Posting of Circular to Shareholders

    RNS Number : 1824J
  Archipelago Resources PLC
  28 November 2008
   


    ARCHIPELAGO RESOURCES PLC
    Posting of Circular to Shareholders and Notice of General Meeting

    Further to the announcement by Archipelago Resources Plc ("Archipelago" or the "Company") on 26 November 2008, in relation to the loan
facility ("the Loan Facility") provided by Abacus Capital International Limited ("Abacus") the Company can now confirm that a circular has
been posted to shareholders in connection with a proposed increase of the Directors' authorities to issue securities. The circular also
convenes a General Meeting. 
    The full text of the notice is reproduced below and will be available from the Company's website www.archipelagoresources.com.au  

    Further Info:    Colin Loosemore, Managing Director, Archipelago Resources Plc.
                              Tel:    [phone]
                              Ron Marshman / John Greenhalgh, Lothbury Financial
                             Tel:    [phone]
                            Gerry Beaney / Fiona Kindness, Grant Thornton UK LLP
                           Tel:     [phone]
    www.archipelagoresources.com.au

    THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.  It contains the Resolutions to be voted on at a General Meeting of
Archipelago Resources Plc ("Archipelago" or the "Company") to be held on 15 December 2008.  If you are in any doubt as to the action you
should take, you are recommended to seek your own personal financial advice from an independent financial adviser authorised under the
Financial Services and Markets Act 2000 (as amended).
    If you have sold or transferred all your ordinary shares of 1p each in the Company ("Ordinary Shares"), please send this circular and
the accompanying form of proxy (the "Form of Proxy") for use in relation to the General Meeting of the Company (the "General Meeting" or
"GM") to the purchaser or transferee or the stockbroker, bank or other agent through whom the sale or transfer was effected, for
transmission to the purchaser or transferee.  If you have sold or otherwise transferred some of your Ordinary Shares you should consult with
the stockbroker, bank or other agent through whom the sale or transfer was effected.
    The Directors, whose names appear below, accept responsibility for the contents of this circular.  To the best of the knowledge and
belief of the Directors (who have taken all reasonable care to ensure that such is the case), the contents of this circular are in
accordance with the facts and do not omit anything likely to affect the import of such contents.
    The circular does not constitute an offer or invitation to you or to the public to subscribe for or purchase any Ordinary Shares or
other transferable securities.
    The attention of Shareholders is drawn to the notice of General Meeting which is set out at the end of this circular.
    ARCHIPELAGO RESOURCES PLC 
(Incorporated in England & Wales under the Companies Act 1985 with Registered Number 4425340)

 Directors:                                                 Registered Office:
                                                          
 John Colin Loosemore (Managing Director)                   22 Melton StreetLondonNW1 2BW
 Michael Norman Arnett (Non Executive)                                                   
 Barry Casson (Non Executive)                                                            
                                                                                         
                                                                                         
                                                                                         
    To the holders of Ordinary Shares and for information only, holders of options under the Archipelago Resources plc 2002 Unapproved Share
Option Scheme and RMB Resources Limited.
    28 November 2008
    Dear Shareholder
    General Meeting
    This circular is being sent to you in connection with a proposed increase of the Directors' authorities to issue securities, including
Ordinary Shares, under the Companies Act 1985 (the "Act"). This circular explains why the Company is seeking to increase its authorities and
provides you with information to enable you to exercise your vote at the forthcoming General Meeting to be held on 15 December 2008 at 10.00
a.m. at the offices of Lawrence Graham LLP, 4 More London Riverside, London SE1 2AU, notice of which is set out at the end of this circular.
 
