Archipelago Resources Share Discussion Threads

[boadicea] 30/8/2012 07:47

Results well on track, continued good exploration results and expectation of further mine-life extension - all adds up to good value here, imho.
Annualised p/e of about 12 without factoring in any growth in H2 output revenue which should result from higher output oz but may be impacted by a slightly lower average pog.

[boadicea] 23/8/2012 06:53

Useful report out today, points towards probability of further LoM extension in due course.

[boadicea] 28/7/2012 08:25

This may not be news to those who have seen Wednesday's half-year production report but it is an easily readable summary and good publicity -


silverfern - You might find KGI worth a look as it has much in common with MML (vein miner that delivers to plan with significant output increase imminent) and is ISA-able. It has risen nicely this past week but could well dip again in current markets.

[silverfern] 26/7/2012 15:49

I am in MML also, by POG I meant Petropavolsk. AR will have its day.

[boadicea] 26/7/2012 10:54

One snag with AR is its AIM status which prevents me putting it in the ISA where most of the available cash sits.
I also note a strong advance today in both MML and KGI which can be ISA'd.
Perhaps AR should now consider itself grown-up enough to graduate to a 'recognised' exchange listing, either here or on ASX.

[boadicea] 25/7/2012 17:06

Producing mines are an effective proxy for the pog. Explorers and uncashed-up developers are dependent on capital input and anything can happen, however good the prospect - the usual effect is that one ends up owning virtually nothing due to dilution or if slightly luckier there is a low-priced sell-out.

Moral - Never get backed into a corner by running short of cash or having to sell at any price - and this applies both at the personal level and for the companies in which one invests.

My own steady income is from elsewhere and AR. is unlikely to run out of cash. Conclusion: it's a good and suitable investment because neither I nor the company reasonably expects to become a forced seller at an inappropriate time.

[boadicea] 25/7/2012 13:58

silverfern - While I agree your figure to an extent, it was my estimate relating to EBITDA (and cash flow + tax) rather than bottom line. Also, fixating on the p/e can be misleading with mines of limited life - originally expected to be ~6years but since extended due to expansion of the resource with every prospect that will continue.
However, p/e of 4 (or even 6 at bottom line adjusted for typical/normal TD&A) is certainly too low (imho) given the realistic prospects of an imminent 35% increase in output values compared to the historic 6m period and further mine life extension(s). Most of the increased value will appear as pre-tax cash flow and profit if overheads are held reasonably constant.

The market has very little trust in miners' forecasts atm and is also factoring in a reduced pog of ~$1350/oz a year or two out which many of us would see as unlikely.

Taken together, this has encouraged me to add today on a two year+ view but not necessarily expecting it to double within months... (but then again it could do just that if miners catch the mood later this year.)

[lucky_punter] 25/7/2012 10:49

Archipelago Resources (LON:AR.) said this morning that it expects to increase gold production for the rest of 2012 at its flagship Toka Tindung mine in Indonesia.

[silverfern] 25/7/2012 10:13

As above, I was made aware the figures would be geared towards second half but am pleased to see 60k already under our belt. Future mining will include the higher grade on an ongoing basis. We shyould see between £80-90m profit this year or 15p a share, a current p/e of well under 4. Makes you wonder what a company has to do to be re-rated.

[hellisreal] 25/7/2012 09:57

Commenting on the results, Mr Marcus Engelbrecht, Managing Director and CEO, said:

"Archipelago's Toka Tindung Mine has been in production for only 15 months (including commissioning) and has produced over 121,000 Au Eq oz. Production for the first half of 2012 demonstrates that Toka Tindung continues to operate in line with our expectations.

The Company looks forward to robust production for the second half of 2012 with operations to benefit from additional mining in the high grade Pajajaran and Kopra deposits."

'On the increase'

[boadicea] 25/7/2012 08:20

Half-year production exceeds 60k oz with full year forecast held at ~140k oz based on a significant increase in head grade from new pits.
Input costs, both labour and materials, are generally increasing but will be moderated by lower strip ratios from new pits.

Looks good enough to me given this is one of the few junior golds that appears capable of reliably delivering on its promises.

[silverfern] 16/7/2012 09:39

I have had my discussion with the company which was, as I had hoped, reassuring. It is an illiquid stock as we know but the price fall is not a reflection of current production, the political environment or exploration work. Expect a production report before the Olympics, and - no surprise - further exploration updates as the year unfolds.

An interesting point is that whilst we can produce gold so cheaply, others cannot, and a gold price fall would constrain the supply as other miners may have to mothball production. So whilst I am bullish about gold prices anyway, there is a nice supply and demand logic that could only benefit AR and would ultimately support the current gold price, giving clear visibility on revenue and profits.

[lfc4ever] 12/7/2012 14:09

don't know, but encouraging to have some life in the old dog.

[silverfern] 12/7/2012 13:13

at last some upward movement- wonder if it will gold til cosing time!

[boadicea] 11/7/2012 08:02

This Liberum report from end of May seems not to have been mentioned here. Worth a read -


Shore Capital also supportive -

[lucky_punter] 09/7/2012 09:52

Tindung gold mine in North Sulawesi, Indonesia.
A total of 28 holes were drilled on the Blambangan deposit. The best intersections included 24 metres at 5.6 grams of the precious metal per tonne, 34 metres at 3.27 grams and 9 metres at over 10 grams.

[silverfern] 09/7/2012 09:00

The quality of the gold seam is good, especially compared with the existing mining which is generating $1000 gross profit per ounce. Typically, the market seems uninterested but this could materailly affect the way the mine/company is percevied

[boadicea] 09/7/2012 07:44

Gold miners' valuations have to factor in the life of the mine, not just current year's earnings. However, it looks like there will be further extensions of mine life here which would certainly point to a significant valuation increase.

[lfc4ever] 06/7/2012 14:45

at least the slide down has stopped for the moment.
when does the rise back up start?

we have a mkt cap of only £287m yet the f/y production should be at least 135,000 oz at say gross profit of US$1,000oz = US$135m = £87million.

makes share price look rather conservative.

[silverfern] 29/6/2012 15:53

no reply to my email to the company - edit- they have finally got back to me

[boadicea] 29/6/2012 11:21

lfc4 - Agreed. We do also have to hope there are no mishaps (floods, earthquakes, pipe leaks etc) here as punishment by the market is currently severe.
In the case of ALD the offer still looks quite cheap as it was in the severely depressed category to start with following a couple of mishaps. St B have got in before the recovery became apparent - good timing by them.

[lfc4ever] 29/6/2012 08:48

quite. A similar premium here would probably be about fair value.

[boadicea] 29/6/2012 08:17

Talking of "silly bargain levels", I note that Allied gold [ALD] is the subject of an offer from St Barbara at a hefty premium -


The values of junior and mid producers should be underpinned by the knowledge that m & a activity is alive and well and that any significant undervaluation will likely attract a predator.

[boadicea] 20/6/2012 10:13

We are about 5 weeks away from Q2 production report which should give a useful pointer towards interim results to follow, typically in September, but they would do themselves a service by generally getting their reports out a few weeks earlier. Prices subside during periods of doubt, so best to keep those as short as possible imo.

Unless, as worries Yorgi, there is leakage of adverse developments, this share seems well into good value territory. Perhaps in the current climate we should just be happy that it hasn't subsided (yet) to the silly bargain levels seen by some other minor goldies.