Kingsgate Consolidated Ltd (ASX: KCN) is pleased to announce the initial results from the current RC drilling program at its Nueva Esperanza project in Chile. The new drilling has intersected exceptional gold and silver mineralisation to the west of the existing Chimberos Pit, outside the current resource boundary.

The following intersection in drillhole ECHR-25 is one of the best intersections ever recorded by Kingsgate in any of its operations and projects with:

• 170m @ 2.79g/t gold & 82g/t silver (4.16g/t AuEq60) from 58m, including 36m @ 8.63g/t gold & 177g/t silver (11.57g/t AuEq60) from 168m.

The hole, drilled to follow-up ECHR-19, intersected a broad zone of intensely silicified breccia which, together with the results from ECHR-19, suggests the potential for a high grade feeder structure as shown in Figure 1. Individual one-metre intervals for the bonanza zone in ECHR-25, which are shown in Table 2, indicate the intensity of mineralisation. Further significant results currently available include:

• 35m @ 3.40g/t gold & 33g/t silver (3.95g/t AuEq60) from 204m including 6m @ 15.36g/t gold and 52g/t silver (16.23g/t AuEq60) from 218m in ECHR-19;
• 19m @ 4.16g/t gold & 77g/t silver (5.45g/t AuEq60) from 195m in ECHR-18;
• 17m @ 2.63g/t gold & 70g/t silver (3.80g/t AuEq60) from 153m in ECHR-19;
• 23m @ 0.18g/t gold & 274g/t silver (4.75g/t AuEq60) from 71m in ECHR-21; and,
• 32m @ 1.97g/t gold & 75g/t silver (3.22g/t AuEq60) from 173m in ECHR-29.

Thirteen out of the nineteen holes drilled so far in the current program have returned significant gold, silver and silver with gold intersections as tabled in this release.

The mineralisation identified from this drill program extends for approximately 300 metres to the west of the current Chimberos Pit, is located outside the current resource boundary and remains open at depth and along strike. Further drilling to follow up these intersections is underway and a second drill rig has been diverted to this campaign. A ground geophysical orientation survey is also underway in order to determine the most appropriate technique for identifying these targets elsewhere within the Nueva Esperanza lease area.

The geological significance of these results is still being assessed within the context of the mineralisation in the Chimberos Pit and nearby satellite prospects.

Kingsgate’s Executive Chairman, Mr. Ross Smyth-Kirk said, “These are spectacular results from this drilling program and we are satisfied that our confidence in the potential for significant growth at Nueva Esperanza is starting to be realised.”

“It is clear that the gold potential of Nueva Esperanza is growing and could significantly improve the project’s already robust economics, and;

“Kingsgate is committed to exploring this emerging and highly prospective property with the recent drilling results pointing to a potential project “game changer”.

Ross Smyth-Kirk
Executive Chairman
Kingsgate Consolidated Limited

To view the full version of this release, including details of the drilling results, please download the PDF by clicking the icon above.

17 October 2014

Kingsgate Consolidated Limited (ASX: KCN) wishes to advise that it has completed an annual update to its Mineral Resources and Ore Reserves for the period ending 30 June 2014. The update takes in to account mining depletion and current economic and operational assumptions. Reflecting the importance of silver and other economic by-products to Kingsgate, Mineral Resources and Ore Reserves are quoted on both a gold and silver only basis and a gold equivalent (AuEq) basis.

Group Mineral Resources

Group Mineral Resources (inclusive of Ore Reserves) were estimated at 4.73 million ounces of gold and 250.0 million ounces of silver (300.7Mt at 0.49g/t Au and 25.9g/t Ag). This equates to a reduction of 0.29 million ounces (~6%) for gold and an increase of 4.0 million ounces (~2%) for silver compared to the 30 June 2013 estimate.

On a gold equivalent basis, Group Mineral Resources were estimated at 10.34 million ounces gold equivalent (300.7Mt at 1.07g/t AuEq) representing a decrease of 0.30 million ounces gold equivalent (~3%) compared to the 30 June 2013 estimate. Approximately 70% of the decrease relates to mining depletion at Chatree and Challenger, the other 30% relates to a reduction from Challenger mostly due to the removal of non-Challenger West resources.

Group Ore Reserves

Group Ore Reserves are estimated at 1.69 million ounces of gold and 69.7 million ounces of silver (72.3Mt at 0.73g/t Au and 30.0g/t Ag). This represents a decrease of 0.23 million ounces (~12%) of gold and an increase of 52.7 million ounces (~410%) of silver compared to the 30 June 2013 estimate. The substantial increase in silver is due to the addition of Ore Reserves from the Nueva Esperanza Project in Chile. The decrease in gold mostly relates to mining depletion from Chatree and Challenger (~92%) with the remainder due to updated pit designs using lower metal prices. The decrease was partially offset by the addition of gold reserves from Nueva Esperanza.

On a gold equivalent basis, Group Ore Reserves are estimated at 2.72 million ounces gold equivalent (72.3Mt at 1.17g/t AuEq). This represents an increase of 0.64 million ounces (~31%) gold equivalent compared to the 30 June 2013 estimate. This increase is principally due to the addition of gold equivalent Ore Reserves from Nueva Esperanza from the conversion of 52.7 million ounces of silver.

Chatree Gold Mine, Thailand

Chatree Mineral Resources are estimated at 3.84 million ounces of gold (181.3Mt at 0.66g/t Au and 6.46g/t Ag) compared to 4.03 million ounces of gold in April 2013. This decrease is in line with mining depletion for the period.

Chatree Ore Reserves are estimated at 1.40 million ounces gold (54.4Mt at 0.80g/t Au and 9.25g/t Ag) compared to 1.82 million ounces gold in 2013, mainly due to mining depletion and pit reoptimisation at lower gold and silver prices.

Challenger Gold Mine, South Australia

Challenger Mineral Resources are now estimated at 0.64 million ounces of gold (2.5Mt at 7.80g/t Au). This compares to 0.74 million ounces of gold in June 2013 and represents a decrease in line with mining depletion for the period and the removal of non-Challenger West resources, partly offset by an increase in the Mineral Resource at Challenger West.

The Ore Reserve estimate for Challenger increased by 0.06 million ounces (~60%) to 0.16 million ounces gold (0.84Mt at 5.77g/t Au) compared to 0.10 million ounces gold in 2013. The increase is principally a result of additional conversion to reserves at Challenger West.

Nueva Esperanza Project, Chile

The Nueva Esperanza Mineral Resource estimate has not changed from 30 June 2013. Mineral Resources are estimated at 1.56 million ounces of gold equivalent (28.9Mt at 1.67g/t AuEq60).

Ore Reserves were estimated for the first time at Nueva Esperanza as part of a feasibility study that was announced on ASX on 17 March 2014. Ore Reserves are estimated at 1.04 million ounces gold equivalent (17.1Mt at1.89g/t AuEq60).

Bowdens Silver, Lead & Zinc Project, New South Wales

The Bowdens Mineral Resource estimate has not changed from that previously reported (ASX announcement, 18 October 2013) of 88.0Mt at 47.4g/t Ag, 0.29g/t Pb and 0.39g/t Zn for a combined 182 million ounces silver equivalent (AgEq).

The Mineral Resource and Ore Reserve estimates have been reported according to the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code, 2012).

Tim Benfield
Acting CEO
Kingsgate Consolidated Limited