KCN - Kingsgate Consolidated

Bangkok Post today

http://www.bangkokpost.com/Business/05Dec2007_biz99.php

MINING / ENVIRONMENTAL CONCERNS

Gold mine policy clarified

YUTHANA PRAIWAN

Industry Minister Kosit Panpiemras yesterday clarified the ministry's delay in granting exploration licences for gold fields, saying it was necessary to revise the policy on gold-mine development for a better balance of interests between mining and communities.

The 56 suspended applications include 44 fields in Phetchabun sought by Akara Mining Co, the local unit of Australia's Kingsgate; two fields in Chanthaburi of Rich Phum Co, two fields in Surat Thani of Amanta Co; four fields in Chanthaburi and Rayong ran by Erawan Mining; and four fields in Chanthaburi of Paron Mining Co, totalling 500,000 rai.

The policy does not affect companies that already have exploration and production licences, which can continue to operate as usual. The suspended applications will be reconsidered once they are cleared by two agencies _ the Forestry Department of the Natural Resources and Environment Ministry; and the Interior Ministry _ especially for sites in reserved forests and public areas.

Community and environmental protests have increased in recent years over gold mining, which the government first promoted in 1987.

The cabinet yesterday endorsed a National Economic and Social Development Board plan to conduct a detailed study to find a new direction for gold-mine development to accommodate environmental and community concerns.

So_Cynical said:

Suspension from Official Quotation

Im thinking that just cant be good...i imagine its a bit like
hitting the panic button. :dunno:

Do company's Suspend trading for good news???? or is it
just the same as a halt...can be good or bad news?

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Really in can only be bad news or business as usual.

This absolutely reeks of local politics. This is all the innfo I can find.

BankokPost said:

MINING / ENVIRONMENTAL CONCERNS

Gold mine policy clarified

YUTHANA PRAIWAN

Industry Minister Kosit Panpiemras yesterday clarified the ministry's delay in granting exploration licences for gold fields, saying it was necessary to revise the policy on gold-mine development for a better balance of interests between mining and communities.

The 56 suspended applications include 44 fields in Phetchabun sought by Akara Mining Co, the local unit of Australia's Kingsgate; two fields in Chanthaburi of Rich Phum Co, two fields in Surat Thani of Amanta Co; four fields in Chanthaburi and Rayong ran by Erawan Mining; and four fields in Chanthaburi of Paron Mining Co, totalling 500,000 rai.

The policy does not affect companies that already have exploration and production licences, which can continue to operate as usual. The suspended applications will be reconsidered once they are cleared by two agencies _ the Forestry Department of the Natural Resources and Environment Ministry; and the Interior Ministry _ especially for sites in reserved forests and public areas.

Community and environmental protests have increased in recent years over gold mining, which the government first promoted in 1987.

The cabinet yesterday endorsed a National Economic and Social Development Board plan to conduct a detailed study to find a new direction for gold-mine development to accommodate environmental and community concerns.

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Todays Australian

http://www.theaustralian.news.com.au/story/0,25197,22895805-643,00.html

Kingsgate regains its lustre

Kevin Andrusiak | December 10, 2007

THAILAND-focused gold miner Kingsgate Consolidated has lashed out at false media reports last week that cast doubt on critical approvals of new leases at its Chatree gold mine.

Kingsgate is expected to be released from a trading halt on the Australian Securities Exchange this morning, armed with advice from senior Thai government officials that the applications for nine leases at Chatree North were still being processed - and not included in a new review of gold mining and its effect on the environment in Thailand, as had been reported.

"Kingsgate confirms that initial Thai media reports early last week were incorrect and misleading. This led to a misinformed market," the company said.

"The facts are the normal processing of the nine mining lease applications at Chatree North remain unaffected by the new review process."

Kingsgate managing director Gavin Thomas and chairman Ross Smyth-Kirk rushed to Thailand last week after The Bangkok Post reported that 60 exploration and production licence applications for the Phichit and Phetchabun provinces had been suspended so authorities could conduct deep environmental due diligence.

After the incorrect reports, investors wiped 20 per cent off the company's market capitalisation before the shares were suspended on Wednesday.

