Kingsgate achieved total gold production of 32,992 ounces in the September quarter, a decrease of 11% on the June quarter. Severe monsoonal rain in Thailand impacted production at Chatree, cutting access roads and restricting pit access, although operations continued throughout the period. At Challenger, production was impacted by a water shortage resulting from a water bore failure that restricted ore treatment through the process plant.

Group operating cash costs were US$815 per ounce over the September quarter, an improvement of 4% over the June quarter despite the reduced production levels at both mines.

Gold sales in the quarter of 33,330 ounces at US$1,699 per ounce maintained a strong operating cash margin.

THAILAND

Chatree Gold Mine

Despite the worst monsoonal rains and flooding in Thailand for 50 years, operations at Chatree continued. However, the head grade was lower at 0.8g/t gold as mining was restricted to lower grade areas of A Hill and access to high grade ore in C North was delayed due to disruptions in mining of the overburden. Flood waters, up to one metre deep in areas, surrounding the mine also had an impact by cutting access roads to the mine site. As an overall consequence, Chatree gold production of 14,428 ounces in the September quarter was down 11% compared to the June quarter.

Total costs for the September quarter were US$608 per ounce (June: US$583 per ounce) including Thai royalties of US$171 per ounce (June: US$141 per ounce). Underlying costs reflect the grade of ore processed and impacts from the monsoon. However, they are expected to improve as higher grade ore becomes available and is processed later in the year.

Chatree continues to demonstrate world’s best practice for safety with 18.6 million man hours (over 8 years) worked, to 30 September 2011, since the last and only Lost Time Incident.

Plant Expansion

The Chatree North Expansion Project is now in the final commissioning phase despite the high rainfall that delayed some electrical work. Design and fabrication work is complete and ongoing activities relate to the completion of noncritical items. The capital cost is expected to be more than 5% under budget.

AUSTRALIA

Challenger Gold Mine, South Australia

Gold production at Challenger of 18,564 ounces was 10% lower than the June quarter, a result of a failed process water bore, combined with extra requirements for water to construct the Tailings Storage Facility No 2 (TSF2) stage 2 lift. These factors lowered treated tonnes of ore through the plant over the quarter but particularly in the month of September where throughput was reduced by 36%. Full throughput resumed in early October.

While average ore grade to the mill for the quarter was 4.41g/t gold, the reconciled ore grade for September increased to 5.44g/t gold, reflecting an improvement in stope extraction and minimisation of mining dilution. This trend has continued in October.

Total cash operating costs for the quarter were US$975 per ounce (June: US$1,059 per ounce), including royalties of US$76 per ounce (June: US$59 per ounce), an improvement of 8% on the June quarter.

Mining activities through the 79 Fault on the 280 level ore drives show that high grade ore continues up to the fault structure and can be accessed without significant difficulty. In addition, drilling below the 79 Fault has returned high grade drill intercepts including 2 metres at 241g/t gold.

Bowdens Silver Project, New South Wales

In September 2011, Kingsgate completed the purchase of the Bowdens advanced silver project.

A resource estimate in accordance with JORC reporting requirements was completed. The resource estimate is 99 million ounces of contained silver (131 million ounces on a silver equivalent basis “AgEq” including by-products) using a 30g/t AgEq cut-off grade.

Kingsgate has commenced a Bankable Feasibility Study, building on the previously completed preliminary feasibility work. A detailed exploration programme to define the mineralisation has been planned and will be undertaken over the next 6-9 months.

CHILE

Updated Mineral Resources for the Nueva Esperanza project (formerly known as Arqueros) have been estimated for all three deposits; namely Arqueros, Chimberos and Teterita. Total Mineral Resources (Indicated and Inferred) at a 0.5g/t gold equivalent cut-off grade are: 28.5 million tonnes at 0.25g/t gold and 78g/t silver (229,000 ounces gold and 71.3 million