Gold production of 22,489 ounces during the September quarter at Kingsgate Consolidated’s Chatree project in Thailand was lower than the previous quarter owing to lower grades during a planned mine cut back phase. Total cash cost per ounce was US$879, including royalty of US$93 per ounce.

The company is confident of meeting its gold production guidance for the 2016 financial year at Chatree of 125,000 to 135,000 ounces and says the scheduled overburden stripping activities will result in a staggered production profile skewed towards a strong second half of the financial year.

Mining continued from Stage 2 of A Pit during the September quarter with ore mined totalling 329,248 tonnes grading 0.66 grams/tonne gold. Total ex-pit ore and waste movement was more than 1.513 million tonnes.

The stockpiled ore at the end of the quarter, including the crushed ore stockpile, was more than 8.007 million tonnes @ 0.47 grams/tonne for 121,550 ounces of contained gold. Silver production during the quarter totalled 166,244 ounces.

Total production costs after deferred stripping costs, depreciation and amortization were US$1197 per ounce.

Mill throughput during the quarter was more than 1.463 million tonnes. At the start of the quarter mill feed consisted mainly of low grade stockpiled ore but the volume of mined ore processed increased during the quarter as the Stage 2 pit deepened.

The mill feed grade was 0.66 grams/tonne gold and 10.3 grams/tonne silver with recoveries for gold and silver of 80.1% and 33.4% respectively. Recovery issues due to carbonaceous ore encountered during the June quarter were not repeated.

Kingsgate implemented a number of business improvement projects at Chatree including improved automation in the milling circuit to help optimize control over throughput, grind size mill liner wear rates. Specialized equipment was also acquired to separate grit from the carbon which will improve gold and silver stripping efficiencies.

During the quarter three holes were drilled to test the underground potential with two holes down dip from A Pit and one hole down dip from C Pit. Results confirmed the continuity of a major alteration zone in A Pit.

Capital expenditure for the quarter was Aus$8.4 million, including $8 million on Tailings Storage Facility 2.

During the quarter the transparency of environmental monitoring at Chatree was enhanced by the publishing of monitoring results on the Akara Resources Public Company Limited website and through other local community channels. Akara is the Thai operating subsidiary of Kingsgate.

Meantime, WPG Resources and Diversified Minerals have entered into an exclusive option agreement to acquire Kingsgate’s Challenger Gold Project in South Australia. The acquisition will be a 50/50 arrangement with WPG appointed as manager and PYBAR Mining Services, which owns Diversified, as preferred mining contractor.