Kingsgate Consolidated Limited - June 2016 Quarterly Report
Kingsgate Consolidated (ASX:KCN) released its June Quarterly Report that indicates that issues regarding the Thai Government decision to close down gold mining have not yet been sorted. Kingsgate is shifting its focus to the Neuva Esperanza project in Chile, with a US$3m exploration program approved. Kingsgate's shares remain suspended.
- On 10 May 2016, the Thai Minister for Industry decided, following a Cabinet meeting, that the Metallurgical Licence for the Chatree Gold Mine would be extended only until the end of 2016, rather than for a further three to five year period as was expected.
- As the Metallurgical Licence is critical to the continued operation of the Chatree Gold Mine, all operations must cease by 31 December 2016.
- Due to ongoing uncertainty with respect to the remaining tenure of the Chatree Gold Mine, Kingsgate shares remain voluntarily suspended from trading.
- There is the potential for a substantial impairment to the carrying value of the Chatree Gold Mine, subject to a final review and audit that will be in the order of US$175 million, which highlights the magnitude of the impact of the Thai Government’s decision to prematurely close the mine.
- Kingsgate continues to push for clarity and remedies to the situation in Thailand.
- Kingsgate has a bright future in Chile being a jurisdiction that welcomes and respects foreign investment.
- Kingsgate is pushing ahead with its 100% owned Nueva Esperanza Project in Chile, and US$3 million has been committed to exploration in FY17.
- Completion of the sale of the Bowdens Silver Project for a total of A$25 million, of which A$20 million has now been received, with the remaining A$5 million to be paid by 30 September 2016.
- Cash and bullion/doré totaled A$55.2 million (March quarter: A$49.8 million), comprising cash of A$47.5 million (including restricted cash of A$11.2 million) and bullion/doré of A$7.7 million.
- Debt facilities of A$86 million comprise a A$10 million corporate facility and an A$76 million equivalent loan facility against Chatree.