FINANCE

During the quarter, Kingsgate raised A$70 million via an ordinary share placement to existing and new institutional shareholders.

At the end of March, Kingsgate had total cash and bullion/ doré of A$87.2 million, comprising cash of A$68.4 million and bullion/doré of A$18.8 million.

The balance of the Thai debt facility is approximately US$85 million, following the first loan repayment of US$15 million on 31 March 2012. The Kingsgate A$60 million corporate credit facility was drawn to A$40 million. Under the terms of these loan facilities, the Group is required to maintain a minimum cash balance of A$5 million in respect of its Australian operations and US$15 million in respect of Akara. After excluding these amounts, the Group cash and bullion/doré was A$67.8 million.

In addition, Kingsgate has a five year A$35 million convertible loan facility that provided funding for the Bowdens acquisition.

Kingsgate declared and paid an interim dividend of 10 cents per share, unfranked, during the quarter (total cash payment of A$13.2 million).

Kingsgate successfully completed the compulsory acquisition of the balance of Laguna Resources NL that it did not own following the close of the offer on 13 January 2012.

OPERATING COSTS

Direct mining and operating costs improved at Chatree with the stronger production performance and despite a lower silver credit. However, the increased production level did generate a higher royalty payment that resulted in total cash costs of US$626/oz compared with US$603/oz in the December quarter. The higher depreciation and amortisation at Chatree represent a full production quarter from the Chatree North expansion plant. Total cash costs at Challenger of US$955/oz reflect the lower production performance.