Archipelago Resources Share Discussion Threads

[lfc4ever] 24/4/2012 10:55

they are looking at something well north of US$100m pre-tax profit next year.
the share price is way undervalued.

[yorgi] 24/4/2012 09:38

AR. always seems slow to react to the good news that flows from the company but it is more important that it keeps doing things well and the share price will then follow in time.

[yorgi] 24/4/2012 09:33

I'm afraid not Ifc4ever, but I would guess it would be a conservative figure. I still expect the POG to get stronger through the year as I see little reason for it to weaken.

[lfc4ever] 24/4/2012 09:31

do you know/ recall what pog their valuation is based on?

[yorgi] 24/4/2012 08:56

Ambrians comment.

ARCHIPELAGO* - 1Q Production Report - Archipelago has released its inaugural production results for 1Q12 following the success of reaching nameplate production at Toka Tindung, its operational gold mine in Indonesia. The production results were in line with its expectations for the year to date. The gold produced during 1Q12 was 32,189oz Au Eq at a head-grade of 2.44 g/t. In this regard and relative to the head-grade achieved for the quarter, Archipelago's 2012 mine plan continues to indicate the delivery of higher-grade ore to the mill as the year progresses, in particular from the Pajajaran pit. Now that it is moving out of the rainy season, mining rates are already showing a marked increase and the company was confident about reiterating its 2012 full-year production guidance of 135,000-145,000oz Au Eq at a cash cost of US$540-590/oz.
Ambrian Comment: This is the first full quarter of production for Archipelago and the results were within our expectations. Importantly, the mill continued at its nameplate capacity with recovery rates at over 91% during the quarter. Production was slightly below our forecast due to slightly lower grade being processed. We expect the grade to increase throughout the year (2.8 g/t by year end) as the higher-grade satellite pits are mined at a greater rate. We maintain our annual forecast for the year of 140,000oz Au. We are currently on site in Indonesia and will provide a more detailed update once we return.
Archipelago Resources (AR)
Price: 61p Target Price: 89p Recommendation: Buy Market Cap: £347m

1Q12 Production Report
Archipelago has released its inaugural production results for 1Q12 following the success of reaching nameplate production at Toka Tindung, its operational gold mine in Indonesia. The production results were in line with its expectations for the year to date. Gold produced during 1Q12 was 32,189oz Au Eq at a head-grade of 2.44 g/t. In this regard and relative to the head-grade achieved for the quarter, Archipelago's 2012 mine plan continues to indicate the delivery of higher-grade ore to the mill as the year progresses, in particular from the Pajajaran pit.
Now that it is moving out of the rainy season, mining rates are already showing a marked increase and the company was confident about reiterating its 2012 full-year production guidance of 135,000-145,000oz Au Eq at a cash cost of US$540-590/oz.
· Ore Mined - 654,768t & Waste Mined - 3,690,547t
· Total Mined - 4,345,315t
· Ore Processed - 427,859t
· Average Head-grade - 2.44 g/t Au Eq & Process Recovery Rate - 91.2%
· Gold Produced - 32,189oz Au Eq
Comment
This is the first full quarter of production for Archipelago and the results were within our expectations. Importantly, the mill continued at its nameplate capacity, with recovery rates at over 91% during the quarter. Production was slightly below our forecast due to slightly lower grade being processed. We expect the grade to increase throughout the year (2.8 g/t by year end) as the higher-grade satellite pits are mined at a greater rate. We maintain our annual forecast for the year of 140,000oz Au. We are currently on site in Indonesia and will provide a more detailed update once we return.
Recommendation
We maintain our BUY recommendation for Archipelago and our target price of 89p. We remain confident in our guidance in light of these preliminary financial figures.
We believe that share price momentum for 2012 will be driven by:
· Continuing exploration drilling at Toka Tindung - Ongoing
· Further resource upgrades - 1H12
· 2Q12 production - July 2012
· M&A activity - 2012

Ambrian acts as Broker to this company

[yorgi] 24/4/2012 07:38

The management here have consistently done what they have promised but for some reason the company does not seem to attract a lot of interest which has always seemed surprising to me.

[silverfern] 24/4/2012 07:09

I hope those analysts show up and tell their friends.

[yorgi] 24/4/2012 07:03

Yes exactly let's hope the share price starts to relection this :-)

[boadicea] 24/4/2012 06:46

Excellent Q1 report out -


Production already at rate of about 130k ozpa and from rainy season and set to improve.
Promises come cheap in the mining field - Delivery earns a premium.

[yorgi] 23/4/2012 17:14

I would agree Boadicea :-) It appears oversold to me, well managed and have delivered the "goods" I doubt it will remain at this level for long.

[boadicea] 23/4/2012 16:53

"... extension to the life of mine to 9 years (plus 7 years of stockpiles)." - Preliminary report.

In addition, they are continuing exploration, so the 9 years will increase. The only question is, by how much?
The low cost and high recovery - mid 90's% - with a head grade that is controllable by blending ore from several pits leads to expectation of good steady performance. When the general vagaries of mining are taken into account, this is a bonus that accounts for its premium (but not intrinsically expensive) rating, imho.

It looks a well managed outfit to me and I anticipate that the share price should more than hold its own when the present poor sentiment towards pm miners improves across the board.

I also note that the forecast cash cost for AR is US$540-590 /oz compared to a last reported (therefore probably now higher) figure for Avocet of $693/oz. AR therefore has a better safety margin against pog volatility.

OK - I am biased as I have chosen to hold AR but not AVM, so dyor!

[trytotakeiteasy] 21/4/2012 18:59

anyone know P/E ratio etc for this company... they ramp up to I think 160,000 for six years in initial production stage... thsi year it is less than that... looks ok just a one mine company..... mine life I think 9 years...... I think Avocet have about the same production but have greater growth prospects and they are same market cap....... which is best??

[hellisreal] 21/4/2012 18:52

We shall see.

BTW was reading of problems in Indonesia for one company,over some law suit.
Trust we shall be ok.

[hellisreal] 21/4/2012 15:01

Only Toppy IF no value added since.

[muffinhead] 21/4/2012 09:54

looks toppy!

[yorgi] 19/4/2012 13:27

Yes I've just read it as well Ifc4ever......interesting, well worth reading.

[hellisreal] 19/4/2012 13:06

A very good read Ifc4

[yorgi] 18/4/2012 15:36

Makes no sense Ifc4ever, but we all know short term stock prices often make no sense but as Hellisreal commented quality will out in the end. AR. represents a very good price to buy at this level and as long as they continue during 2012 as they did last year then we will be somewhat higher than this in a few months time.

[lfc4ever] 18/4/2012 11:59

i agree entirely.
this year they are looking to produce over 130,000 ounces at a gross profit of about (at current gold levels) US$1000 per ounce.
makes the current valuation look pretty undemanding!

[yorgi] 18/4/2012 10:04

I'm amazed at the lack of interest in AR. that has had a "cracking" year doing all it had set out to do is now making a profit extended mine life.

From preliminary results :

Marcus Engelbrecht, Managing Director and CEO, commented:

"In 2011, Archipelago successfully commissioned the Toka Tindung mine and increased the Company's resource and reserve base, supporting a material extension to the life of mine. In 2012, we will continue to pursue further exploration activities, whilst also maintaining low cost ounce production at Toka Tindung; providing the platform for further growth."

"Our focus 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.

[hellisreal] 17/4/2012 00:35

Quality will out,in the end here.
Been adding of late as I'm sure are others.

[yorgi] 16/4/2012 11:54

Buying picking up again and the share price doing it's usual "odd" movements !