toka Tindung: 0.5g/t Au; Kopra: 1.0g/t
Au; Pajajara: 1.0g/t Au; Blambangan: 1.0g/t Au; Araren: 1.0g/t Au.
Toka Tindung: The mineral resource estimate is based on 2.296 drill
holes (124,212m) of which 204 (17,594m) are diamond drill holes and
2,092 (106,618m) are RC drill holes. Cube Consulting Pty Ltd
conducted a review of the methodologies used in previous resource
estimates, which included a site visit during the course of the
exploration and grade control drilling programs. The Batupangah
project consists of Kopra, Pajajaran, Blambangan, and Araren
deposits. The mineral resource estimate for Kopra is based on 444
drill holes (41,255m) of which 219 (19,469m) are diamond rill holes
and 225 (21,786m) and RC drill holes. The mineral resource estimate
for Pajajaran is based on 192 drill holes (17,323m) of which 87
(7,194m) are diamond drill holes and 105 (10,129m) are RC drill
holes. The mineral resource estimate for Blambangan is based on 232
drill holes (21,751m) of which 63 (6,47m) are diamond drill holes
and 169 (6,308m) are RC drill holes. The mineral resource for
estimate of Araren is based on 170 drill holes (13,707m) which 93
(7,399m) are diamond drill holes and 77 (6,308m) are RC drill
holes. Mining Associates Pty Ltd conducted a review of the
methodologies used in previous resource estimates, which included a
site visit during the course of the exploration and grade control
drilling programs. The different cut-off grades are due to the
additional ore haulage cost associated with the increased distance
to the central processing plant site from the southern satellite
Batupangah ore bodies. Gold equivalent ounces are calculated using
the following factors: Au oz + (Ag oz x (Ag price/Au price) x
(projected average Ag recovery/projected average Au recovery)). The
latter currently equate to: US$25/US$1150 and 78%/93% respectively.
Reserve optimisation is based on a gold price of US$1150 per ounce
and silver price of US$25 per ounce. The ore reserve incorporates
depletion from mining prior to 31 December 2011. This statement has
been prepared in accordance with the guidelines defined in the
Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserve (the JORE Code, 2004 Edition).
This information is provided by RNS
The company news service from the London Stock Exchange
END
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