General discussion, page-1269

ERA / Keith Goode /
has the situation changed?/ or are we even better off now?

read:

http://www.eagleres.com.au/home/tag/articles-comments-reports/Kingsgate


looking on some statements/points which are prob. aswell currently valid/ At least to a certain extent:

• KCN’s Chatree gold mine in Thailand was a hive of activity in April 2010, initially aiming to increase gold production by ~50% to >200,000ozpa, and then using satellites and underground to reach ~300,000ozpa. Kingsgate is still exploring for possible stand-alone operations; following up epithermals that it has identified; and using its extensive database to find orebodies in other parts of Thailand.

• Chatree was examining increasing the mine’s life by : deepening the pits using US$950/oz or US$1150/oz pit shells (compared to the existing US$750/oz pit shell of June 2009), extending Chatree on strike NNW or SSE, and delineating higher grade epithermal lodes that can be economically mined underground

• KCN intends to capitalise on its perception as an established, proven developing Asian gold producer while it leads the emerging mid-tier Australian listed gold producers into the A$1bn to A$2bn market cap category (following the takeover of Lihir by Newcrest).

• The Thailand IPO float of 51% of Chatree under Akara Mining Ltd (the preference shares are redeemed for common stock in one movement) is expected to occur during DQ2010/MQ2011, and could raise ~A$400m to A$500m (being ~50% of Kingsgate’s current market cap, plus some capital for ~50% of the mill expansion plus ~50% of the exploration). (It should be noted that Akara may receive an Asian trading multiple and have a higher market cap than Kingsgate).

• Kingsgate effectively retains mine management control with regional and near mine exploration under KCN’s Issara Mining (exploration) company. KCN/Akara’s Chatree controls an area of ~7kmN x 5kmE including the Chatree mine and MLs, while KCN’s Issara has the rest of the SPLs and SPLAs . Should Issara make a discovery, Akara Mining has first right of refusal in acquiring it for Chatree.

• KCN shows a very high sensitivity to Chatree’s gold grades. In our opinion, we believe that there are a number of reasons to suggest that gold grades should be at least 10% higher than expected. If such higher grades are achieved, then at current long-term gold prices of US$270/oz and an A$ exchange rate of US$0.50, the 5%real NPV of the project increases from A$0.87 to A$1.43.

• Production is already building up from 1.8mtpa to 2.3mtpa by January 2006 using scats recycling, which should increase production from the current ~125,000ozpa up to 150,000ozpa at cash costs of ~US$200/oz. Kingsgate are reviewing the possibility of installing a duplicate plant to more than double production up to ~5mtpa and produce >300,000ozpa, which does appear to be achievable.

• KCN’s Chatree appears to be located at the centre of a major volcanic complex with possibly 9 historic volcanoes, major North, NW/SE and SW/NE sutures, faults and/or structures and >29 drill ready targets covering a range of gold mineralisation styles including visible gold, all identified within its tenements.

etc.................