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Tagged with: Kingsgate

Jun 2010 - Kingsgate Cons

Kingsgate Consolidated Limited (KCN) –Receiving renewed BOI incentives for the new Chatree North Plant, paves the way to a very profitable future Kingsgate

  • Kingsgate should score a double-premium for having no RSPT payments (because its operations are not in Australia) and receiving the BOI investment incentives (the same as before : 8 yrs’ tax-free, then 5 yrs at 15% tax, as Thailand moves ahead in encouraging mining investment). Receipt of the BOI, means that production from the second train of the Chatree plant could occur during SQ2011.
  • KCN’s Chatree gold mine in Thailand was a hive of activity in April 2010, initially aiming to increase gold production by ~50% to >200,000ozpa, and then using satellites and underground to reach ~300,000ozpa. Kingsgate is still exploring for possible stand-alone operations; following up epithermals that it has identified; and using its extensive database to find orebodies in other parts of Thailand.
  • Chatree was examining increasing the mine’s life by : deepening the pits using US$950/oz or US$1150/oz pit shells (compared to the existing US$750/oz pit shell of June 2009), extending Chatree on strike NNW or SSE, and delineating higher grade epithermal lodes that can be economically mined underground.
  • KCN intends to capitalise on its perception as an established, proven developing Asian gold producer while it leads the emerging mid-tier Australian listed gold producers into the A$1bn to A$2bn market cap category (following the takeover of Lihir by Newcrest).
  • The Thailand IPO float of 51% of Chatree under Akara Mining Ltd (the preference shares are redeemed for common stock in one movement) is expected to occur during DQ2010/MQ2011, and could raise ~A$400m to A$500m (being ~50% of Kingsgate’s current market cap, plus some capital for ~50% of the mill expansion plus ~50% of the exploration). (It should be noted that Akara may receive an Asian trading multiple and have a higher market cap than Kingsgate).
  • Kingsgate effectively retains mine management control with regional and near mine exploration under KCN’s Issara Mining (exploration) company. KCN/Akara’s Chatree controls an area of ~7kmN x 5kmE including the Chatree mine and MLs, while KCN’s Issara has the rest of the SPLs and SPLAs . Should Issara make a discovery, Akara Mining has first right of refusal in acquiring it for Chatree.

Sep 2001 - Kingsgate Cons

Kingsgate Consolidated NL (KCN) - On Target for its First Gold Bar in November

  • Kingsgate’s Chatree mine in Thailand is well known and after some time attaining all the regulatory requirements, it is now expected to produce its first gold bar by the end of November 2001, following a construction period of almost one year.
  • KCN shows a very high sensitivity to Chatree’s gold grades. In our opinion, we believe that there are a number of reasons to suggest that gold grades should be at least 10% higher than expected. If such higher grades are achieved, then at current long-term gold prices of US$270/oz and an A$ exchange rate of US$0.50, the 5%real NPV of the project increases from A$0.87 to A$1.43.
  • KCN is in the very fortunate position that it does not pay tax for the first 8 years following its first gold pour, and then has a further 5 years after that at half-tax rates or 15%, under an agreement with the Royal Thai Board of Investment.

Jul 2005 - Kingsgate Cons

Kingsgate Consolidated Limited (KCN)– Targeting up to 5mtpa and >300,000ozpa gold by 2007

  • Kingsgate have found that there is a significant correlation between three-dimensional IP (a discovery technique) and their mineralisation, such that they have been able to determine that the main orebody that they have been mining to date (from pits C and H), appears to lie on the south-western edge of a “Mega-Pit”, possibly >2km long by ~650m wide that could average at grades ~2.2g/t to 2.3g/t.
  • KIngsgate announced a resource upgrade for Chatree North of 640,000oz on 23 June 2005 (based on exploration in the past 5 months), to result in resources (for A, AE, Q, KE and KW) of 31.2mt @ 1.9g/t for almost 2moz of gold and 18moz of silver. Together with Chatree, KCN’s resources now extend beyond 3moz, and a further US$9m has been budgeted for exploration in the coming year to June 2006 at a discovery cost of ~US$7/oz.
  • Production is already building up from 1.8mtpa to 2.3mtpa by January 2006 using scats recycling, which should increase production from the current ~125,000ozpa up to 150,000ozpa at cash costs of ~US$200/oz. Kingsgate are reviewing the possibility of installing a duplicate plant to more than double production up to ~5mtpa and produce >300,000ozpa, which does appear to be achievable.
  • KCN only quotes its gold production, crediting silver against its gold cash costs. However, silver grades increase significantly northwards at Chatree, especially in the vicinity of A and AE where the gold/silver ratio increases to >24 to 1. Using our modelling at 20g/t silver infers that Chatree could also be producing >1.6mozpa of silver, yet alone applying the implied grades of 50g/t that equate to a 24 to 1 ratio.
  • KCN’s Chatree appears to be located at the centre of a major volcanic complex with possibly 9 historic volcanoes, major North, NW/SE and SW/NE sutures, faults and/or structures and >29 drill ready targets covering a range of gold mineralisation styles including visible gold, all identified within its tenements.

Aug 2006 - Kingsgate Cons

Kingsgate Consolidated Limited (KCN) – Expanding to ~300,000ozpa gold and ~2mozpa silver from 2008

Mar 2009 - Kingsgate Cons

Kingsgate Consolidated Limited (KCN) –Building Chatree up to >200,000ozpa

  • Kingsgate’s Chatree gold mine in Northern Thailand has now received all its required approvals to mine Chatree North and commenced blasting its “A” prospect in mid-January 2009. At a throughput rate of 2.4mtpa, the expected average grade of ~2g/t results in production of ~140,000ozpa gold and some silver credits (~0.6Mozpa silver or an additional ~10,000ozpa gold equivalent).
  • However, initial grades at “A” appear capable of being >2g/t and when combined with mining higher grades (possibly >6g/t) in C-North, production could increase to 75,000oz to 85,000oz for the first half of 2009, resulting in Kingsgate achieving its ~100,000oz (+/- 3,000oz) forecast for the year ended June 2009.
  • With credit markets in turmoil and debt available at double-digit rates, we have assumed that KCN achieves its increased production through gradually extending its plant (to 5mtpa and >200,000ozpa) at a slower rate, by using its own cashflow.
  • As Chatree North still lies within the Phichit and Phetchabun provinces, the original BOI (Board of Investment approval) tax incentives for Chatree should apply (8 years’ tax-free from 27 Nov 2001, then 5 years at 15% tax), although further concessions are being sought with the increased expenditure.
  • However, the new Chokdee discovery covering a wider footprint than Chatree lies ~20km NW of Chatree in the Phitsanulok province. Hence it would require its own separate new BOI, aside from the likelihood of being a standalone operation.
  • Initial indications are showing that Chokdee has the potential to become a significant discovery, extending over 700m on strike and open in all directions. Interestingly its pyrite has the same lead isotope as Chatree, inferring that it was part of the same magmatic event as Chatree (although its gold mineralisation has some similarities & a separate visible gold-in-quartz veinset amongst the 3 lodes).

Aug 2012 - Kingsgate Cons

Kingsgate Consolidated Limited (KCN) – Establishing a Gold Production Base of ~250,000ozpa Ahead of Bringing its Silver Mine Projects on-Stream

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