Ann: Quarterly Activities Report December 2011 , page-3

re: Ann: Quarterly Activities Report December... ? Group gold production of 53,320 ounces, up 62% on the
September quarter (Chatree: 26,035 ounces and Challenger:
27,285 ounces).

?? Total cash costs of US$608/ounce (including royalties),
down 25% from previous quarter. (Chatree US$603/ounce
and Challenger US$612/ounce).

?? Challenger total cash costs down 37% on previous quarter,
reflecting strong production.

?? Major production increase at Chatree with first gold poured,from commissioning, on 28 October 2011.

?? Chatree North plant expansion EPCM construction contract
12% under budget....

Kingsgate achieved total gold production of 53,320 ounces in the December quarter, a significant increase of over 62% on the September quarter (32,991 ounces). Production was up strongly at Chatree reflecting the impact of the expanded plant commissioning and was despite the restricted pit access to higher grade ore at C North following the heavy rainfall and flooding in Thailand. At Challenger, the strong production was supported by an excellent performance in October and November from M1 and M2 stope sources.

Group operating cash costs were down 25% to US$608/ounce compared to the September quarter (US$815) reflecting the strong production increases at both mines.

Gold sales in the quarter of 49,610 ounces at US$1,680/ounce generated a strong operating cash margin....

OUTLOOK

Following a strong finish to the half year to December 2011, Kingsgate is forecasting stronger production in the second half of the year to 30 June 2012 following the successful commissioning of the Chatree North expansion.
Full year total gold production is expected to be in the range of 210,000 to 230,000 ounces. This includes
115,000 to 125,000 ounces from Chatree and between 95,000 to 105,000 ounces from Challenger.