    Background information on the Company and the Toka Tindung Gold Project
    Since inception, the Company's objective has been to develop its 85% owned Toka Tindung Gold Project in North Sulawesi, Indonesia (the
"Project"). The Project has a defined resource of 1.75 million ounces of gold equivalent, of which 1.1 million ounces will initially be
mineable by open pit mining methods.  Production is expected to be at an annualised average rate of approximately 160,000 ounces per annum
for the first 6 years of an initial 8 year mine life.  Assuming a gold price of US$800/oz and an oil price of US$120 per barrel, the Company
considers that its cash production cost will be about US$384/oz less US$15/oz silver credits leaving a substantial margin of operating
surplus at the targeted production rate.
    After a long and frustrating delay the Company was issued approvals by way of decrees from the Government of Indonesia to recommence
construction on 6 and 11 March 2008, however to date unanimous political support for Project development has been lacking at the provincial
level.
    Reasons for the increase in authorities
    Following Rajawali Corporation's decision not to proceed with its proposed investment in the Company, Archipelago announced on 23
October 2008 that it had reached agreement with Abacus Capital International Limited ("Abacus") whereby Abacus via its managed fund Aurum
Fund ("Aurum") would provide a US$7.5m loan facility (the "Loan Facility") and would also have the right to elect to subscribe for equity in
Archipelago. Abacus via another of its managed funds Avenir Asset Management Ltd is currently Archipelago's largest shareholder holding
approximately 22.3 million Ordinary Shares representing 11.1% of the Company's issued share capital and therefore is a substantial
shareholder for the purposes of the AIM Rules for Companies (the "AIM Rules"). Accordingly the entering into of the loan facility including
the Elective Subscription and the Further Elective Subscription (as defined below) constitutes a related party transaction for the purposes
of the AIM Rules. 
    As announced by the Company on 25 November 2008 Aurum has provided Archipelago the first US$5.5m of the Loan Facility , with US$5m being
used to retire the RMB loan facility. The US$2m balance of the loan funds are targeted for payment in equal installments on 1 December 2008
and 1 January 2009 respectively. The Loan Facility carries a commercial rate of interest and is repayable on 23 February 2009 unless
extended by Aurum. 
    In accordance with the terms of the facility documents which have been entered into with Aurum, Aurum has until 23 February 2009 to
elect to increase its investment in the Company by way of a subscription for up to 104.87 million Ordinary Shares (the "Elective
Subscription"). To the extent that this right is exercised, such shares would be issued utilising the Company's existing authorities to
issue shares which were put in place at the general meetings of the Company held on 15 April 2008 and 13 October 2008. 
    Subject to shareholder approval, the Company has in addition granted Aurum, the right until the earlier of project development financing
or 23 August 2009, to subscribe for additional Ordinary Shares (the "Further Elective Subscription") as would increase the combined
shareholding of Abacus managed funds to a maximum of 51% of the enlarged issued capital of the Company (on a fully diluted basis) at the
time of election.  Aurum is currently entitled to nominate one third of the Company's directors and upon completion of the Elective
Subscription will be entitled to nominate two thirds of the Company's directors  
    Both the Elective Subscription and the Further Elective Subscription will be at the previously announced price of 12 pence per share.
Alternatively Aurum may elect to satisfy part of the Subscriptions by setting off the liability (being the principal together with accrued
interest) of the Company under the Loan Facility, in which case the subscription price for such part subscription would be 7.125 pence per
share . The number of shares to be set off in such way will be determined by the quantum of debt and interest outstanding at the time of set
off.  If the rights under the Elective Subscription and the Further Elective Subscription are fully exercised by Aurum, this will amount to
an investment by Aurum in the Company of approximately £18.5m, versus £9.0m approx for the Elective Subscription only, of which £5.1m approx
would be required to repay the Loan Facility.
    The exercise of the rights under the Elective Subscription and the Further Elective Subscription are  conditional upon, amongst other
things, the Company obtaining loan financing for development of the Project.  With regard to the satisfaction of this condition Aurum has
undertaken to seek and assist the Company to obtain loan financing and has confirmed to the Company that it has already received a
preliminary term sheet from a prospective financier.
    The Company currently does not have sufficient authorities in place under section 80 and section 89 of the Act to satisfy Aurum's
entitlement under the Further Elective Subscription and accordingly as outlined above the Further Elective Subscription is conditional upon
the necessary shareholder approvals being obtained.  The Company is therefore seeking the necessary additional authorities to issue further
Ordinary Shares at the General Meeting, notice of which is set out at the end of this circular.
    Archipelago is pleased that Aurum has sought to increase its proposed shareholding in the Company at a share price averaging
substantially more than the current market price, at a time when financing for development of resource projects is very hard to obtain. The
Directors consider that having Aurum as an enthusiastic and financially strong shareholder, would be very positive for all Shareholders. 
Accordingly the Directors request your support in favour of the resolutions to be proposed at the General Meeting, further details of which
are set out under the heading "Resolutions" below.

