Kingsgate achieved record total gold production of 60,614 ounces in the March quarter, an increase of 14% on the December quarter (53,320 ounces). Production was up strongly at Chatree reflecting the impact of a full quarter at the higher operating rate and initial access to higher grade ore at C North. At Challenger, production was lower principally due to low equipment availability and manning issues in January.

Group operating cash costs of US$744/oz (December quarter US$608) were mainly impacted by the gold production at Challenger.

Gold sales in the quarter were 58,554 ounces at a gold price of US$1,686/oz, maintaining a strong
operating cash margin. Gold sales, due to timing, were less than gold production with a corresponding
increase in bullion and doré held at quarter’s end.

THAILAND

CHATREE GOLD MINE

Chatree gold production of 38,721 ounces gold in the March quarter was 49% higher compared to the December quarter. Grade was 0.94 grams per tonne. Mining progressed well during the dry conditions and it is anticipated that “C” North will be completed in the June quarter as forecast.

Higher royalty levels reflecting the increased gold production resulted in total cash costs of US$626/oz (including US$167/oz royalty), slightly higher than the December quarter (US$603/oz, including US$135/oz royalty). Total production costs after depreciation and amortisation were US$780/oz reflecting the amortisation of the Chatree North plant expansion. Underlying costs reflect the grade of ore processed and improved as higher grade ore was processed.

Chatree continues to demonstrate world’s best practice for safety with 20.0 million man hours (+9 yrs) worked to March 31, 2012 since the last and only Lost Time Incident.

Plant Expansion

The Chatree North Expansion Project is now in the final commissioning/optimisation phase and the daily throughputs are +20% over design with total combined throughput for the two plants equating to around 6.2 million tonnes per annum.

AUSTRALIA

CHALLENGER GOLD MINE, SOUTH AUSTRALIA

Challenger quarterly gold production of 21,893 ounces was 20% lower than the prior quarter. The quarter was affected by a poor January production profile significantly affected by manning and maintenance issues. The following months showed a marked improvement but were unable to make up for the slow start in January. The decline has advanced to within 60m of crossing over the ’79 Fault’.

Total cash costs were US$955/oz (including US$62/oz royalty) compared to the December quarter costs of US$612/oz (including US$54/oz royalty).

Mine development capital expenditure for the quarter was $8.4 million and exploration expenditure was $3.4 million. Development capital expenditure reflects additional development out to Challenger West and development across the ‘79 Fault’ interface.

Diamond drilling at Challenger continues to confirm the offset position of the ore shoot system on the far side of the ’79 Fault’. Results have highlighted the S2 structure is continuous and extends into an area that was not previously interpreted and offers scope for additional development.

Challenger West development has exceeded expectation with 120 metres of strike developed on the 800 level. The ore drive contains narrow but high grade gold mineralisation.

BOWDENS SILVER PROJECT, NEW SOUTH WALES

Work towards completing a bankable feasibility study and an Environmental Impact Statement (EIS) continued during the quarter together with the commencement of a drilling program. The drilling program incorporates metallurgical sampling, definition drilling and sterilisation drilling away from the known mineralisation to allow the planning of mine-associated infrastructure.