RNS Number : 1463E
  Archipelago Resources PLC
  24 September 2008
   
    
 ANNOUNCEMENT
 
 
ARCHIPELAGO RESOURCES PLC
 
TOKA TINDUNG GOLD PROJECT
 
EQUITY COMPONENT of PROJECT FINANCING
 
from
 
INDONESIAN COMPANY RAJAWALI CORPORATION
 
and
 
GENERAL MEETING OF SHAREHOLDERS
 
 
On 29th July 2008 Archipelago Resources plc (*Archipelago* or *the Company*) announced that it had reached agreement regarding the provision
of a conditional US$48m loan facility (the *Loan Facility*) for development of the Company*s 85% owned 160,000 oz per annum Toka Tindung
Gold Project in North Sulawesi, Indonesia (the *Project*).
 
Agreement has now been reached with prominent Indonesian company Rajawali Corporation (*Rajawali*) whereby subject to the Loan Facility and
other conditions, Rajawali will provide additional project development finance by way of placements totalling 64.1 million Ordinary Shares
(the *Placing Shares*) at a price of 25 pence per Ordinary Share (being 2.1 pence above the average mid market closing price of shares over
the period 1 August to 19 September) to raise a total of approximately US$29.3 million (the *Placing*). Rajawali will also be granted
options over up to 14.5 million Ordinary Shares (the *Options*) which will be exercisable at 40 pence per Ordinary Share for a three year
period from the date of grant.
 
As part of the consideration for the Loan Facility, the Loan Facility provider will be entitled to an equity participation in the Company
(the *Equity Participation*), which the Company has the option to satisfy either by way of the issue of 11.3m Ordinary Shares at a price of
25 pence per Ordinary Share or by way of the issue of synthetic warrants over 11.3m Ordinary Shares (the *Synthetic Warrants*), which upon
exercise would oblige the Company to pay to the Loan Facility provider the difference between the base price of the Synthetic Warrants
(being 25 pence per Ordinary Share) and the market price of an Ordinary Share on the date of exercise (the Equity Participation Payment*).
The Loan Facility is conditional upon the Placing, the Options and the Equity Participation as outlined above.
 
Following the Placing, Rajawali will be entitled to nominate a director for appointment to the Board and a second director following the
exercise of all of its Options subject to the Board comprising 5 members in total. Rajawali will also be entitled to participate in any
future share issues to the extent of its pro rata interest.
 
The Loan Facility and the Placing will together provide all of the capital necessary to complete development of the Project and allow
continued investigation of other project opportunities including those expected to arise from the relationship with Rajawali.
 
To complete this transaction, a Notice will be issued to shareholders in coming days regarding the calling of a General Meeting to grant
additional authority (amounting to 35% of the current issued capital of 201,149,334 Ordinary Shares) to the Directors to issue additional
securities to allow the proposed investment and project development to proceed. Despite the approvals in law, support to date for the
Project*s development has not been unanimous within Province and accordingly the Directors consider that the participation of Rajawali as a
major local shareholder will bring with it the provincial support required to ensure prompt, fully supported and successful development of
the Project. Accordingly, the Directors consider this transaction to be very positive for the Company and all of its shareholders and
recommend that all shareholders support the resolution as the Directors will be in respect of their own shareholdings.
 
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 Pac Lang and Cam
Thuy/Ba Thuoc joint ventures with VINACOMIN a Vietnamese Government mining company) and the Philippines (as option holder over a 100%
interest in the Corplex tenements).
 
 
Further Info:          Colin Loosemore, Managing Director, Archipelago Resources Plc.
                                Tel:         00-618-9364-8301
 
                                Richard Chase, Ambrian Partners Ltd
                                Tel:         020-7776-6461
 
                                Ron Marshman / John Greenhalgh, Lothbury Financial
                                Tel:         020-7011-9411
 
                                Gerry Beaney / Fiona Kindness, Grant Thornton UK LLP
                                Tel:         020 7383 5100
 
www.archipelagoresources.com.au


This information is provided by RNS
The company news service from the London Stock Exchange
 
  END 
 
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