PERTH (miningweekly.com) – Gold miner Kingsgate Consolidated has received an offer from Thai firm Northern Gulf Petroleum (NGPI), which it claims could potentially save the company from losing the Chatree gold mine, in central Thailand.
NGPI is offering to acquire a 50.1% stake in Kingsgate for 4.2c a share in cash.
NGPI director Chatchai Yenbamroong said in a letter to Kingsgate shareholders that without the Chatree mine, Kingsgate’s future would hang in the balance, as the company itself had noted that its long-term viability depended on extending the metallurgical licence at Chatree, successfully pursuing legal and other avenues for compensation from the Thai government, realising value from the Chatree asset, implementing a rehabilitation programme at Chatree or through an equity raise.
In May, the Thai government announced that the Chatree mine had to cease operations by the end of December. While not giving any reason for the forced closure, the government has said that the decision to suspend operations at the mine is in no way a reflection on the way that Kingsgate operated the mine.
Kingsgate has previously said that it was pursuing a "range of potential remedies" in regards to the gold mine, including legal and diplomatic options.
In his letter, Yenbamroong said that to save Chatree, an urgent and effective strategy had to be implemented, telling shareholders that Kingsgate had proven itself unable to manage the situation in Thailand, with some board members being openly critical of the Thai government, and irrevocably damaging the company’s reputation in that country.
Yenbamroong told Kingsgate shareholders that he would leverage his own experience and understanding of in-country political and business experience in Thailand to solve the issues around Chatree.
He noted that by gaining a majority shareholding in Kingsgate, NGPI would share the risks, while Kingsgate shareholders would share the economic benefit should the Chatree issues be resolved.
The share offer would open on September 30 and would close on November 4.
Edited by: Creamer Media Reporter
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