OPERATIONS have resumed at Kingsgate Consolidated’s Chatree Gold Project following unsubstantiated claims that slightly elevated levels of arsenic and manganese in some members of the local community were attributable to the mining operation. Operations resumed on February 27 and the mine quickly ramped up to full capacity.
Kingsgate used the shutdown period to undertake major maintenance tasks scheduled for later in the year, thus reducing future downtime. With strong performance in the December half year and flexibility in the current mining areas at Chatree, the company believes that the operation is still likely to achieve full year gold production guidance.
Kingsgate was issued with a temporary suspension notice for up to 30 days by the Thai Department of Primary Industry and Mining. The notice followed the claims that were made following regular health checks of local inhabitants.
The company has been working closely with Thai authorities and the local community and has satisfied all their requests around the health issue. This has included health checks and lifestyle education programs with a commitment to continue to assist with ongoing management of the community health issue.
Kingsgate commissioned a major environmental report by Independent International and Thai scientific experts that confirmed that the Chatree mining operation was not the source or cause of the slightly elevated arsenic and manganese levels. The report was delivered to the Department of Industry and Mining and presented to the local authorities as well as the communities.
The strong position that Kingsgate finished the December half year has enabled it to comfortably cover the period of the stoppage with only minimal effect on its financial position. On the date the temporary suspension order was implemented available cash was around Aus$67 million. When the suspension was lifted, available cash was of the order of Aus$60 million and this was after a scheduled debt repayment in February and other working capital adjustments.
Chatree production for the December quarter was 39,134 ounces, a 16.3% increase over the previous quarter, reflecting a higher head grade of 1.01 grams/tonne as higher grade blocks in A Pit Stage 2 became available. The lower throughput reflects harder ore and stockpile blending.
Total cash costs for the quarter were US$643 per ounce, including US$102 per ounce royalty. The costs were 14.4% lower than the previous quarter reflecting the higher production level and the continued implementation of cost improvement initiatives. Capital expenditure for the quarter was Aus$1.1 million, with an additional Aus$5.2 million on the second tailings storage facility.