    In the event that Aurum exercises its rights in full under the Elective Subscription the shareholding of Abacus managed funds would
increase to approximately 127.2 million  Ordinary Shares (representing 39.1% of the enlarged issued share capital of the Company on a fully
diluted basis). Furthermore, in the event that Aurum exercises its rights in full under the Further Elective Subscription, the shareholding
of Abacus managed funds would increase to represent 51% of the enlarged issued share capital of the Company on a fully diluted basis.  As
the central place of management and control of the Company is outside the United Kingdom, Channel Islands and/or Isle of Man, the Company
does not fall within paragraph 3(a)(ii) of the Introduction of the City Code on Takeovers and Mergers (the "City Code"). The UK Takeover
Panel has therefore confirmed that the Company is not subject to the provisions of the City Code and notwithstanding the fact that Abacus
managed funds could hold in aggregate Ordinary Shares representing in excess of 30% of the enlarged issued share capital, Abacus managed funds are not required to make a general offer for the
Company pursuant to Rule 9 of the City Code.
    Resolutions
    Archipelago currently has 201,149,334 Ordinary Shares in issue and as at 26 November 2008 (being the latest practicable date prior to
the posting of this circular) the Ordinary Shares were trading at 4.375 pence per Ordinary Share giving the Company a market capitalization
of approximately £8.80 m.
    In addition to the existing authorities granted to the Directors pursuant to the resolutions which were passed at the general meeting of
the Company held on 15 April 2008 and the general meeting of the Company held on 13 October 2008, an ordinary resolution will be proposed at
the General Meeting to grant the Directors further authority to allot relevant securities for the purpose of section 80 of the Act up to an
additional aggregate nominal amount of GBP850,000 (representing approximately 42.3% of the current issued share capital). The special
resolution to be proposed at the General Meeting will give the Directors further authority to disapply statutory pre-emption rights in
respect of the same amount of equity securities under section 95 of the Act.
    These resolutions, if passed, will together with existing authorities, enable the Company to issue sufficient Ordinary Shares to satisfy
in full Aurums' current entitlement under the Elective Subscription and the Further Elective Subscription. 
    You will find set out at the end of this circular a notice convening the General Meeting of the Company to be held at the offices of
Lawrence Graham LLP at 4 More London Riverside, London SE1 2AU at 10.00 a.m. on 15 December 2008.
    Action to be taken
    Enclosed with this document is a Form of Proxy for use at the General Meeting. Whether or not you intend to be present at the meeting,
you are requested to complete and return the Form of Proxy to the Company's Registrars, Share Registrars Limited by post at Suite E, First
Floor, 9 Lion and Lamb Yard, Farnham, Surrey GU9 7LL, or by fax on 01252 719232, so as to be received as soon as possible and in any event
not later than 10.00 a.m. on 11 December 2008. 
    Completion and return of a Form of Proxy will not preclude you from attending the GM and voting in person should you so wish.
    Expected timetable
    Latest time and date for receipt of Forms of Proxy    10.00 a.m. on 11 December 2008.
    Time and date of General Meeting     10.00 a.m. on 15 December 2008.
    Recommendation
    The Directors, having consulted with the Company's nominated adviser Grant Thornton, consider that the terms of the Loan Facility
(including the Elective Subscription and the Further Elective Subscription) are fair and reasonable insofar as its Shareholders are
concerned. In providing advice to the Directors, Grant Thornton has taken into account the commercial assessments of the Directors. The
Directors consider that the entering into of the Loan Facility (including the Elective Subscription and the Further Elective Subscription)
is in the best interests of Shareholders as a whole.
    Accordingly the Directors unanimously recommend Shareholders to vote in favour of the resolutions as set out in the notice of General
Meeting, as the Directors who are shareholders intend to do in respect of their own holdings and interests beneficially held by them
amounting to 23,495,825 Ordinary Shares (representing approximately 11.7% of the current issued share capital of the Company).
    Yours faithfully



    John Colin Loosemore
    Managing Director



    ARCHIPELAGO RESOURCES PLC
    (Registered Number: 4425340)
    NOTICE OF GENERAL MEETING
    NOTICE IS HEREBY GIVEN that a GENERAL MEETING of the above named Company will be held at the offices of Lawrence Graham LLP, 4 More
London Riverside, London SE1 2AU on 15 December 2008 at 10.00 a.m. for the purpose of considering and if thought fit passing the following
resolutions which in the case of Resolution 1 will be proposed as an ordinary resolution and in the case of Resolution 2 will be proposed as
a special resolution.  

