2024
Annual Report
2024 ANNUAL REPORT
www.kingsgate.com.au
Front cover: Chatree processing plants
This Image:
New Caterpillar in front
of processing plants
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1
Contents
Contents
Chairman’s Review ...................................................................................
2
Managing Director & CEO’s Report .............................
4
Operations Report
Chatree Gold Mine ...................................................................................
6
Sustainability & Community ......................................................
8
Projects Report
Nueva Esperanza ........................................................................................ 13
Exploration Report
Exploration in Thailand ..................................................................... 14
Mineral Resources and Ore Reserves ................... 24
Competent Persons Statement ....................................... 26
Exploration, Mining and
Special Prospecting Licences .............................................. 28
Directors’ Report ......................................................................................... 32
Remuneration Report .......................................................................... 39
Auditor’s Independence
Declaration ............................................................................................................. 47
Financial Statements
Consolidated Statement of Profit or
Loss and Other Comprehensive Income ................ 48
Consolidated Statement of
Financial Position ....................................................................................... 49
Consolidated Statement of
Changes in Equity ...................................................................................... 50
Consolidated Statement of
Cash Flows .......................................................................................................... 51
Consolidated Entity
Disclosure Statement ........................................................................ 52
Notes to the Consolidated
Financial Statements .......................................................................... 53
Directors’ Declaration ........................................................................ 89
Independent Auditor’s Report ............................................ 90
Shareholder Information .............................................................. 95
Corporate Information ...................................................................... 97
2024 ANNUAL REPORT
www.kingsgate.com.au
Your Company and its directors
are proud that after almost eight
years and against all odds the
Chatree Gold Mine in Central
Thailand is now close to full
operational capacity.
Chairman’s Review
2
Chairman’s
Review
Despite all the difficulties faced by the
Company, politically, financially and the
effluxion of time, the presence of naysayers and
the virtual impossibility of reversing a seemingly
company destroying impediment, we have been
able to achieve the inconceivable. Many of our
loyal and terribly patient shareholders have well
understood the efforts and sacrifices that have
made this all possible and we are extremely
grateful for their ongoing support.
Unfortunately, a small group of disgruntled
shareholders recently have seen fit to wish to
disrupt the progress that has obviously been
made by making unfounded claims on social
media. Whilst these kinds of things have
happened before, your management has not
wavered from its dedication to restoring the
Company to full production and generating
shareholder value and will continue to do so.
Whilst it has taken some time to get to this
point, and we all would hope that things would
happen quicker, we now have both plants
operating above name plate capacity. We are
working assiduously to increase production,
to increase the grade of ore we are processing
and to improve recovery. So far we have been
processing predominantly lower grade ore from
the low grade stock piles, but gradually we are
adding ore from the A Pit with a corresponding
gradual increase in grade.
The Company remains focused on progressing
the work required to get A Pit into the
appropriate configuration for us to economically
and efficiently mine the higher-grade ore that we
know exists at lower levels. As can be seen in the
guidance and outlook we recently released, our
current production and costs are not repre
sentative of what we expect in the longer term,
where higher grades and increased efficiency will
significantly improve our performance on both.
We remain confident that the hard work we are
doing now to get the pit into proper shape is the
right decision to set the pit and the business up
for a strong future.
There is an old saying in the stock market that
‘the market is always right’. I have been at pains
over the years to explain if this was correct it
would be difficult to make money in the stock
market. There is little doubt that the market has
not yet appreciated what has been achieved in
the rejuvenation of your Company, but I have
pointed out to our management that after what
we have been through it would be unlikely for
the market to properly reflect the real value
of the Company until we are at least at full
production capacity.
Incredibly, with our Company’s undoubted
strong outlook and the incredible performance
of the price of gold over recent months, the
short position in our stock increased consid
erably, in what Sir Humphrey Appleby would
surely describe as a “courageous decision”.
However, despite the academic excuses made
for the worth of shorting, it provides little value
to the market, but under the ever watchful eye
of the regulatory authorities its adherents seem
enabled to successfully manipulate the market
on a daily basis. This has been the case in our
stock for some time.
Assembly of one of the new 777
Caterpillar trucks
Ross Smyth-Kirk OAM
Executive Chairman
Chairman’s Review3
Chairman’s Review
Aerial shot of processing plants
Back home, the impending energy crisis that has
been imposed on us by an increasingly ideologi
cally driven government seems increasingly
unavoidable. Bolstered by the ambitious, but
cringeworthy aspiration of being the world’s
renewable superpower and in awe of the once
colourless but very volatile gas - hydrogen – in
its now various colourful incantations, our
politicians seem oblivious to the fact that
nothing will be made in Australia if we continue
to have high energy prices.
Over the past few months we have made
significant new appointments in management
in the areas of finance, geology and mine
operations. All are already contributing to the
efficient running of the business and our ability
to produce the results that we are looking
forward to over coming years. Our thanks to
all our management and loyal employees who
stayed the distance through our long journey
and particularly to our Board, and who, although
subject to many setbacks and risks, kept the
faith through thick and thin.
The new government in Thailand appears to
have a more commercially focused agenda than
previously and we believe we have developed
a good working relationship at all levels of
government and the bureaucracy. Importantly
all recognise that we have operated as a good
corporate citizen, have not transgressed on
environmental and health grounds and were not
treated properly in the past.
Hopefully by this time next year we should be
looking at a much clearer and appealing scenario
and the prospect of shareholder benefits
reflecting the efficient and profitable running of
what we formerly described as South-East Asia’s
showpiece gold mine.
Clearly the current outlook for gold is greatly
enhanced by the current parlous state of
the world. In particular the sad state of the
American political scenario hangs perilously
over the future outlook for the Western world.
This has not been improved by the replacement
of the appalling repeat of Weekend at Bernie’s
the world has been subjected to for the last four
years by the prospect of a vacuous neo-Marxist
inhabiting the White House, with the alternative
the least worst prospect.
The continued buying by central banks, led by
the Chinese, has had a profound effect over
recent years on the gold price and there is no
indication this is likely to subside.
The continued strong showing by both gold
and silver has been quite fortuitous for your
Company’s other project – the Nueva Esperanza
silver/gold deposits in northern Chile. Now that
we have Chatree up and running we are able to
give more attention to the future of our Chilean
interests and, whilst a number of alternatives are
being assessed, we hope to be soon in a position
to announce our intentions for its future.
I’m pleased to say that 2024 has been a watershed year for your
Company, with the Chatree Gold Mine (“Chatree”) entering the
final stages of its continued ramp up. Last year we celebrated the
resumption of operations with processing Plant #2 starting on the
low-grade stockpiles, and this year we have been able to continue
that momentum with Plant #1 coming online, and mining activities
resuming in the A Pit.
These milestones have been supported by a
strong operating performance consisting of:
〉
Total production of 37,015 ounces of gold
and 460,356 ounces of silver;
〉
A processed ore grade of 0.41 grams per
tonne for gold, and 7.87 grams per tonne for
silver, with recoveries averaging 81.0% for
gold, and 54.4% for silver respectively;
〉
Plant #2 operating throughout the year,
processing 3.26 Mt, which is 21% above
nameplate capacity of 2.7 Mtpa;
〉
Refreshing the old mining fleet, with the
arrival of the first tranche of Caterpillar
equipment, and the first blast in May 2024;
〉
Commissioning 11 pieces of mining
equipment before 30 June 2024, with all
operational mining equipment now on site;
and
〉
Completing the Plant #1 overhaul project,
with the first gold pour in June 2024.
Managing Director & CEO's Report
4
Managing Director
& CEO’s Report
www.kingsgate.com.au
Managing Director & CEO's Report5
New Caterpillar fleet
I’m also pleased to say that throughout the year
we have maintained our exceptional safety record
at Chatree. Safety in the workplace is the centre
piece of our operational culture, and we reported
a very low total recordable injury frequency rate
of 1.6 per million hours worked, which reflects
our ongoing focus and commitment to training
and safety across the site.
Exploration also remained a key focus at
Chatree throughout the year, with consistently
good results recorded across a number of key
prospects including Chalawan, Kumpee, and
the B-R Prospects located in the South-Eastern
near-mine corridor. A total of US$4.3 million
has been earmarked to continue focusing on
these areas in FY25, with a view to developing
an inaugural resource estimate for the South-
Eastern complex.
I would also like to acknowledge the excellent
community support that Kingsgate continues
to enjoy around Chatree. We have a strong
culture built upon inclusion and diversity, and I’m
pleased to say that more than 80% of our current
workforce live within 10 kilometres of the mine.
This is further evidenced when local communities
vote in favour of licence applications and
renewals, in most cases, support levels exceed
80% to 90%.
It is also prudent to make a brief comment on the
recent changes in the Thai political landscape,
and to say that Kingsgate has consistently
built good relationships with previous Thai
Governments, and the new government is no
different. In fact, the current Thai Prime Minister,
Paetongtarn Shinawatra’s father (Thaksin
Shinawatra), originally opened Chatree when
he was Prime Minister in 2001, so we feel that
we are on the cusp of a renewed and mutually
beneficial relationship.
Processing plants at night
Managing Director &
CEO’s Report
On that note, I once again want to offer my
thanks and appreciation to all of my Kingsgate
and Akara colleagues, who continue to work
diligently on the ramp up of Chatree. We also
welcomed aboard two new executive staff to
Kingsgate this year, with Jillian Terry taking the
role of General Manager, Geology, and Dan
O’Connell coming onboard as our new Chief
Financial Officer. Both Jill and Dan bring a wealth
of experience to our team and are already making
meaningful contributions to Kingsgate.
I also want to make special mention and express
my sincere appreciation to our colleagues at
Nueva Esperanza, in particular Monica Aris,
Alejandro Llanca, and Gabriel Irusta who have
kept that project in good order, often on a
shoestring budget, and I feel there will finally be
some positive developments for that project in
the coming year.
Consequently, I am keen to grow shareholder
value by identifying gold mining opportunities
with long-term exploration upside, and as we get
closer to returning to steady state production
at Chatree, I am confident that it will underpin
our future operational and financial success and
enable us to achieve our stated goal of once
again becoming a premier mid-tier gold producer.
Jamie Gibson
Managing Director &
Chief Executive Officer
All of these operational achievements reflect
your Company’s successful execution of the
Chatree mining ramp up strategy and were
underpinned by a strong financial performance.
Kingsgate has also ensured that it remains well
funded to support the operational ramp up,
having secured a term facility for US$35 million
with Nebari Gold Fund 1 LP, and Nebari Natural
Resources Credit Fund II, LP. In addition, your
Company reported a net profit of $199.8 million,
which included a gain of $228.7 million arising
from a full impairment reversal of Chatree. The
recoverable value has been calculated to be
significantly greater than the net value of assets
that can be reversed, reflecting the Company’s
confidence in the future performance of the
mine.
Operations Report
6
www.kingsgate.com.au
Operations
Report
Chatree
Gold Mine
Thailand
Operational
Performance
The 2024 financial year was another transform
ative year for the Chatree Gold Mine. Following
its reopening in March 2023, and approval by
the Department of Primary Industries and Mines
in Thailand, the refurbishment of Plant #2 was
completed in March 2023 and Plant #1 overhaul
project was completed in May 2024. Using
Chatree’s substantial ore stockpiles, processing
commenced in March 2023, with mining
operations restarting in May 2024.
Combined plants
The Chatree operations include two separate
processing plants, creating increased
operational resilience. Production for the year
ended 30 June 2024 was 37,015 ounces of
gold and 460,356 ounces of silver, reflecting a
material ramp up from production in the year
ended 30 June 2023. The grade of the processed
ore was 0.41 grams per tonne for gold and
7.87 grams per tonne for silver. Recoveries
averaged 81.0% for gold and 54.4% for silver.
A total of 3.49 million dry tonnes were crushed
for the year. Average crusher feed rate was
508 tonnes per hour with an availability of
94.0%. Total mill throughput from both plants
for the year was 3.46 million tonnes. Average mill
throughput rate was 427 tonnes per hour with
an availability of 93.7%.
Plant #1
Whilst Plant #2 operated throughout the full
financial year, the Plant #1 overhaul project was
undertaken by Thai based and international
engineering firms during the year ended 30 June
2024. Plant #1’s original design throughput was
2.3 million tonnes of ore per annum (Mtpa) with
Plant #1 in commissioning phase at 30 June
2024, following the first gold being poured
6 June 2024.
Commissioning for Plant #1 crushing circuit
started on 10 May 2024. A total of 227,985
dry tonnes were crushed before 30 June 2024.
Average crusher feed rate was 307 tonnes per
hour with an availability of 97.1%. Commissioning
for Plant #1 grinding circuit started on 18 May
2024. A total of 196,641 dry tonnes were milled
before 30 June 2024. Average milling feed rate
was 211 tonnes per hour with an availability of
89.5%.
Plant #2
Plant #2 continues to perform above
expectation. The original design throughput
was 2.7 Mtpa and it was operating at 3.26 Mtpa
or 21% above design throughput for the year
ended 30 June 2024.
A total of 3.26 million dry tonnes were crushed
for the year. Average crusher feed rate was 472
tonnes per hour with an availability of 94.6%. In
addition, a total of 3.26 million dry tonnes were
milled for the year. Average milling feed rate
was 401 tonnes per hour with an availability of
95.2%.
Mining
The first blast in the A West pit commenced
in May 2024 with the first tranche of new
Caterpillar equipment commissioned reflecting
the successful commencement of the Chatree
mining ramp up strategy. A total of 11 pieces
of mining equipment was commissioned before
30 June 2024, with an additional 30 pieces of
mining equipment scheduled to be delivered
during the year ended 30 June 2025 to allow a
full ramp up of mining operations.
Operations Report
First doré bar from Plant #1
Gold pour
7
Operations Report
Before 30 June 2024, a total of approximately
140,000 tonnes of ore was mined from A
West pit. Rehandle of stockpiles continued
throughout the year with approximately 3.1
million tonnes of ore taken from the marginal
grade stockpiles to the primary crusher.
Construction of the sixth lift of TSF #2 (Tailings
Storage Facility) commenced during the
year ended 30 June 2024 and will provide an
additional 3.6 million tonnes of storage capacity.
Throughout the year, waste rock from A Pit was
sent directly to TSF #2 for the construction of the
downstream embankment. An additional 114,000
tonnes of laterite and clay material was excavated
and used for the construction of TSF #2.
The TSF #1 rehabilitation plan continued with
368,160 tonnes of Non-Acid-Forming (NAF)
material placed by a local contractor for the year
ended 30 June 2024.
At year end, 3.7 million tonnes of ore remained
in the stockpiles with an average contained gold
grade of 0.44 grams per tonne representing
42,556 ounces of gold.
Two Lost Time Injuries were recorded during the
year.
Chatree and the
Thailand-Australia Free
Trade Agreement (TAFTA)
In effect since 2005, TAFTA is a bilateral trade
agreement between Thailand and Australia
to promote trade, services, and investment.
It seeks to protect Australian investments in
Thailand by providing rights to arbitration and
compensation in cases of expropriation.
In 2016, the Thai Government ordered the
closure of the Chatree Gold Mine, prompting
Kingsgate to seek damages under TAFTA. An
arbitral hearing was held in 2020, and while the
tribunal was prepared to issue an award, both
Kingsgate and the Thai Government recognised
the mutual benefit of reopening Chatree and
deferred the award to continue settlement
discussions.
Following Chatree’s reopening in 2023, negotia
tions have focused on reaching an amicable
resolution. Both parties have jointly requested
multiple extensions of the award deferral to
facilitate these negotiations. In light of recent
political changes in Thailand, the holding period
for the arbitral award has now been extended
until 30 September 2025.
continuedu
8
www.kingsgate.com.au
Operations Report
Sustainability
and Community
Sustainability at
Kingsgate and Akara
Kingsgate, and our subsidiary Akara Resources
is committed to upholding high environmental,
social and governance (ESG) standards and
operating in a sustainable way that benefits
shareholders, employees and local communities.
Akara’s approach to sustainability is based on
a four-pillar strategy; sustainable community,
educational opportunities, health and wellbeing,
and clean water.
Four Pillar Strategy
Sustainable
Community
Tree planting
Akara planted over 15,000 trees across 12
community forests at community tree planting
events throughout the year. Akara also donated
over 3,000 fruit trees to community volunteers
at the planting events.
Firebreak activity
In collaboration with the Phichit Forest Center
and the Phichit Provincial Security Operations
Department Akara participated in a firebreak
activity across 10 community forests, to protect
over 3 km2 of forest area during the dry season.
Recycling
Approximately 160 tonnes of waste from the
Chatree Gold Mine was recycled during the year.
Cultural and religious events
Akara participated in and supported a number
of important cultural and religious community
events including the Loy Krathong event in
November 2023 and the Songkran Festival in
April 2024.
Household visits
During FY24, Akara visited over 2,600
households located within 5 km of the Chatree
Gold Mine. During these household visits the
1
Communities
Community Engagement
Akara is focused on enhancing the quality of
life in the communities where we operate and
maintains active engagement with the local
community through monthly meetings with 28
nearby villages, involving over 5,000 households
and approximately 14,000 individuals.
Community feedback is gathered during
these monthly meetings and through multiple
channels including Facebook, Line Official, and
feedback boxes.
Maintained 98%
Thai workforce
and over 80% local
employment
Visited over
2,600 local
households
Participated in
over 100 village
meetings
Conducted a free
annual health check
for over 450 local
residents
Recycled
approximately 160
tonnes of waste
Planted
approximately 15,000
trees across 12
community forests
Maintained water
quality from 16
filtration stations
Sustainability
Highlights for FY24
Operations Report
Operations Report9
Health &
Wellbeing
Community health checks
Akara conducted a free health check for
over 450 local residents from across Phichit,
Phetchabun and Phitsanulok provinces.
Local hospital support
Akara continued its ongoing support of the
Wang Pong Hospital in the Phetchabun province
this year. Akara donated 100,000 THB to be
used to upgrade medical facilities. Akara staff
also generously donated a further 40,000 THB.
Medical supplies
During FY24 Akara distributed first aid kits and
blood pressure monitors across all 28 villages
within 5 km of the Chatree Gold Mine.
team listened to feedback from local residents,
provided information on operations and
responded to questions.
Community village meetings
Akara participated in over 100 community
meetings in villages within 5 km of the Chatree
Gold Mine this year. At these meetings the team
discussed projects that the various community
funds support and also provided an update on
operations.
Educational
Opportunities
Support for local schools
Akara supported a number of infrastructure
projects at three schools located within 5 km
of the Chatree Gold Mine, including Ban
Kirithepminit School, Thairath Wittaya School,
and Wat Sattasira-Ard School. Akara also
donated equipment and uniforms to underprivi
leged students.
Scholarships
Akara participated in activities at six local
schools for Thailand’s Children’s Day this year
and also provided scholarships to support local
primary school students.
2
3
continuedu
www.kingsgate.com.au
Operations Report
10
Community sporting events
Akara staff participated in a range of sporting
events within the community, including a
charity fun run event to raise funds for the
Banmung temple in Phitsanulok province. Akara
also sponsored the Khao Chet Luk Football
Club and provided uniforms for the junior team
participating in the Thap Khlo District Cup
competition.
Red Cross blood donation
Akara participated in the Thai Red Cross
Society’s annual blood donation program this
year and has done so for the past 20 years.
Clean
Water
Water filtration
Akara maintained 16 water filtration stations
around the Chatree Gold Mine and monitored
water quality by measuring pH, hardness,
turbidity and electrical conductivity values.
Water for the Chatree community
During FY24 Akara supplied and donated
100,000 water bottles to staff and the local
community.
4
continuedu
People
Workforce
As at 30 June 2024, the total number of Akara
employees was 399, with Thai nationals making
up over 98% of the workforce. In addition, 84%
of employees are from the local communities
surrounding Chatree.
Women make up 20% of Akara’s workforce and
32% of all supervisory-level roles are held by
women.
Operations Report
Operations Report
11
Health & Safety
A key focus for FY24 was further strengthening
health and safety initiatives at the Chatree
Gold Mine. During the year, an Occupational
Safety and Health Committee was established
and Akara staff participated in a range of
training sessions including, first aid, chemical
management and rope access training.
Operations Report
12
www.kingsgate.com.au
Environment
Water
The Chatree Gold Mine operates on a nil-release
basis. All rainfall on site is harvested and no
water leaves the site. Water quality is regularly
monitored at 24 surface water and 76 ground
water sampling sites. Independent consultants
conduct quarterly water sampling with results
reported on a semi-annual basis.
Dust
Dust is monitored using high-volume air
samplers with Mass Flow Control (MFC) for
24-hour continuous measurement of PM-10
and total suspended particles. Independent
consultants assess dust levels at nine
monitoring stations on a quarterly basis. All
readings throughout FY24 were below the
permissible thresholds.
Noise and vibration
Noise is tracked at nine sites around the mine,
while vibration is measured in the seven nearest
villages. The results are assessed by independent
consultants with the results reported on a
semi-annual basis. All noise and vibration levels
were within guidelines set by the Thai Ministry
of Natural Resources and Environment and the
Thai Ministry of Science during FY24.
Governance
Corporate Governance
Kingsgate is committed to maintaining
high standards of corporate governance,
underpinned by a comprehensive suite of
corporate policies, procedures and training.
This framework is built upon the principles
and recommendations of the ASX Corporate
Governance Council (Corporate Governance
Principles and Recommendations 4th edition).
Kingsgate’s Corporate Governance Statement,
along with the Board and Committee charters,
is available on our website for stakeholders to
review.
The Board believes that good corporate
governance helps ensure the future success
of the Company, the Group and adds value to
stakeholders and enhances investor confidence.
As we continue to expand our Chatree
production this has resulted in a doubling in
headcount, the Board of Kingsgate has been
actively reviewing and updating our corporate
governance policies. During FY24, significant
updates and reviews were made to key policies,
introducing comprehensive training programs
for our directors, officers, and staff across
Australia and Thailand. These efforts have
been effective and are ongoing, with further
training and implementation of processes and
controls scheduled for FY25. This reinforces our
commitment to transparent and ethical business
practices at all levels of the organisation.
Our corporate policies include Code of
Conduct, Anti-Bribery and Corruption Policy,
Whistleblowing Policy and Diversity Policy. In
July 2024, we strengthened our governance
framework with the approval of an additional
Conflict of Interest Policy by the Board. Our
commitment to high standards of corporate
governance result in Policies that have been
reviewed to reflect contemporary standards,
provide greater clarity and help guide the
actions of our leaders, employees, contractors,
suppliers and customers.
Modern Slavery Statement
Following the recommencement of operations,
Kingsgate is subject to the Australian Modern
Slavery Act (Cth) 2018 and will be publishing its
first Modern Slavery Statement by the end of
2024.
Kingsgate will continue to take steps to address
the modern slavery risks in its operation
and supply chains and report its effort to
combat modern slavery risks in future annual
statements.
Chatree Environmental
Monitoring Map
13
Projects Report
Projects
Report
Nueva Esperanza
Gold/Silver
Chile
Summary
Nueva Esperanza is a prospective pre-feasibility
stage development project, located in the
well-endowed Maricunga gold/silver belt of
the Atacama region of Chile. The project has
a resource base1 of approximately 0.49 million
ounces of gold and 83.4 million ounces of silver.
Nueva Esperanza project consists of three open
pits and an underground zone and is the seventh
largest under-developed silver deposit in the
world2.
In July 2020, Kingsgate advised that its 100%
owned Laguna Resources Chile entity (“LRC”)
had been granted an Environmental Impact
Assessment (“RCA-64/20”) approval for the
Nueva Esperanza Gold/Silver Project (See
ASX: KCN released titled “Nueva Esperanza
Project – EIA Approved” dated 14 July 2020).
Projects Report
This approval enables the development of
the project (subject to compliance with local
mining laws/regulations) and follows a public
consultation period that resulted in no objec
tions being lodged against the project and is the
successful culmination of 18 months of detailed
work that saw Kingsgate working closely with
environmental consultants, local indigenous
communities and the Chilean Government.
As advised earlier this year, an updated Resource
Estimate is being developed by Cube Consulting
and will be delivered before the end of calendar
year 2024. Cube Consulting will assess if an
updated Ore Reserves estimate is required.
Historical data is also being revisited to plan
a targeted exploration program, including
investigating the project’s gold endowment.
Kingsgate is currently exploring all possible
options to unlock value of the Nueva Esperanza
project for shareholders, including a separate
listing. Further updates will be provided in due
course as the project progresses.
1
Refer to pages 24–25 for resource and reserve
tonnages, grades and confidence classification.
2
https://www.mining.com/web/mapped-the-10-
largest-undeveloped-silver-deposits-in-the-world/
Exploration Report
14
www.kingsgate.com.au
Exploration
Report
Thailand
Summary
Tactical exploration programs were conducted
on 32 Phetchabun Special Prospecting Licenses
(SPL). Field activities included geological
mapping, rock chip and soil sampling. Drilling
included Rotary Air Blast (RAB), Reverse
Circulation (RC) and Diamond (DD) holes
(Table 1). RC & DD drilling was conducted across
prospects including B-R, Chalawan, Kumpee,
Chang Puek, Jorakae, Sua Dao, Mangkorn,
Singto and Nok Kaeo.
Strategic exploration activities included risk
and opportunity assessment, alignment with
Chatree Mine strategic plans and endowment
range analysis to inform exploration targets and
programs of work.
15 SPLs in Phetchabun province were
relinquished in October 2023. The remaining 17
SPLs cover an area of 232.6 km2 (Figure 1 Akara
concession area).
Permanent Forest Licenses were received for
Chang Puek, Singto and Nok Kaeo prospects.
15 SPLs were applied for in Phichit province
(pending approval) in June 2024.
