Acquisition

Dominion Mining Limited
On 20 October 2010 Kingsgate and Dominion signed a Scheme Implementation Agreement for Kingsgate to acquire all of the shares in Dominion via a Scheme of Arrangement. Consideration for the transaction is Kingsgate shares, with Dominion shareholders were offered 0.31 Kingsgate shares for each Dominion share they own.

On 2 February 2011, as announced to the Australian Stock Exchange, shareholders and option holders of Dominion Mining Limited approved the Scheme of Arrangement. This was subsequently approved by Federal Court of Australia on 4 February 2011. The acquisition date is 2 February 2011.

Dominion shares were subsequently suspended from 8 February 2011 and traded in New Kingsgate Shares on a deferred settlement basis. The Scheme of Arrangement was implemented on 21 February 2011.

Laguna Resources NL
On 25 October 2010 Kingsgate and Laguna signed a Bid Implementation Agreement for an unconditional off-market takeover bid by Kingsgate for all the issued and outstanding shares in Laguna. The transaction valued Laguna at $0.02 per share.

On 20 December 2010 Kingsgate acquired control over Laguna Resources NL by acquiring an interest in more than 50% Laguna issued shares. On 31 December 2010 Kingsgate Consolidated Limited had acquired an interest in 59.98% of Laguna shares (Refer to Note 8).

On 15 February 2011 Kingsgate closed its unconditional offer to acquire Laguna shares and announced it had acquired a total of 69.84% interest in Laguna.

Dividends

An interim dividend of 10 cents per share was declared on 22 February 2011 with respect of the half-year ended 31 December 2010. The record date is 9 March 2011 and the dividend will be paid on the 16 March 2011.

The Kingsgate Dividend Reinvestment Plan remains active. The rules of the Dividend Reinvestment Plan are detailed on Kingsgate’s website.

Taxation

Kingsgate’s Thai operating subsidiary, Akara Mining Limited (Akara), has paid $3.972 million income tax during the half-year ended 31 December 2010. The BOI half-year tax rate of 15% applied for the whole reporting period.

During the half-year, Kingsgate recognised $1.90 million in deferred tax assets on temporary differences and $3.61 million tax losses arising from prior periods.

Exploration

Resource Development continued to focus on the drilling of A-Pit, S-Pit and Q-Pit areas with the main aim of increasing resources and to fully understand the open pit potential of the mine.

Additional drilling has commenced to target deeper high grade structures, particularly at A-Pit East and S-Pit areas. This continues to advance the underground mining potential with good continuous high-grade mineralization now intersected over considerable strike lengths.

Drilling in the A-Pit was designed to target potential structures between A-Pit Hill and A-Pit Central and beneath the A-Pit Central zone. Alteration studies combining pit mapping, drill logging and spectral data is underway for the A-Pit East and A-Pit Hill areas.

The S-Pit structure is one of the most consistent and significant high-grade structures in the Chatree mining leases. Follow-up drillings during the reporting period were incurred and have confirmed and extended previously reported high grade gold zones below the pit.