September 2018 Quarterly Report

Quarterly Report

For the period ending 30 September 2018

KEY ISSUES:

Chile:

• Following the appointment of a corporate advisor to identify advantageous options to monetise the Nueva Esperanza Project, expressions of interest are currently being sought from interested parties.
• The response has been positive with a number of interested parties engaging in the requisite due diligence and requesting site visits.

Corporate

• Political Risk Insurance Claim (“PRI”) – In October 2017, Kingsgate commenced proceedings in the New South Wales Supreme Court against Zurich Insurance Australia Ltd, and other named insurers, under a Political Risk Insurance Policy (with a maximum liability of US$200 million) that was held by the Company when the Thai Government expropriated the Chatree Gold Mine in May 201.
• On 6 July 2018, a Directions Hearing was held in the Supreme Court of New South Wales for the Company’s PRI claim.
• The Court listed the Proceedings for trial, for up to fifteen days commencing on 3 June 2019.
• Kingsgate remains open to achieving a settlement, but in the meantime will continue to prosecute its claim against the insurers in the Supreme Court of New South Wales.
• TAFTA Claim – The Tribunal has adopted a Procedural Calendar which provides that the merits of the TAFTA (“Australia Thailand Free Trade Agreement”) Claim will be heard on 18 November to 29 November 2019.
• However, the Tribunal has also ordered that the proceedings are to be kept confidential, except where disclosure is required to fulfil a legal duty.
• Kingsgate remains committed to seeking a settlement of the matter with the Thai Government.

Financial:

• In May 2018, Kingsgate drew down a $15.0 million Standby Loan Facility (“SLF”) in order to ensure continuing
  funding of its activities.
• The SLF is on normal commercial terms for a loan of this nature, other than the utilisation fee under the SLF which has been satisfied by the issue of 2,641,003 Kingsgate shares. (See ASX:KCN “Appendix 3B – Issue of Shares” dated 7 May 2018).
• Investec Australia Finance Pty Limited (“Investec”) has agreed to extend the repayment date of its loan to the Company to February 2019, and to increase the Facility Limit from $15 million to $20 million.
• Cash at 30 September 2018 totalled A$1.5 million.
• Corporate debt at 30 September 2018 is A$15.0 million.

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