Activities
Rotary Air
Blast
RAB
Reverse
Circulation
RC
Diamond
Drilling
DD
Rock
Samples
Soil
Samples
Number of holes
628
202
3
Metres
5,912
19,799
282
Number of samples
2,026
19,567
263
349
382
CHEVRON-DOWN Table 1: Exploration Drilling Summary
RC drill chip logging
continuedu
Exploration Report
Exploration Report
Exploration Report
15
CHEVRON-DOWN Figure 1: Akara concession area
675000E
667500E
682500E
690000E
697500E
675000E
667500E
682500E
690000E
697500E
1815000N
1807500N
1800000N
1807500N
1785000N
1777500N
1770000N
1815000N
1807500N
1800000N
1807500N
1785000N
1777500N
1770000N
Phitsanulok
Phetchabun
Phichit
37/2563
37/2563
11/2563
11/2563
10
10
12/2555
12/2555
8/2555
8/2555
7/2555
7/2555
1/2
1/25
9/2555
9/2555
6/2555
6/2555
10/2555
10/2555
2/2555
2/2555
13
13
3/2555
3/2555
4/2555
4/2555
14/2555
14/2555
11/2555
11/2555
1/2549
1/2549
9/2563
9/2563
563
563
16/2563
16/2563
4/2563
4/2563
5/2
5/2
7/2563
7/2563
/2563
/2563
3
45/2563
45/2563
44/2563
44/2563
/
12/2563
12/2563
W
L
est
West
W
L
L
Jora
Jora
o
Sua
rn
rn
Chang Puek
Chang Puek
Kra Tae South
K
T
S
t
Tae South
Kra
SPLs Relinquished 2023
SPLs Relinquished 2022
Other Company SPLA
Legend
N
0
5
10
1
km
Mining Lease
Priority Prospects
Phetchabun SPLs
Phichit SPLAs
Exploration Report
16
www.kingsgate.com.au
B-R Prospect
B-R Prospect is interpreted to be a peripheral
component of the Chatree epithermal system.
It consists of three main rock units: an upper
volcanogenic sedimentary unit, a polymictic
intermediate breccia unit and a basal porphyritic
andesite unit. These rock units are intruded
by andesite, porphyritic andesite and feldspar
porphyry dykes. Mineralisation dips gently to
the east and occurs along a NNW-SSE structure
that extends from the Chatree deposit.
Gold mineralisation is found within the
polymictic intermediate breccia and the
volcanogenic sediments and is associated with
3 – 10% sulphides (mainly pyrite) in the form of
clots, dissemination, and fracture fills. There is
supergene enrichment (10 – 20m) in some areas.
CHEVRON-UP Figure 2: Phyllic-altered sedimentary
breccia and fracture-filled quartz
with 5 – 10% pyrite clots and along
fractures.
Drill
Type
Hole ID
Easting
Northing
Collar
RL
Azimuth
Dip
˚
Hole
Depth
m
From
m
To
m
Interval
m
Au
g/t
RC
7806RC
8476
10186
80.68
270
-55
118
25
40
15
0.67
43
56
13
0.61
59
81
22
0.61
RC
7810RC
8564
10137
78.13
270
-55
154
33
45
12
0.71
52
74
22
0.72
82
110
28
0.43
RC
7815RC
8376
10359
81.46
270
-55
60
0
37
37
0.65
RC
7818RC
8535
10190
78.02
270
-55
154
0
10
10
0.59
19
32
13
0.66
50
83
33
0.84
94
116
22
1.34
RC
7819RC
8537
10086
78.43
270
-55
100
21
58
37
1.37
73
84
11
0.87
RC
7919RC
8410
9735
77.50
90
-55
120
38
76
38
0.86
RC
7922RC
8658
9771
78.27
270
-55
84
4
43
39
0.86
RC
7926RC
8672
9735
78.41
270
-55
72
4
57
53
0.72
RC
7929RC
8293
9985
81.12
90
-55
72
21
26
5
1.13
37
58
21
1.99
RC
7931RC
8520
9985
78.52
90
-50
126
73
88
15
0.47
RC
7933RC
8270
10085
82.22
90
-55
60
18
34
16
1.04
RC
7934RC
8310
10085
82.79
90
-55
60
0
6
6
1.07
32
42
10
0.79
RC
7935RC
8420
10035
81.20
270
-55
60
0
8
8
0.69
CHEVRON-DOWN Table 2: B-R Prospect – Drilling assay highlights (Au>5 gram x metre). 1 2 3 4
Field reconnaissance
continuedu
Exploration Report
Exploration Report
Exploration Report
17
72m
102m
90m
102m
120m
120m
102m
123m
129m
165m
200.95m
8250mE
8350mE
8450mE
8550mE
8250mE
8350mE
8450mE
8550mE
0
50m RL
-50m RL
100m RL
0
50m RL
-50m RL
100m RL
150m RL
150m RL
6m@0.58 (63–69m)
21m@1.99 (37–58m)
including 5m@5.12 (48–53m)
10m@1.07 (63–69m)
56m@0.54 (49–105m)
63m@2.14 (8–71m)
8m@0.54 (0–8m)
11m@0.68 (33–44m)
11m@0.45 (0–11m)
5m@1.13 (21–26m)
38m@0.51 (11–49m)
23.7m@0.2 (14.8–38.5m)
18m@1.09 (7–25m)
15m@0.47 (73–88m)
38m@0.84 (4–42m)
5m@0.57 (58–63m)
15m@0.31 (17–32m)
3m@0.43 (0–3m)
70m@1.24 (5–75m)
B-R Prospect
Section 9985N
2020RC
2005RC
7929RC
2004RC
2006RC
2003RC
Legend
Mineralisation
Zone
Feldspar
porphyry
>1.0 g/t Au
>3.0 g/t Au
Average Au
grade intercept
>0.2 g/t Au
>0.5 g/t Au
>0.1 g/t Au
Andesite
dyke
4561DD
2002RC
4538RC
2001RC
7931RC
4548RC
4549RC
N
CHEVRON-UP Figure 3: Significant gold intercepts in section 9985N, B-R Prospect with background IP-Resistivity. 5 6 7
Exploration Report
Exploration Report
Exploration Report
17
Exploration Report
18
www.kingsgate.com.au
Exploration Report
Exploration staff conducting
field mapping
Exploration staff conducting
field mapping
Chalawan
The prospect is interpreted to be a peripheral
component of the Chatree epithermal system
and a northern extension of the B-R Prospect,
however the sequence is cut by comparably less
andesitic dykes.
Significant gold intercepts were identified in
silicified/ phyllic-altered polymictic andesitic
breccia, silicified andesitic tuff, propylitic-altered
rhyolitic tuff and polymictic rhyolitic tuff,
containing trace to 20% quartz veining and
1 – 10% fine-grained disseminated pyrite.
51 RAB holes were drilled for 548 metres
confirming the presence of supergene
enrichment.
A total of 31 RC holes were drilled for 2,355
metres during FY2024. Significant gold was
intersected8 9 as nearer surface supergene
enrichment and deeper primary mineralisation
(Figure 4).
120m
120m
96m
90m
75m
90m
66m
60m
54m
54m
50m
8150mE
8250mE
8350mE
8450mE
8150mE
8250mE
8350mE
8450mE
0
50m RL
-50m RL
100m RL
0
50m RL
-50m RL
100m RL
3m@0.85 (92–95m)
8m@0.68 (81–89m)
6m@0.85 (72–78m)
1m@1.07 (55–56m)
8m@0.52 (42–50m)
2m@1.18 (22–24m)
34m@0.89 (0–34m)
17m@1.06 (1–18m)
6m@0.54 (6–12m)
12m@0.52 (6–18m)
3m@1.03 (51–54m)
2m@2.09 (36–38m)
12m@2.29 (2–14m)
including 2m@9.8 (11–13m)
8m@1.33 (53–61m)
Legend
Chalawan Prospect
Section 10885N
Mineralisation
Zone
>0.2 g/t Au
>0.5 g/t Au
>1.0 g/t Au
>3.0 g/t Au
Average Au
grade intercept
7901RC
>0.1 g/t Au
4549RC
7887RC
7907RC
7889RC
7924RC
7798RC
7874RC
7925RC
7876RC
7893RC
7916RC
N
CHEVRON-UP Figure 4: Significant gold intercepts in section 10885N, Chalawan Prospect with background IP-Resistivity. 10 11 12
Chang Puek
Situated approximately 23 km south of the
Chatree Mine, the main hill zone is comprised
of rhyolitic tuff with minor polymictic rhyolitic
breccias, and traces of sediments gently dipping
to the east. Limestone occurs as lenses striking
NE – SW on the western side of the hill. The
sequence is intruded by diorite in the south-east
of the prospect.
Gold mineralisation can be traced for 2.5 km
along a NE – SW trend from the Chang Puek
hill, mainly restricted to vertical or sub-vertical
quartz veins striking NE – SW or NNW that are
hosted in phyllic and silicic altered rocks.
19 RAB holes were drilled for 257 metres around
the northern hill outside the main mineralised
zone and returned no significant assay results.
A total of nine RC holes and one DD hole were
drilled for 1,437 metres and 130 metres respec
tively during FY2024. Several holes confirmed
quartz-vein-hosted gold mineralisation13
(Figure 5).
Chatree rock chip sampling
continuedu
Exploration Report
Exploration Report
Exploration Report
19
continuedu
Exploration Report
Exploration Report
Exploration Report
19
Exploration Report
Fault
152m
246m
196m
130m
126m
10700mE
10800mE
10900mE
11000mE
10700mE
10800mE
10900mE
11000mE
0
50m RL
-50m RL
-100m RL
100m RL
150m RL
0
50m RL
-50m RL
-100m RL
100m RL
150m RL
33m@1.08 (49–82m)
including 2m@4.76 (70–72m)
4.4m@0.24 (9.9–14.3m)
2.35m@0.49 (19–21.35m)
2.35m@0.49 (19–21.35m)
9m@0.57 (56–65m)
12m@0.41 (31–43m)
9m@0.50 (25–34m)
2m@1.42 (77–79m)
26m@3.02 (81–107m)
20m@3.87 (112–132m)
including 4m@17.89 (126–130m)
18m@2.13 (180–198m)
4m@1.31 (212–216m)
8m@3.18 (228–236m)
1m@1.71 (195–196m)
2m@0.56 (137–139m)
7m@5.77 (125–132m)
Legend
Chang Puek Prospect
Section 2075N
>0.2 g/t Au
>0.5 g/t Au
>1.0 g/t Au
>3.0 g/t Au
Average Au
grade intercept
7726DD
7728RC
>0.1 g/t Au
Alteration Zone
Phyllic/Silicified
Mineralisation
Zone
7722RC
7647RC
7725RC
7651RC
N
CHEVRON-UP Figure 5: Significant gold intercepts in section 2075N, Chang Puek Prospect. 14 15 16
Exploration Report
20
www.kingsgate.com.au
Jorakae
The area is located approximately 7 km north-
east of Chatree Mine within rice fields. RAB and
RC holes have intersected a package of altered
rhyolitic tuff and polymictic rhyolitic tuff,
covered by 15 – 25 metres of saprolite beneath a
near-surface gravel bed.
Significant gold intercepts were found in the
saprolite zone from surface to the bedrock of
silicified/phyllic-altered polymictic andesitic
breccia, silicified andesitic tuff, propylitic altered
rhyolitic tuff and polymictic rhyolitic tuff,
containing trace to 20% quartz and 1 – 10%
fine-grained disseminated pyrite.
198 RAB holes were drilled for 1,986 metres
with 50 metre line spacing and 25 – 50 metre
hole spacing. Several holes confirmed supergene
mineralisation17.
A total of 57 RC holes and one DD hole were
drilled, for 5,078 metres and 66 metres respec
tively in FY2024. Mineralisation was variably
encountered from surface to over 100 metres
depth18 19 (Figure 6).
Kumpee
Kumpee is located 500 metres north-east of
B-R Prospect within rice fields. The prospect is
interpreted to be a peripheral component of the
Chatree epithermal system similar to Chalawan
and the B-R prospect. RAB and RC holes have
intersected a package of andesitic, rhyolitic and
polymictic tuffs, intercalated with siltstone,
sandstone and sedimentary breccia.
Gold mineralisation is mainly hosted within
silicified/phyllic-altered polymictic rhyolitic
breccia, rhyolitic tuff and sedimentary units
(including siltstone, sandstone and sedimentary
breccia), containing trace to 10% quartz veins
and 2 – 10% fine-grained disseminated pyrite.
Post mineralisation andesite/diorite and felspar
porphyry dykes are interpreted to cut through
the mineralised zones.
A total of 56 RC holes and one DD hole were
drilled for 6,327 metres and 86.2 metres
respectively during FY2024. Significant gold
intercepts are shown in Table 3.
Fresh rock
Oxidised rock + Saprolite
90m
120m
132m
186m
96m
90m
66m
96m
54m
54m
42m
9750mE
9850mE
9950mE
10050mE
9750mE
9850mE
9950mE
10050mE
0
50m RL
-50m RL
100m RL
0
50m RL
-50m RL
100m RL
150m RL
150m RL
9m@0.28 (80–89m)
5m@0.36 (120–125m)
6m@0.36 (60–66m)
7m@0.78 (48–55m)
5m@0.28 (60–65m)
3m@0.77 (50–53m)
4m@0.21 (27–31m)
4m@0.98 (13–17m)
17m@1.35 (6–23m)
10m@0.66 (58–68m)
15m@0.32 (27–42m)
10m@0.31 (77–87m)
13m@0.41 (46–59m)
9m@0.36 (64–73m)
2m@0.68 (54–56m)
24m@1.86 (29–53m)
21m@0.71 (15–36m)
21m@0.97 (1–22m)
5m@0.86 (18–23m)
17m@0.9 (27–44m)
22m@0.86 (2–24m)
43m@1.13 (3–46m)
13m@2.85 (3–16m)
29m@1.53 (3–32m)
28m@0.53 (28–56m)
5m@0.21 (100–105m)
Jorakae Prospect
Section 6650N
7807RC
Legend
Mineralisation
Zone
>1.0 g/t Au
>3.0 g/t Au
Average Au
grade intercept
>0.2 g/t Au
>0.5 g/t Au
>0.1 g/t Au
Andesite/
diorite Dyke
7766RC
7803RC
7763RC
7747RC
7793RC
7884RC
7801RC
7768RC
7808RC
7791RC
7805RC
N
CHEVRON-UP Figure 6: Significant gold intercepts in section 6650N, Jorakae Prospect. 20 21 22
Reverse circulation drilling
continuedu
Exploration Report
Exploration Report
Exploration Report
21
CHEVRON-DOWN Table 3: Kumpee Prospect – Drilling assay highlights (Au>5 gram x metre). 23 24 25
Drill
Type
Hole ID
Easting
Northing
Collar
RL
Azimuth
Dip
˚
Hole
Depth
m
From
m
To
m
Interval
m
Au
g/t
RC
7748RC
8820
10685
79.92
270
-55
90
36
65
29
0.43
RC
7749RC
8815
10632
79.73
270
-55
114
59
70
11
0.75
73
84
11
0.77
RC
7755RC
8865
10631
79.75
270
-55
144
139
143
4
1.71
RC
7757RC
8673
10533
78.72
270
-55
54
20
36
16
0.86
RC
7758RC
8699
10534
78.97
270
-55
78
7
26
19
0.75
63
72
9
0.62
RC
7759RC
8757
10535
79.23
270
-55
126
52
59
7
2.22
62
68
6
1.67
RC
7765RC
8715
10482
79.56
270
-55
116
8
45
37
0.88
RC
7771RC
8793
10682
79.78
270
-55
99
78
88
10
0.61
DD
7775DD
8738
10690
79.73
270
-55
86.20
24.25
38.8
14.55
1.09
RC
7776RC
8619
10435
78.45
270
-55
90
13
37
24
1.36
RC
7780RC
8637
10487
79.61
270
-55
96
16
25
9
0.87
RC
7787RC
8599
10433
78.34
270
-55
48
5
22
17
0.33
RC
7821RC
8714
10135
78.92
270
-55
150
18
28
10
0.52
95
119
24
0.44
RC
7825RC
8740
9985
77.84
270
-55
126
50
57
7
1.14
67
71
4
2.47
RC
7829RC
8735
9935
78.04
270
-55
176
75
79
4
1.25
98
109
11
0.66
114
136
22
0.41
RC
7837RC
8775
9935
78.32
270
-55
168
112
120
8
0.89
RC
7865RC
8719
10233
78.71
270
-55
150
18
42
24
0.79
RC
7870RC
8742
10185
78.54
270
-55
158
18
28
10
0.57
31
44
13
0.57
RC
7891RC
8679
10235
78.84
270
-55
138
20
25
5
1.16
RC
7896RC
8702
10185
78.43
270
-55
160
23
41
18
0.45
RC
7918RC
8610
10335
79.20
270
-55
96
36
55
19
0.41
RC
7923RC
8696
10285
79.19
270
-55
136
106
130
24
0.75
RC
7927RC
8690
10335
79.39
270
-55
120
55
72
17
0.43
Ore block mark-out
Exploration Report
22
www.kingsgate.com.au
Mangkorn
The prospect is located approximately 20 km
south-west of the Chatree Mine and consists
of a thick pile of shallow east-dipping bedded
fossiliferous limestone which is overlain by
siltstones and sandstones to the east. Vesicular
basalt is locally seen overlying the sediments.
Flow-banded rhyolite and spherulite are also
widely distributed on the eastern side of the
prospect forming a N – S trending hill which
appears to be the youngest lithology in the area.
Replacement style mineralisation is charac
terised by the silicified limestone exposed as
outcrop and subcrop, over an area of >1.6 km
long and 200 – 300 m wide. The limestone
appears to have formed along feeder structures
which splay-out along favourable beds as
sub-horizontal strata.
Rock chip samples (float) returned assays of
up to 36 g/t Au & 390 ppm Ag26. An additional
59 infill RAB holes were drilled for 213 metres
during FY2024. Results27 confirmed a high-grade
gold zone over an area of approximately
700 x 200 metres.
A total of seven RC holes were drilled for 390
metres. The only significant intercept28 was
2 m @ 1.28 g/t Au and 885 g/t Ag from 7743RC
from 7 – 9 metres.
Nok Kaeo
The prospect is located 13 km north-west of
the Chatree Mine with a geological setting of
rhyolitic to andesitic tuff and polymictic breccia,
siltstone, sandstone and limestone, intruded
by diorite stock and dykes. Strong NW – SE
lineaments are observed in geophysical data.
Mineralisation occurs along dilated N – S vein
sets up to five metres in diameter hosted in
strongly silicified and partially hydrothermally
brecciated rock. Sulphides observed include
pyrite, chalcopyrite, sphalerite, and minor
galena.
An additional 66 rock chip samples were
collected, mainly from new outcrops in FY2024
with some samples returning notable assay
results29.
A total of 12 RC holes were drilled for 1,351
metres during FY2024. The only significant gold
intercept was 16 m @ 3.19 g/t Au from 6 – 22
metres in hole 7943RC30.
Singto
The prospect is located 16 km south-west of the
Chatree Mine and comprises a diorite porphyry,
with remnant clastic sediments at higher
elevation and shallow easterly dipping bedded
limestone in the eastern part of the area.
A magnetite-sulphide skarn has formed along
the contact between the diorite and limestone.
The skarn is approximately 250 m x 1.2 km
trending NNW with a chlorite-epidote-pyrite-
chalcopyrite assemblage.
RAB and RC drilling demonstrate that the diorite
has undergone strong propylitic and phyllic
alteration, overprinted by argillic alteration
within an area of 3 x 2 km2 as confirmed by a
potassium high (2.5 x 2.5 km) from Airborne
radiometric surveys. Deep targets remain
untested. Diamond holes have been planned for
the FY2025 field season.
A total of five RC holes were drilled for 705
metres during FY2024. No significant gold was
observed but copper was generally anomalous
(0.1 – 0.3%) and two significant mineralised
zones of >0.3% copper were intersected31.
Sua Dao
The Sua Dao Prospect is located 16 km south-
east of the Chatree Mine. The area is comprised
of clastic sedimentary rocks and limestone
with minor andesitic tuff that are intruded by a
small granitic stock forming a skarn proximal to
the contact and calc-silicate rock distal to the
contact.
Mineralised narrow (1 – 5 m) quartz veining
(pyrite, chalcopyrite, galena and sphalerite) is
exposed in two areas, 800 m apart with rock
chip samples returning anomalous gold of up to
44.8 g/t.
Other prospects
Detailed geological mapping was conducted
in the Khao Rang Taen and Sua Dum areas to
the east of Sua Dao, within SPL7/2563 where
anomalous gold and copper were returned from
grid soil samples. Mapping exposed magnetite
skarn mineralisation with trace chalcopyrite
along the contact between calc-silicate rock and
granite, however rock chips samples returned no
significant gold or copper assays.
B Prospect
Endnotes
1, 8, 17, 18, 23
KCN Quarterly Report for the period ending 31 March 2024 published 30 April 2024
2, 5, 9, 10, 19, 30
KCN Quarterly Report for the period ending 30 June 2024 published 31 July 2024
3, 6, 11, 15, 21, 25
Length weighted averages of downhole intervals (apparent thickness)
4, 7, 12, 16, 22, 24
Local Grid
13, 14, 26, 27, 28, 29, 31
KCN Quarterly Report for the period ending 31 December 2023 published 23 January 2024
20
Significant Gold Exploration Results Continue near Chatree Gold Mine published 26 March 2024
Exploration Report
Exploration Report
Exploration Report
23
Drill and Blast – A Pit
24
www.kingsgate.com.au
Mineral Resources and Ore Reserves
Measured Resources
Indicated Resources
Inferred Resources
Tonnes
Grade
Tonnes
Grade
Tonnes
Grade
Deposit
Mt
Au
g/t
Ag
g/t
Mt
Au
g/t
Ag
g/t
Mt
Au
g/t
Ag
g/t
Chatree3 4 5
Open Pit
66.7
0.72
6.3
49.4
0.64
5.5
40.6
0.59
4.5
Stockpiles
3.7
0.44
7.6
–
–
–
–
–
–
Nueva Esperanza6 7 8
Open Pit
1.6
0.01
93
27.2
0.46
73
10.6
0.3
43
Total Mineral Resources
Proved Reserves
Probable Reserves
Tonnes
Grade
Tonnes
Grade
Deposit
Mt
Au
g/t
Ag
g/t
Mt
Au
g/t
Ag
g/t
Chatree10 11 12
Open Pit
30.9
0.85
7.6
14.5
0.78
6.7
Stockpiles
–
–
–
3.7
0.44
7.6
Nueva Esperanza13 14 15
Open Pit
–
–
–
17
0.5
87
Total Ore Reserves
Mineral Resources9 (inclusive of Ore Reserves)
Ore Reserves12
Mineral Resources and Ore Reserves
as at 30 June 2024
Mineral Resources
As at 30 June 2024, Mineral Resources*, inclusive of Ore Reserves, were estimated to contain 3.88 million ounces of gold and 112.4 million ounces of silver.
This represents a decrease from 30 June 2023 of 0.8% gold and 0.4% silver due to mining depletion at Chatree.
Ore Reserves
As at 30 June 2024, Ore Reserves** were estimated to contain 1.55 million ounces of gold and 59.4 million ounces of silver.
This represents a decrease from 30 June 2023 of 1.9% gold and 0.5% silver due to mining depletion at Chatree.
25
Mineral Resources and Ore Reserves
Mineral Resources
and Ore Reserves
Total Resources
June 2024
June 2023
Tonnes
Grade
Contained Metal
Tonnes
Grade
Contained Metal
Mt
Au
g/t
Ag
g/t
Au
Moz
Ag
Moz
Mt
Au
g/t
Ag
g/t
Au
Moz
Ag
Moz
156.7
0.66
5.6
3.34
28.1
163.6
0.65
5.6
3.42
29.4
3.7
0.44
7.6
0.05
0.9
39.4
0.39
66
0.49
83.4
39.4
0.39
66
0.49
83.4
199.8
0.60
17.5
3.88
112.4
203.0
0.60
17.3
3.91
112.8
Proved and Probable Reserves
June 2024
June 2023
Tonnes
Grade
Contained Metal
Tonnes
Grade
Contained Metal
Mt
Au
g/t
Ag
g/t
Au
Moz
Ag
Moz
Mt
Au
g/t
Ag
g/t
Au
Moz
Ag
Moz
45.3
0.82
7.3
1.20
10.7
51
0.77
7.3
1.28
11.9
3.7
0.44
7.6
0.05
0.91
17
0.5
87
0.3
47.8
17
0.5
87
0.3
47.8
66
0.72
28
1.55
59.4
68
0.71
27
1.58
59.7
continuedu
*
Mineral Resources are reported on a 100% basis.
Refer to the Mineral Resources table for detailed tonnage, grade and metal content categorised by confidence classification.
**
Ore Reserves are reported on a 100% basis.
Refer to the Ore Reserves table for detailed tonnage, grade and metal content categorised by confidence classification.
26
www.kingsgate.com.au
Mineral Resources and Ore Reserves
Re-estimation of Mineral
Resources and Ore Reserves
A full re-estimation of Chatree and Nueva
Esperanza Mineral Resources and Ore
Reserves is being undertaken by independent
consultants, Cube Consulting.
Updated Mineral Resources and Ore Reserves
estimates will be published in Q2 FY2025 when
modelling, estimation and verification have been
completed.
Kingsgate Consolidated confirms that it is not
aware of any new information or data that
materially affects the Mineral Resources and Ore
Reserves information included in this Annual
Report.
Governance
Assurance processes and internal controls
applied to verify the Mineral Resources and Ore
Reserves estimates includes:
〉
Processes for public reporting aligned with
ASX Listing Rules Chapter 5 (2019) and
the Australasian Code for Reporting of
Exploration Results, Mineral Resources and
Ore Reserves, December 2012 (JORC Code)
〉
Independent assessment of new or
materially changed estimates and,
〉
Reconciliation performance metrics to
validate Chatree Ore Reserves.
Competent
Persons
Statement
Endnotes to the Mineral Resources and Ore Reserves tables
1, 9
All tabulated tonnes, grade and metal information has been rounded to two significant
figures to reflect appropriate precision in the estimates and this may cause some
apparent discrepancies in totals.
2
Ore delivered to processing facility.
3, 10
Reported on a wet tonnes basis assuming a moisture content of 3%.
4, 11
Chatree metallurgical recoveries: 83.3% Au and 38.7% Ag based on metallurgical
testwork and plant performance.
5
Chatree Mineral Resources are reported at a cut-off of 0.30 g/t Au aligned with
projected gold and silver price assumptions used to estimate Ore Reserves.
6, 13
Reported on a dry tonnes basis.
7, 14
Nueva Esperanza metallurgical recoveries: 80% Au and 84% Ag based on metallurgical
testwork.
