- Kingsgate Consolidated (KCN) locks in the first round of funding for the long-awaited restart of the embattled Chatree Gold Mine in Thailand
- The company has struck a deal with Taurus Mining Finance Fund for US$15 million (A$20 million) in funding through a bridge facility to support the refurbishment and restart of the mine
- Further to the bridge loan, Kingsgate is busy negotiating a US$30 million (A$41 million) project facility with Taurus to ensure it has enough funds to refurbish Chatree
- A Chatree scoping study shows Plant 2 at the project could be up and running within four to six months from the start of refurbishments — meaning Kingsgate could pour its first gold from the restarted project before the end of 2022
- Shares in Kingsgate Consolidated are soaring on the ASX following today’s news, up 24.3 per cent to $1.46
Kingsgate Consolidated (KCN) has locked in the first round of funding for the long-awaited restart of the embattled Chatree Gold Mine in Thailand.
The company this morning told investors it had struck a financing deal with Taurus Mining Finance Fund for US$15 million (A$20 million) in funding through a bridge facility to support the refurbishment and restart of the mine.
Kingsgate said the Taurus loan will fund general working capital, the costs associated with the re-commissioning of the Chatree project, and some regional exploration programs in the Chatree area.
The company said it expected the first tranche of funds from the funding deal to be available for drawdown in April. The loan comes with a 9 per cent per annum interest rate and is to be repaid within one year.
However, to ensure it has enough cash to fully fund the refurbishment of the Chatree project, Kingsgate said it was also negotiating a US$30 million (A$41 million) project facility with Taurus.
This extra loan would provide enough funds to finance Kingsgate’s capital costs associated with design, engineering, procurement, construction, and development costs for Chatree, and to cover the fees and capitalised interest from the shorter-term bridge loan.
In tandem with the funding, Kingsgate said an international engineering firm had prepared a scoping study for Chatree to prioritise the refurbishing and re-commissioning of Plant 2 at the project.
According to the scoping study, Plant 2 could be up and running within four to six months from the start of the refurbishment process — meaning subject to the finalisation of the Taurus project facility, Kingsgate could pour its first gold from the refurbished project before the end of 2022.
A long battle
Chatree was once the largest gold mine in Thailand, producing over 1.8 million ounces of gold and more than 10 million ounces of silver for roughly 15 years before it was shut down by the Thai government at the end of 2016.
Kingsgate said the decision to shut down the mine went against the Thailand-Australia Free Trade Agreement (TAFTA), and the company launched legal action against the government following the forced closure of Chatree.
The legal battle between Kingsgate and the Thailand government lasted five years until the Thai government finally agreed to allow Kingsgate to restart operations at Chatree in 2021.
Shares in Kingsgate Consolidated have spiked following the announcement of the Taurus financing deal, with the company up 24.3 per cent to $1.46 at 2:43 pm AEDT.