The trouble came after the Thai Government recently lifted the royalty rate for gold mining.

Kingsgate is awaiting approval to mine an area on its leases just north of Chatree, as the current operation is becoming exhausted.

Kingsgate applied for the licences more than four years ago.

Ore supplies are expected to run out at Chatree before the end of the financial year, but the company's cash reserves of $50 million have given it breathing space needed to wait for the Chatree leases.

Mr Thomas was reluctant to speculate on when the lease applications would be granted, allowing Kingsgate to access the high-grade ore at Chatree North.

Kingsgate has strong support from local communities and is a three-time winner of the National Occupational Health Safety and Environment Award in Thailand.

The Sydney-based miner had initially hoped that the leases would be approved before Christmas, but Mr Smyth-Kirk said at last month's AGM that there was little chance that necessary licences would be issued before the December 23 national elections.

It appears likely that a coalition will be needed to form government, led by either the People Power party or the Democrat party.

Mr Thomas said Kingsgate had the backing of both sides but a new government would not be officially formed until early February.

"While the media reports caught us completely offside, it did give us a chance to get to Thailand and talk to government officials and senior members of the political parties contesting the election," Mr Thomas said.

"We got reconfirmation that they all are very supportive of the gold mining industry and foreign investment. We are down to the very last strokes of getting the approvals. but I've been burned too many times in the past saying when it was likely that they would be signed off."

Goldman Sachs JBWere analysts noted recently that while they saw "significant value" in Kingsgate, it was entirely dependent upon the successful resolution of the mining lease applications.

"Chatree mine is an efficient and extremely safe mining operation," they said. "Kingsgate has built up an enviable exploration database and team that has delineated a gold province, not just a gold mine."

Despite the fact that nothing has changed, it looks like there will be a lot of resistance around $4.75 (the support that has held for the last months), until at least the elections.

juw177 said:

Despite the fact that nothing has changed, it looks like there will be a lot of resistance around $4.75 (the support that has held for the last months), until at least the elections.

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Hm intersting

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS -27.6 9.8 70.8 73.8
DPS 0.0 12.5 17.3 43.3

Date: 10/12/2007
Author: Katrina Nicholas
Source: The Australian Financial Review --- Page: 18
Australian-listed gold mining group Kingsgate Consolidated will emerge from atrading halt on the stock exchange on 10 December 2007. Its share price haddeclined markedly in the previous week due to news that the Thai Government wascarrying out a review of mining approval applications that could affect thecompany's Chatree asset. Kingsgate now says it has been reassured that itsoperation will not be covered by the new measures. However, it also does notbelieve its applications will be processed prior to the general election inThailand on 23 December

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I got more at $4.50.

Westpac still rates this as a buy with an intrinsic value of $7.70.

It's relationship with the Thai local community and regulatory authorities does still seem to be very positive.

http://www.theaustralian.news.com.au/story/0,25197,22902718-643,00.html

Kingsgate shines after suspension
Kevin Andrusiak | December 11, 2007

SHARES in gold miner Kingsgate Mining made a triumphant return to the stock exchange boards yesterday after the company confirmed its lease applications for its Chatree mine were not affected by a new review initiated by the military-backed Thailand Government.

The stock price jumped 21 per cent when the suspension on the shares was lifted yesterday morning, partly cancelling out a 95c fall the previous Monday after Thai media reports suggested the lease applications had been stalled by the new review.

After meetings between Kingsgate executives and Thai officials last week, the Sydney-based miner was able to declare that the lease applications were still being reviewed.

A decision is not expected until early 2008 following Thai elections on December 23.

The leases are vital to Kingsgate's mining operations in Thailand because ore at its current operations is expected to be exhausted by the end of the current financial year.

The leases would give Kingsgate access to the high-grade zones to the north of the Chatree open pit.

Kingsgate has a good track record, both socially and environmentally, in Thailand.

Shares in the company closed 14 per cent higher, rising by 55c to $4.50 yesterday.

UP over 10% in about an hour.

Closed and my long term sell order was next in line.

