Kingsgate entered into an agreement in August 2011 to purchase the Bowdens silver project in Lue, New South Wales, from a wholly-owned subsidiary of Silver Standard Resources Inc., subject to the satisfaction of certain conditions precedent.

Bowdens, located some 240 km west of Sydney, is an epithermal silver deposit with a resource of approximately 100 Moz silver reported in line with JORC guidelines. Bowdens has the potential to be a robust project with the possibility of increasing the resource base.

Key Attributes of Bowdens

1. Robust Project

• Bowdens has the potential to be developed as an open pit operation with the capacity to sustain a 3 – 4 Mtpa ore processing rate over a minimum 10 year mine life.
• Low strip ratio is expected due to the near-surface and fl at lying nature of the mineralisation.
• Availability of key infrastructure with access to water, proximity to grid power and a skilled workforce. Silver Standard has already acquired, and has further options, over land covering a signifi cant portion of the likely footprint of the project, and these will pass to Kingsgate as part of the transaction.

2. Advanced Nature of the Project

• Bowdens underwent a detailed assessment by respected technical consultants as part of a 2004 resource modelling and detailed scoping study which included metallurgical, mining, environmental, capital and operating cost aspects of the project.
• Previous scoping studies provide the platform to accelerate environmental base line, feasibility and development work and move through the required regulatory and environmental approvals.
• The region hosts a large number of skilled workers, given the presence of numerous operating mines.

3. Resource Potential

• The current pit shell has been optimised based on existing drilling. Areas of potential for further mineralisation will be the subject of a planned drill programme over the next 6 – 9 months.
• Kingsgate will assess the project based on the current resource base, with any exploration success having the potential to scale-up the project and extend mine life.

The previous owners completed 395 drill holes totalling more than 43,000 metres of drilling. As this project was Silver Standard’s only project outside of the Americas, only minor work has been undertaken on it since 2006.

Mining

Mineralisation at Bowdens occurs as gently dipping continuous zones that outcrop over large parts of the deposit and plunge to the north. Mining is likely to occur through an open pit operation. The strip ratio is expected to be low as a result of the favourable location and character of the mineralisation.

Initial pit optimisation work indicates a near-surface zone of higher grade silver that could be accessed in the early stages of production. This will have a positive impact on project economics and payback period.

Mineralisation and Processing

Bowdens is an epithermal silver deposit hosted in volcanic rocks, comprising rhyolite and volcanic breccia. Silver mineralisation is associated with lead and zinc sulphides. Early stage mineralisation is disseminated within siliceous fi ll-cementing breccia with late stage mineralisation being quartz-carbonate-sulphide assemblages in crustiform veining. Visible sulphides are pyrite, sphalerite and galena.

Previous metallurgical work has been completed in Australia and Canada. Most of the payable silver reports to a silver-rich lead concentrate with minor silver reporting to the zinc concentrate. Early indications are that the concentrate will be of high quality and in strong demand by off takers and traders. This could assist Kingsgate when assessing optimum funding routes for project development.

Exploration

The potential exists to grow the resource base over time through further exploration. A drilling programme has been planned to test the possible extent of the mineralisation. This exploration will not impact the planned feasibility and development work schedule.

Further growth potential is considered from the following:

• in and around the currently defi ned zone of mineralisation; and
• several prospects in close proximity to the Bowdens Deposit require further exploration. Drilling elsewhere within the Exploration Licence has identifi ed similar mineralisation and grades with excellent potential to increase the resource portfolio.

Forward Work Programme

Kingsgate has commenced a Bankable Feasibility Study building on the high quality work previously completed by Silver Standard. A detailed exploration programme to defi ne the extent of the mineralisation better has been planned which, pending board approval, will be undertaken over the next 6 – 9 months.

Work on updating the scoping study is well advanced and results should be available for release in the short term.

Environmental, regulatory and government approvals are likely to be the key determinants to the timing of project development. Whilst these time-lines are uncertain, signifi cant base-line studies have already been completed over a number of years, which will facilitate completion of the required work.