8
Nueva Esperanza Mineral Resource cut-off is 0.5 g/t gold equivalent based on long
term historical prices of US$1200/oz for gold and US$19/oz for silver and combined
life of mine average metallurgical recoveries of 80% Au and 84% Ag estimated from
testwork using the formula AuEq (g/t) = Au (g/t) + Ag (g/t) ÷ 60. It is Kingsgate’s opinion
that all elements included in the metal equivalents calculation have reasonable
potential to be recovered and sold.
12
Chatree Ore Reserves were estimated using a projected gold price of US$1700/oz and
silver price of $US22/oz and are reported at a cut-off grade of 0.35 g/t Au.
15
Nueva Esperanza Ore Reserves are based on a floating cut-off grade method. In this
method, each Resource block is subjected to a series of estimates to generate revenue
and cost fields that are used to determine a breakeven cut-off grade.
Ore block mark-out
Geology review
27
Competent Persons Statement
Competent Persons Statement
Information relating to Chatree Mineral
Resource estimates is extracted from the
ASX: KCN announcement Kingsgate Mineral
Resources and Ore Reserves 2017 released
5 October 2017 and is available to view on
www.kingsgate.com.au. The extracted Mineral
Resource estimate has been depleted for mine
production to 30 June 2024.
Information relating to Chatree Ore
Reserve estimates is extracted from the
ASX: KCN announcement Kingsgate announces
46% increase in Chatree Ore Reserve released
18 May 2022 and is available to view on
www.kingsgate.com.au. The extracted Ore
Reserve estimate has been depleted for mine
production to 30 June 2024.
Information relating to Nueva Esperanza
Mineral Resource estimates is extracted
from the ASX: KCN announcement Nueva
Esperanza Mineral Resource Update released
14 April 2016 and is available to view on
www.kingsgate.com.au.
Information relating to Nueva Esperanza
Ore Reserve estimates is extracted from the
ASX: KCN announcement Nueva Esperanza
Pre-Feasibility Study Confirms Kingsgate Growth
Strategy released 14 April 2016 and is available
to view on www.kingsgate.com.au.
The Company confirms that it is not aware of
any new information or data that materially
affects the information included in the original
market announcements describing Mineral
Resources and Ore Reserves referenced above,
and that all material assumptions and technical
parameters underpinning the estimates in the
relevant market announcement continue to
apply and have not materially changed. The
Company confirms that the form and context
in which the Competent Person’s findings are
presented have not been materially modified
from the original market announcements.
The information in this report that relates to the
Chatree Mineral Resources estimate and Nueva
Esperanza Mineral Resources estimate is based
on information compiled by Jillian Terry, General
Manager Geology and a full-time employee of the
Kingsgate Group, a Competent Person who is a
Fellow of the Australasian Institute of Mining and
Metallurgy. Ms Terry has sufficient experience
that is relevant to the style of mineralisation
and type of deposits under consideration, and
to the activity being undertaken to qualify as a
Competent Person as defined in the 2012 Edition
of the Australasian Code for Reporting of Mineral
Resources and Ore Reserves.
Ms Terry declares that she has no issues that
could be perceived by investors as a material
conflict of interest in preparing the reported
information. Ms Terry has consented to the
public reporting of these statements and the
inclusion of the material in the form and context
in which it appears.
The information in this report that relates to
the Chatree Ore Reserve estimate and Nueva
Esperanza Ore Reserve estimate is based on
information compiled by Stephen Kable, who
is a Member of the Australasian Institute of
Mining and Metallurgy. Mr Kable, Chatree
Superintendent Mine Planning is a full-time
employee of Akara Resources and has sufficient
relevant experience in the style of mineralisation
and type of deposits under consideration, and
to the activity being undertaken to qualify as a
Competent Person as defined in the 2012 Edition
of the Australasian Code for Reporting of Mineral
Resources and Ore Reserves. Mr Kable declares
that he has no issues that could be perceived
by investors as a material conflict of interest in
preparing the reported information. Mr Kable
has consented to the public reporting of these
statements and the inclusion of the material in
the form and context in which it appears.
continuedu
27
www.kingsgate.com.au
28
Exploration, Mining and Special Prospecting Licences
Exploration, Mining and
Special Prospecting Licences
held by Kingsgate and/or its subsidiaries as at 30 June 2024
No.
ML/MLA
Province
Issue Date
Expiry Date
Rai
Application
Date
1
26917/15804
Phichit
21/7/2008
20/7/2028
252-3-06
2
26922/15805
Phichit
21/7/2008
20/7/2028
283-1-65
3
26921/15806
Phichit
21/7/2008
20/7/2028
275-2-54
4
26920/15807
Phichit
21/7/2008
20/7/2028
293-2-02
5
26923/15808
Phichit
21/7/2008
20/7/2028
204-1-26
6
32529/15809
Phetchabun
21/7/2008
20/7/2028
283-1-49
7
32530/15810
Phetchabun
21/7/2008
20/7/2028
299-1-60
8
32531/15811
Phetchabun
21/7/2008
20/7/2028
279-1-79
9
32532/15812
Phetchabun
21/7/2008
20/7/2028
294-1-28
10
25528/14714
Phetchabun
21/7/2008
20/7/2028
93-1-77
11
26910/15365
Phichit
30/12/2021
29/12/2031
285-3-4
12
26911/15366
Phichit
30/12/2021
29/12/2031
275-1-81
13
26912/15367
Phichit
30/12/2021
29/12/2031
294-0-37
14
25618/15368
Phetchabun
19/6/2000
18/6/2020
299-1-92
under licence
renewal
15
MLA 6/2556
Phetchabun
57-2-93
16/7/2013
16
MLA 1/2559
Phichit
194-2-36
25/3/2016
17
MLA 2/2559
Phichit
51-0-28
25/3/2016
18
MPL 1/2551
Phichit/
Phetchabun
19/1/2022
18/1/2027
2439-0-75
Total Rai
6456-3-92
Total km2
10.33
Chatree, Thailand
Mining Leases, Mining Lease Applications and Special Prospecting Licence applications for Akara Resources Public Company Limited as at 30 June 2024.
Mining licences
29
Exploration, Mining and Special Prospecting Licences
Exploration, Mining and
Special Prospecting Licences
continuedu
No.
App No
Province
Area (Rai)
1
8/2549
Chantaburi
5,360
2
9/2549
Chantaburi
9,290
3
6/2555
Chantaburi
9,320
4
2/2550
Lop Buri
9,923
5
3/2550
Lop Buri
9,967
6
4/2550
Lop Buri
10,000
7
5/2550
Lop Buri
8,504
8
6/2550
Lop Buri
10,000
9
7/2550
Lop Buri
6,711
10
8/2550
Lop Buri
9,597
11
9/2550
Lop Buri
9,255
12
10/2550
Lop Buri
9,347
13
11/2550
Lop Buri
9,426
14
12/2550
Lop Buri
9,493
15
13/2550
Lop Buri
10,000
16
14/2550
Lop Buri
7,948
17
15/2550
Lop Buri
10,000
18
16/2550
Lop Buri
10,000
19
1/2551
Lop Buri
10,000
20
1/2549
Phichit
10,000
21
1/2550
Phichit
9,812
22
2/2550
Phichit
10,000
23
3/2550
Phichit
10,000
24
4/2550
Phichit
10,000
25
1/2555
Phichit
9,850
26
2/2555
Phichit
9,375
27
3/2555
Phichit
9,440
28
4/2555
Phichit
9,900
29
5/2555
Phichit
8,919
30
6/2555
Phichit
10,000
31
7/2555
Phichit
10,000
32
8/2555
Phichit
10,000
33
9/2555
Phichit
10,000
34
10/2555
Phichit
9,862
35
11/2555
Phichit
9,500
36
12/2555
Phichit
10,000
37
13/2555
Phichit
9,500
No.
App No
Province
Area (Rai)
38
14/2555
Phichit
7,519
39
1/2550
Phitsanulok
130
40
2/2550
Phitsanulok
1,050
41
10/2554
Phitsanulok
2,170
42
11/2554
Phitsanulok
8,695
43
12/2554
Phitsanulok
1,300
44
13/2554
Phitsanulok
9,868
45
14/2554
Phitsanulok
9,909
46
15/2554
Phitsanulok
8,973
47
16/2554
Phitsanulok
10,000
48
17/2554
Phitsanulok
9,460
49
18/2554
Phitsanulok
10,000
50
19/2554
Phitsanulok
9,635
51
20/2554
Phitsanulok
10,000
52
21/2554
Phitsanulok
10,000
53
22/2554
Phitsanulok
10,000
54
23/2554
Phitsanulok
10,000
55
24/2554
Phitsanulok
4,072
56
25/2554
Phitsanulok
3,869
57
26/2554
Phitsanulok
9,393
58
27/2554
Phitsanulok
8,700
59
1/2550
Phetchabun
9,019
60
2/2550
Phetchabun
9,992
61
3/2550
Phetchabun
10,000
62
4/2550
Phetchabun
586
63
3/2553
Phetchabun
9,576
64
4/2553
Phetchabun
10,000
65
1/2549
Rayong
7,300
66
4/2554
Saraburi
9,381
67
5/2554
Saraburi
9,500
68
6/2554
Saraburi
9,460
69
7/2554
Saraburi
7,106
70
8/2554
Saraburi
9,656
71
9/2554
Saraburi
9,921
72
10/2554
Saraburi
10,000
Total Rai
626,539
Total km2
1,002.46
Special prospecting licence applications
www.kingsgate.com.au
30
Exploration, Mining and Special Prospecting Licences
No.
SPL No
Province
Issue Date
Expiry Date
Area (Rai)
1
3/2563
Phetchabun
26/10/2020
25/10/2025
9,375
2
4/2563
Phetchabun
26/10/2020
25/10/2025
9,672
3
5/2563
Phetchabun
26/10/2020
25/10/2025
9,107
4
7/2563
Phetchabun
26/10/2020
25/10/2025
9,798
5
9/2563
Phetchabun
26/10/2020
25/10/2025
10,000
6
10/2563
Phetchabun
26/10/2020
25/10/2025
10,000
7
11/2563
Phetchabun
26/10/2020
25/10/2025
10,000
8
12/2563
Phetchabun
26/10/2020
25/10/2025
10,000
9
13/2563
Phetchabun
26/10/2020
25/10/2025
9,009
10
15/2563
Phetchabun
26/10/2020
25/10/2025
9,716
11
16/2563
Phetchabun
26/10/2020
25/10/2025
9,858
12
28/2563
Phetchabun
26/10/2020
25/10/2025
9,375
13
36/2563
Phetchabun
26/10/2020
25/10/2025
9,005
14
37/2563
Phetchabun
26/10/2020
25/10/2025
2,112
15
44/2563
Phetchabun
26/10/2020
25/10/2025
7,985
16
45/2563
Phetchabun
26/10/2020
25/10/2025
9,350
17
46/2563
Phetchabun
26/10/2020
25/10/2025
1,034
Total Rai
145,396
Total km2
232.63
Special prospecting licences
Nueva Esperanza, Chile
Tenements for Laguna Resources Chile Limitada (LRC), (a wholly owned subsidiary of Kingsgate Consolidated Limited) as at 30 June 2024.
Mining licences
ID
ID File
Name
Owner
Area (ha)
Observation
1
031022897-4
PASCUA I 1/20
LRC
200
Constituted
2
031022894-K
PASCUA II 1/30
LRC
300
Constituted
3
031022895-8
PASCUA III 1/30
LRC
300
Constituted
4
031022896-6
PASCUA IV 1/20
LRC
200
Constituted
5
031021296-2
ROBINSON 1/14
LRC
94
Constituted
6
031021193-1
PASCUA 1/328
LRC
1,131
Constituted
7
031021169-9
PENA 1/181
LRC
905
Constituted
8
031023646-2
NEGRA 1/1003
LRC
4545
Constituted
9
031021152-4
NEGRA 1/1003
LRC
370
Constituted
10
031022998-9
REEMPLAZO A 1/10
LRC
10
Constituted
31
Exploration, Mining and Special Prospecting Licences
continuedu
Exploration, Mining and
Special Prospecting Licences
Tenements in progress
Mining licences continued
ID
ID File
Name
Owner
Area (ha)
Observation
33
03201P647-4
PACITA 6D
LRC
100
In Progress
34
03102Q947-5
PACITA 19D
LRC
200
In Progress
35
03102Q948-3
PACITA 20D
LRC
300
In Progress
36
03102Q949-1
PACITA 21D
LRC
200
In Progress
37
03102Q950-5
PACITA 22D
LRC
200
In Progress
38
03102Q951-3
PACITA 23D
LRC
200
In Progress
39
03102Q952-1
PACITA 24D
LRC
200
In Progress
Total ha
1400
ID
ID File
Name
Owner
Area (ha)
Observation
11
031022999-7
REEMPLAZO B 1/5
LRC
5
Constituted
12
031022318-2
NEGRA 1/1003
LRC
100
Constituted
13
031021151-6
FLOR 1/20
LRC
100
Constituted
14
031021192-3
CANARIAS 1/414
LRC
1066
Constituted
15
031026465-2
CRISTAL 54 B 1/40
LRC
200
Constituted
16
031026466-0
GASTON B 1/40
LRC
88
Constituted
17
03201C776-3
PACITA 1A, 1/40
LRC
196
Constituted
18
03201C777-1
PACITA 2A, 1/40
LRC
200
Constituted
19
03201C778-K
PACITA 3A, 1/40
LRC
200
Constituted
20
03201C779-8
PACITA 4A, 1/40
LRC
200
Constituted
21
03201C780-1
PACITA 5A, 1/40
LRC
200
Constituted
22
03201C893-K
PACITA 6A, 1/20
LRC
100
Constituted
23
03201C781-K
PACITA 7A, 1/40
LRC
200
Constituted
24
03201C782-8
PACITA 8A, 1/40
LRC
200
Constituted
25
03201C783-6
PACITA 9A, 1/40
LRC
200
Constituted
26
03201C784-4
PACITA 10A, 1/40
LRC
200
Constituted
27
03201C785-2
PACITA 11A, 1/40
LRC
200
Constituted
28
03201C786-0
PACITA 12A, 1/40
LRC
200
Constituted
29
03201C787-9
PACITA 13A, 1/40
LRC
200
Constituted
30
03201C788-7
PACITA 14A, 1/20
LRC
100
Constituted
31
03201C790-9
PACITA 16A, 1/32
LRC
144
Constituted
32
03201C791-7
PACITA 17A, 1/20
LRC
80
Constituted
Total ha
12434
Directors' Report
32
www.kingsgate.com.au
Directors’
Report
Your Directors present their
report on the Group consisting of
Kingsgate Consolidated Limited
and the entities it controlled at
the end of, or during the year
ended 30 June 2024.
Directors
The following persons were Directors of
Kingsgate Consolidated Limited during the
year ended 30 June 2024 and up to the date
of this report.
Ross Smyth-Kirk OAM
Executive Chairman
Jamie Gibson
Managing Director & Chief Executive Officer
Nucharee Sailasuta
Non-Executive Director
Peter Warren
Non-Executive Director
Principal activities
Kingsgate is a gold and silver mining,
development and exploration company based in
Sydney, Australia. Kingsgate owns and operates
the Chatree Gold Mine (Chatree) in Thailand.
In addition, the Company has an advanced
development project, Nueva Esperanza, in the
highly prospective Maricunga Gold/Silver Belt
in Chile.
Dividends
〉
No final dividend was declared for the year
ended 30 June 2023 (30 June 2022: nil).
〉
No interim dividend was declared for the year
ended 30 June 2024 (30 June 2023: nil).
Review of operations
and results
Operational performance
Chatree
The 2024 financial year was another transform
ative year for the Chatree Gold Mine. Following
its reopening in March 2023, and approval by
the Department of Primary Industries and Mines
in Thailand, the refurbishment of Plant #2 was
completed in March 2023 and Plant #1 overhaul
project was completed in May 2024. Using
Chatree’s substantial ore stockpiles, processing
commenced in March 2023, with mining opera
tions restarting in May 2024.
Combined plants
The Chatree operations include two separate
processing plants, creating increased opera
tional resilience. Production for the year ended
30 June 2024 was 37,015 ounces of gold and
460,356 ounces of silver, reflecting a material
ramp up from production in the year ended
30 June 2023. The grade of the processed ore was
0.41 grams per tonne for gold and 7.87 grams per
tonne for silver. Recoveries averaged 81.0% for
gold and 54.4% for silver.
A total of 3.49 million dry tonnes were crushed
for the year. Average crusher feed rate was 508
tonnes per hour with an availability of 94.0%.
Total mill throughput from both plants for
the year was 3.46 million tonnes. Average mill
throughput rate was 427 tonnes per hour with
an availability of 93.7%.
Plant #1
Whilst Plant #2 operated throughout the full
financial year, the Plant #1 overhaul project was
undertaken by Thai based and international
engineering firms during the year ended 30 June
2024. Plant #1’s original design throughput was
2.3 million tonnes of ore per annum (Mtpa) with
Plant #1 in commissioning phase at 30 June 2024,
following the first gold being poured 6 June 2024.
Commissioning for Plant #1 crushing circuit
started on 10 May 2024. A total of 227,985
dry tonnes were crushed before 30 June 2024.
Average crusher feed rate was 307 tonnes per
hour with an availability of 97.1%. Commissioning
for Plant #1 grinding circuit started on 18 May
2024. A total of 196,641 dry tonnes were milled
before 30 June 2024. Average milling feed rate
was 211 tonnes per hour with an availability of
89.5%.
Plant #2
Plant #2 continues to perform above expectation.
The original design throughput was 2.7 Mtpa and
it was operating at 3.26 Mtpa or 21% above design
throughput for the year ended 30 June 2024.
A total of 3.26 million dry tonnes were crushed
for the year. Average crusher feed rate was
472 tonnes per hour with an availability of
94.6%. In addition, a total of 3.26 million dry
tonnes were milled for the year. Average milling
feed rate was 401 tonnes per hour with an
availability of 95.2%.
Mining
The first blast in the A West pit commenced
in May 2024 with the first tranche of new
Caterpillar equipment commissioned reflecting
the successful commencement of the Chatree
mining ramp up strategy. A total of 11 pieces
of mining equipment was commissioned before
30 June 2024, with an additional 30 pieces of
mining equipment scheduled to be delivered
during the year ended 30 June 2025 to allow a
full ramp up of mining operations.
Before 30 June 2024, a total of approximately
140,000 tonnes of ore was mined from A West
pit. Rehandle of stockpiles continued throughout
the year with approximately 3.1 million tonnes of
ore taken from the marginal grade stockpiles to
the primary crusher.
Directors’ Report
33
Directors' Report
continuedu
Construction of the sixth lift of TSF #2
(Tailings Storage Facility) commenced during
the year ended 30 June 2024 and will provide an
additional 3.6 million tonnes of storage capacity.
Throughout the year, waste rock from A Pit was
sent directly to TSF #2 for the construction of
the downstream embankment. An additional
114,000 tonnes of laterite and clay material
was excavated and used for the construction
of TSF #2.
The TSF #1 rehabilitation plan continued with
368,160 tonnes of Non-Acid-Forming (NAF)
material placed by a local contractor for the year
ended 30 June 2024.
At year end, 3.7 million tonnes of ore remained
in the stockpiles with an average contained gold
grade of 0.44 grams per tonne representing
42,556 ounces of gold.
Two Lost Time Injuries were recorded during
the year.
Chatree and the Thailand-
Australia Free Trade Agreement
(TAFTA)
Kingsgate, by joint agreement with the Kingdom
of Thailand, deferred the arbitral award under
the Thailand-Australia Free Trade Agreement
(TAFTA) until 30 September 2024.
Nueva Esperanza
Nueva Esperanza is a feasibility-stage devel
opment project with a resource base (inclusive of
ore reserves) of approximately 0.49 million ounces
gold and 83.4 million ounces of silver (See ASX:
KCN release titled “Kingsgate Mineral Resources
and Ore Reserves 2016” dated 7 October 2016).
Throughout the year ended 30 June 2024,
Kingsgate continued to work with a number
of parties interested in acquiring the Nueva
Esperanza Project. No exploration work was
carried out during the period and management
costs were kept to a minimum.
Financing
At the end of June 2024, Group cash totalled
$3.89 million, which does not include the following:
〉
bullion receivable of $7.0 million as at 30 June
2024 received in July 2024;
〉
unrefined gold/silver of $7.6 million as
at 30 June 2024: 1,835 ounces gold and
23,368 ounces silver were held as doré at the
end of June. The doré is valued at $7.6 million
based on a gold price of $3,561 per ounce and a
silver price of $45 per ounce. $7.6 million cash
was received before the date of this report.
Secured loan note
On 19 December 2023, Kingsgate entered
a Loan Note Subscription Agreement with
Nebari Gold Fund 1, LP to provide funding for
the Processing Plant #1 overhaul project at
Chatree Gold Mine and general working capital
within the Kingsgate Group for the amount of
US$11,500,000 (“Facility”). The Facility was
provided subject to security over interests and
shares held in Kingsgate’s subsidiaries. In July
2024, this Facility was fully repaid out of the
US$35,000,000 term facility drawdown.
Refer to the ASX: KCN release title “Debt Facility”
dated 19 December 2023 for the terms and
conditions of the Facility.
US$35,000,000 term facility
On 15 July 2024, Kingsgate entered into
a senior secured term facility with a limit of
US$35,000,000 ($52,475,000) consisting of a
Tranche 1 for US$22,000,000 and Tranche 2 for
US$13,000,000 with Nebari Gold Fund 1 (“NGF
1”), LP and Nebari Natural Resources Credit Fund
II, LP (“NNRCF II” and, together, “Nebari”) (the
“Facility”). On 17 July 2024, an amount of
US$35,000,000 was fully drawn and the existing
loan balance as at 30 June 2024 was fully repaid
from the proceeds. The Facility was provided
subject to security over interests and shares
held in Kingsgate’s subsidiaries.
Refer to the ASX: KCN release title “Kingsgate
Financing Update” dated 16 July 2024 for the
terms and conditions of the Facility.
Advances from preference
shareholder
On 25 November 2022, Akara Resources
Public Company Limited (Akara) received an
unsecured 200 million Thai baht advance from
the preference shareholder. On 22 February
2023, Akara received an additional cash advance
of 100 million Thai baht from the preference
shareholder. Both advances are repayable in
12 months from drawdown with a 12% interest
rate.
On 19 July 2024, an amount of THB150,000,000
($6,125,000) was repaid and the remaining
balance of THB150,000,000 ($6,125,000)
is required to be repaid within 90 days of
drawdown according to the terms of the
US$35,000,000 Facility.
Directors' Report
34
www.kingsgate.com.au
Financial results
2024
2023
2022
2021
2020
Net profit/(loss) after tax ($‘000)
199,761
4,738
(12,420)
(8,877)
(24,244)
EBITDA ($‘000)
213,789
11,072
(10,406)
(7,415)
(22,782)
Dividends paid (cents/share)
–
–
–
–
–
Share price 30 June ($/share)
1.62
1.51
1.33
0.84
0.40
Basic earnings/(loss) per share (Cents)
77.5
2.06
(5.61)
(4.00)
(10.84)
Diluted earnings/(loss) per share (Cents)
76.8
2.04
(5.61)
(4.00)
(10.84)
Kingsgate has recorded a net profit after
income tax of $199.8 million for the year ended
30 June 2024. This result includes a gain of
$228.7 million arising from impairment reversal
of Chatree Gold Mine, $1.0 million arising from a
reversal of the inventory stockpiles write-down
to the net realisable and gold sales of 36,546
ounces at an average gold price received
of US$2,084 per ounce, offset by Plant #1
refurbishment expense of $10.4 million charged
to profit and loss.
Direct costs of mining and processing was
$126.4 million, a result of the production at
Chatree of 37,015 ounces of gold and 460,356
ounces of silver.
Production summary
Units
FY2024
FY2023
Production summary
Ore treated
tonnes
3,455,727
723,006
Head grade - gold
Au g/t
0.41
0.55
Head grade - silver
Ag g/t
7.87
9.71
Gold recovery
%
81.0
83.2
Silver recovery
%
54.4
56.8
Gold poured
ounces
37,015
9,705
Silver poured
ounces
460,356
112,097
Revenue summary
Gold sold
ounces
36,546
8,437
Silver sold
ounces
451,706
97,693
Average gold price received
US$/oz
2,084
1,964
Average silver price received
US$/oz
25
23
Impairment reversal
of Chatree Gold Mine
(see Note 3i for details)
In accordance with AASB136 – Impairment of
Assets, an impairment reversal of $228,699,000
has been recorded against the carrying value of
the Chatree Gold Mine for the year ended 30 June
2024.
In 2015, the Group recorded a partial impairment
write-down of the Chatree Gold Mine assets
because of a low gold price. In 2016, following
a decision made by the Thai Government, the
Chatree Gold Mine ceased operations and the
remaining assets were fully impaired.
In the prior period, the recommencement of
operations through the processing of the
inventory stockpiles using Chatree Plant #2
was considered to be an indicator for reversal
of the inventory write-down and impairment
as it related to the inventory stockpiles and
Chatree Plant #2. The mine and Chatree Plant #1
did not have a reversal indicator as the mining
operations and Chatree Plant #1 operations had
not yet resumed. A reversal of the inventory
stockpiles write-down to the net realisable value
amounting to $59,822,000 was recognised in
the prior period. No reversal of impairment in
respect of Chatree Plant #2 was recorded.
In the current financial year, a number of factors
represented further indicators of impairment
reversal. This included the completion of Plant #1
overhaul project followed by its commissioning,
restarting of the mining operations, and an
increase of gold and silver prices compared to
the gold price that was considered in 2015.
Consequently, the recoverable amount for
Chatree Gold Mine assets was determined.
The recoverable amount of the Chatree Gold
Mine CGU was determined using a fair value less
costs of disposal basis. The costs of disposal
have been estimated by management based on
prevailing market conditions.
The recoverable amount has been estimated
based on discounted cash flows using market-
based commodity price and exchange rate
assumptions, estimated quantities of recoverable
minerals, production levels, operating costs and
capital requirements, based on latest life of mine
plan for a period of approximately 10 years.
Based on the financial model developed by
the Group, the recoverable value is significantly
greater than the net carrying value of the assets
that can be reversed for impairment and as
result, an impairment reversal amounting to
$228,699,000 has been recorded in the statement
of profit or loss (see table below for a list of
each non-current asset reversed). Following this
reversal of impairment, the full amount of the CGU
that was previously impaired has been reversed.