Any news or supposed rumor ?????

UMike said:

UP over 10% in about an hour.

Closed and my long term sell order was next in line.

Any news or supposed rumor ?????

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KCN does have good numbers despite soverign Thailand risks

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS -27.6 22.0 40.9 70.4
DPS 0.0 12.3 12.5 37.8

Also gold could be bullish if US Fed cutrates in the recession etc

thx

MS

Does anyone have any inside information on this stock in terms of the downward price movement of late?

My suspicion is that, given the impending outcome of its lease approval process, absolute speculation is driving this stock i.e. a bit of a down sends everyone into a panic because 'someone, somewhere must know something', but the exact same thing happened with the upswing in Jan.

To be honest, the stock is a bit of a punt now given the erractic gold-related policy of the Thais of late, but the word is that the new PM is something of a Thaksin stooge and will be angling to get him back into the country and then potentially back in power. This would imply the new PM has aligned views with the pre-coup government which was not responsible for the recent freeze on new exploration leases. Also. in terms of current policy, stimulating overseas investment in Thailand has been made a priority in the near term so one would think that this stacks the odds in favour of a positive outcome.

Anyone with inside contacts in the Thai government??

rgdk said:

Does anyone have any inside information on this stock in terms of the downward price movement of late?

My suspicion is that, given the impending outcome of its lease approval process, absolute speculation is driving this stock i.e. a bit of a down sends everyone into a panic because 'someone, somewhere must know something', but the exact same thing happened with the upswing in Jan.

To be honest, the stock is a bit of a punt now given the erractic gold-related policy of the Thais of late, but the word is that the new PM is something of a Thaksin stooge and will be angling to get him back into the country and then potentially back in power. This would imply the new PM has aligned views with the pre-coup government which was not responsible for the recent freeze on new exploration leases. Also. in terms of current policy, stimulating overseas investment in Thailand has been made a priority in the near term so one would think that this stacks the odds in favour of a positive outcome.

Anyone with inside contacts in the Thai government??

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Hi does anyoen still own this stock?

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS -27.6 10.0 59.0 197.6
DPS 0.0 11.0 15.8 16.8

Jamie Freed
July 19, 2008


THE goldminer Kingsgate Consolidated could be close to securing long-awaited leases for its Chatree North deposit in Thailand.

The Sydney company entered a trading halt yesterday after receiving "unsupported information" that the Thai Minister of Industry had approved the mining leases.

But a religious holiday on Thursday and Friday meant Kingsgate was unable to confirm the information. It expects to update the market by the start of trading on Tuesday.

Kingsgate has been processing low-grade ore from its Chatree mine for nearly two years while awaiting approval of the leases, which was delayed after a coup in September 2006. If the leases are not granted soon it will have to cease its operations. In its March quarterly report Kingsgate said it would only have ore feed for its mill until August or September.

Analysts have long said that Kingsgate shares are likely to be re-rated after it receives approval to mine in its high-grade northern leases. It could be a takeover target, although the most oft-mentioned suitor, Oxiana, is now seen as out of the running since its merger with Zinifex.

Kingsgate employs nearly 1000 Thai workers - 80 per cent of whom are from the surrounding area - and only eight Western expatriates at its Chatree operation. It has the world's best safety record for a goldmine.

The granting of the leases would allow Kingsgate to expand to 300,000 ounces a year of low-cost gold production amid high prices, up from 65,000 to 80,000 ounces of higher-cost production this year.

It had cash costs of $US404 ($416) an ounce in the March quarter and said its operations were profitable, even though it was processing material with an average grade of only 1.1 grams in the tonne.

In May Kingsgate said it could double the size of its treatment plant by the middle of next year, depending on when it was granted the leases. That would allow it to produce 300,000 ounces in 2010, up from an expected 100,000 to 140,000 ounces next year.

The company, which has about $45 million cash and no debt, has ordered key components it needs to expand the plant.

A Merrill Lynch analyst, Anna Kassianos, yesterday said her revised gold price assumptions gave Kingsgate among the greatest appreciation in asset value of the goldminers she covered, assuming it was granted the Chatree North leases.

