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Key points -

• Group quarterly gold production of 47,509 ounces at a totalcash cost of US$1,051/oz.

• Chatree production in-line with December quarter whileChallenger transitions from a bias towards capitaldevelopment to the mining of stopes.

• Reviews of project expenditure and operating plans are underway following the recent volatility in metal prices.

• Significant exploration results from A Pit and Q Prospect at Chatree continue to highlight the strong resource upside.

• Column leach testing commenced on-site for the potential initial heap leach stage at Nueva Esperanza.

• The Director General’s Requirements for the Bowdens EIS were received and were in line with expectations.

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Financial Results – Half Year to 31 December 2012

• EBITDA (before significant items)* of $65.0 million (2011, $69.6 million).

• Net profit before tax and significant items of $27.2 million (2011, $38.3 million).

• Net profit after tax of $8.1 million (2011, $38.9 million). This was impacted by a noncashwrite down $14.9 million relating to the sale of greenfield explorationproperties and a write back of the balance of capitalised borrowing fees of $1.8 million following the Akara re‐financing.

• An interim dividend of 5 cents per share, unfranked, was declared. The dividendrecord date is 15 March 2013 with payment on 12 April 2013.

Kingsgate’s financial results for the half year reflect the transitional nature of the 2013 financial year with Chatree finally receiving its metallurgical licence for Plant 2 in October and Challenger undergoing an accelerated development program during the December half year to set the mine up for a sustainable future.

The result reflected higher revenue from increased gold sales volumes of 91,480 ounces (up 10% from 2011) with a higher contribution from Chatree offset by lower production from Challenger and a lower realised average gold price of US$1,676 per ounce (2011, US$1,687). Cost of sales increased to $119.6 million (2011, $95.0 million) mostly reflecting the increased treatment costs with the addition of Plant 2 at Chatree and higher depreciation and amortisation charges.

At Nueva Esperanza in Chile, detailed feasibility, design and approval work continued during the period. The feasibility study has been expanded to investigate a complementary heap leach operation and on‐site power options.

At Bowdens in New South Wales, the initial phase of the drilling program for metallurgical and resource evaluation was completed and resulted in a 40% increase in the Mineral Resources.

In late December documentation was submitted to the NSW Government to enable the Director‐General’s Requirements for an Environmental Impact Statement (EIS) to be prepared for the project.

Outlook
The outlook for the Group is for a stronger production performance in the second half of fiscal year 2013. Chatree Plant 2 will be operating for a full six months and Challenger will benefit from the accelerated development program.

Group gold production for the full year to 30 June 2013 is expected to be in the range of 200,000 to 220,000 ounces. This includes 120,000 to 130,000 ounces from Chatree and between 80,000 to 90,000 ounces from Challenger. Kingsgate’s two advanced development projects are both expected to progress through feasibility studies during the second half of the financial year.
Gavin Thomas
Managing Director and CEO
Kingsgate Consolidated Limited

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24.0 metres @ 5.6g/t gold from surface, including 8 metres @ 11.3g/t gold from 14 metres, in reverse circulation drill hole 4715RC; and,
34.0 metres @ 1.7g/t gold from surface in reverse circulation drill hole 4718RC.

The drilling at Q Prospect, which is immediately to the north of A Pit, commenced in the middle of January and is part of the overall strategic drilling program, previously announced, that is aimed at increasing both resources and reserves within the mining leases at Chatree. The new results follow closely behind the initial program that was focused on increasing resources at the A Pit where high grade mineralisation was reported last week.

Encouraged by the results at both A Pit and Q Prospect, exploration will be intensified with additional drill rigs employed to test areas of mineralisation adjacent to historical open pits which were previously explored and exploited at significantly lower gold prices. Consequently the mineralisation remains open below the majority of Chatree’s current and historical pits.

Kingsgate Managing Director Gavin Thomas said “The discovery of new high grade gold mineralisation at Q Prospect continues to support our broader view of the prospectivity that remains within the mining leases at Chatree.”

“Importantly, these recent results from Q prospect are from the surface and provide an opportunity to access higher grade mineralisation for processing at Chatree within the next 12 months”, he said.

The full table of current drilling results from Q Prospect are included in the appendix.

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Kingsgate Consolidated Limited (ASX: KCN) is pleased to report that recent drilling at its’ Chatree gold mine in Thailand has intersected a broad zone of high grade gold mineralisation to the north of A Pit.
The results include an intersection of 49.4* metres @ 4.3g/t gold from 227 metres, including a high grade interval of 29.8 metres @ 6.25g/t gold from 246 metres, in diamond drillhole 07559DD.
The mineralisation confirms the continuation of the A East structure north of the existing pit and current resource model. The drilling is part of a strategic exploration program within the mining leases at Chatree that commenced in late 2012. The initial program of 16 holes is primarily focussed within the mining leases in, and around, the A Pit and designed to investigate a number of specific areas that have the potential to upgrade both ore reserves and mineral resources at Chatree and include:

• Upgrading Inferred Resources for optimal long term mine planning;

• Targeting extensions to currently known areas of mineralisation;

• Exploring deeper higher grade structures that may have the potential to extend the pit deeper or for underground mining;

Kingsgate Managing Director Gavin Thomas said “We are encouraged by the early results from our strategic drilling program at Chatree. These results have successfully renewed the exploration potential within the immediate areas surrounding the current pit design at A Pit and confirm the significant potential to discover new resources within the current mining leases at Chatree.”
“They support our long-held confidence in the world class gold system which has already produced over 1.4 million ounces of gold and in the longer term future potential of the Chatree mine beyond the current reserve and resource base”, he said.
The full table of current drilling results are included in the appendix and include the following significant gold intersections;15.0 metres @ 4.34g/t gold from 197 metres in hole 07564DD, 4.1 metres @ 39.3g/ gold from 275 metres in hole 07565DD, 11.0 metres @ 3.65g/t gold from 201 metres in hole 07554RD and 9.0 metres @ 4.2 g/t gold from 89 metres in hole 07567DD.
The initial program is to be followed by a resource conversion drilling program to be completed across the entire mining lease areas over the following 12 to18 months.

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Key points:

• Group quarterly gold production of 46,149 ounces at a
  total cash cost of US$975/oz.
• Chatree Plant 2 offline until metallurgical licence granted
  in early October. Continued underground development
  focus at Challenger.
• Record quarterly development at Challenger of 1,833
  metres shows initiatives are working.
• Significant exploration results at Chatree and Challenger
  continue to highlight the resource upside at both
  operations.
• The Nueva Esperanza feasibility study has been expanded
  to incorporate a complementary heap leach operation.
• Bowdens resource increased by 40% to 182 million
  ounces, silver equivalent (AgEq*). An application for the
  Director Generals Requirements for the Environmental
  Impact Study was submitted to the NSW Government.

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