Directors’ Report
35
Directors' Report
continuedu
$’000
Property, plant and equipment (Note 11)
83,715
Exploration, evaluation and
development (Note 13)
144,984
Impairment reversal
– Chatree Gold Mine
228,699
Any reasonable change in the key assumptions
used to determine the recoverable amount
would not result in the estimated recoverable
amount to be less than the amount reversed.
In addition to the above, a reversal of the
inventory stockpiles write-down to the net
realisable value amounting to $983,000 was also
recognised during the year ended 30 June 2024.
The net realisable value of the inventory has
been determined based on the accounting
policy for inventory described in Note 2i. The
determination of net realisable value involves
significant judgements and estimates in relation
to the selling price in the ordinary course of
business less estimated costs of completion and
estimated costs necessary to make the sale.
Material business risks
As a mining company, we operate in a dynamic
and complex environment where various factors
and risks can impact our operations, financial
performance, and sustainability. It is crucial for
our stakeholders to be aware of the material
business risks we face. While we strive to
manage these risks effectively, there can be no
assurance that they will not have a significant
impact on our business in the future. The
following are the material business risks that
could affect our Group:
Capital and financing risk
Access to capital for exploration, development,
and expansion projects is essential for our growth.
Financial market conditions, interest rates, and
credit availability can influence our ability to raise
funds. The Group’s ability to successfully develop
projects is contingent on the ability to fund those
projects from operating cash flows or through
affordable debt and equity raisings.
Political, economic, social
and security risks
The Group’s activities are subject to the
political, economic, social and other risks and
uncertainties in the jurisdictions in which those
activities are undertaken, including changes in
government policies, local community relations,
and potential disruptions due to protests or
conflicts in the regions where we operate.
As evidenced by the decision by the Thai
Government that the Chatree Gold Mine must
cease operation by 31 December 2016, there can
be no certainty as to what changes, if any, will be
made to relevant laws in the jurisdictions where
the Group has current interests, or other jurisdic
tions where the Group may have interest in the
future, or the impact that relevant changes may
have on the Group’s ability to own and operate
its mining and related interests and to otherwise
conduct its business in those jurisdictions.
Market risks - commodity price
volatility, exchange rates, credit
risk and liquidity risk
Commodity prices fluctuate according to
changes in demand and supply. The Group is
exposed to changes in commodity prices, which
could affect the profitability of the Group’s
projects. Significant adverse movements in
commodity prices could also affect the ability
to raise debt and equity to fund exploration
and development of projects. The Group is also
exposed to foreign exchange risk arising from
currency exposures, primarily with respect to
the US dollar and Thai baht. Credit risk arises
from cash and cash equivalents, deposits with
banks and financial institutions, as well as credit
exposures to customers including, outstanding
receivables and committed transactions. The
Group has no significant concentrations of credit
risk. The Group’s liquidity requirements are based
upon cash flow forecasts. Liquidity management,
including debt/equity management, is carried
out under policies approved by the Board and
forecast material liquidity changes are discussed
at Board meetings. Further detail on the Group’s
market risk exposures is detailed in Note 27 to
the Financial Statements.
Mineral resources
and ore reserves
Ore reserves and mineral resources are
estimates. These estimates are substantially
based on interpretations of geological data
obtained from drill holes and other sampling
techniques. Actual mineralisation or geological
conditions may be different from those
predicted and as a consequence there is a risk
that any part, or all of the mineral resources, will
not be converted into reserves.
The fluctuations of the market price for gold and
silver as well as increased production and capital
costs, may render ore reserves unprofitable to
develop at a particular site for periods of time.
Mining risks and insurance risks
These risks and hazards could result in significant
costs or delays that could have a material adverse
impact on the Group’s financial performance and
position.
The Group maintains insurance to cover some
of these risks and hazards at levels that are
believed to be appropriate for the circumstances
surrounding each identified risk. However,
there remains the possibility that the level of
insurance may not provide sufficient coverage
for losses related to specific loss events.
Regulatory risk
The Group’s activities are subject to obtaining
and maintaining the necessary titles, authorisa
tions, permits and licences, and associated land
access arrangements with the local community,
which authorise those activities under the
relevant law (“Authorisations”). There can
be no guarantee that the Group will be able
to successfully obtain and maintain relevant
Authorisations to support its activities, or
that renewal of existing Authorisations will
be granted in a timely manner or on terms
acceptable to the Group.
Authorisations held by or granted to the Group
may also be subject to challenge by third parties
which, if successful, could impact on the Group’s
exploration, development and/or mining activities.
Reliance on contractors
Some aspects of the Group’s activities are
conducted by contractors. As a result, the
Group’s business performance is impacted
upon by the availability and performance of
contractors and the associated risks.
Legal and litigation risk
We may face legal disputes related to
contractual agreements, environmental claims,
or other matters that can result in financial
losses and damage to our reputation.
Directors' Report
36
www.kingsgate.com.au
Community relations
and reputational risk
The Group has established community relations
functions that have developed a community
engagement framework, including a set of
principles, policies, and procedures designed to
provide a structured and consistent approach to
community activities.
A failure to appropriately manage local
community stakeholder expectations may
lead to damage to the Group’s reputation and
disruptions in the Group’s activities.
Health and safety of workers
Ensuring the health and safety of our employees
is paramount. Health crises, such as pandemics,
can disrupt operations and pose risks to our
workforce.
Mining operations inherently involve risks
related to equipment failures, accidents, and
geological challenges. Ensuring the safety of
our workforce and mitigating operational
disruptions is a top priority.
Environmental, health and
safety regulations
Stringent and extensive environmental regulations
govern our industry. Failure to comply with these
regulations can lead to fines, legal liabilities,
and reputational damage. Adapting to evolving
environmental standards is crucial. Delays in
obtaining, or failure to obtain government permits
and approvals may adversely affect the Group.
Climate change and
sustainability
Climate change considerations, including carbon
emissions and environmental sustainability, are
increasingly important for our industry. Failure
to address these issues can result in reputational
harm and regulatory challenges.
Risk management
It is essential to note that these risks are
interconnected, and their impact may vary based
on market conditions, industry trends, and other
factors. We are committed to proactive risk
management, continuous improvement, and
transparency in our reporting to mitigate these
material business risks and ensure the long-term
success of our mining operations.
Please note that this list of material business
risks is not exhaustive, and there may be other
risks specific to our industry or individual
circumstances that could affect our business.
Our Board and management team regularly
review and update our risk assessment to
adapt to changing conditions and implement
strategies for risk mitigation.
Significant changes in the
state of affairs
There were no other significant changes in the
state of affairs of the Group that occurred during
the financial year not otherwise disclosed in this
report or the consolidated financial statements.
Matters subsequent to the
end of the financial year
US$35,000,000 term facility
On 15 July 2024, Kingsgate entered into a
senior secured term facility with a limit of
US$35,000,000 ($52,475,000) consisting of a
Tranche 1 for US$22,000,000 and Tranche 2 for
US$13,000,000 with Nebari Gold Fund 1 (“NGF
1”), LP and Nebari Natural Resources Credit
Fund II, LP (“NNRCF II” and, together, “Nebari”)
(the “Facility”). On 17 July 2024, an amount of
US$35,000,000 was fully drawn. The Facility
was provided subject to security over interests
and shares held in Kingsgate’s subsidiaries.
Interest is equal to the three month Secured
Overnight Financing Rate (“SOFR”) plus a margin
of 7.75% p.a. applied to aggregate amounts
outstanding. If the Term SOFR is less than 4.75%
per annum, interest will be deemed to be 4.75%.
Straight-line amortisation is applicable to
Tranche 1 principal amount of US$22,000,000
commencing in March 2025 equal to 3.0% of the
Tranche 1 principal amount.
The maturity date for Tranche 1 is 36 months
from drawdown and for Tranche 2 is 30 months
from drawdown.
The Tranche 2 principal amount is US$13,000,000
and an initial 6,986,589 unlisted warrant with an
exercise price of $2.07 was issued to Nebari on
17 July 2024. In addition, Kingsgate may be
required to issue up to a further 2,328,863
warrants to Nebari. The expiry date for each
warrant is 30 months from closing date i.e.
18 January 2027. Each warrant will entitle the
holder to subscribe for one ordinary share of the
Company at the exercise price of $2.07 per share.
Following the drawdown of this Facility, the
existing loan balance with Nebari as at 30 June
2024 was fully repaid.
Repayment of advances
from preference shareholder
On 19 July 2024, an amount of THB150,000,000
($6,125,000) was repaid and the remaining
balance of THB150,000,000 ($6,125,000)
is required to be repaid within 90 days of
drawdown according to the terms of the facility.
No other matter or circumstance has arisen
since 30 June 2024 that has significantly
affected, or may significantly affect:
〉
the Group’s operations in future
financial periods;
〉
the results of those operations in future
financial periods; or
〉
the Group’s state of affairs in future
financial periods.
Likely developments
and expected results
of operations
Kingsgate is focused on ramping up operations at
the Chatree Gold Mine, in Thailand, and resuming
a steady state production of between 95,000 and
120,000 ounces of gold per annum, as well as
completing an aggressive near mine and regional
exploration program.
The Company also plans to monetise or joint
venture its advanced gold-silver development
project, Nueva Esperanza, in Chile. Kingsgate
will also continue to assess, other viable gold
project opportunities which may offer value
enhancing opportunities for shareholders.
Material business risks that may impact the
results of future operations include tenure risks,
environmental risks, ore reserve and mineral
resource estimates, production estimates
and metallurgical recovery, sovereign risks,
debt funding risks, future commodity prices,
exchange rate risks, development risks, reliance
on key personnel, operating risks, capital costs,
operating costs, occupational health and safety,
political and regulatory risks.
Environmental laws
The Group is subject to various environmental
laws in respect to its activities in Thailand
and Chile. For the year ended 30 June 2024,
the Group has operated within all applicable
environmental laws and regulations.
Directors’ Report
37
Directors' Report
continuedu
Directors’ meetings
Board
Meetings
Meetings of Committees
Directors
Audit
Nomination
Remuneration
A
B
A
B
A
B
A
B
Ross Smyth-Kirk OAM
5
6
2
2
1
1
1
1
Jamie Gibson
6
6
2
2
1
1
1
1
Nucharee Sailasuta
6
6
Peter Warren
6
6
2
2
1
1
1
1
A
Number of meetings attended.
B
Number of meetings held during the time the Director held office or was a member of the committee during the year.
New Caterpillar 777 trucks
Directors' Report
38
www.kingsgate.com.au
Information on Directors/Company Secretary
Ross Smyth-Kirk OAM
B Com, CPA, F Fin
Executive Chairman
Mr Smyth-Kirk was a founding director of
the former leading investment management
company, Clayton Robard Management Limited
and has had extensive experience in investment
management across the minerals and mining
sectors. Mr Smyth-Kirk has been a director of a
number of companies over the past 44 years in
both Australia and the United Kingdom and was
previously Chairman of the Australian Jockey Club
Limited. He is Chairman of Kingsgate’s subsidiary,
Akara Resources Public Company Limited.
Mr Smyth-Kirk is a CPA, a Fellow of the Financial
Services Institute of Australasia (FINSIA) and
holds a Bachelor of Commerce degree from the
University of New South Wales.
Responsibilities
Chairman of the Board, member of the Audit
Committee, Chairman of the Nomination and
Remuneration Committees.
Jamie Gibson
MBA, GAICD,
GradCertGlobalBusPrac, DipMgt
Managing Director &
Chief Executive Officer
Mr Gibson is the Managing Director and Chief
Executive Officer of Kingsgate Consolidated
Limited. Since joining the Company in 2013,
he has been instrumental in shaping corporate
strategy, managing investor relations, and
successfully restarting the Chatree Gold Mine.
An accomplished corporate professional,
Mr Gibson has previously worked in government
as a Chief Advisor in the mining portfolios
(metals and coal) with extensive trade and
investment expertise within the Asia-Pacific
region. He is a Director of Akara Resources Public
Company and has made significant contributions
as a Board Member and Vice President of the
Australia Thailand Business Council.
Mr Gibson holds a Master of Business
Administration and a Graduate Certificate
in Global Business Practice from Macquarie
University, as well as a Diploma of Management
from the Sydney Institute of Technology. He is
also a graduate of the Australian Institute of
Company Directors.
Responsibilities
Member of the Audit, Nomination and
Remuneration Committees.
Nucharee Sailasuta
Non-Executive Director
Mrs Sailasuta is the Chairman and co-founder
of LotusHall Mining Heavy Engineering
Construction Company Limited, Chairman
of Lotus Green Energy Company Limited,
and the owner of Pangluang Garden Resort &
Restaurant in Thailand. LotusHall Mining has
been the mining contractor at the Chatree Gold
Mine since exploration in 1999 and operations
commenced in 2001.
Over her 40 year career, Mrs Sailsauta has
worked across gold, copper, quarry, coal,
kaolin and limestone mining operations, both
in Thailand and within the neighbouring region,
including the Sepon Gold/Copper Mine and
Phubia Mining in Laos.
Mrs Sailasuta owns the FGD No.2 Project in
partnership with EGAT (Electricity Generating
Authority of Thailand) is the President of the
Businesswoman’s Association of Lampang and
works as a conciliator of Alternative Dispute
Resolution for Lampang Court, Thailand.
Peter Warren
B Com, CPA
Non-Executive Director
Mr Warren is a highly experienced mining
professional and was Kingsgate’s Chief
Financial Officer and Company Secretary for
six years until his retirement in 2011. He was
previously Chief Financial Officer and Company
Secretary for Equatorial Mining Limited and of
the Australian subsidiaries of the Swiss-based
Alusuisse Group. Mr Warren has also held
various financial and accounting positions for
Peabody Resources and Hamersley Iron and is a
former Director of Kingsgate’s subsidiary, Akara
Resources Public Company Limited.
Mr Warren is a CPA and holds a Bachelor of
Commerce degree.
Responsibilities
Chairman of the Audit Committee and
member of the Nomination and Remuneration
Committees.
Stephanie Wen
GAICD, LLB, B Com, MIA
General Counsel &
Company Secretary
Ms Wen is a seasoned legal professional with
broad experience across corporate transactions,
general commercial legal advisory, regulatory
implementation and governance. She has
practised corporate law at both top-tier and
mid-tier law firms in Asia and Australia and
held senior in-house legal counsel role in global
financial institutions. Ms Wen previously served
as a non-executive director for an ASX-listed
healthcare company.
Ms Wen holds a dual degree in Law and
Commerce (LLB, B.Com in Accounting) from the
University of New South Wales, and a Master of
International Affairs (International Business and
Finance) from Columbia University in New York.
Additionally, she is a graduate of the Australian
Institute of Company Directors and a Fellow of
the Governance Institute of Australia.
Directors’ Report
39
Directors' Report
continuedu
Remuneration Report
Introduction
This Remuneration Report forms part of the
Directors’ Report. It outlines the Remuneration
Policy and framework applied by the Company
as well as details of the remuneration paid to
Key Management Personnel (“KMP”). KMP are
defined as those persons having the authority
and responsibility for planning, directing and
controlling the activities of the Company,
directly or indirectly, including Directors and
executive management.
The information provided in this report has
been prepared in accordance with s300A and
audited as required by section 308 (3c) of the
Corporations Act 2001.
The objective of the Company’s remuneration
philosophy is to ensure that Directors and
Executives are remunerated fairly and respon
sibly at a level that is competitive, reasonable
and appropriate, in order to attract and retain
suitably skilled and experienced people.
Remuneration Policy
This Remuneration Policy has been designed to
align the interests of shareholders, Directors,
employees and other Company stakeholders.
This is achieved by setting a framework to:
〉
help ensure an applicable balance of
fixed and at-risk remuneration, with the
at-risk component linking incentive and
performance measures to both Group and
individual performance;
〉
provide an appropriate reward for Directors
and executive management to manage and
lead the business successfully and to drive
strong, long-term growth in line with the
Company’s strategy and business objectives;
〉
encourage Directors and executive
management to strive for superior
performance;
〉
encourage Directors and executive
management to perform their roles with
honesty and integrity and with skill, care
and diligence;
〉
facilitate transparency and fairness in
Directors and Executive remuneration
policy and practices;
〉
be competitive and cost effective in the
current employment market;
〉
contribute to appropriate attraction
and retention strategies for Directors
and Executives; and
〉
avoid adverse community and investor
perception and have regard to the
Company’s commercial interest in controlling
expenses by avoiding excessive pay.
In consultation with external remuneration
consultants, the Group has structured a Directors
and executive management remuneration
framework that is market competitive and aligned
with the business strategy of the organisation.
The framework is intended to provide a mix of
fixed and variable remuneration, with a blend of
short and long-term incentives as appropriate.
Remuneration Committee
The Remuneration Committee is a committee
of the Board and has responsibility for setting
policy for determining the nature and number of
emoluments of Board members and Executives.
The Committee makes recommendations to the
Board concerning:
〉
Non-Executive Director fees;
〉
remuneration level of Executive Directors
and other KMP;
〉
the executive remuneration framework
and operation of the incentive plan;
〉
key performance indicators and performance
hurdles for the executive team; and
〉
the engagement of specialist external
consultants to design or validate method
ology used by the Company to remunerate
Directors and employees.
In forming its recommendations, the Committee
takes into consideration the Group’s stage of
development, remuneration in the industry and
performance.
The Remuneration Committee Charter is in the
Company’s Corporate Governance materials and
may be viewed on its website.
Remuneration
Consultants
The Group engages the services of independent
and specialist remuneration consultants from
time to time. Under the Corporations Act 2001,
remuneration consultants must be engaged by
the Non-Executive Directors and reporting of
any remuneration recommendations must be
made directly to the Remuneration Committee.
Executive Director
Remuneration
The Executive pay and reward framework is
comprised of three components:
〉
fixed remuneration including
superannuation;
〉
short-term performance incentives; and
〉
long-term incentives.
Fixed Remuneration
Total fixed remuneration (“TFR”) is structured
as a total employment cost package, including
base pay and superannuation. Base pay may
be delivered as a mix of cash, statutory and
salary sacrificed superannuation, and prescribed
non-financial benefits at the Executive’s
discretion.
Executives are offered a competitive base pay
based on benchmarking of equivalent roles. Base
pay for executives is reviewed annually to ensure
their pay is competitive with the market. An
Executive’s pay is also reviewed on promotion.
Directors' Report
40
www.kingsgate.com.au
The following summarises the performance of the Group over the last five years:
2024
2023
2022
2021
2020
Revenue ($‘000)
133,091
27,337
–
12,339
–
Net profit/(loss) after tax ($‘000)
199,761
4,738
(12,420)
(8,877)
(24,244)
EBITDA ($‘000)
213,789
11,072
(10,406)
(7,415)
(22,782)
Share price at year end ($/share)
1.62
1.51
1.33
0.84
0.40
Dividends paid (cent/share)
–
–
–
–
–
KMP short-term employee benefits ($‘000s)
*1,601
1,333
555
559
328
* see page 43 for table outlining the short-term employee benefits.
Short-Term Incentives
Linking current financial year earnings of executives to their performance and the performance of the Group is the key objective of our Short-Term Incentive
(“STI”) Plan. The Remuneration Committee sets key performance measures and indicators for the individual executives on an annual basis that reinforce the
Group’s business plan and targets for the year.
The Board has discretion to issue cash bonuses to employees for individual performance outside the STI Plan.
The structure of the STI Plan remains unchanged since 30 June 2016 and its key features are outlined in the table below. The STI Plan does not currently apply
to any current executives. Following the restart of the operations at Chatree, the Group will review its remuneration structure with appropriately qualified
consultants to align it with market norms and investor expectation.
What is the STI Plan
and who participates?
The STI Plan is a potential annual reward for eligible Executive Key Management Personnel for
achievement of predetermined individual Key Performance indicators (“KPI’s”) aligned to the achievement
of business objectives for the assessment period (financial year commencing 1 July).
How much can the
executives earn under
the STI Plan?
Threshold – represents the minimum acceptable level of performance that needs to be achieved before
any Individual Award would be payable in relation to that Performance Measure.
Managing Director/CEO – up to 15% of TFR. COO and CFO – up to 12.5% of TFR. Other KMP – up to 10% of TFR.
Target – represents a challenging but achievable level of performance relative to past and otherwise expected
achievements. It will normally be the budget level for financial and other quantitative performance objectives.
Managing Director/CEO – up to 30% of TFR. COO and CFO – up to 25% of TFR. Other KMP – up to 20% of TFR.
Stretch (Maximum) – represents a clearly outstanding level of performance which is evident to all as a
very high level of achievement.
Managing Director/CEO – up to 60% of TFR. COO and CFO – up to 50% of TFR. Other KMP – up to 40% of TFR.
(TFR – Total Fixed Remuneration)
Is there Board
discretion in the
payment of an STI
benefit?
Yes, the plan provides for Board discretion in the approval of STI outcomes.
What are the perfor
mance conditions?
For KMP between 70–80% of potential STI weighting (dependent upon role) is assessed against specific
predetermined KPI’s by role with 20–30% being based on company performance indicators.
How are performance
targets set and
assessed?
Individual performance targets are set by the identification of key achievements required by role in order
to meet business objectives determined for the upcoming assessment period in advance. The criteria
for KMP are recommended by the Managing Director/CEO for sign off by the Remuneration Committee
and in the case of the Managing Director/CEO, are recommended by the Chairman by sign off by the
Remuneration Committee.
The relative achievement at the end of the financial period is determined by the above authorities with
final sign off by the Remuneration Committee after confirmation of financial results and individual/
company performance against established criteria.
The Remuneration Committee is responsible for assessing whether the KPIs are met. To assist in this
assessment, the Committee receives detailed reports on performance from management which are
verified by independent remuneration consultants if required. The Committee has the discretion to adjust
STIs in light of unexpected or unintended circumstances.
Directors’ Report
41
Directors' Report
continuedu
How is STI delivered?
STIs are paid in cash after the conclusion of the assessment period and confirmation of financial
results/individual performance and subject to tax in accordance with prevailing Australian taxation
laws. The STIs are then in effect paid and expensed in the financial year subsequent to the
measurement year.
What happens in the
event of cessation of
employment?
Executives are required to be employed for the full 12 months of the assessment period before they are
eligible to be considered to receive benefits from the STI Plan.
Long-Term Incentives
The objectives of the Long-Term Incentive (“LTI”) Plan are to retain key executives and to align an at-risk component of certain executives’ remuneration with
shareholder returns.
It is the Company’s policy to establish remuneration structures which can clawback or otherwise limit performance-based outcomes after award payment or
vesting in circumstances where expected outcomes are not achieved or outcomes are deleterious to the Company.
Under the terms of the Kingsgate Employee Share Plan (ESOP) long-term incentives can be provided to certain employees through the issue of options to
acquire Kingsgate shares. Options are issued to employees to provide incentives for employees to deliver long-term shareholder returns.
No executive was the recipient of options during the 2024 financial year.
Key features of the ESOP LTI Plan are outlined in the following table. The LTI Plan does not currently apply to any current executives. Following the restart
of the operations at Chatree, the Group will review its remuneration structure with appropriately qualified consultants to align it with market norms and
investor expectation.
What is the LTI
Plan and who
participates?
Kingsgate executives and other eligible employees can be granted options to acquire Kingsgate Consolidated
Limited fully paid shares. In granting the options the Board takes into account such matters as the position
of the eligible person, the role they play in the Company, their current level of fixed remuneration, the nature
of the terms of employment and the contribution they make to the Group.
What are the perfor
mance and vesting
conditions?
The period over which the options vest is at the discretion of the Board though in general it is 1–3 years.
The executive and eligible employee must still be employed by the Company at vesting date.
Is there a cost to
participate?
The options may at the discretion of the Board be issued for nil consideration and are granted in
accordance with performance guidelines established by the Remuneration Committee and approved
by the Board.
What happens in
the event of bonus
shares, rights issues,
or other capital
reconstructions?
If between the grant date and the date of conversion of options into shares there are bonus shares,
rights issues or other capital reconstructions that affect the value of Kingsgate Consolidated shares, the
Board may, subject to the ASX Listing Rules make adjustments to the number of rights and/or the vesting
entitlements to ensure that holders of rights are neither advantaged or disadvantaged by those changes.
Directors and Key Management Personnel
The named Directors held their current position for the whole of the year and up to the date of this report.
Ross Smyth-Kirk OAM
Jamie Gibson
Nucharee Sailasuta
Peter Warren
Executive Chairman
Managing Director &
Chief Executive Officer
Non-Executive Director
Non-Executive Director
Changes since the end of the Reporting Period
There were no changes to Directors and Key Management Personnel since the end of the reporting period.
Directors' Report
42
www.kingsgate.com.au
Contract Terms of the Executive Directors and Key Management Personnel
Remuneration and other key terms of employment for the Senior Executives are summarised in the following table:
Name
Term of
agreement
Fixed annual remuneration
including superannuation
Notice period by
Executive
Notice period by
the Company2
FY 2024
FY 2023
Ross Smyth-Kirk
Open
$427,3991
$319,2921
90 days
90 days
Jamie Gibson3
Note 3
Note 3
Note 3
90 days3
90 days3
1
Amount shown are annual salaries as at year end. This amount does not include the director fees received from subsidiary.
2
Notice period by the Company in respect of benefits payable in the event of an early termination.
3
Jamie Gibson became an Executive Director on 3 February 2023 and was remunerated pursuant to the terms and conditions of a Consultancy
Agreement entered into between Mr Gibson and the Company. Pursuant to the Agreement and subsequent amendment, Mr Gibson is entitled to a
payment of up to $2,500 per day (inclusive of all entitlements) or as otherwise approved by Kingsgate, in respect of work performed for the Company.
The Agreement may be terminated by either party by giving of 90 days notice, or earlier in the event of default not remedied within 14 days.
Fixed annual remuneration, inclusive of the required superannuation contribution amount is reviewed annually by the Board following the end of the financial year.
Non-Executive Directors’ Fees
Non-Executive Directors are paid fixed fees for their services to the Company plus statutory superannuation contributions the Company is required by law to
make on their behalf. Those fees are inclusive of any salary-sacrificed contribution to superannuation that a Non-Executive Director wishes to make.
The level of Non-Executive Directors’ fees is set so as to attract the best candidates for the Board while maintaining a level commensurate with boards
of similar size and type. The Board may also seek the advice of independent remuneration consultants, including survey data, to ensure Non-Executive
Directors’ fees and payments are consistent with the current market.
