Update on Chatree Gold Mine Metallurgical Licence
Update on Chatree Gold Mine Metallurgical Licence
Kingsgate Consolidated’s (ASX:KCN) (“Kingsgate” or the “Company”) Thai controlled subsidiary, Akara Resources Public Company Limited (“Akara”), received a letter titled “Renewal of the Metallurgical Processing Licence No. 1/2551” on 1 December 2016, from the Thai Department of Primary Industries and Mines (“DPIM”).
The letter is in response to Akara’s application to renew the Metallurgical Licence which was submitted on 28 October 2016. (See ASX:KCN release dated 28 October 2016)
The letter raised the following points:
- A new Committee established last month called the National Mineral Management Policy Committee (“NMMPC”) to be chaired by the Prime Minister or Deputy Prime Minister is in the process of developing a new Mineral Management Policy; and
- The NMMPC is now considering the Metallurgical Licence renewal for the Chatree Gold Mine in line with the new Mineral Management Policy.
It is not known when the new Mineral Management Policy will be finalised, or how it might affect Akara’s Metallurgical Licence renewal.
Kingsgate is now urgently seeking clarity in relation to this letter, and with 29 days to go until the current Metallurgical Licence expires, appropriate arrangements have been made for the Chatree Gold Mine to transition to care and maintenance on 1 January 2017.
Regrettably, in light of the circumstances, stopping operations will result in the loss of over 1,000 direct and contractor jobs. Kingsgate continues to pursue remedies to the premature closure of the Chatree Gold Mine.
Greg Foulis
Chief Executive Officer
Kingsgate Consolidated Limited
2016 AGM – Chairman’s Address to Shareholders
2016 AGM – Chairman’s Address to Shareholders
Since the announcement of the unprecedented forced closure of the Chatree Mine in May your Board and Management have been totally focused on maximising our gold production up to 31st December. To date we are well on schedule to be in a position to generate enough cash to completely repay our debt before the end of the year and to cover all our known obligations.
In fact I can report today that we are now already net debt free and on best estimations our cash position at 31st December should well exceed the $18 million estimated in our recently released Target Statement for the failed takeover bid.
This is a scenario that few outside the Company would have thought possible in May and is a testament to the professionalism of our Management and the forthright leadership from your Board.
We have already announced that production for October was 15,461 ounces of gold and we are well on the way to more than achieving our budgeted production for November of 17,500 ounces. Again, we believe production in the quarter should even exceed the top end of our current guidance.
At the same time both Board and Management have been working tirelessly over the last 6 months to convince the Thai government that their actions in forcibly closing the mine is not only unfair but counter to the interests of the local community and the Thai economy as a whole.
They have been unable to prove that any of the various accusations against us have any substance and there has even been an apparent admission that they are aware that they may not have any legal reason to do what they have done.
We have had great support from the Australian Government, in particular the Trade Minister, the Right Honourable Steve Ciobo, the Department of Foreign Affairs and Trade, the Ambassador to Thailand and, apart from our representations in Thailand, we have pushed our case to the Thai Ambassador to Australia in Canberra.
In the meantime, because we don’t know anything to the contrary, we have to assume that the mine will cease operating on 31st December. We have already had to modify operations, make do with equipment that normally would have been replaced and been forced to lay-off staff over a period, with the remainder to be given notice next week. At this stage, even if there is some last minute reprieve, it is likely that the operation would go onto a care and maintenance basis from early January.
We are continuing to look at all the legal and other rights available to us with regard to our situation, but because of the sensitive nature of much of this, I do not propose to elaborate any further at this stage. Suffice to say, all options are open at the moment.
Meanwhile, the Nueva Esperanza Silver/Gold Project in Chile goes from strength to strength as we move towards conclusion of the feasibility study. A planned exploration programme over the next few months has been announced and is underway, and we await with interest the results.
Nueva Esperanza is shaping up as one of the most attractive new precious metals mining projects in South America, a fact reinforced by the number of industry players and financiers contacting us with a view to participating in some way in the project.
We have also announced that we have under application quite a number of prospective exploration areas in fairly near vicinity of the current project. This is part of our strategic plans to expand our Chilean footprint beyond Nueva Esperanza.
