Chief Executive Officer Succession
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.”
Financial Results and Appendix 4D for the Half Year Ended 31 December 2013
Kingsgate has recorded the following financial performance for the half year to 31 December 2013:
- Revenue of $165.1 million.
- EBITDA* (before significant items) of $27.9 million.
- Statutory loss after tax of $4.9 million.
- Gross cashflow from operations for the half?year of $41.5 million.
- Higher gold sales (+19%) offset by lower gold price received.
- Investment and capital expenditure reduced by 62%.
- Corporate debt facilities restructured and a total of ~$17 million repaid
Gold sales for the half?year were up 19% to 108,610 ounces (1HFY13: 91,480 ounces) with higher production from both Chatree and Challenger. This was more than offset by the lower realised gold price of US$1,297 per ounce (1HFY13: US$1,663 per ounce). Gross operating cashflow for the half?year was $41.5 million despite the lower gold price. Investment and capital expenditure was reduced by 62% following the implementation of cost reduction initiatives following the volatility in the gold price.
During the half?year the Kingsgate Group repaid approximately A$17 million of its outstanding debt. At year end, Kingsgate had A$44 million outstanding under its current corporate facilities, down from A$55 million at the end of the September quarter. Kingsgate has completed the documentation for a restructure of its corporate debt facilities and following the satisfaction of Conditions Precedent, expected during the current quarter, Kingsgate’s corporate debt will reduce to A$40 million under one new corporate debt facility. In addition, approximately US$119 million is outstanding under the Kingsgate’s Thai operating subsidiary Akara Resources PCL (“Akara”) loan facility following the initial repayment of US$5.6 million in November.
The two development projects continued to advance during the year. For the Nueva Esperanza silver/gold project in Chile, the Definitive Feasibility Study (DFS) was well advanced during the half?year with completion of the DFS expected by the end of March 2014.
At the Bowdens silver project in New South Wales, the feasibility work will continue in 2014 in parallel with the preparation of the Environmental Impact Statement (EIS).
Outlook
Kingsgate is on track to meet gold production guidance for the 2014 financial year following the strong first half. Group production guidance for the year remains at 190,000 to 210,000 ounces including 120,000 to 130,000 ounces from the Chatree gold mine in Thailand and 70,000 to 80,000 ounces from the Challenger gold mine in South Australia.
Kingsgate continues to pursue strategies to adapt to the volatile operating environment for gold producers with the focus to remain on operating efficiencies and cost saving initiatives in order to maximise shareholder returns. This may also include consideration of partners for development projects and potential rationalisation of the asset base.
December 2013 Quarterly Report
KEY POINTS
- Strong Group operating performance with a 7% increase in quarterly gold production to 54,539 ounces, and a 12% reduction in total cash costs to US$918/ounce, when compared to the September quarter.
- Challenger’s performance highlights the benefits of the restructuring plan. Gold production of 20,318 ounces was at the highest level for seven quarters, and total operating costs were 17% lower than the September quarter.
- Continued optimisation at Chatree delivered a strong quarter with 34,221 ounces of gold produced and operating costs 8% lower than the previous quarter.
- Group debt repayments of approximately A$17 million were made during the quarter and corporate borrowing facilities were restructured.
- The definitive feasibility study (DFS) for Nueva Esperanza is nearing completion.
CommSec interview with Kingsgate’s Gavin Thomas
CommSec CBA Resources Series: Kingsgate (KCN)
12th June 2013
CommSec’s Tom Piotrowski talks with Gavin Thomas, Managing Director (MD) & Chief Executive Officer (CEO)