    ORDINARY RESOLUTION
    THAT, in addition to the existing authorities, the Directors be and they are hereby generally and unconditionally authorised in
accordance with section 80 of the Companies Act 1985 (the "Act") to exercise all the powers of the Company to allot relevant securities
(within the meaning of that section) up to a maximum aggregate nominal amount of £850,000 provided that such authority shall expire (unless
previously revoked, varied or extended by the Company in general meeting) five years after the passing of this resolution save that the
Company may before such expiry make an offer or agreement which would or might require relevant securities to be allotted after such expiry
and the Directors may allot relevant securities in pursuance of such offer or agreement as if the power conferred hereby had not expired.
    SPECIAL RESOLUTION
    THAT (subject to the passing of Resolution 1 above), in addition to the existing authorities, the Directors be and they are hereby
empowered pursuant to section 95 of the Act to allot equity securities for cash pursuant to the authority conferred by Resolution 1 above as
if sub-section (1) of section 89 of the Act did not apply to any such allotment provided that this power shall be limited to the allotment
of equity securities:
    (i)     in connection with an offer of such securities by way of rights to holders of ordinary shares of 1p each in proportion (as
nearly as may be practicable) to their respective holdings of such shares, but subject to such exclusions or other arrangements as the
Directors may deem necessary or expedient in relation to fractional entitlements or any legal or practicable problems under the laws of any
territory, or the requirements of any regulatory body or stock exchange; and
    (ii)    the allotment (otherwise than pursuant to sub-paragraph 2(i) above) of equity securities up to an aggregate nominal amount of
£850,000
    and such power shall expire (unless previously revoked, varied or extended by the Company in general meeting) five years after the
passing of this resolution save that the Company may before such expiry make an offer or agreement which would or might require equity
securities to be allotted after such expiry and the Directors may allot equity securities in pursuance of such offer or agreement as if the
power conferred hereby had not expired.
    Dated 28 November 2008

 Registered Office:                 By Order of the Board
 22 Melton Street                               Secretary
 London NW1 2BW      Cargil Management Services Limited  



    NOTES:
    *     A member entitled to attend and vote at the above meeting convened by this notice is entitled to appoint one or more proxies to
attend and vote and, on a poll, to vote instead of him or her. A proxy need not be a member of the Company but must attend the Meeting to
represent you. Details of how to appoint the Chairman of the Meeting or another person as your proxy using the proxy form are set out in the
notes to the proxy form.  
    *     You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may
appoint more than one proxy to exercise rights attached to any one share. To appoint more than one proxy please contact Share Registrars
Limited on 01252 821390.
    *     A Form of Proxy is enclosed. To be effective, the Form of Proxy, together with any power of attorney or other written authority
under which it is signed, or a notarially certified copy or a certified copy in accordance with the Powers of Attorney Act 1971 of such
power or written authority must be completed signed and to be valid the proxy must be duly executed and deposited with the Company at the
offices of the Company's registrars, Share Registrars Limited, Suite E, First Floor, 9 Lion and Lamb Yard, Farnham, Surrey GU9 7LL or
returned by fax on 01252 719232 not later than 10.00 a.m. on 11 December 2008. 
    *     Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001 to be entitled to attend and vote at the meeting (and
for the purposes of the determination by the Company of the number of votes they may cast), members must be entered on the Company's
register of members by close of business on 13 December 2008 or, in the event that the meeting is adjourned, on the Register of Members of
the Company not more than 48 hours before the time of any adjourned meeting, and only such members shall be entitled to attend and vote at
the meeting in respect of the number of shares registered in their name at that time. Changes to entries on the Register of Members after
close of business on 13 December 2008 or, in the event that the meeting is adjourned, not more than 48 hours before the time of any
adjourned meeting, shall be disregarded in determining the rights of any person to attend and vote at the meeting. 
    *     In the case of joint holders, the vote of the senior who tenders a vote, whether in person or by proxy, will be accepted to the
exclusion of the votes of any other joint holders. For these purposes, seniority shall be determined by the order in which the names stand
in the register of members in respect of the joint holding.
    *     In the case of a corporation, the Form of Proxy must be executed under its common seal or signed on its behalf by a duty
authorized attorney or duly authorized officer of the corporation.
    *     A vote withheld option is provided on the Form of Proxy to enable you to instruct your proxy not to vote on any particular
resolution. However, it should be noted that a vote withheld in this way is not a "vote" in law and will not be counted in the calculation
of the proportion of votes "For" and "Against" a resolution.
    *     To change your proxy instructions simply submit a new proxy appointment using the methods set out above. Note that the cut-off
time for receipt of proxy appointments (see above) also apply in relation to amended instructions; any amended proxy appointment received
after the relevant cut-off time will be disregarded. Where you have appointed a proxy and would like to change the instructions using
another hard-copy proxy form, please contact Share Registrars Limited. If you submit more than one valid proxy appointment, the appointment
received last before the latest time for the receipt of proxies will take precedence.
    *     In order to revoke a proxy instruction you will need to inform the Company by sending a signed hard copy notice clearly stating
your intention to revoke your proxy appointment to Share Registrars Limited, Suite E, First Floor, 9 Lion and Lamb Yard, Farnham, Surrey GU9
7LL. In the case of a member which is a company, the revocation notice must be executed under its common seal or signed on its behalf by an
officer of the company or an attorney for the company. Any power of attorney or any other authority under which the revocation notice is
signed (or a duly certified copy of such power or authority) must be included with the revocation notice. The revocation notice must be
received by Share Registrars Limited no later than 11 December at 10.00 a.m. If you attempt to revoke your proxy appointment but the
revocation is received after the time specified then, subject to the paragraph directly below, your proxy appointment will remain valid. If
you attempt to revoke your proxy but the revocation is received after the time specified then, subject to paragraph 10 below, your proxy appointment will remain valid.
    *     Appointment of a proxy does not preclude you from attending the Meeting and voting in person. If you have appointed a proxy and
attend the Meeting in person, your proxy appointment will automatically be terminated.
    *     As at 10.00 a.m. on 26 November 2008 the Company's issued share capital comprised 201,149,334 ordinary shares of 1p each
("Ordinary Shares") each Ordinary Share carries the right to one vote at a general meeting of the Company and therefore the total number of
voting rights in the Company as at 10.00 a.m. on 26 November 2008 is 201,149,334.


