massive silver hits!

Strong Drilling Results From Teterita Have Upgraded The Nueva Esperanza Project in Chile

Kingsgate Consolidated Ltd (KCN) is pleased to announce an update of the Nueva Esperanza project in
Chile following the completion of resource drilling at the Teterita deposit. The drilling has consistently
returned higher grades than achieved by previous exploration with bonanza grade intercepts including 15
metres @ 2,248g/t silver from a depth of 65 meters in drillhole ETED-06. The higher assays have the
capacity to lift the overall grade of the Teterita resource and are believed to be in part due to differences in
analytical method.

Selected high grade intersections in holes recently drilled include the following:
? 40m at 868 g/t silver from 48m depth, including 15m at 2,248 g/t silver (ETED-06);
? 17m at 339 g/t silver from 46m depth, including 1m at 1160 g/t silver (ETED-04);
? 45m at 179 g/t silver from 53m depth, including 32m at 225 g/t silver (ETED-08);
? 29m at 317 g/t silver from 64m depth, including 19m at 407 g/t silver (ETER-09);
? 32 m at 155 g/t silver from 32m depth, including 21m at 213 g/t silver (ETER-19A);
? 26m at 340 g/t silver from 24m depth, including 14m at 592 g/t silver (ETER-20);
? 62m at 177 g/t silver from 10m depth, including 20m at 452 g/t silver (ETER-21);

An upgraded resource for Teterita is expected by the end of the March quarter 2012 and, following
preliminary mine optimisation studies of the three deposits at Nueva Esperanza, Teterita is likely to be the
first deposit mined due to its high silver grade and low strip ratio.

The revised mine plan incorporating all three deposits will be integrated into the technical feasibility study
that will then undergo a peer review due for completion by the end of the June quarter. The Teterita drilling
results are anticipated to improve the overall project analysis.

Outside of the three deposits, the lease area is considered highly prospective where sporadic historical
exploration has identified a number of prospects that require further exploration.

“These exciting new assay results are expected to lead to an overall enhancement of the Nueva Esperanza
project”, Managing Director, Gavin Thomas said, “The low strip ratio and an expected upgrade to the Teterita
resource will allow a fast track to mining at Nueva Esperanza”.

“The progress of the feasibility study and the environmental impact assessment remain on schedule to
support first production in the December quarter of 2013”, he said.
Yours sincerely,
Gavin Thomas
Managing Director & CEO
Kingsgate Consolidated Limited
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NUEVA ESPERANZA PROJECT UPDATE

Highlights

? Drilling at Teterita has returned consistently high grades including a bonanza intercept of 40
metres at 868g/t silver, including 15 metres at 2,248 g/t silver (ETED-06).
? The updated mineral resource for Teterita is due for completion by the end of March 2012.
? Technical feasibility study is scheduled for completion in the June quarter following
integration of Teterita and Chimberos deposits into the current mine plan and peer review.
? Preliminary mine optimisations for the three Nueva Esperanza deposits indicate that Teterita
is likely to be the first resource mined due to its high grade and low strip ratio.
? Opportunities exist to accelerate exploration work on highly prospective areas of
mineralisation outside the three deposits within the Nueva Esperanza leases.

Background

The Nueva Esperanza Project comprises three high sulphidation epithermal gold-silver and silver mineral
resources (Figure 1) associated with the Esperanza alteration system, located in the northern Maricunga
Gold Belt, near Copiapó in northern Chile. The project is in feasibility study currently based only on the
Indicated Resource of the Arqueros sector. The Teterita and Chimberos sectors will be brought into this
study as soon as their resources have been upgraded to Indicated category.


Current resource drilling on the deposit has now been completed with 5,986 metres in 65 RC and diamond
drill holes planned to validate the historical data and upgrade the resource. About 88% of assay results have
been received with intersections at greater than 22.5 g/t silver reported in Appendix 1. Drill collar locations
are shown in Figure 3, with an interpreted cross-section on

Most of the recent intersections, including 5 ‘twinned’ drill holes designed to closely parallel pre-existing
holes, returned higher grades than earlier drilling. This is believed to be in part due to differences in
analytical methods; the current approach adopting a stronger multi-acid digestion (HF-HNO3-HClO4-HCl) for
a more complete dissolution of the silver minerals compared to the previous single acid Aqua Regia
digestion.

Feasibility Study

The feasibility study for Nueva Esperanza continues to advance with the final bankable document on
schedule to be delivered at the end of the June quarter. The feasibility study will include a detailed
independent review of engineering and costs by a third party engineering group.
Mine planning for Nueva Esperanza is being advanced by Kingsgate technical services and will be
incorporated into the process design and scoping of costs. The purpose of the plan is to optimise the
development of the three deposits and determine the impact of commencing production with the low strip
Teterita and Arqueros North deposits. This has the potential to deliver three to four years production before
mining the larger and higher strip Arqueros South orebody, with distinct economic benefit to the project.

Environmental Impact Assessment

The application for environmental mining license was submitted to the authorities in Chile on 29 December
2011. The environmental impact assessment documentation was approved by the Department of the
Environment for entry into the system, and has subsequently been dispatched to several government
departments.

The process is advancing in line with expectations and we expect the environmental permitting to be granted
between nine and twelve months of submission.
Exploration


In addition, the Huantajaya occurrence which lies between Arqueros, Teterita and Chimberos is also
unexplored although 3,425 tonnes of mineralised material was extracted by a previous operator at an
average grade of 4.54 g/t gold and 344 g/t silver.
Kingsgate is in the process of planning and resourcing a campaign to assess the potential of the broader
Esperanza alteration system, which underpins the basis of the Nueva Esperanza mining complex.
The current Mineral Resources at Nueva Esperanza are 28.5 million tonnes of 0.28g/t gold and 78g/t silver.
The updated resource estimate that will incorporate all recent drilling is scheduled for completion by the end
of the March quarter and an update will be released soon after.