I am beginning to think the grade control issue should have been...

I am beginning to think the grade control issue should have been a disclosure event to the ASX and the Market under the continuous disclosure listing requirements.

This issue would have been known to adversely impact production when discovered and should have immediately given rise to an announcement, rather than silence at the time and only a reference to it under guidance review when reporting retrospectively.

Per the Q2 FY25 report there was circa 3 months of grade control errors, discovered in September and resolved in October. The duration of the errors depends on when mid 2024 occured.

Why wasn't it reported in the Q1 report issued 30 October ? - It had been resolved by then, according to the Q2 report.

As a producer, this should have been disclosed, together with a revision to guidance and an impact assessment of the consequences.

None of this happened.

Plenty of people, me included bought shares on the basis of a good quarter, when management would have known well that it was not going to be as the grade control issue was known by the time of the issue of the quarterly for Q1 FY25.

The issue only made the following note in the Q2 FY25 report as pasted below.

Guidance Review
While Chatree has successfully ramped up material movement, production has been impacted by lower head
grade than forecast by the previous resource and reserve models (in use prior to January 2025).
In addition, grade control modelling software was installed by a third-party software provider in mid-2024. In late
September 2024, Kingsgate identified that the software was causing grade delineation errors when plant samples
didn’t reflect grade control estimates. The error was acknowledged and corrected by the third-party provider in
October 2024, however kilotonnes of ore had been incorrectly identified and delivered to waste and kilotonnes
of waste had been incorrectly identified and processed as ore. Kingsgate is currently assessing options to rectify
this commercial matter.
As a result, Chatree production is now expected to be around the lower end of the guidance range, and AISC per
ounce is expected to be around the top end of guidance, based on the assumptions provided.
2

Anyone agree ? - and want to take it further?

Wazz