As announced on 13 March 2014 Kingsgate Consolidated Limited (ASX: KCN) advised that the Board has commenced a succession plan for Managing Director and Chief Executive Officer (CEO), Gavin Thomas, after nearly 10 years in the position.
Gavin has been fighting a serious illness over the past 18 months and has decided to relinquish his position with immediate effect to focus on his health.
The Company wishes to acknowledge the outstanding contribution Gavin has made to Kingsgate during his tenure and particularly his passion and unending drive for the benefit of the Company and its shareholders. Gavin has taken Kingsgate from a single mine operation to a multi-national entity with two operating mines and two advanced development projects during that time.
The Company is progressing towards the appointment of a new CEO and the Executive Committee of Kingsgate will continue to execute the activities of the Company in anticipation of the appointment.
Kingsgate Consolidated Limited
Kingsgate Consolidated Limited (ASX: KCN) wishes to advise that business is continuing as usual at its Chatree operations in Thailand following the move by the army to take control of the administration of the country on Wednesday 22 May. This followed the imposition of martial law on Tuesday 20 May 2014 which was implemented after several months of anti-government protests in Bangkok.
Kingsgate has been investing and operating in Thailand for over 15 years and the mine has not lost one day of production due to similar issues over that time. Travel to Thailand, including the capital Bangkok and the Chatree mine approximately 250km north of Bangkok, continues around the imposed curfew of 10.00pm to 5.00am.
Kingsgate would also like to confirm that the previously announced annual gold production guidance remains unchanged at 190,000 to 210,000 ounces, with both Chatree and Challenger performing inline with expectations.
Managing Director and CEO
Kingsgate Consolidated Limited
Kingsgate had a solid March quarter. Group gold production for the quarter of 48,725 ounces at a total cash cost of US$977/ounce was in-line with expectations, with production on track to achieve the guidance range for the year.
This result reflects continued focus on operating efficiencies and cost reduction initiatives given the current volatile operating environment for gold producers.
Gold sales for the quarter were 48,216 ounces at an average gold price received of US$1,274/ounce. The Group All-in Sustaining Cash Cost was US$1,126/ounce for the quarter.
- Solid Group operating performance with quarterly gold production in-line with expectations at 48,725 ounces.
- Strong June quarter expected to deliver full year guidance.??Chatree produced 31,609 ounces of gold at US$805/ounce and Challenger produced 17,116 ounces of gold at US$1,293/ounce for the quarter.
- Balance sheet strengthened with institutional placement and accelerated entitlement issue completed raising A$28.5 million (before costs). Retail component completed in April raising an additional A$30.9 million (before costs).
- The Definitive Feasibility Study (DFS) for Nueva Esperanza confirms robust project economics.
- CEO search well advanced.
The Board of Kingsgate Consolidated Limited ABN 42 000 837 472 (“Company”) has resolved to cancel the general meeting scheduled to be held on 9 May 2014 (“General Meeting”), in accordance with rule 9.7 of the constitution of the Company.
The General Meeting was called for shareholders to consider and approve the following 3 resolutions:
- Resolution 1 – to approve and ratify under ASX Listing Rule 7.4 a prior issue of 11,774,572 ordinary shares to Investec Bank (Australia) Limited on 19 December 2013;
- Resolution 2 – to approve and ratify under ASX Listing Rule 7.4 a prior issue of 14,661,220 ordinary shares to domestic and international institutional investors on 28 March 2014; and
- Resolution 3 – to approve, if necessary, the issue up to 11,100,000 ordinary shares to RCA VI GP Ltd (an entity which forms part of the Resource Capital Funds (“RCF”) group) in the event that RCF’s commitment to subscribe for ordinary shares in the Company was not fulfilled by RCF partially sub-underwriting the recent Retail Entitlement Offer.
The Board has determined that:
- due to the success of the recent capital raising, the Company does not need to refresh its placement capacity at this point in time, and accordingly it is not necessary to put Resolution 1 and Resolution 2 to shareholders; and
- as RCF’s commitment was fulfilled under its sub-underwriting of the Retail Entitlement Offer, it is not necessary to put Resolution 3 to shareholders.
Accordingly, the Board has determined that in order to avoid costs and disruption associated with holding the General Meeting, it is in the best interest of the Company and shareholders to cancel the General Meeting.
- Proved and Probable ore reserves total 17.1 million tonnes at 97 g/t silver and 0.27 g/t gold (113 g/t silver equivalent (AgEq) or 1.89 g/t gold equivalent (AuEq))
- Average annual production of 7,500,000 oz of AgEq (approximately 125,000 oz AuEq)
- Initial +6 year mine life with significant potential for extensions
- Capital costs of US$140 million including a US$10 million contingency
- Average cash operating costs of US$11.44/oz AgEq or US$687/oz AuEq (incl. royalties)
- First production is targeted in first half of 2016 calendar year
Kingsgate is currently working with its consultants to finalise environmental approvals. This process is well advanced and final approvals are expected within six months.
The DFS also provides the basis to assess the optimum financing strategy for the project. Discussions are underway with potential debt financiers with several financing options being considered.
Gavin Thomas, Kingsgate’s Managing Director and CEO said, “We are delighted by the results of the feasibility study, which support our long held belief in the underlying quality and inherent value of the Nueva Esperanza project.
The final Nueva Esperanza Definitive Feasibility Study is a result of over three years continuous evaluation and several iterations to determine the optimal process route delivering the most financially robust outcome.”
“We remain optimistic in the mineral endowment of the immediate vicinity, which has the potential to provide Kingsgate with a long, sustainable operating presence in this region.”
“The decision to begin construction is anticipated in the second half of this year and will put Kingsgate back on a growth path and validate the underlying value of the project acquisition”, he said.
Kingsgate Consolidated Limited (ASX: KCN) wishes to advise that Managing Director and Chief Executive Officer, Gavin Thomas, will be stepping down from that role, effective June 2014, after nearly ten years in the position, and after some recent health issues. The Company has commenced a succession process for the position of Chief Executive Officer.
To maintain a high level of corporate continuity, Mr Thomas will remain on the Board of Kingsgate as an Executive Director, to assist the transition to the new leadership.
The Chairman, Ross Smyth-Kirk said, “Gavin’s contribution to Kingsgate and the wider industry has been extraordinary, in both dedication and discovery. Gavin’s legacy to the mining industry goes well beyond his time at Kingsgate, with more than 40 years’ operating throughout the world.
Under Gavin’s leadership, Kingsgate has evolved from a single operation in Thailand into a geographically diversified asset base that is well placed to enable the Company to grow into the future.”
In addition, with the Nueva Esperanza Definitive Feasibility Study close to completion, it heralds an exciting new time for Kingsgate that allows a new Chief Executive Officer to be part of the development, construction and commissioning of this important project.
Mr Thomas said “The Company’s operating and development portfolio is well placed to support the ongoing success of Kingsgate, and preparations are underway on development timetables to maximise the underlying value of those assets.
I am confident that there will be a smooth transition in the Company leadership team, and I look forward to continuing to make a valuable contribution.”