AR. Archipelago Res

RNS Number:4815M
Archipelago Resources PLC
19 May 2005


                                  ANNOUNCEMENT



                                    GRANTING

                                       of

                          EXCLUSIVE FINANCING MANDATE

                                      and

                                   ACCEPTANCE

                                       of

                             INDICATIVE TERM SHEET

                                      from

                        NM ROTHSCHILD & SONS (AUSTRALIA)



Archipelago Resources plc is pleased to announce that it has granted N.M.
Rothschild & Sons (Australia) Limited ("Rothschild") an Exclusive Financing
Mandate and accepted an Indicative Term Sheet regarding the provision of debt
finance and hedging facilities to facilitate development of the Company's 85%
owned Toka Tindung Gold Project in Sulawesi, Indonesia.  Rothschild was
appointed based upon its extensive cross border and in-country project finance
experience. The terms of the finance proposal are that US$35M will be provided
by way of debt finance together with a US$4M cost overrun facility.

Together with the recently completed and previously announced placing of
23,216,560 Ordinary Shares of 1p each in the capital of the Company ("Ordinary
Shares") at an issue price of 34 pence per share to the value of GBP7,893,630
this facility will provide funding sufficient for the Company to undertake
construction of the Toka Tindung Gold Project leading to production at an
average annualised rate of 160,000 ounces (ozs) of gold equivalent per annum
commencing in mid 2006.

The Indicative Term Sheet contains a number of pre-conditions to finance
including completion of legal and financial due diligence and documentation, the
obtaining of necessary operating permits and an obligation to hedge
approximately 50% of initially planned gold production.

Recruiting and pre-production activities have already commenced at site in
anticipation of an imminent start to development and construction activities.
The Toka Tindung Gold Project has a resource of 1.75M ozs of gold equivalent, of
which at least 0.9M ozs will initially be mineable by open pit.  The project has
an initial mine life of 6 years.

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 holders
over a 100% interest in the Corplex tenements).



                          www.mining-investor.com/arch


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