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.