Archipelago Res Share Chat (AR.)

Archipelago, an AIM-listed mining company, said Wednesday the Toka Tindung Mine in North Sulawesi, Indonesia, delivered 139,012 ounces of gold in the year ended December 31st.

This was achieved at a cash cost of $635 per oz (net of silver credits), meeting both production and cash cost guidance set for the first full year of operations.

In the final quarter of the year the group set a quarterly production record of 42,302 Au equivalent oz.

Looking ahead to 2013, production is expected to be between 140,000 and 155,000 Au equivalent oz at a cash cost of between $620 and $680 per Au oz.

Marcus Engelbrecht, CEO give a very good presentation where you are able to see the presentation at the same time. It is on the website but here is link if required.
http://www.brrmedia.co.uk/event/107062/marcus-engelbrecht-managing-director-and-chief-executive-officer

didnt know this was gold................

The faltering gold price meant that - despite solid operational progress - Archipelago's share price is almost 20 per cent off its 12-month high. Nevertheless, with resource upgrades likely, rising production and growing free cash flow, we reckon that Archipelago's shares should be rated higher than just five times forecast earnings for 2013 (see table), especially as broker Westhouse Securities thinks there is underlying value of 75p assuming a long-term gold price of $1,250 and $1,600 in the current year.,..........but as always dyor and gl..

Archipelago does not hedge its gold production, so its share price is ultra sensitive to movements in gold's spot price. Consequently, it is especially important for potential investors to have a feel for where the price may be headed. Industry delegates at this month's London Bullion Market Association predicted the gold price would be $1,849 per oz by next September (against $1,725 currently). True, this figure is little more than glorified guess work, but it's lower than earlier estimates owing to a slowdown in Chinese demand and it helps underpin the notion that the gold price will stay high for the time being.

Prospective investors should also note that Archipelago's principal shareholder is Indonesia's largest conglomerate - the Rajawali Corporation - which owns 52.4 per cent of the equity. Although dedicated support from a heavyweight local partner reduces some risk, the limited free float of stock could make the share price especially volatile..........

Archipelago's production ramp up is another reason for further optimism. Record third-quarter output of 36,184 oz, leaves the group on target to meet full-year production of 135,000 oz-145,000 oz. In addition, cash costs have been trending down on increased production and a reduction in the volume of waste extracted from the mine. Archipelago expects cash costs to be between $580 and $640 per oz (£367 to £405). None of Archipelago's London-quoted peers can come close to that figure.

And concerns over Archipelago's ability to meet its enhanced production schedule should be set against the ease with which it hit initial planned capacity at its processing plant. This reflects good quality ore at Toka Tindung and a straightforward production process. Meanwhile, Archipelago is studying a low-capital, heap-leach operation that could allow it to raise annual output to 230,000 oz.

The clamour for gold has trailed off since the US Federal Reserve launched a relatively modest third stimulus package in September. But industry analysts are cautiously optimistic about next year's prospects after a fairly lacklustre 2012. Meanwhile, Indonesia-focused gold producer Archipelago Resources (AR.) may generate optimism of its own as it upgrades estimates of its resources.

Archipelago's main project is the open-cast Toka Tindung Gold Mine in Indonesia. Toka Tindung was commissioned late last year, and should produce about 160,000 ounces (oz) a year over the next six years. However, that figure could rise appreciably as a result of exploration at four other drill targets, two of which are satellite pits of Toka. True, there is no guarantee of success, but this year Archipelago has already raised the estimate of its resources to 2.69m oz. And little exploration work has been carried out within its 400 sq km catchment in Indonesia.

Archipelago Resources said new tests at its Toka Tindung mine in Indonesia demonstrated the site's potential as a multi-million ounce mine deposit. "Combined with the results reported earlier in the year, these high-grade intercepts now have the potential to again materially increase our economically defined gold resource, providing a further platform for growing our production profile and increasing shareholder value," the firm said.

Look at the buys here - big buys - no reaction (yet)!

Some very decent amounts in the results...with little or no reaction in SP