The Company does not give performance-based remuneration or retirement benefits to Non-Executive Directors.
The maximum total remuneration for Non-Executive Directors is determined by resolution of shareholders and is currently set at $1,000,000 in aggregate.
Non-Executive Directors’ base fees, inclusive of committee membership but not including statutory superannuation, are outlined as follows:
Financial
year ended
30 June 20241
$
Financial
year ended
30 June 20231
$
Non-Executive Directors’ remuneration excluding superannuation
180,000
270,000
1
On an annualised basis for all Non-Executive Directors. This amount does not include director fees received from subsidiary.
The aggregate remuneration of Non-Executive Directors is set by shareholders in general meeting in accordance with the Constitution of the Company, with
individual Non-Executive Directors’ remuneration determined by the Board within the aggregate total.
Non-Executive Directors do not receive any additional fees for serving on committees of the Company.
There are no retirement allowances for Non-Executive Directors.
Directors’ Report
43
Directors' Report
continuedu
Additional Statutory Disclosures
Details of remuneration
Details of the nature and amount of each major element of the remuneration of the Directors and the Group Key Management Personnel are set out in the
following tables:
Year ended
30 June 2024
Name
Short-term benefits
Long-term
benefits
Post-
employment
benefits
Cash salary
and fees
$
Non-monetary
benefit1
$
Other
benefits
$
Other
benefits
$
Super-
annuation
$
Total
$
Non-Executive Directors
Nucharee Sailasuta
by Company
90,000
–
–
–
–
90,000
by subsidiary
40,949
–
–
–
–
40,949
Peter Warren
90,000
–
232,4003
–
27,500
349,900
Sub-total Non-Executive Directors
Compensation
220,949
–
232,400
–
27,500
480,849
Executive Directors
Ross Smyth-Kirk
by Company
400,000
3,623
41,5072
2,3082
27,399
474,837
by subsidiary
81,897
–
–
–
–
81,897
Jamie Gibson
by Company
580,000
–
–
–
–
580,000
by subsidiary
40,949
–
–
–
–
40,949
Sub-total Executive Directors
Compensation
1,102,846
3,623
41,507
2,308
27,399
1,177,683
TOTAL
1,323,795
3,623
273,907
2,308
54,899
1,658,532
1
Non-monetary benefit relates to car parking.
2
Represents annual leave (short-term) and long service leave (long-term) entitlements measured on an accrual basis and reflects the leave expenses
over the 12 month period.
3
Consulting fee related to assisting Kingsgate in managing its finances following the retirement of Kingsgate’s previous Chief Financial Officer earlier
in the year while the Company continues to ramp up operational capacity at the Chatree Gold Mine, assisting the Acting Chief Financial Officer in the
day-to-day capital management of Kingsgate, assisting with the preparation of statutory financial documents, and in particular working with various
debt providers (lenders) to secure an additional debt facility for Kingsgate to provide ongoing working capital and liquidity.
Directors' Report
44
www.kingsgate.com.au
Year ended
30 June 2023
Name
Short-term benefits
Long-term
benefits
Post-
employment
benefits
Cash salary
and fees
$
Cash bonus8
$
Non-monetary
benefit1
$
Other
benefits2
$
Other
benefits2
$
Super-
annuation
$
Total
$
Non-Executive Directors
Nucharee Sailasuta3
Payable by Company
36,964
–
–
–
–
–
36,964
Paid by subsidiary
16,424
–
–
–
–
–
16,424
Peter Warren
90,000
–
–
–
–
9,450
99,450
Peter Alexander4
52,500
–
–
–
–
5,513
58,013
Sub-total Non-Executive
Directors Compensation
195,888
–
–
–
–
14,963
210,851
Executive Directors
Ross Smyth-Kirk5
Paid by Company
294,000
250,000
13,702
24,6286
547
25,292
608,169
Paid by subsidiary
81,009
–
–
–
–
–
81,009
Jamie Gibson7
Paid by Company
207,143
250,000
–
–
–
–
457,143
Paid by subsidiary
16,424
–
–
–
–
–
16,424
Sub-total Executive
Directors Compensation
598,576
500,000
13,702
24,628
547
25,292
1,162,745
TOTAL
794,464
500,000
13,702
24,628
547
40,255
1,373,596
1
Non-Monetary benefit relates to car parking.
2
Represents annual leave (short-term) and long service leave (long-term) entitlements, measured on an accrual basis, and reflects the leave expenses
over the 12 month period.
3
Appointed 3 February 2023. See Note 22 related party transactions and Note 16 for borrowings.
4
Resigned 1 February 2023.
5
Full time employment effective 1 July 2022.
6
Benefits paid on 6 September 2023.
7
Managing Director and Chief Executive Officer appointed 4 July 2023, previously Managing Director and Acting Chief Executive Officer appointed
3 February 2023.
8
Cash bonus paid at the discretion of the Board.
The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:
Name
Fixed remuneration
2024
STI/cash bonus
2024
At risk – LTI
2024
Executive Directors
Ross Smyth-Kirk
100%
–
–
Jamie Gibson1
N/A
N/A
N/A
1
Jamie Gibson became an Executive Director on 3 February 2023 and was remunerated pursuant to the terms and conditions of a Consultancy
Agreement entered into between Mr Gibson and the Company. Pursuant to the Agreement and subsequent amendment, Mr Gibson is entitled to a
payment of up to $2,500 per day (inclusive of all entitlements) or as otherwise approved by Kingsgate, in respect of work performed for the Company.
Directors’ Report
45
Directors' Report
continuedu
Shareholdings for Directors
Balance at
start of year
Other changes
during the year
Balance at
year end
Executive Chairman
Ross Smyth-Kirk
5,078,058
–
5,078,058
Executive Director
Jamie Gibson1
25,000
27,000
52,000
Non-Executive Directors
Nucharee Sailasuta
–
–
–
Peter Warren
220,000
–
220,000
1
Jamie Gibson purchased 27,000 shares on-market on 2 October 2023.
Loans to Directors
There were no loans made to Directors or other Key Management Personnel at any time during the year.
END OF THE REMUNERATION REPORT
Insurance of officers
During the financial year, the Group paid premiums to insure Directors and Officers of the Group. The contracts include a prohibition on disclosure of the
premium paid and nature of the liabilities covered under the policy.
Directors’ interest in contracts
a. Advances from preference shareholder (see Note 16b and Note 22d)
On 25 November 2022, Akara Resources Public Company Limited (Akara) received an unsecured THB200,000,000 advance from the preference shareholder
Mrs Nucharee Sailasuta. Terms and conditions of the advance were as follows:
Currency
Interest rate
Financial year
of maturity
Face value
$’000
Carrying amount
$’000
Advance from preference shareholder
Thai baht
12%
2025
8,167
8,167
On 22 February 2023, Akara received an additional cash advance of THB100,000,000 from the preference shareholder Mrs Nucharee Sailasuta.
Terms and conditions of the advance were as follows:
Currency
Interest rate
Financial year
of maturity
Face value
$’000
Carrying amount
$’000
Advance from preference shareholder
Thai baht
12%
2025
4,083
4,083
A total of $1,951,000 interest was expensed during the year and $188,000 accrued at year end.
On 25 October 2023, the repayment of both cash advances was extended until at least 25 November 2024. On 19 July 2024, an amount of THB150,000,000
($6,125,000) was repaid and the remaining balance of THB150,000,000 ($6,125,000) is required to be repaid within 90 days of drawdown according to the
terms of the US$35,000,000 Facility.
b. Preference shares in controlled entity (see Note 16a and Note 22d)
Preference shareholder interest in the amount of $1,356,000 were expensed during the year and an amount of $108,000 accrued at year end.
Directors' Report
46
www.kingsgate.com.au
c. Services provided to Chatree Gold Mine (see Note 22d)
LotusHall Mining Heavy Engineering Construction Co., Ltd (LotusHall), of which Mrs Nucharee Sailasuta is the Managing Director, provided mining related
services to Chatree Gold Mine during the year ended 30 June 2024. A total of $9,337,000 was recorded for services received from LotusHall during the year.
At year end, $2,021,000 was included in current payables.
Non-audit services
Details of amounts paid or payable to the auditor for non-audit services provided during the year are detailed in Note 28: Auditors’ Remuneration.
The Directors are satisfied that the provision of non-audit services during the period by the auditor is compatible with the general standard of
independence for auditors imposed by the Corporations Act 2001.
The Directors are of the opinion that the services disclosed in Note 28: Auditors’ Remuneration to the financial statements do not compromise the
external auditors’ independence, based on the Auditors’ representations and advice received from the Audit Committee, for the following reasons:
〉
all non-audit services have been reviewed to ensure they do not impact the integrity and objectivity of the auditor; and
〉
none of the services undermine the general principles relating to auditor independence as set out in Code of Conduct APES 110 Code of Ethics for
Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including reviewing or auditing the auditor’s own work,
acting in a management or decision-making capacity for the Company, acting as advocate for the Company or jointly sharing economic risks and rewards.
A copy of the Auditor’s Independence Declaration as required under section 307c of the Corporations Act 2001 is set out in page 47.
Rounding of amounts
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial Directors’ Reports) Instrument 2016/191 and in accordance with that
instrument, amounts in the Directors’ Report have been rounded to the nearest thousand dollars except where otherwise indicated.
Auditors
PricewaterhouseCoopers continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of Directors.
Ross Smyth-Kirk OAM
Director
Sydney
19 September 2024
Directors' Report
47
Auditor’s Independence
Declaration
Auditor’s Independence Declaration
Auditor’s Independence Declaration
As lead auditor for the audit of Kingsgate Consolidated Limited for the year ended 30 June 2024, I
declare that to the best of my knowledge and belief, there have been:
(a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b)
no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Kingsgate Consolidated Limited and the entities it controlled during the
period.
Craig Thomason
Sydney
Partner
PricewaterhouseCoopers
19 September 2024
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
www.kingsgate.com.au
48
Financial Statements
Note
2024
$’000
2023
$’000
Sales revenue
5a
133,091
27,337
Cost of sales
5b
(126,398)
(23,500)
Gross profit
6,693
3,837
Exploration expenses
(6,811)
(7,408)
Plant refurbishment expenses
(10,412)
(14,788)
Corporate and administration expenses
5c
(9,939)
(11,386)
Other income and expenses
5d
390
212
Foreign exchange losses
(100)
(2,811)
Impairment reversal – Chatree Gold Mine
5j
228,699
–
Reversal of previously recorded inventory write-down to net realisable value
5e
983
59,822
Rehabilitation provision revision expenses
17
338
(11,444)
Care and maintenance expenses
–
(5,027)
Profit before finance costs and income tax
209,841
11,007
Finance income
53
57
Finance costs
5f
(7,298)
(6,326)
Net finance costs
(7,245)
(6,269)
Profit before income tax
202,596
4,738
Income tax expense
6
(2,835)
–
Profit after income tax
199,761
4,738
Other comprehensive income
Items that may never be reclassified to profit and loss
Exchange differences on translation of foreign operations (net of tax)
19a
(2,124)
1,382
Total other comprehensive (loss)/ income for the year
(2,124)
1,382
Total comprehensive income for the year
197,637
6,120
Profit attributable to:
Owners of Kingsgate Consolidated Limited
199,761
4,738
Total comprehensive income attributable to:
Owners of Kingsgate Consolidated Limited
197,637
6,120
Earnings per share
Cents
Cents
Basic earnings per share
29
77.5
2.06
Diluted earnings per share
29
76.8
2.04
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
For the year ended 30 June 2024
Directors' Report
Financial Statements
49
Financial Statements
Note
2024
$’000
2023
$’000
ASSETS
Current assets
Cash and cash equivalents
7
3,890
8,921
Restricted cash
7
3,087
649
Receivables
8
9,802
9,331
Inventories
9
29,783
34,800
Other assets
10
4,197
4,636
Total current assets
50,759
58,337
Non-current assets
Restricted cash
7
1,773
–
Inventory
9
18,489
29,681
Property, plant and equipment
11
96,824
120
Exploration, evaluation and development
13
187,630
26,436
Right-of-use assets
12
21,135
–
Intangibles
14
642
711
Other assets
10
11,688
11,439
Total non-current assets
338,181
68,387
TOTAL ASSETS
388,940
126,724
LIABILITIES
Current liabilities
Payables
15
34,361
16,889
Lease liabilities
12
4,566
–
Borrowings
16
29,686
12,756
Provisions
17
2,392
2,436
Total current liabilities
71,005
32,081
Non-current liabilities
Payables
15
5,879
7,441
Lease liabilities
12
14,317
–
Borrowings
16
10,836
11,286
Provisions
17
36,503
25,867
Deferred tax liabilities
6
2,714
–
Total non-current liabilities
70,249
44,594
TOTAL LIABILITIES
141,254
76,675
NET ASSSETS
247,686
50,049
EQUITY
Contributed equity
18
727,307
727,307
Reserves
19a
58,307
60,431
Accumulated losses
19b
(537,928)
(737,689)
TOTAL EQUITY
247,686
50,049
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
Consolidated Statement
of Financial Position
As at 30 June 2024
www.kingsgate.com.au
50
Financial Statements
Contributed
equity
$’000
Reserves
$’000
Accumulated
losses
$’000
Total equity
$’000
Balance at 1 July 2022
675,484
59,049
(742,427)
(7,894)
Profit after income tax
–
–
4,738
4,738
Total other comprehensive income for the year
–
1,382
–
1,382
Total comprehensive income for the year
–
1,382
4,738
6,120
Transaction with owners in their capacity as owners:
Issue of shares
54,647
–
–
54,647
Share issue costs
(2,824)
–
–
(2,824)
Total transaction with owners
51,823
–
–
51,823
Balance at 30 June 2023
727,307
60,431
(737,689)
50,049
Balance at 1 July 2023
727,307
60,431
(737,689)
50,049
Profit after income tax
–
–
199,761
199,761
Total other comprehensive income for the year
–
(2,124)
–
(2,124)
Total comprehensive income for the year
-
(2,124)
199,761
197,637
Balance at 30 June 2024
727,307
58,307
(537,928)
247,686
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Consolidated Statement
of Changes in Equity
For the year ended 30 June 2024
Directors' Report
Financial Statements
51
Financial Statements
Note
2024
$’000
2023
$’000
Cash flows from operating activities
Receipts from customers
134,836
20,272
Payments to suppliers and employees (inclusive of GST/VAT)
(123,211)
(60,731)
Interest received
53
57
Net cash inflow/(outflow) from operating activities
24
11,678
(40,402)
Cash flows from investing activities
Payments for property, plant and equipment
(11,494)
(22)
Payments for exploration, evaluation and development
(6,328)
–
Payments for intangibles
(60)
(733)
Payments for right-of-use asset
(1,449)
–
Net payments of deposits
(738)
(4,282)
Increase in restricted cash
(4,420)
(649)
Net cash outflow from investing activities
(24,489)
(5,686)
Cash flows from financing activities
Proceeds from secured loan note with Nebari, net of transactions costs
13,868
–
Proceeds from insurance premium funding
2,118
–
Repayments of insurance premium funding
(1,415)
–
Proceeds from issue of shares
–
54,647
Payments for share issue transaction costs
–
(2,815)
Proceeds from Secured Bridge Facility, net of transaction costs
–
10,808
Proceeds from advances from preference shareholder, net of transaction costs
–
12,658
Repayment of Secured Bridge Facility
–
(22,538)
Payments of lease liabilities
(1,947)
(20)
Finance costs paid
(4,761)
(5,059)
Net cash inflow from financing activities
7,863
47,681
Net (decrease)/increase in cash held
(4,948)
1,593
Cash at the beginning of the year
8,921
7,424
Effects of exchange rate on cash and cash equivalents
(83)
(96)
Cash at the end of the year
3,890
8,921
Non-cash financing activities
Right-of-use asset
21,384
–
Total non-cash financing activities
21,384
–
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
Consolidated Statement
of Cash Flows
For the year ended 30 June 2024
52
www.kingsgate.com.au
Financial Statements
Consolidated Entity
Disclosure Statement
For the year ended 30 June 2024
Name of entity
Type of entity
% of ordinary shares
held directly or indirectly
by the Company in the
body corporate
Country of
incorporation
Australian or
foreign tax
resident
Jurisdiction
for foreign
tax residual
Kingsgate Consolidated Limited (the Company)
Body corporate
Australia
Australian
N/A
Dominion Mining Limited
Body corporate
100%
Australia
Australian
N/A
Gawler Gold Mining Pty Ltd
Body corporate
100%
Australia
Australian
N/A
Dominion Copper Pty Ltd
Body corporate
100%
Australia
Australian
N/A
Yilgarn Metals Pty Ltd
Body corporate
100%
Australia
Australian
N/A
Kingsgate Treasury Pty Ltd
Body corporate
100%
Australia
Australian
N/A
Kingsgate Capital Pty Ltd
Body corporate
100%
Australia
Australian
N/A
Kingsgate Nominees Pty Limited
Body corporate*
100%
Australia
Australian
N/A
Kingsgate South America Pty Ltd
Body corporate
100%
Australia
Australian
N/A
Kingsgate Chile NL
Body corporate
100%
Australia
Australian
N/A
Laguna Exploration Pty Ltd
Body corporate
100%
Australia
Australian
N/A
Akara Resources Public Company Limited
Body corporate
100%**
Thailand
Foreign
Thailand
Issara Mining Limited
Body corporate
100%
Thailand
Foreign
Thailand
Suansak Patana Limited
Body corporate
100%
Thailand
Foreign
Thailand
Phar Mai Exploration Limited
Body corporate
100%
Thailand
Foreign
Thailand
Richaphum Mining Limited
Body corporate
100%
Thailand
Foreign
Thailand
Phar Lap Limited
Body corporate
100%
Thailand
Foreign
Thailand
Phar Rong Limited
Body corporate
100%
Thailand
Foreign
Thailand
Asia Gold Ltd
Body corporate
100%
Mauritius
Foreign
Mauritius
Laguna Resources Chile Limitada
Body corporate
100%
Chile
Foreign
Chile
Minera Kingsgate Chile Limitada
Body corporate
100%
Chile
Foreign
Chile
*
Trustee of the Company under Executive Share Plan.
**
The ordinary share class constitutes 48% of issued capital of Akara Resources Public Company Limited.
Notes to the Consolidated Financial Statements
53
Notes to the Consolidated
Financial Statements
continuedu
Notes to the
Consolidated Financial
Statements
for the year ended 30 June 2024
The Financial Report of Kingsgate Consolidated
Limited (Kingsgate or the “Company”) for the
year ended 30 June 2024 was authorised for issue
in accordance with a resolution of Directors on
19 September 2024.
Kingsgate is a Company limited by shares
incorporated in Australia whose shares are publicly
traded on the Australian Securities Exchange using
the ASX code KCN. The consolidated financial
statements of the Company as at and for the
year ended 30 June 2024 comprise the Company
and its subsidiaries (together referred to as the
“Group” and individually as “Group entities”).
A description of the nature of the Group’s
operations and its principal activities is included
in the Directors’ Report.
1. Basis of preparation
These general purpose financial statements have
been prepared in accordance with the Australian
Accounting Standards, other authoritative
pronouncements of the Australian Accounting
Standards Board and the Corporations Act
2001. The Company is a for-profit entity for the
purpose of preparing the financial statements.
The financial statements have been prepared on
a going concern basis, which indicates continuity
of business activities and the realisation of
assets and settlement of liabilities in the normal
course of business.
At 30 June 2024, the Group’s current liabilities
exceeded its current assets by $20,246,000. The
Group’s current liabilities included a secured loan
note of $16,733,000 owed to Nebari Gold Fund 1,
LP and an advance from preference shareholder
for $12,250,000 (see Note 16). On 17 July 2024,
the loan balance of $16,733,000 was fully repaid.
On 19 July 2024, an amount of $6,125,000 was
repaid to the preference shareholder (see Note
25). As a result the current asset net deficiency
as at 30 June 2024 has been remediated.
Based on cash flow forecast, the directors
believe the Group has sufficient cash resources
to settle its liabilities and commitments and
to support its ongoing activities for at least
12 months from date of this report.
a. Compliance with IFRS
The financial statements comply with
International Financial Reporting Standards
(“IFRS”) adopted by the International
Accounting Standards Board (“IASB”).
b. Historical cost convention
The financial statements have been prepared
under the historical cost convention, as
modified by the revaluation of available-for-sale
financial assets and financial instruments
(including derivative instruments) at fair value
through profit or loss. Comparative information
is reclassified where appropriate to enhance
comparability or in conformity with revised
standards and interpretations.
c. Functional and presentation
currency
The financial statements of the Group entities
are measured using the currency of the
primary economic environment in which the
entity operates (“the functional currency”).
The consolidated statements are presented
in Australian dollars, which is the Company’s
functional currency and presentation currency.
d. Rounding of amounts
The Company is of a kind referred to in ASIC
Corporations (Rounding in Financial/Directors’
Reports) Instrument 2016/191 relating to
the ‘rounding off’ of amounts in the financial
statements. Amounts in the financial statements
have been rounded off in accordance with the
instrument to the nearest thousand dollars, or
in certain cases, the nearest dollar.
e. Critical accounting
estimates
The preparation of financial statements requires
the use of certain critical accounting estimates.
It also requires management to exercise its
judgement in the process of applying the
Group’s accounting policies. The areas involving
a higher degree of judgement or complexity,
or areas where assumptions and estimates
are significant to the financial statements are
disclosed in Note 3.
f. New and amended
standards adopted by the
group
The Group has applied all the new standards
and amendments that have been published
and which are applicable for the first time for
its annual reporting period commencing 1 July
2023. These standards and amendments did
not have a material impact on the financial
statements.
g. New standards and
interpretations not yet
adopted
Certain new accounting standards and
interpretations have been published that are not
mandatory for 30 June 2024 reporting periods
and have not been early adopted by the Group.
These standards are not expected to have a
material impact on the financial statements.
Notes to the Consolidated Financial Statements
54
www.kingsgate.com.au
2. Significant
accounting policies
The principal accounting policies adopted in the
preparation of the financial statements are set
out below. These policies have been consistently
applied to all the years presented.
a. Principles of consolidation
(i) Business combinations
Business combinations are accounted for using
the acquisition method as at the acquisition
date, which is the date on which control is
transferred to the Group. Control is the power
to govern the financial and operating policies
of an entity so as to obtain benefits from its
activities. In assessing control, the Group takes
into consideration potential voting rights that
currently are exercisable.
The consideration transferred for the acquisition
of a subsidiary comprises the fair value of the
assets transferred, the liabilities incurred and
the equity interests issued by the Group. The
consideration transferred does not include
amounts related to the settlement of a
pre-existing relationship. Such amounts
are generally recognised in profit or loss.
Costs related to the acquisition other than
those associated with the issue of debt or equity
securities, that the Group incurs in connection
with a business combination are expensed as
incurred. Any contingent consideration payable
is recognised at fair value at the acquisition date.
Acquisitions of non-controlling interests are
accounted for as transactions with owners
in their capacity as owners and therefore
no goodwill is recognised as a result of such
transactions. The non-controlling interest
in the acquiree is based on the fair value of
the acquiree’s net identifiable assets. The
adjustments to non-controlling interests are
based on the proportionate amount of the net
assets of the subsidiary. The acquisition of an
asset or group of assets that is not a business
is accounted for by allocating the cost of the
transaction to the net identifiable assets and
liabilities acquired based on their fair values.
(ii) Subsidiaries
Subsidiaries are entities controlled by the Group.
The Group controls an entity when the Group
is exposed to, or has rights to, variable returns
from its involvement with the entity and has
the ability to affect those returns through its
power to direct the activities of the entity. The
financial statements of subsidiaries are included
in the consolidated financial statements from the
date that control commences until the date that
control ceases.
The accounting policies of subsidiaries have been
changed when necessary to align them with the
policies adopted by the Group. Losses applicable
to the non-controlling interests in a subsidiary
are allocated to the non-controlling interests
even if doing so causes the non-controlling
interests to have a deficit balance.
Intra-group balances and transactions, and
any unrealised gains arising from intra-group
transactions are eliminated in preparing the
consolidated financial statements. Unrealised
losses are also eliminated unless the transaction
provides evidence of the impairment of the asset
transferred.
b. Foreign currency translation
(i) Transactions and balances
Foreign currency transactions are translated
into the respective functional currencies of the
Group entities at exchange rates on the dates
of the transactions. Foreign exchange gains
and losses resulting from the settlement of
such transactions and from the translation at
year-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are
recognised in the profit or loss; except when
they are deferred in equity as qualifying cash
flow hedges and qualifying net investment
hedges or, are attributable to part of the net
investment in a foreign operation.
Translation differences on assets and liabilities
carried at fair value are reported as part of the
fair value gain or loss. Translation differences
on non-monetary assets and liabilities such as
equities held at fair value through profit or loss
are recognised in profit or loss as part of the
fair value gain or loss. Translation differences
on non-monetary assets are included in the fair
value reserve in equity.
Exchange gains and losses which arise on
balances between Group entities are taken to
the foreign currency translation reserve where
the intra-group balances are in substance part
of the Group’s net investment. Whereas a result
of a change in circumstances, a previously
designated intra-group balance is intended to be
settled in the foreseeable future, the intra-group
balance is no longer regarded as part of the net
investment. The exchange differences for such
balance previously taken directly to the foreign
currency translation reserves are recognised in
the profit or loss.
(ii) Foreign operations
The results and financial position of all the
Group entities (none of which has the currency
of a hyperinflationary economy) that have
a functional currency different from the
presentation currency are translated into the
presentation currency as follows:
〉
the assets and liabilities of the foreign
operations, including goodwill and fair value
adjustments arising on acquisition, are
translated at the year-end exchange rate;
〉
the income and expenses of foreign opera
tions are translated at average exchange
rates (unless this is not a reasonable approxi
mation of the cumulative effect of the rate
prevailing on the transaction dates, in which
case income and expenses are translated at
the dates of the transactions); and
〉
foreign currency differences are recognised in
other comprehensive income, and presented
in the foreign currency translation reserve.
c. Revenue
Revenue is measured at the fair value of the
consideration received or receivable. Sales
revenue represents the net proceeds receivable
from the buyer.
Gold and silver sales
Revenue from contracts with customers
is recognised when control of the goods is
transferred to the customers at an amount that
reflects the consideration to which the Group
expects to be entitled in exchange for those
goods.