    ARCHIPELAGO RESOURCES PLC
    GENERAL MEETING
    FORM OF PROXY
    I/We (block capitals please) .............................................................................*.. ..............*****.***.
    of .......................................................................*........
..............................******....*****............
    *........................................................................
......******..................Postcode.............................**
    being (a) holder(s) of Ordinary Shares in the above-named Company hereby appoint the Chairman of the Meeting, or (see Note
2).............................................................................. ...........................******...as 
    my/our proxy to vote for me/us and on my/our behalf at the General Meeting of the Company to be held at 10.00 a.m. on 15 December 2008
and at any adjournment thereof and thereat to vote as indicated below.
    Dated ..................................2008
    Signature(s) ................................................................................ ..................
    Please indicate with an X in the spaces below how you wish your vote to be cast.



    1.    Ordinary resolution to authorise the Directors to allot relevant securities in accordance with section 80 Companies Act 1985. 

 FOR  AGAINST  WITHHELD

    

 

    2.    Special resolution to authorise the  Directors to disapply the statutory pre-emption rights contained in section 89(1) Companies
Act 1985 in relation to the securities issued under the ordinary resolution.
 FOR  AGAINST  WITHHELD








    NOTES:
    *     All members are entitled to attend and vote at the meeting, whether or not they have returned a form of proxy.
    *     If any other proxy is preferred, delete the words "the Chairman of the Meeting or," and insert the name of the proxy you wish to
appoint. A proxy need not be a member of the Company.
    *     In the case of a corporation this form of proxy must be executed under its common seal or under the hand of an officer or attorney
duly authorised in writing.
    *     In the case of joint holders, the vote of the senior who tenders a vote, whether in person or by proxy, will be accepted to the
exclusion of the votes of the other joint holders and for this purpose seniority shall be determined by the order in which the names stand
in the Register.
    *     It should be noted that a vote withheld is not a "vote" in law and will not be counted in the calculation of the proportion votes
"For" and "Against" a resolution.
    *     If this form of proxy is returned duly signed but without any indication as to how the person appointed proxy shall vote, he will
exercise his discretion as to how he votes and whether or not he abstains from voting.
    *     To be effective, this form of proxy, duly executed together with the power of attorney or other authority (if any) under which it
is signed (or a notarially certified or office copy thereof) must be lodged at the Company's Registrars by not later than 10.00 a.m. on 11
December 2008.
    *     Any alterations made in this form of proxy should be initialed.
    *     Appointment of a proxy will not preclude a member from attending and voting in person should he subsequently decide to do so.
    *     Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, to be entitled to attend and vote at the Meeting (and
for the purposes of the determination by the Company of the number of votes they may cast) members must be entered on the Company's register
of members by close of business on 13 December 2008. 

This information is provided by RNS
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