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December 2015 Quarterly Report

Highlights

  • Group quarterly gold production of 47,307 ounces at a total cash cost of US$832 per ounce generated solid cashflow, delivering a 26% operating margin against an average gold price achieved of US$1,122 per ounce.
  • Both Chatree and Challenger operations remain within FY16 production guidance, with a stronger second half expected.
  • Chatree quarterly gold production of 28,257 ounces at a total cash cost of US$854 per ounce.
  • Challenger quarterly gold production of 19,050 ounces at a total cash cost of US$799 per ounce was a very strong performance despite two separate mill down-times.
  • At Nueva Esperanza, the Spring Phase 1 drilling campaign commenced during the quarter delivering exciting gold intersections in the new project area of Carachitas which is within two kilometres of the proposed plant site.
    • A total of six holes were drilled on three section lines at 50 metre intervals following up from a single hole drilled previously which also intersected gold mineralisation. All six holes returned significant gold intersections from shallow depths less than 20 metres below the natural surface.
    • The best of the new intersections was: 11 metres at 4.90g/t gold from 14 metres in drillhole ECCR-02.
    • The FY16 objective remains unchanged with the primary goal to continue to define and drill gold targets on the ~45 square kilometre alteration system with the aim of increasing the 1.9Moz AuEq Nueva Esperanza resource.
  • Kingsgate maintains a healthy cash position with cash and bullion/doré totaling A$55.5 million and is confident that its second half year cashflow will support all of its financing and debt activities.

Group Operating Summary

Operation Production
(ounces)
Total Cash Costs
(US$/ounce)
Chatree 28,257 854
Challenger* 19,050 799
Total 47,307 832

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