The Group recognises revenue from gold doré
sales at the point where the doré is delivered to
the buyer at the buyer’s location.
d. Income tax
Income tax expense comprises current and
deferred tax. Current tax and deferred tax is
recognised in profit or loss except to the extent
that it relates to a business combination, or
items recognised directly in equity or in other
comprehensive income.
Current tax is expected tax payable or receivable
on the taxable income or loss for the year using
tax rates enacted or substantively enacted at
the reporting date, and any adjustment to tax
payable in respect of previous years. Deferred
tax is provided using the liability method,
providing for temporary differences between
the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts
used for taxation purposes. The amount of
deferred tax provided is based on the expected
manner of realisation or settlement of the
carrying amount of assets and liabilities, using
tax rates enacted or substantively enacted at
the reporting date.
Notes to the Consolidated Financial Statements
55
Notes to the Consolidated
Financial Statements
continuedu
continuedu
A deferred tax asset is recognised for unused
tax losses, tax credits and deductible temporary
differences, to the extent that it is probable that
future taxable profits will be available against
which they can be utilised. Deferred tax assets
are reviewed at each reporting date and are
reduced to the extent that it is no longer probable
that the related tax benefit will be realised.
Deferred tax is not recognised for:
〉
temporary differences on the initial recog
nition of assets or liabilities in a transaction
that is not a business combination and that
affects neither accounting nor taxable profit
or loss;
〉
temporary differences related to invest
ments in subsidiaries where the Company is
able to control the timing of the reversal of
the temporary differences and it is probable
that they will not reverse in the foreseeable
future; and
〉
taxable temporary differences arising on the
initial recognition of goodwill.
Deferred tax assets and liabilities are offset
if there is a legally enforceable right to offset
current tax liabilities and assets and, they relate
to income taxes levied by the same tax authority
on the same taxable entity.
Additional income tax expenses that arise from
the distribution of cash dividends are recognised
at the same time that the liability to pay the
related dividend is recognised.
Tax consolidation
The Company and its wholly owned Australian
resident entities formed a tax-consolidation
group with effect from 1 July 2003 and are
therefore taxed as a single entity from that date.
The head entity within the tax-consolidation
group is Kingsgate Consolidated Limited.
Current tax expense or benefit, deferred tax
assets and deferred tax liabilities arising from
temporary differences of the members of the
tax-consolidation group are recognised in the
separate financial statements of the members
of the tax-consolidation group using the
“standalone taxpayer” approach by reference to
the carrying amounts in the separate financial
statements of each entity and the tax values
applying under tax consolidation.
Current tax assets or liabilities and deferred tax
assets arising from unused tax losses assumed
by the head entity from the subsidiaries in the
tax-consolidation group, are recognised as
amounts receivable or payable to other entities
in the tax-consolidation group in conjunction
with any tax funding agreement amounts.
The Company recognises deferred tax
assets arising from unused tax losses of the
tax-consolidation group to the extent that it
is probable that future taxable profits of the
tax-consolidation group will be available against
which the asset can be utilised.
Tax funding and sharing
agreements
The members of the tax-consolidation group
have entered into a funding agreement that
sets out the funding obligations of members
of the tax-consolidation group in respect of tax
amounts. The tax funding arrangements require
payments to or from the head entity and any
deferred tax asset assumed by the head entity,
resulting in the head entity recognising an
intra-group receivable or payable in the separate
financial statements of the members of the
tax-consolidation group equal in amount to the
tax liability or asset assumed. The intra-group
receivables or payables are at call.
The head entity recognises the assumed current
tax amounts as current tax liabilities or assets
adding to its own current tax amounts, since
they are also due to or from the same taxation
authority. The current tax liabilities or assets
are equivalent to the tax balances generated
by external transactions entered into by the
tax-consolidated group.
The amounts receivable or payable under the
tax funding agreement are due upon receipt of
the funding advice from the head entity, which
is issued as soon as practicable after the end
of each financial year. The head entity may also
require payment of interim funding amounts to
assist with its obligations to pay tax instalments.
The members of the tax-consolidation group have
also entered into a tax sharing agreement. The tax
sharing agreement provides for the determination
of the allocation of income tax liabilities between
the entities should the head entity default on
its tax payment obligations. No amounts have
been recognised in the consolidated financial
statements in respect of this agreement as
payment of any amounts under the tax sharing
agreement is considered remote.
Uncertain tax position
An uncertain tax treatment is any tax treatment
applied by the Group where there is uncertainty
over whether that treatment will be accepted
by the tax authority. The Group is required to
determine the uncertainty over income tax
treatment by addressing the following:
〉
the Group determines whether uncertain tax
treatments should be considered separately,
or together as a group, depending on which
approach better predicts the resolution of
the uncertainty;
〉
the Group determines if it is probable that
the tax authorities will accept the uncertain
tax treatment; and if it is not probable that
the uncertain tax treatment will be accepted,
the Group reflects the effect of the uncer
tainty in its income tax accounting in the
period in which that determination is made
(for example, by recognising an additional
tax liability or applying a higher tax rate);
〉
the Group measures the tax uncertainty
based on the most likely amount or expected
value, depending on whichever method better
predicts the resolution of the uncertainty.
Based on the assessment completed by the
Group, there is no material tax uncertainty that
requires a tax liability to be recognised or that
requires a different tax rate to be applied.
e. Leases
Where the Group has entered into a lease
contract for the right to control the use of an
asset over the lease term, the present value of
future lease commitments is recognised as a
liability on the balance sheet at commencement
date, with the corresponding asset recognised
as a right-of-use asset.
The lease liability represents the present value of
the expected future lease payments, discounted
at the rate implicit in the lease or if that rate
cannot be determined at the consolidated
entity’s average incremental borrowing rate.
The right of use assets are classified as leases of
property and are carried at cost less accumulated
depreciation and impairment loss. The assets are
amortised on a straight-line basis over the shorter
of the asset’s useful life and the lease term.
Lease payments are allocated between principal
and finance cost. The finance cost is charged
to profit or loss over the lease period so as to
produce a constant periodic rate of interest on the
remaining balance of the liability for each period.
f. Impairment of assets
Assets other than goodwill and indefinite life
intangible assets are tested for impairment
whenever events or changes in circumstances
indicate that the carrying amount may not be
recoverable. An impairment loss is recognised for
the amount by which the assets carrying amount
exceeds its recoverable amount. The recoverable
amount is the higher of an asset’s fair value in use.
For the purposes of assessing impairment, assets
are grouped at the lowest levels for which there
are separately identifiable cash inflows which
are largely independent of the cash inflows from
other assets or groups of assets (cash-generating
units). Non-financial assets other than goodwill
that suffered impairment are reviewed for possible
reversal of the impairment at each reporting date.
Notes to the Consolidated Financial Statements
56
www.kingsgate.com.au
2. Significant accounting policies continued
g. Cash and cash equivalents
Cash and cash equivalents includes cash
on hand, deposits held at call with financial
institutions, other short-term, highly liquid
investments with original maturities of three
months or less that are readily convertible to
known amounts of cash and which are subject
to an insignificant risk of changes in value, and
bank overdrafts. Bank overdrafts are shown
within borrowings in current liabilities in the
statement of financial position.
h. Trade and other receivables
Trade and other receivables are recognised
initially at fair value and subsequently measured
at amortised cost using the effective interest
method, less provision for impairment.
Receivables are due for settlement no more than
90 days from the date of recognition.
Collectability of trade and other receivables is
reviewed on an ongoing basis. The Group applies
the AASB 9 simplified approach to measuring
expected credit losses which uses a lifetime
expected loss allowance for all trade and other
receivables.
The amount of the impairment loss is recognised
in the income statement within other expenses.
When a trade and other receivable for which
an impairment allowance had been recognised
becomes uncollectible in a subsequent period, it
is written off against the allowance account.
Subsequent recoveries of amounts previously
written off are credited against other expenses
in the income statement.
i. Inventories
Raw materials and stores, work in progress
and finished goods (including gold bullion), are
stated at the lower of cost and net realisable
value. Cost comprises direct materials, direct
labour and an appropriate proportion of variable
and fixed overhead expenditure, the latter being
allocated on the basis of normal operating
capacity. Costs are assigned to individual
items of inventory on the basis of weighted
average costs. Costs of purchased inventory
are determined after deducting rebates and
discounts. Net realisable value is the estimated
selling price in the ordinary course of business
less the estimated costs of completion and the
estimated costs necessary to make the sale.
Stockpiles represent ore that has been extracted
and is available for further processing. If there
is significant uncertainty as to whether the
stockpiled ore will be processed it is expensed
as incurred. Where the future processing of
this ore can be predicted with confidence, e.g.
because it exceeds the mine’s cut-off grade, it
is valued at the lower of cost and net realisable
value. If the ore will not be processed within
the 12 months after the reporting date, it is
included within non-current assets. Work in
progress inventory includes ore stockpiles and
other partly processed material. Quantities are
assessed primarily through surveys and assays,
and truck counts.
j. Non-derivative
financial assets
Loans and receivables
Loans and receivables are non-derivative
financial assets with fixed or determinable
payments that are not quoted in an active
market. They are included in current assets,
except for those with maturities greater than
12 months after the reporting date which are
classified as non-current assets.
Loans and receivables are measured at
amortised cost using the effective interest
method, less any impairment losses.
k. Derivative financial
instruments
Derivative financial instruments are used by the
Group to protect against the Group’s Australian
dollar gold price risk exposures. The Group does
not apply hedge accounting and accordingly
all fair value movements on derivative financial
instruments are recognised in the profit or loss.
Derivative financial instruments are stated at
fair value on the date a derivative contract is
entered into and are subsequently remeasured
to their fair value at each reporting date. The
resulting gain or loss is recognised in the income
statement immediately.
l. Property, plant and
equipment
Property, plant and equipment are stated at
historical cost less depreciation. Historical cost
includes expenditure that is directly attributable
to the acquisition of the items.
Subsequent costs are included in the asset’s
carrying amount or recognised as a separate
asset, as appropriate, only when it is probable
that future economic benefits associated with
the item will flow to the Group and the cost of
the item can be measured reliably. The carrying
amount of any component accounted for as a
separate asset is derecognised when replaced.
All other repairs and maintenance are charged
to the income statement during the reporting
period in which they are incurred.
Depreciation
Depreciation and amortisation of mine
buildings, plant, machinery and equipment is
provided over the assessed life of the relevant
mine or asset, whichever is the shorter.
Depreciation and amortisation is determined on
a units-of-production basis over the estimated
recoverable reserves from the related area.
In some circumstances, where conversion
of resources into reserves is expected, some
elements of resources may be included. For mine
plant, machinery and equipment, which have an
expected economic life shorter than the life of
the mine, a straight line basis is adopted.
The expected useful lives are as follows:
〉
mine buildings – the shorter of applicable
mine life and 10 years;
〉
plant, machinery and equipment – the
shorter of applicable mine life and 3-10 years
depending on the nature of the asset.
The estimated recoverable reserves and life of
each mine and the remaining useful life of each
class of asset are reassessed at least annually.
Where there is a change in the reserves during
the period, depreciation and amortisation rates
are adjusted prospectively from the beginning of
the reporting period.
Major spares purchased specifically for a
particular plant are capitalised and depreciated on
the same basis as the plant to which they relate.
Impairment
An asset’s carrying amount is written down
immediately to its recoverable amount if the
asset’s carrying amount is greater than its
estimated recoverable amount (Note 2f).
Derecognition
An item of property, plant and equipment is
derecognised upon disposal or when no future
economic benefits are expected to arise from
the continued use of the asset.
Any gain or loss arising on derecognition of the
asset (calculated as the difference between the
net disposal proceeds and the carrying amount
of the item) is included in the profit or loss in the
period the item is derecognised.
m. Deferred stripping costs
As part of its mining operations, the Group
incurs stripping (waste removal) costs both
during the development phase and production
phase of its operations.
Notes to the Consolidated Financial Statements
57
Notes to the Consolidated
Financial Statements
continuedu
Stripping costs incurred during the production
phase are generally considered to create two
benefits, being either the production of inventory
in the period or improved access to the ore to
be mined in the future. Where the benefits are
realised in the form of inventory produced in
the period, the production stripping costs are
accounted for as part of the cost of producing
those inventories. Where production stripping
costs are incurred and the benefit is improved
access to the ore to be mined in the future, the
costs are recognised as a non-current asset,
referred to as a “production stripping asset”,
if the following criteria are all met:
〉
future economic benefits (being improved
access to the ore body) associated with the
stripping activity are probable;
〉
the component of the ore body for which
access has been improved can be accurately
identified; and
〉
the costs associated with the stripping
activity associated with that component can
be reliably measured.
The amount of stripping costs deferred is based
on the ratio obtained by dividing the volume
of waste mined by the volume of ore mined for
each component of the mine. Stripping costs
incurred in the period are deferred to the extent
that the actual current period waste to ore ratio
exceeds the life of component expected waste
to ore (“life of component”) ratio.
A component is defined as a specific volume of
the ore body that is made more accessible by
the stripping activity. An identified component
of the ore body is typically a subset of the total
ore body of the mine. It is considered that each
mine may have several components, which are
identified based on the mine plan. The mine
plans and therefore the identification of specific
components will vary between mines as a result
of both the geological characteristics and location
of the ore body. The financial considerations
of the mining operations may also impact the
identification and designation of a component.
The identification of components is necessary
for both the measurement of costs at the
initial recognition of the production stripping
asset, and the subsequent depreciation of the
production stripping asset.
The life of component ratio is a function of an
individual mine’s design and therefore changes
to that design will generally result in changes to
the ratio. Changes in other technical or economic
parameters that impact reserves will also have
an impact on the life of component ratio even if
they do not affect the mine’s design. Changes
to the life of component ratio are accounted for
prospectively from the date of change.
The production stripping asset is initially
measured at cost, which is the accumulation of
costs directly incurred to perform the stripping
activity that improves access to the identified
component of ore. If incidental operations are
occurring at the same time as the production
stripping activity, but are not necessary for the
production stripping activity to continue as
planned, these costs are not included in the
cost of the stripping activity asset.
The production stripping asset is amortised
over the expected useful life of the identified
component of the ore body that is made
more accessible by the activity, on a units of
production basis. Economically recoverable
reserves are used to determine the expected
useful life of the identified component of the
ore body. The production stripping asset is then
carried at cost less accumulated amortisation
and any impairment losses.
The production stripping asset is included in
“Exploration, Evaluation and Development”.
These costs form part of the total investment
in the relevant cash generating unit to which
they relate, which is reviewed for impairment
in accordance with the Group’s impairment
accounting policy (Note 2f).
n. Exploration, evaluation
and feasibility expenditure
Exploration and evaluation
expenditure
Exploration and evaluation expenditure incurred
by, or on behalf of the Group is accumulated
separately for each area of interest. Such
expenditure comprises direct costs and
depreciation and does not include general
overheads or administrative expenditure not
having a specific nexus with a particular area
of interest.
Exploration expenditure for each area of interest
is carried forward as an asset provided the rights
to tenure of the area of interest are current and
one of the following conditions is met:
〉
the exploration and evaluation expenditures
are expected to be recouped through
successful development and exploitation of
the area of interest, or alternatively by its
sale; or
〉
exploration and evaluation activities in the
area of interest have not at the reporting
date reached a stage which permits a
reasonable assessment of the existence
or otherwise of economically recoverable
reserves, and active and significant opera
tions in, or in relation to, the area of interest
are continuing.
Exploration expenditure is written off when it fails
to meet at least one of the conditions outlined
above or an area of interest is abandoned. The
carrying value of exploration and evaluation assets
is assessed in accordance with AASB 6 Exploration
for and Evaluation of Mineral Resources and the
Group’s impairment policy (Note 2f).
Feasibility expenditure
Feasibility expenditure represents costs
related to the preparation and completion of
a feasibility study to enable a development
decision to be made in relation to an area of
interest and capitalised as incurred.
At the commencement of production, all
past exploration, evaluation and feasibility
expenditure in respect of an area of interest
that has been capitalised is transferred to mine
properties where it is amortised over the life
of the area of interest to which it relates on a
unit-of-production basis.
o. Mine properties
Mine properties represents the accumulated
exploration, evaluation, land and development
expenditure incurred by or on behalf of the
Group in relation to areas of interest in which
mining of a mineral resource has commenced.
When further development expenditure
is incurred in respect of a mine property
after commencement of production, such
expenditure is carried forward as part of the
mine property only when substantial future
economic benefits are thereby established.
Otherwise, such expenditure is classified as
part of the cost of production.
Amortisation of costs is provided on the units-
of-production method with separate calculations
being made for each component. The units-
of-production basis results in an amortisation
charge proportional to the depletion of the
estimated recoverable reserves. In some
circumstances, where conversion of resources
into reserves is expected, some elements of
resources may be included. Development and
land expenditure still to be incurred in relation
to the current recoverable reserves are included
in the amortisation calculation. Where the life
of the assets is shorter than the mine life, their
costs are amortised based on the useful life of
the assets.
The estimated recoverable reserves and life of
each mine and the remaining useful life of each
class of asset are reassessed at least annually.
Where there is a change in the reserves during a
six-month period, depreciation and amortisation
rates are adjusted prospectively from the
beginning of that reporting period.
Notes to the Consolidated Financial Statements
58
www.kingsgate.com.au
2. Significant accounting policies continued
p. Trade and other payables
Trade and other payables represent liabilities for
goods and services provided to the Group prior
to the end of the financial year which are unpaid.
The amounts are unsecured and are usually paid
in line with normal creditor terms.
q. Borrowings
Borrowings are initially recognised at fair value,
net of transaction costs incurred. Borrowings
are subsequently measured at amortised cost.
Any difference between the proceeds (net of
transaction costs) and the redemption amount
is recognised in the profit or loss over the period
of the borrowings using the effective interest
method. Fees paid on the establishment of loan
facilities are recognised as transaction costs to
the extent that it is probable that some or all of
the facility will be drawn down. In this case, the
fee is deferred until the drawdown occurs. To the
extent there is no evidence that it is probable that
some or all of the facility will be drawn down, the
fee is capitalised and amortised over the period of
the facility to which it relates.
Preference shares which are mandatorily
redeemable on a specific date are classified as
liabilities. The dividends on these preference
shares are recognised in the profit or loss as
finance costs.
Borrowings are removed from the statement of
financial position when the obligation specified
in the contract is discharged, cancelled or
expired. The difference between the carrying
amount of a financial liability that has been
extinguished or transferred to another party and
the consideration paid, including any non-cash
assets transferred or liabilities assumed, is
recognised in other income or finance costs.
Borrowings are classified as current liabilities
unless the Group has an unconditional right
to defer settlement of the liability for at least
12 months after the reporting date.
r. Borrowing costs
Borrowing costs directly attributable to the
acquisition, construction or production of
qualifying assets are added to the cost of
those assets, until such time as the assets are
substantially ready for their intended use.
Where the funds used to finance a qualifying
asset form part of general borrowings, the
amount capitalised is calculated using a weighted
average of rates applicable to the relevant
borrowings during the period. Where funds
borrowed are directly attributable to a qualifying
asset, the amount capitalised represents the
borrowing costs specific to those borrowings.
All other borrowing costs are recognised
as expenses in the period in which they are
incurred.
s. Provisions
Provisions for legal claims are recognised when
the Group has a present legal or constructive
obligation as a result of past events, it is
probable that an outflow of resources will be
required to settle the obligation and the amount
has been reliably estimated. Provisions are not
recognised for future operating losses.
Where there are a number of similar obligations,
the likelihood that an outflow will be required
in settlement is determined by considering the
class of obligations as a whole. A provision is
recognised even if the likelihood of an outflow
with respect to any one item included in the
same class of obligations may be small.
Provisions are measured at the present value of
management’s best estimate of the expenditure
required to settle the present obligation at
the reporting date. The discount rate used to
determine the present value reflects current
market assessments of the time value of money
and the risks specific to the liability. The increase
in the provision due to the passage of time is
recognised as finance costs.
t. Restoration and
rehabilitation provision
The estimated costs of decommissioning and
removing an asset and restoring the site are
included in the cost of the asset at the date the
obligation first arises and to the extent that it is
first recognised as a provision. This restoration
asset is subsequently amortised on a units-of-
production basis.
The corresponding provision of an amount
equivalent to the restoration asset created is
reviewed at the end of each reporting period.
The provision is measured at the best estimate
of present obligation at the end of the reporting
period based on current legal and other
requirements and technology, discounted where
material using national government bond rates
at the reporting date with terms to maturity and
currencies that match, as closely as possible, the
estimated future cash outflows.
Where there is a change in the expected
restoration, rehabilitation or decommissioning
costs, an adjustment is recorded against the
carrying value of the provision and any related
restoration asset, and the effects are recognised
in the income statement on a prospective basis
over the remaining life of the operation.
The unwinding of the effect of discounting on
the rehabilitation provision is included within
finance costs in the income statement.
Costs incurred that relate to an existing
condition caused by past operations, but do not
have a future economic benefit are expensed as
incurred.
u. Employee benefits
(i) Wages and salaries, annual
leave and sick leave
Liabilities for wages and salaries (including
non-monetary benefits and annual leave)
expected to be settled within 12 months of
the reporting date are recognised in provisions
for employee benefits in respect of employees’
services up to the reporting date and are
measured at the amounts expected to be paid
when the liabilities are settled. Liabilities for sick
leave are recognised when the leave is taken and
are measured at the rates paid or payable.
(ii) Long service leave and
severance pay
The liability for long service leave and severance
pay is recognised in the provision for employee
benefits and measured as the present value
of expected future payments to be made in
respect of services provided by employees up
to the reporting date. Consideration is given
to the expected future wage and salary levels,
experience of employee departures and periods
of service. Expected future payments are
discounted using market yields at the reporting
date on corporate bonds with terms to maturity
and currency that match, as closely as possible,
the estimated future cash outflows.
The obligations are presented as current
liabilities in the balance sheet if the entity
does not have an unconditional right to defer
settlement for at least 12 months after the
reporting period, regardless of when the actual
settlement is expected to occur.
(iii) Cash bonuses
Cash bonuses are expensed in the income
statement at reporting date.
A liability is recognised for the amount expected
to be paid if the Group has a present legal or
constructive obligation to pay this amount as a
result of past service provided by the Directors
or employees and the obligation can be
estimated reliably.
Notes to the Consolidated Financial Statements
59
Notes to the Consolidated
Financial Statements
continuedu
(iv) Retirement benefit obligations
Defined contribution plan
Contributions to defined contribution
superannuation plans are recognised as an
expense in the income statement as they
become payable.
Defined benefit plan
The Company’s Thai subsidiary, Akara Resources
Public Company Limited, have a defined benefit
plan which is the amount of pension benefit that
an employee will receive on retirement, usually
dependent on one or more factors such as age,
years of service and compensation.
Retirement benefit
Under labour laws applicable in Thailand,
employees completing 120 days of service are
entitled to severance pay on termination or
retrenchment without cause or upon retirement
age of 60. The severance pay will be at the rate
according to number of years of service as
stipulated in the Labour Law which is currently
at a maximum rate of 400 days of final salary.
The liability recognised in the statement of
financial position in respect of defined benefit
pension plans is the present value of the
defined benefit obligation at the end of the
reporting period, together with adjustments for
unrecognised past-service costs. The defined
benefit obligation is calculated annually using
the projected unit credit method. The present
value of the defined benefit obligation is
determined by discounting the estimated future
cash outflows using market yield of government
bonds that are denominated in the currency in
which the benefits will be paid, and that have
terms to maturity approximating to the terms
of the related pension liability.
(v) Share-based payment
transactions
The Group provides benefits to employees
(including Directors) in the form of share-based
payments, whereby employees render services
in exchange for shares or rights over shares
(“equity settled transactions”).
The fair value of these equity settled
transactions is recognised as an employee
benefit expense with a corresponding increase in
equity. The fair value is measured at grant date
and recognised over the period during which the
employees become unconditionally entitled.
The fair value at grant date is determined using
a pricing model that takes into account the
exercise price, the term, the share price at the
grant date, the expected price volatility of the
underlying share, the expected dividend yield
and the risk free interest rate.
Upon the exercise of the equity settled reward,
the related balance of the share-based payments
reserve is transferred to share capital.
v. Dividends
Dividends are recognised as a liability in the
period in which they are declared.
w. Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by
dividing:
〉
the profit attributable to owners of the
Company, excluding any costs of servicing
equity other than ordinary shares; and
〉
by the weighted average number of ordinary
shares outstanding during the financial year,
adjusted for bonus elements in ordinary
shares issued during the year and excluding
treasury shares.
(ii) Diluted earnings per share
Diluted earnings per share adjust the figures
used in the determination of basic earnings per
share to take into account:
〉
the after income tax effect of interest
and other financing costs associated with
dilutive potential ordinary shares; and
〉
by the weighted average number of
additional ordinary shares that would have
been outstanding assuming the conversion
of all dilutive potential ordinary shares.
x. Contributed equity
Issued ordinary share capital is classified as
equity and is recognised at the fair value of
the consideration received by the Group.
Incremental costs directly attributable to the
issue of shares and share options are recognised
as a deduction, net of tax from the proceeds.
y. Goods and services tax and
similar value added taxes
(GST)
Revenues, expenses and assets are recognised
net of the amount of associated GST, unless
the GST incurred is not recoverable from the
taxation authority. In this case it is recognised as
part of the cost of acquisition of the asset or as
part of the expense.
Receivables and payables are stated inclusive of
the amount of GST receivable or payable. The
net amount of GST recoverable from or payable
to, the taxation authority is included with other
receivables or payables in the statement of
financial position.
Cash flows are presented on a gross basis.
The GST components of the cash flows arising
from investing or financing activities which are
recoverable from, or payable to the taxation
authority, are presented as operating cash flows.
Commitments and contingencies are disclosed
net of the amount of GST recoverable from, or
payable to, the taxation authority.
z. Operating and segment
reporting
Operating segments are reported in a manner
consistent with the internal reporting provided
to the chief operating decision maker. The chief
operating decision maker, who is responsible for
allocating resources and assessing performance
of the operating segments, has been identified
as the Board of Directors.