Kingsgate shares last traded at $4.69.

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I sold mine some time ago... it was way too volatile for my liking..
anyone care to estimate a price target provided the lease permit goes through ?

Hi Michael,

Can I ask where you sourced these figures from?

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS -27.6 10.0 59.0 197.6
DPS 0.0 11.0 15.8 16.8

If they did come to pass (almost $2 eps in 2010) then you would expect at least $10 per share (and that is being quite conservative

Cheers V

I have seen targets well over $8 but it depends on the leases being granted. I am also pretty sure I have heard brokers say that they could double once the leases have come through.

They are targeting production of 300,000 ounces of gold and 1.5 million ounces of silver in 2010(depending on when the leases are granted).
The papers are saying that the equipment for the mill upgrade has been ordered.

The other thing about Kingsgate is that they also have quite a bit of exploration to go on with and it is quite possible that Chatree is only the start.

They have put out quite a few presentations while we have been waiting for the leases to be granted and they are available on their website at

www.kingsgate.com.au

I hold some of this stock and have been waiting patiently for the leases to be granted so hopefully it will be good news next week. Please do your own research as i only know what I read and half of that may be hype.

subi1 said:

I have seen targets well over $8 but it depends on the leases being granted. I am also pretty sure I have heard brokers say that they could double once the leases have come through.

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Yes subi, I have heard some comments like this and if the news comes through on an up day for gold then it will be quite significant for the sp, pending other market dramas.

Personally, I have the feeling that the leases will be granted because overall, it will be good for the new leaderships own hip pockets.



Good luck to long term holders.

The leases have now been granted and the excitement should start.

Check out their presentations at

www.kingsgate.com.au

subi1 said:

I have seen targets well over $8 but it depends on the leases being granted. I am also pretty sure I have heard brokers say that they could double once the leases have come through.

They are targeting production of 300,000 ounces of gold and 1.5 million ounces of silver in 2010(depending on when the leases are granted).
The papers are saying that the equipment for the mill upgrade has been ordered.

The other thing about Kingsgate is that they also have quite a bit of exploration to go on with and it is quite possible that Chatree is only the start.

They have put out quite a few presentations while we have been waiting for the leases to be granted and they are available on their website at

www.kingsgate.com.au

I hold some of this stock and have been waiting patiently for the leases to be granted so hopefully it will be good news next week. Please do your own research as i only know what I read and half of that may be hype.

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I also have been a long term holder (partial trader).

Great to see the leases being granted and wasn't suprised at the sharp increase.

It is now consoladating so hopefully they will reach their true value in the next week or two.

UMike said:

I also have been a long term holder (partial trader).

Great to see the leases being granted and wasn't suprised at the sharp increase.

It is now consoladating so hopefully they will reach their true value in the next week or two.

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I'm am surprised KCN has not kicked along further than it has with the leases being granted - I mean the situation was looking dire if there was any further delay - now it looks like a PE of 3 by 2010 & possible further upside if further exploration success (likely). Am I missing something?

Cheers,
PETEAI

Bell potter recommendations (I personally always double check BPS recommendations and mostly found they were in correct or contradictory and do not update recommendations for long time)

We consider KCN suitable for speculative investors

Ausenco) and purchase of required mining fleet becomes available.

We have an updated assessed value of $4.92 (previously $3.96) and a price target of $6.40 (previously $5.15), which incorporates revised gold price and FX assumptions and assumes a successful expansion of gold production to ~250,000ozpa by FY11.

KCN’s gold production is unhedged and for investors with a bullish outlook on the gold price this provides attractive exposure to movements in the gold price. At a constant Au price of US$1,000/oz (and FX of 0.95) the assessed value of KCN would increase to $6.81, with a price target of $8.85.
Kingsgate Consolidated (KCN) Speculative Buy

KCN S&P/ASX Small Resources
Bell

Aspect Huntly droppped the spec from the Buy recomendation since the Ministerial approval for the grant of the Chatree North mining leases. (although in the risk rating them maintained a "high")


Their intrinsic value is $9.50/share with Gold calculated at $750.

dyor I 'spose.