Senior Management Changes
The Board of Kingsgate Consolidated (ASX:KCN) (“Kingsgate” or the “Company”) has accepted the resignation of its Chief Executive Officer, Mr Greg Foulis.
The Board would like to thank Mr Foulis for his efforts during his tenure in the role, in particular overseeing the strong performance from the Chatree Gold Mine after the Thai Government prematurely closed the mine in December 2016.
The Board would also like to acknowledge Greg’s efforts in advancing the flagship Nueva Esperanza Gold-Silver Project in Chile.
As an interim measure Mr Ross Smyth-Kirk will assume the role of Executive Chairman.
Mr Smyth-Kirk said “We wish Greg all the very best in his future endeavours and Kingsgate remains well placed to deal with the many challenges that lie ahead.”
Kingsgate Consolidated Limited
Quarterly Report for the period ending 31 March 2017
- Kingsgate continues to progress its 100% owned Nueva Esperanza Project, with work continuing on a seasonal exploration program as well as permitting and feasibility related activities.
- Exploration drilling, comprising a total of 7,756 metres (43 holes) of Reverse Circulation (RC) drilling and 2,322 metres (8 holes) of diamond drilling, has been completed at Nueva Esperanza during the field season that commenced at the beginning of September 2016.
- To date, there have been encouraging drill intercepts from both the Huantajaya and Carachitas exploration targets. (See ASX:KCN release titled “Chile – Drill Results from District Exploration”, dated 27 February 2017).
- Drilling is in progress on exciting new geophysical targets.
- Some large-scale mergers and acquisitions in the Maricunga Belt in March 2017 have firmly cemented its claim as a highly prospective region.
- The Chatree Gold Mine was placed on Care and Maintenance following cessation of production under Thai Government orders on 31 December 2016.
- On 3 April 2017, Kingsgate advised that it will be seeking a range of remedies, including compensation, from the Government of Thailand for the measures taken against the Chatree Gold Mine in violation of the Thai-Australia Free Trade Agreement (“TAFTA”).
- As a first step, Kingsgate notified the Prime Minister of Thailand that it wishes to engage in consultations as required under TAFTA.
- TAFTA consultations can take up to three months and, failing a mutual outcome, international arbitration proceedings may follow.
- Kingsgate is well funded to meet its planned calendar 2017 expenditures in Chile and Thailand.
- Cash at 31 March 2017 totaled A$28.7 million ($0.13 per share).
- Corporate debt at 31 March 2017 is zero following the repayment of an A$5 million corporate bank debt facility on 3 February 2017. Kingsgate retains a $10 million Thai related preference share liability classified as debt.
Kingsgate Commences Claim Against Thailand
Kingsgate Consolidated Limited (ASX:KCN) (Kingsgate or the Company) advises that it will be seeking a range of remedies, including compensation, from the Thai Government for the measures taken against the Chatree Gold Mine in violation of the Australia – Thailand Free Trade Agreement (“TAFTA”).
As a first step, Kingsgate has today notified the Prime Minister of the Kingdom of Thailand that it wishes to engage in consultations as required under TAFTA.
Over the past 11 months, Kingsgate has made sustained, good faith efforts to engage with the Thai Government in relation to the measures against the Chatree Gold Mine that ultimately resulted in its premature closure on 31 December 2016.
These efforts included numerous unanswered requests for meetings with Thailand’s Prime Minister and members of his Cabinet. Regrettably, Kingsgate has now reached a position where it believes that the only option to resolve the situation is to exercise its rights as a protected Australian investor under TAFTA.
TAFTA was signed in 2004 between Thailand and Australia to promote and improve the environment for bilateral services, trade and investment. TAFTA entered into force in 2005.
TAFTA contains a range of provisions specifically relating to investment protection. Amongst other things, these provisions guarantee certain rights to Australian investors in Thailand, including the right to seek impartial resolution of disputes with the Thai Government relating to covered investments by way of arbitration before an international tribunal.
The TAFTA consultations can take up to three months, and failing a mutual outcome, any international arbitration proceedings that may follow under TAFTA can take an undetermined amount of time to resolve, and could involve significant expenditure by Kingsgate. Kingsgate is currently investigating a range of funding options for the potential TAFTA arbitration process if it should proceed. Furthermore, it should be noted that the outcome of such consultations and any arbitral proceedings is uncertain.