Segment results that are reported to the Board
of Directors include items directly attributable
to a segment as well as those that can be
allocated on a reasonable basis. The operating
segments are disclosed in Note 4.
aa. Parent entity financial
information
The financial information for the parent entity
Kingsgate Consolidated Limited, disclosed in
Note 30 has been prepared on the same basis as
the consolidated financial statements except as
set out below:
Investments in subsidiaries
Investments in subsidiaries are accounted for at
cost in the financial statements of Kingsgate.
Share-based payments
The issue by the Company of equity instruments
to extinguish liabilities of a subsidiary
undertaking in the Group is treated as a capital
contribution to that subsidiary undertaking.
3. Critical accounting
estimates, assumptions
and judgements
Estimates and judgements are continually
evaluated and are based on historical experience
and other factors, including expectation of future
events that may have a financial impact on the
Group and that are believed to be reasonable
under the circumstances. The Group makes
estimates and assumptions concerning the
future. Actual results may differ from these
estimates under different assumptions and
conditions. The estimates and assumptions that
could materially affect the financial position and
results are discussed below:
Notes to the Consolidated Financial Statements
60
www.kingsgate.com.au
3. Critical accounting estimates, assumptions and judgements continued
(i) Impairment reversal –
Chatree Gold Mine
In 2015, the Group recorded a partial impairment
write-down of the Chatree Gold Mine assets
because of a low gold price. In 2016, following
a decision made by the Thai Government, the
Chatree Gold Mine ceased operations and the
remaining assets were fully impaired.
At the end of each reporting period, the Group
need to assess whether there is any indication
that an impairment loss recognised in prior
periods for an asset may no longer exist or may
have decreased. If any such indication exists, the
entity shall estimate the recoverable amount
of that asset and reverse the impairment to
the lower of the recoverable amount or what
the carrying amount would have been had no
impairment been recognised.
In the prior period, the recommencement of
operations through the processing of the
inventory stockpiles using Chatree Plant #2
was considered to be an indicator for reversal
of the inventory write-down and impairment
as it related to the inventory stockpiles and
Chatree Plant #2. The mine and Chatree Plant #1
did not have a reversal indicator as the mining
operations and Chatree Plant #1 operations had
not yet resumed. A reversal of the inventory
stockpiles write-down to the net realisable value
amounting to $59,822,000 was recognised in
the prior period. No reversal of impairment in
respect of Chatree Plant #2 was recorded.
In the current financial year, a number of factors
represented further indicators of impairment
reversal. This included the completion of
Plant #1 overhaul project followed by its
commissioning, restarting of the mining
operations, and an increase of gold and
silver prices compared to the gold price that
was considered in 2015. Consequently, the
recoverable amount for Chatree Gold Mine
assets was determined.
Methodology
The recoverable amount of the Chatree Gold
Mine CGU was determined using a fair value less
costs of disposal basis. The costs of disposal
have been estimated by management based on
prevailing market conditions.
The recoverable amount has been estimated
based on discounted cash flows using
market-based commodity price and exchange
rate assumptions, estimated quantities of
recoverable minerals, production levels,
operating costs and capital requirements,
based on latest life of mine plan for a period of
approximately 10 years.
The recoverable amount estimate for the
Chatree Gold Mine is considered to be level 3 fair
value measurement (as defined by accounting
standards) as it is derived from valuation
techniques that include inputs that are not based
on observable market data. The Group considers
the inputs and the valuation approach to be
consistent with the approach taken by market
participants.
Significant judgements and assumptions are
required in making estimates of the recoverable
amount. This is particularly so in the assessment
of long-life assets. It should be noted that the
CGU recoverable amount is subject to variability
in key assumptions including, but not limited
to, gold and silver prices, currency exchange
rates, discount rates, production profiles and
operating and capital costs. A change in one or
more of the assumptions used to estimate the
recoverable amount would result in a change in
the CGU’s recoverable amount.
Key assumptions
In determining each key assumption, management
has used external sources of information and
utilised experts within the Group to validate
entity specific assumptions such as reserves
and resources. Production and capital costs
are based on the Group’s estimate of forecast
geological conditions, capacity of both plants,
mining equipment and future production levels.
This information is obtained from external experts
where applicable and internally maintained
budgets and life of mine financial models.
The key assumptions to which the recoverable
amount is most sensitive to include:
Average gold price (US$ per ounce) US$2,100
Average silver price (US$ per ounce)
US$25
USD: THB exchange rate
36.5
Discount rate (real term)
9.5%
Reversal of impairment results
Based on the financial model developed by
the Group, the recoverable value is significantly
greater than the net carrying value of the assets
that can be reversed for impairment and as
result, an impairment reversal amounting to
$228,699,000 has been recorded in the statement
of profit or loss (see table below for a list of
each non-current asset reversed). Following this
reversal of impairment, the full amount of the CGU
that was previously impaired has been reversed.
$’000
Property, plant and equipment
(Note 11)
83,715
Exploration, evaluation and
development (Note 13)
144,984
Impairment reversal –
Chatree Gold Mine
228,699
Any reasonable change in the key assumptions
used to determine the recoverable amount
would not result in the estimated recoverable
amount to be less than the amount reversed.
In addition to the above, a reversal of the
inventory stockpiles write-down to the net
realisable value amounting to $983,000 was also
recognised during the year ended 30 June 2024.
The net realisable value of the inventory has
been determined based on the accounting
policy for inventory described in Note 2i. The
determination of net realisable value involves
significant judgements and estimates in relation
to the selling price in the ordinary course of
business less estimated costs of completion and
estimated costs necessary to make the sale.
(ii) Restoration and
rehabilitation provision
In respect of rehabilitation liabilities, following
the commissioning of Plant #1 during the
financial year ending 30 June 2024, the Group
revised its previous estimates and increased
its total rehabilitation liability to $35,871,000
with $10,902,000 recognised as an addition of
rehabilitation asset included in mine properties.
Significant estimates and assumptions are
required in determining the provision for mine
rehabilitation as there are many transactions
and other factors that will affect the ultimate
liability payable to rehabilitate the mine site.
Factors that will affect this liability include
changes in technology, changes in regulations,
price increases, changes in timing of cash flows
which are based on life of mine plans and changes
in discount rates. When these factors change or
become known in the future, such differences will
impact the mine rehabilitation provision in the
period in which they change or become known.
(iii) Impairment of non-current
assets – exploration,
evaluation and development
assets Nueva Esperanza
At 30 June 2019, the recoverable amount of the
Nueva Esperanza Gold/Silver Project CGU was
determined to be $27,509,000 resulting in an
impairment loss of $33,436,000. Significant
judgements and assumptions were required in
making estimates of the recoverable amounts.
The Group has assessed if impairment indicators
existed as at 30 June 2024 and determined that
it was not necessary to formally estimate the
recoverable amount of the CGU as no indication
of an impairment loss was identified as a result
of that assessment, in accordance with the
Group’s accounting policy.
Notes to the Consolidated Financial Statements
61
Notes to the Consolidated
Financial Statements
continuedu
The Group also assessed whether changes in estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised,
existed as at 30 June 2024 and whether such changes in estimates would require reversal of impairment. The Group determined that no such changes in
estimates were identified.
In reaching these conclusions, the Group considered both external and internal factors relevant to the CGU which included impairment criteria noted in
AASB 6 Exploration for and Evaluation of Mineral Resources, Kingsgate’s market capitalisation, the sustained high gold and silver prices and recent expressions
of interest for the acquisition of the Nueva Esperanza Gold/Silver Project.
4. Segment information
The Group’s operating segments are based on the internal management reports that are reviewed and used by the Board of Directors (chief operating
decision maker). The operating segments represent the Group’s mine and project and include the following:
〉
Chatree Gold Mine, Thailand; and
〉
Nueva Esperanza Gold/Silver Project, Chile.
Information regarding the results of each reportable segment is included as follows:
2024
Chatree
$’000
Nueva
Esperanza
$’000
Corporate
$’000
Total
$’000
External sales revenue
133,091
–
–
133,091
Other income/(expense)
390
–
–
390
Total segment income
133,481
–
–
133,481
Segment EBITDA – before impairment reversal
(1,404)
(5,762)
(7,744)1
(14,910)
Impairment reversal – Chatree Gold Mine
228,699
–
–
228,699
Depreciation and amortisation
(3,750)
(8)
(190)
(3,948)
Segment result
223,545
(5,770)
(7,934)
209,841
Finance income
–
–
53
53
Finance costs
–
–
(7,298)
(7,298)
Net finance costs
–
–
(7,245)
(7,245)
Profit before tax
223,545
(5,770)
(15,179)
202,596
Other segment information
Segment assets
352,225
34,693
2,022
388,940
Segment liabilities
(105,412)
(14,771)
(21,071)
(141,254)
Net assets/(liabilities)
246,813
19,922
(19,049)
247,686
1
includes foreign exchange losses of $100,000 for the Group.
Notes to the Consolidated Financial Statements
62
www.kingsgate.com.au
4. Segment information continued
2023
Chatree
$’000
Nueva
Esperanza
$’000
Corporate
$’000
Total
$’000
External sales revenue
27,337
–
–
27,337
Other income/(expense)
216
(4)
–
212
Total segment income
27,553
(4)
–
27,549
Segment EBITDA
27,198
(6,839)
(9,287)1
11,072
Depreciation and amortisation
(28)
(31)
(6)
(65)
Segment result
27,170
(6,870)
(9,293)
11,007
Finance income
57
57
Finance costs
(6,326)
(6,326)
Net finance costs
(6,269)
(6,269)
Profit before tax
27,170
(6,870)
(15,562)
4,738
Other segment information
Segment assets
85,572
34,972
6,180
126,724
Segment liabilities
(62,434)
(11,189)
(3,052)
(76,675)
Net asset/(liabilities)
23,138
23,783
3,128
50,049
1
includes foreign exchange loss of $2,811,000 for the Group.
5. Revenue and expenses
2024
$’000
2023
$’000
a. Sales revenue
Gold sales
116,172
24,048
Silver sales
16,919
3,289
Total sales revenue
133,091
27,337
b. Cost of sales
Direct costs of mining and processing
83,758
20,090
Royalties and other expenses incurred upon the sales of doré
16,930
3,382
Inventory movements
21,960
–
Depreciation (operation)
3,750
28
Total cost of sales
126,398
23,500
c. Corporate and administration expenses
Administration
7,459
6,506
Statutory and professional fees
2,282
4,843
Depreciation (corporate)
198
37
Total corporate and administration expenses
9,939
11,386
d. Other income and expenses
Net loss on sale of fixed assets
(60)
(4)
Other income
1,703
216
Other expenses
(1,253)
–
Total other income and expenses
390
212
Notes to the Consolidated Financial Statements
63
Notes to the Consolidated
Financial Statements
continuedu
2024
$’000
2023
$’000
e. Reversal of previously recorded inventory write-down
to net realisable value
Chatree Gold Mine (see Note 3i and Note 9)
983
59,822
Total reversal of previously recorded inventory write-down to net realisable value
983
59,822
f. Finance costs
Interest and finance charges
6,313
3,954
Amortisation of deferred borrowing costs
985
2,372
Total finance costs
7,298
6,326
g. Depreciation and amortisation
Property, plant and equipment (Note 11)
507
17
Right-of-use assets (Note 12)
1,772
20
Intangibles (Note 14)
77
28
Mine properties (Note 13)
1,592
–
Total depreciation and amortisation expenses
3,948
65
Included in:
Depreciation – operation
3,750
28
Depreciation – corporate
198
37
h. Employee benefits expenses
Included in::
Cost of sales
10,742
2,904
Care and maintenance expenses
–
1,525
Corporate and administration expenses
3,020
1,605
Exploration expenses
867
321
Total employee benefits expenses
14,629
6,355
i. Other items
Short-term and low value lease expenses
49
250
Total other items
49
250
j. Impairment reversal
Chatree Gold Mine (Note 3i)
228,699
–
Total impairment reversal
228,699
–
k. Significant items
Impairment reversal - Chatree Gold Mine
228,699
–
Reversal of previously recorded inventory write-down to net realisable value
983
59,822
Total significant items
229,682
59,822
Notes to the Consolidated Financial Statements
64
www.kingsgate.com.au
6. Income tax
2024
$’000
2023
$’000
a. Income tax expense
Current tax
–
–
Deferred tax
2,835
–
Total income tax expense
2,835
–
Deferred tax expense included in income tax expense comprises:
Decrease/(increase) in deferred tax assets
3,982
(2,349)
(Decrease)/increase in deferred tax liabilities
(6,696)
2,349
Deferred tax expense
(2,714)
–
b. Numerical reconciliation of income tax expense to
prima facie tax payable
Profit before income tax
202,596
4,738
Tax at Australian rate of 30%
60,779
1,421
Tax effect of amounts not deductible/assessable in calculating taxable income
Non-deductible expenses
1,728
121
Non-deductible interest expense to preference shareholders
407
403
Non-deductible rehabilitation provision revision expenses
(101)
3,433
Non-assessable impairment reversal – Chatree Gold Mine
(68,610)
–
Non-assessable reversal of previously recorded inventory write-down to net realisable value
(295)
(17,947)
Initial recognition of temporary differences
2,835
–
Deductible temporary differences not recognised
385
498
Tax losses not brought to account
5,707
12,071
Income tax expense
2,835
–
Kingsgate’s Thai controlled entity Akara Resources Public Company Limited (Akara) received on 8 June 2023 approval from the Royal Thai Board of
Investment (BOI) for investment promotion application for the Chatree Gold Mine. This approval provides Akara an eight-year exemption including:
〉
the 20 per cent corporate income tax rate, up to a cap of 3.25 billion Thai baht;
〉
the 10 per cent withholding tax on dividends remitted overseas; and
〉
import duties on machinery, raw materials used in research and development, and raw materials used in production for export.
The start of the promotion period was 20 March 2023.
Notes to the Consolidated Financial Statements
65
Notes to the Consolidated
Financial Statements
continuedu
2024
$’000
2023
$’000
c. Tax recognised in other comprehensive income
Foreign exchange losses recognised directly in foreign currency translation reserves
–
–
Total tax recognised in other comprehensive income
–
–
d. Deferred tax liabilities offset
Deferred tax assets amounting to $14,946,000 (2023: $10,964,000) have been offset against
deferred tax liabilities.
e. Unrecognised deferred tax assets for tax losses
Tax losses – Australian entities
303,271
302,895
Tax losses – other entities
57,648
68,045
Subtotal
360,919
370,940
Total unrecognised deferred tax assets for tax losses
104,286
111,282
f. Tax consolidation group
Kingsgate Consolidated Limited and its wholly owned Australian subsidiary have implemented the tax consolidation legislation as of 1 July 2003. The
accounting policy in relation to this legislation is set out in Note 2d.
On adoption of the tax consolidation legislation, the entities in the tax-consolidation group entered into a tax sharing agreement which, in the opinion of the
Directors, limits the joint and several liabilities of the wholly owned entities in the case of default by the head entity, Kingsgate Consolidated Limited.
The entities have also entered into a tax funding agreement under which the wholly owned entities fully compensate Kingsgate for any current tax payable
assumed and are compensated for any current tax receivable and deferred tax assets relating to the unused tax losses or unused tax credits that are trans
ferred to Kingsgate under the tax legislation. The funding amounts are determined by reference to the amounts recognised in the wholly owned entities’
financial statements.
The amount receivable/payable under the tax agreement are due upon receipt of the funding advice from the head entity, which is issued as soon as practicable
after the end of each financial year. The head entity may also require payment of interim funding amounts to assist with its obligation to pay tax instalments.
Notes to the Consolidated Financial Statements
66
www.kingsgate.com.au
6. Income tax continued
Assets
Liabilities
Net
g. Recognised deferred tax assets
and liabilities
2024
$’000
2023
$’000
2024
$’000
2023
$’000
2024
$’000
2023
$’000
Deferred tax assets/(liabilities)
Employee benefits
544
91
–
–
544
91
Unrealised exchange losses/(gains)
9,290
10,534
(10,153)
(10,964)
(863)
(430)
Financial assets
321
321
–
–
321
321
Property, plant and equipment
–
–
(189)
–
(189)
–
Exploration, evaluation and development
–
–
(6,916)
–
(6,916)
–
Right-of-use assets
–
–
(402)
–
(402)
–
Lease liabilities
270
–
–
–
270
–
Restoration and rehabilitation provision
4,192
–
–
–
4,192
–
Other items
329
18
–
–
329
18
Total deferred tax assets/(liabilities)
14,946
10,964
(17,660)
(10,964)
(2,714)
–
Set off tax
(14,946)
(10,964)
14,946
10,964
–
–
Net deferred tax assets/(liabilities)
–
–
(2,714)
–
(2,714)
–
Deferred tax assets/(liabilities) expected to be
recovered within 12 months
–
–
–
–
–
–
Deferred tax assets/(liabilities) expected to be
recovered after more than 12 months
14,946
10,964
(17,660)
(10,964)
(2,714)
–
Total deferred tax assets/(liabilities)
14,946
10,964
(17,660)
(10,964)
(2,714)
–
h. Movement in deferred tax balances
2024
Balance at
1 July
$’000
Initial
recognition
of temporary
differences1
$’000
Recognised in
profit or loss
$’000
Balance at
30 June
$’000
Deferred tax assets/(liabilities):
Employee benefits
91
342
111
544
Unrealised exchange losses
(430)
–
(433)
(863)
Financial assets
321
–
–
321
Property, plant and equipment
–
(189)
–
(189)
Exploration, evaluation and development
–
(6,916)
–
(6,916)
Right-of-use assets
–
(448)
46
(402)
Lease liabilities
–
305
(35)
270
Restoration and rehabilitation provision
4,192
–
4,192
Other items
18
–
311
329
Net deferred tax liabilities
–
(2,714)
–
(2,714)
2023
Net deferred tax assets/(liabilities):
Employee benefits
66
–
25
91
Unrealised exchange losses
(188)
–
(242)
(430)
Financial assets
321
–
–
321
Other items
(199)
–
217
18
Net deferred tax assets/(liabilities)
–
–
–
–
1
Initial recognition of previously unrecognised temporary differences relates to the impact of the impairment reversal for Chatree Gold Mine assets.
The amount recognised in the profit and loss for the current year is $2,835,000 and the amount recognised in other comprehensive income is ($121,000).
Notes to the Consolidated Financial Statements
67
Notes to the Consolidated
Financial Statements
continuedu
7. Cash and cash equivalents and restricted cash
2024
$’000
2023
$’000
Cash and cash equivalents
Cash on hand
12
12
Deposits at call
3,878
8,909
Total cash and cash equivalents
3,890
8,921
Restricted cash
Current
3,087
649
Non-current
1,773
–
Total restricted cash
4,860
649
Cash on hand
These are petty cash balances primarily held by subsidiaries.
Deposits at call
These deposits are at call and may be accessed daily.
Restricted cash
Current restricted cash includes cash held on deposit with financial institutions that is restricted to use on community projects in Thailand and rehabilitation
projects for Chatree Gold Mine.
Non-current restricted cash primarily relates to cash held under an escrow account as required under the hire purchase agreement between Akara and Metro
Machinery Co., Ltd as at 30 June 2024.
Risk exposure
The Group’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in Note 27.
8. Receivables
2024
$’000
2023
$’000
Current
Trade receivables
6,951
7,280
Other debtors
2,851
2,051
Total receivables – current
9,802
9,331
Trade receivables
Trade receivables represent gold and silver sales at the end of the financial year, where payment was yet to be received. No trade receivables were past due or
impaired as at 30 June 2024.
Other debtors
Other debtors relate to Goods and Services Tax/Value Added Tax receivables.
Risk exposure
The Group’s exposure to credit and currency risks are disclosed in Note 27.
Notes to the Consolidated Financial Statements
68
www.kingsgate.com.au
9. Inventories
2024
$’000
2023
$’000
Current
Consumables and stores at net realisable value
10,282
4,057
Stockpiles and work in progress
15,491
27,398
Gold bullion
4,010
3,345
Total inventories – current
29,783
34,800
Non-current
Stockpiles
18,489
29,681
Total inventories – non-current
18,489
29,681
As noted in Note 3(i), there was a reversal of the inventory stockpiles write-down to the net realisable of $983,000 for the year ended 30 June 2024
(30 June 2023: $59,822,000).
10. Other assets
2024
$’000
2023
$’000
Current
Prepayments
1,089
634
Other deposits
2,974
3,477
Other assets
134
525
Total other assets – current
4,197
4,636
Non-current
Prepayments
9,153
9,195
Other deposits
2,535
2,244
Total other assets – non-current
11,688
11,439
Prepayments
Non-current prepayments include prepaid royalties and water rights in respect of the Nueva Esperanza Gold/Silver Project in Chile.
Notes to the Consolidated Financial Statements
69
Notes to the Consolidated
Financial Statements
continuedu
11. Property, plant and equipment
2024
$’000
2023
$’000
At 1 July
Cost
269,710
261,159
Accumulated depreciation and amortisation
(85,330)
(76,801)
Accumulated impairment
(184,260)
(184,260)
Net book amount
120
98
Year ended 30 June
Opening net book amount
120
98
Additions
14,287
22
Disposals
(18)
(4)
Impairment reversal (Note 3i)
83,715
–
Depreciation and amortisation expense
(507)
(17)
Foreign currency differences
(773)
21
Closing net book amount
96,824
120
At 30 June
Cost
139,754
269,710
Accumulated depreciation and amortisation
(42,930)
(85,330)
Accumulated impairment
–
(184,260)
Net book amount
96,824
120
12. Right-of-use assets and finance lease liabilities
This note provides information for leases where the Group is a lessee.
The consolidated statement of financial position shows the following amounts relating to leases:
2024
$’000
2023
$’000
Right-of-use assets
Plant and equipment
19,907
–
Property
1,228
–
Total right-of-use assets
21,135
–
Finance lease liabilities
Current
4,566
–
Non-current
14,317
–
Total finance lease liabilities
18,883
–
Notes to the Consolidated Financial Statements
70
www.kingsgate.com.au
12. Right-of-use assets and finance lease liabilities continued
The consolidated statement of profit or loss and other comprehensive income shows the following amounts relating to leases:
Depreciation charge of right-of-use assets
2024
$’000
2023
$’000
Plant and equipment
1,571
–
Property
201
20
Total depreciation charge of right-of-use assets
1,772
20
Other item
Interest expense
830
–
Total other item
830
–
The total cash outflow related to finance leases in the current period was $1,947,000 (2023: $20,000).
The table below analyses the Group’s finance lease liabilities into relevant maturity groupings based on their contractual maturities.
At 30 June 2024
Less than
1 year
$’000
Between
1–2 years
$’000
Between
2–5 years
$’000
Over
5 years
$’000
Total
contractual
cash flows
$’000
Carrying
amount
$’000
Finance lease liabilities
6,137
6,056
9,557
–
21,750
18,883
Notes to the Consolidated Financial Statements
71
Notes to the Consolidated
Financial Statements
continuedu
13. Exploration, evaluation and
development
Exploration
& evaluation
$’000
Feasibility
expenditure
$’000
Mine
properties
$’000
Total
$’000
At 30 June 2022
Cost
–
87,715
356,904
444,619
Accumulated depreciation and amortisation
–
–
(66,186)
(66,186)
Accumulated impairment
–
(63,091)
(289,871)
(352,962)
Net book amount
–
24,624
847
25,471
Year ended 30 June 2023
Opening net book amount
–
24,624
847
25,471
Foreign currency exchange differences
–
936
29
965
Closing net book amount
–
25,560
876
26,436
At 30 June 2023
Cost
–
88,651
368,945
457,596
Accumulated depreciation and amortisation
–
–
(78,198)
(78,198)
Accumulated impairment
–
(63,091)
(289,871)
(352,962)
Net book amount
–
25,560
876
26,436
Year ended 30 June 2024
Opening net book amount
–
25,560
876
26,436
Additions
877
–
18,220
19,097
Disposals
–
–
(17)
(17)
Impairment reversal – Chatree Gold Mine (Note 3i)
–
–
144,984
144,984
Depreciation and amortisation expense
–
–
(1,592)
(1,592)
Foreign currency exchange differences
(38)
(119)
(1,121)
(1,278)
Closing net book amount
839
25,441
161,350
187,630
At 30 June 2024
Cost
839
88,532
265,690
355,061
Accumulated depreciation and amortisation
–
–
(104,340)
(104,340)
Accumulated impairment
–
(63,091)
–
(63,091)
Net book amount
839
25,441
161,350
187,630
Notes to the Consolidated Financial Statements
72
www.kingsgate.com.au
14. Intangibles
2024
$’000
2023
$’000
Year ended 30 June
Opening net book amount
711
–
Additions
60
733
Disposals
(25)
–
Depreciation and amortisation expense
(77)
(28)
Foreign currency differences
(27)
6
Closing net book amount
642
711
At 30 June
Cost
742
739
Accumulated depreciation and amortisation
(100)
(28)
Net book amount
642
711
Intangibles primarily relate to mining software licenses with a useful life of 10 years.
15. Payables
2024
$’000
2023
$’000
Current
Trade payables
17,141
5,555
Other payables and accruals
17,220
11,334
Total payables – current
34,361
16,889
Non-current
Other payables
5,879
7,441
Total payables – non-current
5,879
7,441
The Group’s exposure to currency and liquidity risk related to trade and other payables is disclosed in Note 27.
The Group is required to pay Anglo American US$2,000,000 per year in advance pre-production royalties related to the Nueva Esperanza Gold/Silver Project.
The Group also has an obligation to pay US$64,800 per month to Anglo American for water rights. During the year ended 30 June 2021, the Group finalised
an agreement with Anglo American relating to the deferral of 65% of the fees for both the water rights and project royalty payments which were due from
June 2020 until December 2021. These balances are now repayable from January 2022 to September 2025. These deferred balances are also repayable
immediately under certain conditions including the sale of Nueva Esperanza Gold/Silver Project. Included in non-current other payable is also a US$3,000,000
contingent consideration for the Nueva Esperanza Gold/Silver Project which is due 24 months after the start of commercial operation.
