Kingsgate’s Chatree licence renewed to year-end, no certainty about mine’s future

JOHANNESBURG (miningweekly.com) – Australian miner Kingsgate Consolidated on Thursday requested an extension of its voluntary trading halt on the ASX, owing to continued uncertainty over the future of its only operating mine, Chatree, in Thailand.

The company was granted a renewal of its metallurgical licence for the gold mine, which the Thai government intended to close. However, the licence was only valid until December 31, and was not renewed for the anticipated five years as has been the practice in the past.

Kingsgate stated that the licence renewal was understood to be subject to certain conditions, which had not been provided to the company.

“This decision was made by the Thai Prime Minister and a subsequent attempt by the company to seek a copy of the order for the purposes of clarity has resulted in the company being informed that the order has been classified and as such cannot be publicly disclosed. In addition, the Thai Minister of Industry has not met with the company and has not provided any clarity as to the company’s position,” Kingsgate stated in a note to the ASX.

The Thailand Industry Ministry announced earlier this month that it had ordered the closure of the Chatree mine, which had been at the centre of protests over alleged poisoning of residents, crops and livestock. The government had indicated that it would inform Kingsgate about its order before the end of May.

Operations at the Chatree mine were temporarily suspended at the beginning of 2015, after random urine and blood tests of villagers nearby the mine revealed above-standard arsenic and manganese levels. However, an environmental report confirmed that the Chatree operation was neither the source, nor the cause of the elevated arsenic and manganese levels, and Kingsgate resumed mining activities in March of 2015.

Permitting delays have also dogged the project, with Kingsgate in March cutting its full-year production expectations at the mine to between 95 000 oz and 105 000 oz, compared with a previous forecast of between 125 000 oz and 135 000 oz. Kingsgate said at the time that permitting delays had constrained access to various orebodies and placed undue pressure on the ageing mine fleet, while also impacting on the mine plan.

Kingsgate reported on Thursday that it had completed a revised mine plan for Chatree to operate until December 31, but added that there was uncertainty about the basis on which the mine would be allowed to operate.