Kingsgate Consolidated has received approval from Thailand’s Board of Investment for a Zone 3 investment promotion package for Kingsgate’s planned Chatree North processing plant at its openpit gold operations in central Thailand. Based on this approval, engineering and construction contracts are being finalized, and construction has begun.
The Zone 3 fiscal incentive includes an eight-year tax-free period from first production, followed by a further five years at half the 30% corporate tax rate. Tax will continue to be paid on production from the existing Chatree plant at half the 30% corporate tax rate until November 2014.
The Chatree North plant will be a separate 2.7-million-mt/y ore processing plant and is being built alongside the current 2.3-million-mt/y Chatree plant. When the new plant is fully operational, Chatree gold production is expected to increase to between 200,000 and 250,000 oz/y. Since mine startup in November 2001, Chatree production has varied between 74,000 and 154,000 oz/y.
Funding of Chatree North’s $100-million construction cost is expected to be predominantly from debt facilities. Already, $25 million has been spent on long-lead capital items and engineering design.
Currently, Kingsgate has approximately $36 million in cash and an undrawn $30 million working capital facility with Investec.