Kingsgate Consolidated granted mining leases to re-start Chatree gold mine
Kingsgate Consolidated is evaluating financing options and is in discussions with potential lenders to fund resumption of gold mining at Chatree.
The Government of Thailand has granted four outstanding mining leases to mineral explorer Kingsgate Consolidated (ASX: KCN), giving it the go-ahead to restart the Chatree gold mine north of Bangkok.
Three leases at Chatree South and one at Quartz will be in force for the next 10 years and complement the recent renewal of a metallurgical processing licence for the project.
Quartz has been pending approval since 2011 and was needed to fully optimise the operation’s A Pit.
Kingsgate is currently assessing a number of options for the re-start including the refurbishment of two onsite processing plants which will have a combined total annual capacity of over 5 million tonnes.
Refurbishment of the Chatree North processing plant (Plant #2) will enable the company to access low-grade stockpiled ore for processing.
The current stockpile is around 6.6Mt of ore containing 73,000 ounces of gold and 780,000oz of silver.
It is expected this strategy could generate sufficient cash flow to fund other works including development of the Quartz lease, cut back of the A Pit, refurbishment of Plant #1 and implementation of resource-to-reserves delineation as well as regional grassroots exploration programs.
Kingsgate is currently finalising its capital expenditure requirements and has contracted a specialist recruitment agency to manage the appointment of technical staff to operate the mine.
The company has also been investigating financing options with potential lenders to expedite Chatree’s re-start.
Mine closure
Located in central Thailand, approximately 280km north of Bangkok, Chatree was developed as a large scale, low-grade, open pit gold mine.
It was Thailand’s first and largest modern gold mine, commencing commercial operations in November 2001 to produce more than 1.8Moz of gold and more than 10Moz of silver.
In 2016, the Thai Government announced the closure of all gold mining operations in the country and by the following year, Chatree had been placed on care and maintenance.
Akara retains approximately 31 fulltime staff to manage ongoing maintenance and rehabilitation works.
In late 2020, the Thai Government gave Akara permission to sell Chatree’s high value gold and silver “sludge” (material cleaned from the tanks and processing plant following the mine’s closure) to a refinery for processing into doré.
Nueva Esperanza deal
Kingsgate today confirmed that a deal with TDG Gold Corp to acquire Kingsgate’s Nueva Esperanza gold-silver project in Chile would not go ahead.
TDG confirmed that results from its 2021 exploration and drill program at Toodoggone had exceeded expectations and the company would now focus its efforts and expenditure on building that resource.
Kingsgate said it had been previously approached by other parties with a view to acquiring Nueva Esperanza in the event the agreement with TDG did not proceed.