BANGKOK LIFTS KINGSGATE SUSPENSION
Shares of Aussie miner, which operates Thailand’s biggest gold mine, soar 36pc on news
KINGSGATE Consolidated Ltd, the Australian producer that shuttered Thailand’s biggest gold mine following a licensing dispute, advanced the most in 18 months after Bangkok said a suspension had been lifted.
The miner rose 36 per cent to A$0.30, the largest gain since February 12 last year, in Sydney trading yesterday.
The shares had earlier briefly jumped the most since 1997. Kingsgate’s market valuation has tumbled to about A$67 million (RM227.2 million) from A$1.1 billion at the end of 2010.
Kingsgate estimated a potential restart of the operation would cost more than US$50 million (RM214.5 million), said executive chairman Ross Smyth-Kirk.
“It’s a very expensive situation to re-open, and quite frankly we haven’t got the funds to do that at the moment,” he said.
Kingsgate had cash of A$22 million as of June 30, said the miner in a filing last month.
Kingsgate had been informed by Thailand’s government that it had lifted a temporary suspension on the Chatree mine, while authorities also advised the producer’s local unit that an application for a renewal of its metallurgical processing licence could now go ahead, said the mining company in a statement yesterday.
Thailand’s junta leader Prime Minister Prayuth Chan-Ocha suspended gold mining from January 1, citing complaints about environmental and health risks at Chatree.
Kingsgate rejected the allegations and argued that a government-commissioned report offered a “scientific rebuttal” of the allegations, according to an April filing.
While Thailand’s government said it would not offer compensation for losses related to Chatree’s closure or assist with costs of a restart, Kingsgate had been informed authorities “may be willing to provide other meaningful benefits in consideration of the shut-down,” said the miner.
Kingsgate’s board “has determined that it is in the interests of the firm to further explore this matter”, the statement added.
Chatree was Kingsgate’s only producing mine after the company last year sold an operation in Australia and with studies still continuing on potential gold and silver projects in Chile.
Any restart of the Thailand mine would take at least three to five months, said Smyth-Kirk.
The site would probably require new equipment and it remained unclear how many of the about 1,000 people who left jobs connected to the operation would be available to return, he said. Bloomberg