Chief Executive Officer
Kingsgate Consolidated Limited
ASX APPENDIX 4D and HALF-YEAR FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2016
Kingsgate Consolidated Limited present their ASX Appendix 4D and Half Year Financial Statements for the six months ended 31 December 2016.
Chile – Drill Results from District Exploration
Kingsgate Consolidated (ASX:KCN) (“Kingsgate” or the “Company) is pleased to provide an update on exploration activities at its 100% owned Nueva Esperanza Precious Metals Project in Chile.
(“Nueva”) Nueva is a feasibility stage development project with a resource base of approximately 1.9 million ounces gold equivalent1. Kingsgate is moving forward with feasibility and permitting activities in 2017 and in parallel is pursuing a systematic exploration program covering the highly prospective 45km2 alteration footprint (See Figure 1).
Two emerging exploration targets of interest are Huantajaya and Carachitas, both of which highlight the potential for gold discoveries outside the existing resource envelopes.
Huantajaya Target: This target is located approximately 600 metres southwest of the Chimberos Gold deposit (See Figure 2).
Three diamond drill holes totalling 525.5 metres were completed in January 2017 testing the depth projection of outcropping zones of mineralised breccias. All three holes intercepted the targeted silicified and oxidised breccia at depth with the following intercepts:
- Hole KDD-1 intercepted 24.0 metres grading 1.81 g/t Au and 86.24 g/t Ag or 3.25 g/tAuEq602 from 101 metres;
- Hole KDD-2 intercepted 11.0 metres grading 2.07 g/t Au and 57.03 g/t Ag or 3.02 g/tAuEq60 from 153 metres; and,
- Hole KDD-3 intercepted 3.0 metres grading 3.33 g/t Au and 31.48 g/t Ag or 3.85 g/tAuEq60 from 146 metres.
Carachitas Target: Carachitas is located approximately 2.3 kilometres southeast of the Arqueros deposit (See Figure 3). The target footprint was significantly expanded in late 2016 by the innovative property-wide bedrock Air-Blast drilling campaign (~800 holes property-wide) undertaken by Kingsgate. This campaign returned a highly anomalous bedrock sample of 8.83 g/t Au and 27.90 g/t Ag located some 450 metres west of earlier scout-drilling.
Ten shallow RC holes totalling 1,062.10 metres have now been completed between the anomalous Air-Blast sample and the earlier scout RC drilling. Results for the first, westernmost RC hole (KRC-23) have been received, and the highlights of which are noted below:
- Hole KRC-23 returned 10 metres grading 6.66 g/t Au and 31.81 g/t Ag or 7.13 g/tAuEq60 from 12 metres. (The interval is oxidised)
Carachitas was historically highlighted by limited RC scout-drilling in 2015, which returned an intercept of 38 metres grading 2.30 g/t Au and 22.0 g/t Ag (Hole ECCR-02) from a depth of 14 metres. (See ASX:KCN released titled “New Gold Discovery at Nueva Esperanza Project, Chile” dated 15 December 2015)
Results from the remaining nine RC holes are pending. Once all results have been received additional holes will be planned for the area.
Kingsgate has planned for a budget of ~US$5 million for exploration at Nueva during 2017.
Since mid-2016, the experienced Chile exploration team has stepped back from the three defined deposits that are the foundation for feasibility and focused on broader property-wide exploration. All historical exploration data in Kingsgate’s possession has now been systematically compiled into one GIS database which is driving on-going drill-target generation.
The geological models being applied have evolved, with added exploration focus around the margins of large and barren dacitic flow-domes that occur in the district and elsewhere in the northern Maricunga. Exploration has now been prioritised around the peripheries of the numerous dacitic domes on the property, in particular in areas that present strong hydrothermal alteration and accompanying anomalous geochemistry.
Geophysical Survey: A combined IP/Resistivity survey was conducted in January 2017 over the core of the Nueva property. Approximately 40 line kilometres were surveyed along 9 east-west lines spaced at 500 metres.
The survey has highlighted a number of highly resistive features, consistent with silicic alteration, some of which remain untested by drilling to date.
Maricunga Generative Program: Strategically, Kingsgate is building its portfolio in Chile. Kingsgate has six licence areas under application located to the northeast of Nueva in the highly prospective Maricunga Belt, and has separate to Nueva, a regional prospecting programme that started in early January 2017.
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