Your Company has a proud record of looking after Shareholders. We paid our first dividend after only 7 months of production –almost unheard of at the time. We were a leader in changing the concept of a mining company, through dividends, meaningfully sharing in the good times with its Shareholders, a concept now seemingly accepted in mining circles.
Despite the false claims we built a world standard mining complex in Thailand that has been viewed for many years as the gold standard for mining companies in South East Asia. Those of you who have visited the site can attest to this.
I sincerely want to thank all of those many loyal long term Shareholders, who have shared with us the good times and the bad, who have contacted us in recent months with words of encouragement and support.
I do want to apologise to those who were inconvenienced by the long suspension of trading, but I truly believe that, because of the degree of uncertainties, it was in the best interests of Shareholders. If it wasn’t for the recent ill-fated frivolous takeover attempt it is more than probable that the shares would still be suspended. Apart from the fact that the shares can be purchased at historically low prices I am not sure that you as shareholders are particularly advantaged by current levels of trading.
I cannot let this opportunity go by without congratulating Gerry Harvey on his recent criticism of the iniquitous practice of short- selling in our markets. It is a pity more people don’t speak up and point out the harm it is doing to the integrity of markets.
I can absolutely reassure you that I, and the Board, are determined to restore real value to your shareholding. I thank the Board and Management for their efforts over this last demanding year and hope that the actions now in place will result in rewarding you for the confidence you have placed in us.
Ross Smyth-Kirk
Chairman
Resignation of Peter McAleer as Non-Executive Director
Resignation of Peter McAleer as Non-Executive Director
Kingsgate Consolidated (ASX:KCN) (“Kingsgate” or the “Company”) has today received the resignation of Mr Peter McAleer, a Non-Executive Director from the Kingsgate Board. The Chairman of Kingsgate, Mr Ross Smyth-Kirk, on behalf of the Board acknowledges the longstanding and valuable contribution Peter has made to Kingsgate since his appointment to the Board in 2000.
In particular, Peter has extensive knowledge and experience with precious metals operations in South America. More recently, Peter has been on a leave of absence since February 2016 due to ill health. Both the Kingsgate Board and Management wish Peter a speedy recovery and success in his future endeavours.
Greg Foulis
Chief Executive Officer
Update on October Production and Debt Repayment
Update on October Production and Debt Repayment
Kingsgate Consolidated’s (ASX:KCN) (“Kingsgate” or the “Company”) Chatree Gold Mine (“Chatree”) delivered strong production in October 2016, through continued access to higher grades, which is consistent with the previously stated projected operating performance in the Company’s Target’s Statement in response to the unsolicited takeover offer from Northern Gulf Petroleum International Pte. Ltd. (“NGPI).
Kingsgate further advises that the unsolicited opportunistic takeover bid from NGPI was unsuccessful, with approximately 0.2% of shareholders accepting the offer.
A total of 15,461 ounces of gold was produced during October, with 13,956 ounces of gold poured, and 17,504 ounces of gold sold at an average price of US$1,265 per ounce. This strong production follows on from strong September production, which saw the highest ever gold pour for a single month since Chatree commenced operations more than 15 years ago.
Chatree remains on track to achieve the guidance range of 40,000 – 45,000 ounces of gold production for the December 2016 quarter.
Kingsgate’s total current cash position is A$45.7 million and the Company continues to make commitments to discretionary payments against the Chatree Loan Facility, including a recent payment of US$5 million on 4 November 2016.
The next scheduled loan repayment of US$5 million against the Chatree Loan Facility is due on 15 November 2016, and it is intended that a further discretionary payment of US$5 million will also be made at this time.
Following these repayments the Kingsgate Group total debt position will be A$35 million1, down from A$72 million at 30 September 2016.
As previously stated, Kingsgate reasonably expects that all Chatree related debt will be fully repaid by 31 December 2016.
Greg Foulis
Chief Executive Officer
Note:
1. Includes an A$30 million equivalent Chatree Loan Facility and an A$5 million corporate facility.
Supplementary Target’s Statement
Kingsgate Consolidated Limited – Supplementary Target’s Statement
Please find attached Kingsgate Consolidated Limited – Supplementary Target’s Statement
Ross Coyle
Company Secretary