The Chatree/Chatree North gold mine in central Thailand, about 280 km north of Bangkok, is now back to full capacity following a successful ramp-up of operations when full access was granted to new mining leases. It is owned and operated by Kingsgate Consolidated Ltd., through its Thai subsidiary Akara Mining Ltd. The mine had been through uncertain times while the operator had to await the Thai government’s green light for the Chatree expansion proposal and the granting of all necessary permits. These included forestry, access, establishment of new haul roads, construction of environmental bunds, sedimentation and catchment ponds, and construction of a new explosives magazine to obtain a critical new blasting license.

Now that the permits have been obtained, and with the price of gold an all-time high, the future looks bright. The mine’s first 1 million oz of gold was poured in February 2010. Forecast production is up to 140,000 oz in the year to June 2010. The mine has at least 1.5 million oz in ore reserves.

During the December 2009 quarter, nearly 2 million metric tons (mt) of ore were mined and nearly 670,000 mt treated. Gold production was 40,224 oz in the December 2009 quarter. The gold grade increased to 2 g/t due to access to high-grade ore at the C North Pit. Silver production was 131,948 oz.

The throughput rate of the processing plant is currently more than 2.6 million mt/y. Ausenco has been retained to complete detailed design and engineering for a plant expansion up to 5 million mt/y.

Kingsgate’s CEO, Gavin Thomas, said: “Our cash costs are very good—down to $312/oz and this includes a $73/oz royalty to the Thai government. The grade increased to 2 g/t gold for the quarter, enabling gold production costs of $230/oz on site.” He said the company was now in a position to deliver growth plans on the basis of its latest results, which places the Kingsgate as a “lowest quartile global gold cost producer.”

Mining continues at a higher rate than ore processing, with several open-pits providing ore blending flexibility. Stockpiled ore is now nearly 4 million mt at a grade of 0.84 g/t gold for 104,700 oz of gold.

Commissioning of new mining equipment, most recently steel shells for the grinding mills, has improved the productivity of the mine and made it more cost-effective. The mine has acquired 11 new blasthole drill rigs, three new excavators (O&K RH40s) and two smaller backup excavators (Cat 385s). Twelve 50-mt Cat 773 trucks and eight 40-mt Cat 740 trucks now work with the excavators. The new fleet also includes support vehicles such as water trucks, graders, dozers, and loaders. An expanded mining fleet on the enlarged A Pit includes a second RH90 excavator and four new Cat 777 haul trucks (to a total of eight).

The mining method is by simple drill and blast, after initial drilling to accurately establish the gold grade of each block of rock. The Chatree plant uses the Carbon-in-Leach (CIL) method, and has processing capacity of about 2.3 million mt/y of ore. Doré bars from the mine are refined in Hong Kong.

Resource development drilling has identified new and deeper gold zones beneath the previously closed D Pit within the original mining leases. The D Pit could be reopened at current gold process. Chatree’s deepest pit, the C Pit, was mined to a depth of 150 m and the depth potential of D Pit would probably be about the same. Some of the best results from the drilling under D Pit include 14 m at 3.8 g/t gold, 21 m at 2.9 g/t gold and 9 m at 4.2 g/t gold.

The Suwan gold project area was identified about 10 km north of Chatree, with the potential to provide ore feed for Chatree. Mineralization covers an area of 4 x 5 km with best drilling results of 42 m at 1.8 g/t gold and 7 m at 7.4 g/t gold. To better understand the extent of deeper structures beneath the current workings, an orientation seismic survey is being conducted.

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Precious Metals ($/oz)

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