Notes to the Consolidated Financial Statements
73
Notes to the Consolidated
Financial Statements
continuedu
16. Borrowings
2024
$’000
2023
$’000
Current
Advances from preference shareholderb
12,250
12,756
Secured loan notec
16,733
–
Insurance premium fundingd
703
–
Total borrowings – current
29,686
12,756
Non-current
Preference shares in controlled entitya
10,836
11,286
Total borrowings – non-current
10,836
11,286
Total borrowings1
40,522
24,042
1
The Group has nil unused facilities as of 30 June 2024.
a. Preference shares in controlled entity
Terms and conditions of outstanding preference shares in controlled entity were as follows:
Currency
Interest rate
Financial
year of
maturity
Face value
$’000
Carrying
amount
$’000
Preference shares in controlled entity
Thai baht
12%
n/a
10,836
10,836
During the year ended 30 June 2024 the terms of the Preference Shareholder Agreement, which is between the preference shareholder, Akara and Kingsgate
Capital Pty Ltd relating to preference shares issued by Akara were amended. The amendment has extended the date whereby the preference shareholder
may exercise a put option for the preference shares to be repaid at any time commencing from January 2026, by giving a six month written notice of such
intention resulting in the preference shares being repayable at the earliest in July 2026.
b. Advances from preference shareholder
On 25 November 2022, Akara Resources Public Company (Akara) received an unsecured THB200,000,000 advance from the preference shareholder.
Terms and conditions of the advance were as follows:
Currency
Interest rate
Financial
year of
maturity
Face value
$’000
Carrying
amount
$’000
Advance from preference shareholder
Thai baht
12%
2025
8,167
8,167
On 22 February 2023, Akara received an additional cash advance of THB100,000,000 from the preference shareholder.
Terms and conditions of the advance were as follows:
Currency
Interest rate
Financial
year of
maturity
Face value
$’000
Carrying
amount
$’000
Advance from preference shareholder
Thai baht
12%
2025
4,083
4,083
On 25 October 2023, the repayment of both cash advances was extended until at least 25 November 2024. On 19 July 2024, an amount of THB150,000,000
($6,125,000) was repaid and the remaining balance of THB150,000,000 ($6,125,000) is required to be repaid within 90 days of drawdown according to the
terms of the US$35,000,000 facility (see Note 25).
Notes to the Consolidated Financial Statements
74
www.kingsgate.com.au
16. Borrowings continued
c. Secured loan note
Currency
Interest rate
Financial
year of
maturity
Face value
$’000
Carrying
amount
$’000
Secured loan note
USD
SOFR+2.5%
2025
16,733
16,733
On 19 December 2023, Kingsgate entered a Loan Note Subscription Agreement with Nebari Gold Fund 1, LP to provide funding for the Processing Plant #1
overhaul project at Chatree Gold Mine and general working capital within the Kingsgate Group for the amount of US$11,500,000 (“Facility”). The Facility
was provided subject to security over interests and shares held in Kingsgate’s subsidiaries.
Terms and conditions of the Facility were as follows:
1.
Facility
The Facility is a secured loan note providing an initial drawing of US$10,526,000 with a US$526,000 Original Issue Discount (“OID”) payable on drawdown.
On 20 December 2023, Kingsgate received a net drawn amount of US$10,000,000 ($14,771,000).
2. Fees, royalties and interest costs
〉
Royalty payments: a monthly royalty payment of 0.75% on gold produced by the Chatree Gold Mine;
〉
Interest costs: interest costs equal to the 30-day Secured Overnight Financing Rate (“SOFR”) with a minimum 5% per annum plus a margin of 2.5% per
annum applied to aggregate amounts outstanding;
〉
Line fee: a monthly line fee of 2.50% per annum of the Facility limit;
〉
PIK: capitalisation of interest, fees and royalties during the term of the Facility;
〉
Termination fee: on the maturity date, any amounts outstanding up to the initial Facility limit and not less than US$11,500,000.
During the year ended 30 June 2024, a total of US$1,474,000 ($2,217,000) was capitalised into liabilities including OID, interest, line fee and royalties.
3. Term and Maturity
The maturity date was six months from the drawdown. On 5 June 2024, Kingsgate elected to extend the maturity date till 31 July 2024.
Subsequent to year-end, the loan balance of $16,733,000 as at 30 June 2024 was fully repaid out the drawdown of US$35,000,000 term facility (see Note 25).
d. Insurance premium funding
Currency
Interest rate
Financial
year of
maturity
Face value
$’000
Carrying
amount
$’000
Insurance premium funding
AUD
3.35%
2025
703
703
On 10 January 2024, Kingsgate entered into an unsecured insurance premium funding agreement with Clearmatch Originate Pty Limited (Clearmatch) for
a total of $1,680,000. The fixed interest rate is 3.35% per annum and the maturity date is 12 months from 1 December 2023. An amount of $977,000 was
repaid before 30 June 2024.
On 14 July 2023, Kingsgate entered into an unsecured insurance premium funding agreement with Clearmatch for a total of $438,000. The fixed interest rate
was 4.5% per annum and the maturity date was 31 December 2023. The total amount of $438,000 was fully repaid before 30 June 2024.
For more information about the Group’s exposure to interest rate and liquidity risk, see Note 27.
Notes to the Consolidated Financial Statements
75
Notes to the Consolidated
Financial Statements
continuedu
17. Provisions
Note
2024
$’000
2023
$’000
Current
Employee benefits
2u, 23
1,307
874
Restoration and rehabilitation
2t
1,085
1,562
Total provisions – current
2,392
2,436
Non-current
Employee benefits
2u, 23
1,717
906
Restoration and rehabilitation
2t
34,786
24,961
Total provisions – non-current
36,503
25,867
Movements in the restoration and rehabilitation provision:
Restoration and rehabilitation
At the beginning of the financial year
26,523
14,779
Additional provision charge to mine property
10,902
–
Charge/(credit) to profit and loss
– unwinding of discount
621
–
– additional provision recognised/(reversed)
(338)
11,444
Amounts used during the year
(836)
–
Foreign currency exchange differences
(1,001)
300
At the end of the financial year
35,871
26,523
18. Contributed equity
2024
Shares
2023
Shares
2024
$’000
2023
$’000
Opening balance
257,751,692
221,320,453
727,307
675,484
Shares issued via placement
–
30,698,067
–
46,047
Shares issued via Share Purchase Plan
–
5,733,172
–
8,600
Share issue costs
–
–
–
(2,824)
Closing balance
257,751,692
257,751,692
727,307
727,307
Placement and Share Purchase Plan (SPP)
On 28 March 2023, the Company announced the successful completion of a Placement to institutional investors at an issue price of $1.50 per share, raising
$46,047,000.
The Company also announced a Share Purchase Plan to existing shareholders in April 2023. The SPP provided the opportunity to acquire up to $30,000 of
fully paid ordinary shares in Kingsgate without incurring any brokerage fees. The SPP was issued at $1.50 per share, raising $8,600,000.
The Placement and SPP raised $54,647,000, issuing 36,431,239 shares. The total cost of $2,824,000 was deducted from shareholder equity.
Notes to the Consolidated Financial Statements
76
www.kingsgate.com.au
19. Reserves
2024
$’000
2023
$’000
a. Reserves
Foreign currency translation reserve
50,837
52,961
Share-based payment reserve
10,811
10,811
General reserve
(3,341)
(3,341)
Total reserves
58,307
60,431
Movements:
Foreign currency translation reserve
At the beginning of the financial year
52,961
51,579
Exchange differences on translation of foreign controlled entities (net of tax)
(2,124)
1,382
At the end of the financial year
50,837
52,961
Share-based payment reserve
At the beginning of the financial year
10,811
10,811
Share-based payment expense
–
–
At the end of the financial year
10,811
10,811
General reserve
At the beginning of the financial year
(3,341)
(3,341)
Net change
–
–
At the end of the financial year
(3,341)
(3,341)
Foreign currency translation reserve
Exchange differences arising on translation of the foreign controlled entities are taken to the foreign currency translation reserve, as described in Note 2b.
Notes to the Consolidated Financial Statements
77
Notes to the Consolidated
Financial Statements
continuedu
Share-based payment reserve
The share-based payment reserve is used to recognise the fair value of deferred rights, performance rights and options issued but not exercised. The share-
based payment reserve also records the value of the equity instrument issued to the previous lender of the Group.
Under the terms of the loan facility entered into with the previous lender, 2,500,000 options were issued during the year ended 2022 and have the following
conditions attached to them:
〉
each option will entitle the holder to subscribe for one ordinary share of the Company;
〉
options are granted for no consideration; and
〉
options granted under the plan carry no dividend or voting rights.
Set out below are summaries of options granted:
Grant date
13 May 2022
Expiry date
12 May 2027
Exercise price ($)
$2.00
Balance at the start of the year (Number)
–
Granted during the year (Number)
2,500,000
Exercised during the year (Number)
–
Balance at the end of year (Number)
2,500,000
Vested and exercisable at end of year (Number)
2,500,000
The options will expire at the end of its vesting periods.
Fair value of options granted
The fair value at grant date of the options is determined using the Black-Scholes option pricing model which incorporates the following inputs.
Term
5 years
Exercise price ($)
$2.00
Underlying share price at the date of grant
$1.385
Exercised share price volatility over the terms of the options
65%
Risk free rate for the term of the options (based on government bond rate)
3%
The assessed fair value of the share options issued was $0.6678 resulting in a value of $1,669,000.
General reserve
The general reserve represents changes in equity as a result of changes in non-controlling interests and revaluation of employee benefit obligations
recognised in other comprehensive income in prior periods.
2024
$’000
2023
$’000
b. Accumulated losses
At the beginning of the financial year
(737,689)
(742,427)
Profit after income tax
199,761
4,738
Total accumulated losses
(537,928)
(737,689)
Notes to the Consolidated Financial Statements
78
www.kingsgate.com.au
20. Commitments for expenditure
2024
$’000
2023
$’000
Short-term and low value leases
Within one year
–
84
In addition to the table above, the Group is also to pay Anglo American US$2,000,000 per year in advance pre-production royalties related to the Nueva
Esperanza Gold/Silver Project. Akara has a minimum contribution commitment for various community and rehabilitation funds for 65 million Thai baht on a
calendar year basis. The Group also has an obligation to pay US$64,800 per month to Anglo American for water rights.
The Group entered into a purchase order with Metro Machinery Co. Ltd regarding 41 pieces of mining equipment with a total value of $59,410,000 (excluding
Value Added Tax). A total of 11 pieces of mining equipment was commissioned before 30 June 2024, with an additional 30 pieces of mining equipment for a
total of $45,599,000 scheduled to be delivered during the year ended 30 June 2025 to allow a full ramp up of mining operations. A deposit of $553,000 was
paid before end of June 2024 and the remaining balance of $45,046,000 is due on or before each delivery for the additional 30 pieces of equipment.
21. Dividends
No final dividend was declared for the year ended 30 June 2023 (30 June 2022: nil).
No interim dividend was declared for the year ended 30 June 2024 (30 June 2023: nil).
22. Related parties
a. Controlling entity
The ultimate parent entity of the Group is Kingsgate Consolidated Limited.
b. Subsidiaries
Interests in subsidiaries are set out in the Consolidated Entity Disclosure Statement.
c. Key Management Personnel
The aggregate compensation provided to Key Management Personnel is set out below:
2024
$
2023
$
Short-term employee benefits
1,601,325
1,332,794
Long-term employee benefits
2,308
547
Post-employment benefits
54,899
40,255
Total Key Management Personnel compensation
1,658,532
1,373,596
Detailed information on remuneration of Directors and Key Management Personnel is disclosed in the Remuneration Report.
d. Related party transactions
Mrs Nucharee Sailasuta is a Non-Executive Director of Kingsgate and also a director and preference shareholder of the Company’s Thai subsidiary, Akara
Resources Public Company Limited.
Details of the related party transactions during the year were as follows:
〉
LotusHall Mining Heavy Engineering Construction Co., Ltd (LotusHall), of which Mrs Nucharee Sailasuta is the Managing Director, provided mining related
services to Chatree Gold Mine during the year ended 30 June 2024. A total of $9,337,000 was recorded for services received from LotusHall during the year.
At year end, $2,021,000 was included in current payables;
〉
preference shareholder interest in the amount of $1,356,000 were expensed during the year and an amount of $108,000 accrued at year end
(see Note 16b for details);
〉
Mrs Nucharee Sailasuta advanced a total of 300,000,000 Thai baht as working capital support to Akara during the year ended 30 June 2023.
A total of $1,951,000 interest was expensed and $188,000 accrued at year end (see Note 16a for details); and
〉
a total of $126,964 accrued directors fee to Mrs Nucharee Sailasuta as at 30 June 2024 is included in current payables.
Notes to the Consolidated Financial Statements
79
Notes to the Consolidated
Financial Statements
continuedu
23. Employee benefits
2024
$’000
2023
$’000
Employee benefits and related on-costs liabilities
Provision for employee benefits – current
1,307
874
Provision for employee benefits – non–current
1,717
906
Total employee provisions
3,024
1,780
Superannuation
The Group makes contributions on behalf of employees to externally managed defined contribution superannuation funds. Contributions are based on
percentages of employee wages and salaries and include any salary-sacrifice amounts. Contributions to defined contribution plans for 2024 were $414,000
(2023: $215,000).
24. Reconciliation of profit after income tax to
net cash flow from operating activities
2024
$’000
2023
$’000
Profit for the year
199,761
4,738
Depreciation and amortisation
3,948
65
Net loss on sale of fixed assets
60
4
Amortisation of deferred borrowing costs
985
2,373
Net exchange differences
1,120
2,245
Rehabilitation provision
(338)
11,444
Interest and finance charges
6,313
3,954
Impairment reversal – Chatree Gold Mine
(228,699)
–
Change in operating assets and liabilities:
(Increase)/decrease in receivables
(862)
(9,037)
(Increase)/decrease in prepayments
(489)
(536)
(Increase)/decrease in other assets
386
(328)
(Increase)/decrease in inventories
14,262
(63,984)
Increase/(decrease) in creditors
12,661
7,814
Increase/(decrease) in provisions
(144)
846
Increase/(decrease) in deferred tax balances
2,714
–
Net cash inflow/(outflow) from operating activities
11,678
(40,402)
Net (debt)/cash and cash equivalents reconciliation
Cash and cash equivalents
3,890
8,921
Borrowings – repayable within one year
(29,686)
(12,756)
Borrowings – repayable after one year
(10,836)
(11,286)
Finance liabilities – repayable within one year
(4,566)
–
Finance liabilities – repayable after one year
(14,317)
–
Net (debt)/cash and cash equivalents
(55,515)
(15,121)
Cash and cash equivalents
3,890
8,921
Gross debt – fixed interest rates
(42,672)
(24,042)
Gross debt – variable interest rates
(16,733)
–
Gross debt – nil interest rates
–
–
Net (debt)/cash and cash equivalents
(55,515)
(15,121)
Notes to the Consolidated Financial Statements
80
www.kingsgate.com.au
24. Reconciliation of profit after income tax to net cash flow from operating activities continued
Cash
Secured
loan note
Insurance
premium funding
due within 1 year
Borrowing
from Taurus due
within 1 year
Preference
shares in
controlled entity
due after 1 year
Advances from
preference
shareholder due
within 1 year
Lease liabilities
due within 1 year
Lease liabilities
due after 1 year
Total
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Net cash and cash equivalents/(debt)
as at 30 June 2022
7,424
–
–
(8,960)
(10,915)
–
(20)
–
(12,471)
Cash flows
1,593
–
–
11,730
–
(12,658)
20
–
685
Foreign exchange adjustments
(96)
–
–
(847)
(371)
(98)
–
–
(1,412)
Other non-cash movements
–
–
–
(1,923)
–
–
–
–
(1,923)
Net cash and cash equivalents/(debt)
as at 30 June 2023
8,921
–
–
–
(11,286)
(12,756)
–
–
(15,121)
Cash flows
(4,947)
(13,868)
(703)
–
–
–
1,947
–
(17,571)
Foreign exchange adjustments
(84)
(215)
–
–
450
506
–
–
657
Other non-cash movements
–
(2,650)
–
–
–
–
(6,513)
(14,317)
(23,480)
Net cash and cash equivalents/(debt)
as at 30 June 2024
3,890
(16,733)
(703)
–
(10,836)
(12,250)
(4,566)
(14,317)
(55,515)
25. Events occurring after reporting date
US$35,000,000 term facility
On 15 July 2024, Kingsgate entered into a senior secured term facility with a limit of US$35,000,000 ($52,475,000) consisting of a Tranche 1 for
US$22,000,000 and Tranche 2 for US$13,000,000 with Nebari Gold Fund 1 (“NGF 1”), LP and Nebari Natural Resources Credit Fund II, LP (“NNRCF II” and,
together, “Nebari”) (the “Facility”). On 17 July 2024, an amount of US$35,000,000 was fully drawn. The Facility was provided subject to security over
interests and shares held in Kingsgate’s subsidiaries.
Interest is equal to the three month Secured Overnight Financing Rate (“SOFR”) plus a margin of 7.75% p.a. applied to aggregate amounts outstanding.
If the Term SOFR is less than 4.75% per annum, interest will be deemed to be 4.75%.
Straight-line amortisation is applicable to Tranche 1 principal amount of US$22,000,000 commencing in March 2025 equal to 3.0% of the Tranche 1 principal
amount.
The maturity date for Tranche 1 is 36 months from drawdown and for Tranche 2 is 30 months from drawdown.
The Tranche 2 principal amount is US$13,000,000 and an initial 6,986,589 unlisted warrant with an exercise price of $2.07 was issued to Nebari on 17 July
2024. In addition Kingsgate may be required to issue up to a further 2,328,863 warrants to Nebari. The expiry date for each warrant is 30 months from
closing date i.e. 18 January 2027. Each warrant will entitle the holder to subscribe for one ordinary share of the Company at the exercise price of $2.07 per
share.
Following the drawdown of this Facility, the existing loan balance with Nebari as at 30 June 2024 was fully repaid.
Repayment of advances from preference shareholder
On 19 July 2024, an amount of THB150,000,000 ($6,125,000) was repaid and the remaining balance of THB150,000,000 ($6,125,000) is required to be
repaid within 90 days of drawdown according to the terms of the Facility.
No other matter or circumstance has arisen since 30 June 2024 that has significantly affected, or may significantly affect:
〉
the Group’s operations in future financial periods;
〉
the results of those operations in future financial periods; or
〉
the Group’s state of affairs in future financial periods.
Notes to the Consolidated Financial Statements
81
Notes to the Consolidated
Financial Statements
continuedu
26. Contingent assets and liabilities
In March 2019, Kingsgate settled a Political Risk Insurance claim against Zurich Insurance Australia Ltd, and other named insurers. The settlement consisted of:
〉
a cash payment of US$55,000,000 received in April 2019;
〉
a contribution totalling US$3,500,000 and $750,000 for future costs incurred towards the Thailand-Australia Free Trade Agreement (TAFTA) Arbitration.
To the extent that any amount is recovered by Kingsgate (being Kingsgate Consolidated Limited and/or Kingsgate Capital Pty Ltd) in connection with the
TAFTA Arbitration, the Award Proceeds (meaning “any monetary amount finally received under, or from enforcement of, an Arbitral Award”) or any amount
received by Kingsgate following a negotiated settlement or compromise of the TAFTA Arbitration, the settlement allows for a sharing arrangement between
Kingsgate and the Insurers. The Insurers are only entitled to the amount of their original financial contribution including interest.
The Group had no other contingent assets or liabilities at 30 June 2024 that is required to be reported. At the time of preparing this financial report some
companies included in the Group are parties to pending legal proceedings. The Directors have determined that the possibility of any outflow in settlement
resulting from these proceedings is remote.
27. Financial risk management and instruments
The Group’s activities expose it to a variety of financial risks: market risk (including foreign currency risk, price risk, fair value risk and interest rate risk), credit
risk and liquidity risk.
At this point, the Directors believe that it is in the interest of shareholders to expose the Group to foreign currency risk, price risk and interest rate risk.
Therefore, the Group does not employ any derivative hedging of foreign currency or interest rate risks. The Directors and management monitor these
risks, in particular market forecasts of future movements in foreign currency and price movements and, if it is to be believed to be in the best interests of
shareholders, will implement risk management strategies to minimise potential adverse effects on the financial performance of the Group.
The Board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, credit risk, use of
derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity. Risk management is carried out by the senior
executive team.
2024
$’000
2023
$’000
Financial assets
Cash and cash equivalents
3,890
8,921
Restricted cash
4,860
649
Receivables
9,802
9,331
Other deposits
5,509
5,721
Total financial assets
24,061
24,622
Financial liabilities
Payables
(40,240)
(24,330)
Borrowings
(40,522)
(24,042)
Lease liabilities
(18,883)
–
Total financial liabilities
(99,645)
(48,372)
Notes to the Consolidated Financial Statements
82
www.kingsgate.com.au
27. Financial risk management and instruments continued
Market risk
Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk arising from currency exposures, primarily with respect to the US dollar and
Thai baht and, as discussed earlier, no financial instruments are employed to mitigate the exposed risks. This is the Group’s current policy and it is reviewed
regularly including forecast movements in these currencies by management and the Board. Foreign exchange risk arises from future commercial transactions
and recognised assets and liabilities denominated in a currency that is not the functional currency of the relevant group entity. Currently foreign exchange
risks arise primarily from:
〉
cash balances in US dollars;
〉
receivables denominated in US dollars for Australian entities; and
〉
payables denominated in Australian dollars for Thailand entities.
The functional currency of the Thai subsidiaries is Thai baht. The functional currency of the Chilean subsidiaries is the US dollar. The Company’s functional
currency is Australian dollar.
The Group’s exposure to US dollar and Thai baht foreign currency risk arises mainly from balances receivable and payable between Group companies which
are not considered to form part of the related investment balance in the entities. The unrealised foreign exchange gain/loss on these balances is therefore
recorded in the statement of profit or loss of the Group. At the reporting date, expressed in Australian dollars these balances were as follows:
USD 2024
$’000
THB 2024
$’000
Total 2024
$’000
USD 2023
$’000
THB 2023
$’000
Total 2023
$’000
Cash and cash equivalents
59
–
59
110
–
110
Receivables
–
78,812
78,812
1,960
76,172
78,132
Payables
(5,811)
(78,812)
(84,623)
(7,253)
(76,172)
(83,425)
Borrowings
(16,733)
–
(16,733)
–
–
–
Total exposure to foreign currency risk
(22,485)
–
(22,485)
(5,183)
–
(5,183)
Impact on post tax
profit and loss
Impact on other
comprehensive income
2024
$’000
2023
$’000
2024
$’000
2023
$’000
One per cent weakened in Australian dollar against the US dollar
285
20
285
20
One per cent strengthened in Australian dollar against the US dollar
(279)
(19)
(279)
(19)
One per cent weakened in Australian dollar against the Thai baht
1,343
622
1,535
821
One per cent strengthened in Australian dollar against the Thai baht
(1,332)
(624)
(1,520)
(819)
Notes to the Consolidated Financial Statements
83
Notes to the Consolidated
Financial Statements
continuedu
Interest rate risk
The Group’s exposure to interest rate risk for classes of financial assets and financial liabilities, at 30 June 2024 and 30 June 2023 are set out as follows:
Floating
interest rate
$’000
Fixed interest rate maturing in
Non-interest
bearing
$’000
Total
$’000
1 year or less
$’000
1–2 years
$’000
2–5 years
$’000
More than
5 years
$’000
2024
Financial assets
Cash and cash equivalents
40
–
–
–
–
3,850
3,890
Restricted cash
4,860
–
–
–
–
–
4,860
Receivables
–
–
–
–
–
9,802
9,802
Other deposits
2,528
–
–
–
–
2,981
5,509
Total financial assets
7,428
–
–
–
–
16,633
24,061
Financial liabilities
Payables
–
(2,922)
(487)
–
–
(36,831)
(40,240)
Borrowings
–
(29,686)
(10,836)
–
–
–
(40,522)
Lease liabilities
–
(4,566)
(5,013)
(9,276)
(28)
–
(18,883)
Total financial liabilities
–
(37,174)
(16,336)
(9,276)
(28)
(36,831)
(99,645)
Net financial assets/(liabilities)
7,428
(37,174)
(16,336)
(9,276)
(28)
(20,198)
(75,584)
2023
Financial assets
Cash and cash equivalents
5,207
–
–
–
–
3,714
8,921
Restricted cash
649
–
–
–
–
–
649
Receivables
–
–
–
–
–
9,331
9,331
Other deposits
2,625
–
–
–
–
3,096
5,721
Total financial assets
8,481
–
–
–
–
16,141
24,622
Financial liabilities
Payables
–
(1,879)
(1,161)
(698)
–
(20,592)
(24,330)
Borrowings
–
(12,756)
(11,286)
–
–
–
(24,042)
Total financial liabilities
–
(14,635)
(12,447)
(698)
–
(20,592)
(48,372)
Net financial assets/(liabilities)
8,481
(14,635)
(12,447)
(698)
–
(4,451)
(23,750)
Notes to the Consolidated Financial Statements
84
www.kingsgate.com.au
27. Financial risk management and instruments continued
Credit risk
Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions, as well as credit exposures to customers including,
outstanding receivables and committed transactions.
The Group has no significant concentrations of credit risk.
The maximum exposure to credit risk is represented by the carrying value of the Group’s financial assets in the statement of financial position. The maximum
exposure to credit risk at reporting date was:
2024
$’000
2023
$’000
Cash and cash equivalents
3,890
8,921
Restricted cash
4,860
649
Receivables
9,802
9,331
Other deposits
5,509
5,721
Total exposure to credit risk at year end
24,061
24,622
Liquidity risk
The Group’s liquidity requirements are based upon cash flow forecasts. Liquidity management, including debt/equity management, is carried out under
policies approved by the Board and forecast material liquidity changes are discussed at Board meetings. The following table analyses the Company’s financial
assets and liabilities into relevant maturity groupings based on the remaining period at the reporting date. The amounts disclosed are the contractual
undiscounted cash flows. The borrowings of the Group are repayable on demand, however the contractual amounts for borrowings also include the interests
that are expected to be repaid until the repayment of these debts based on the cash flow forecast prepared by the Group.
Carrying
amount
$’000
1 year
or less
$’000
1–2 years
$’000
2–5 years
$’000
More than
5 years
$’000
Total
$’000
2024
Payables
40,240
34,361
653
4,8891
337
40,240
Borrowings
40,522
31,680
11,485
–
–
43,165
Lease liabilities
18,883
6,137
6,056
9,557
–
21,750
Total financial liabilities
99,645
72,178
18,194
14,446
337
105,155
2023
Payables
24,330
16,889
1,273
5,7361
452
24,350
Borrowings
24,042
14,328
11,286
–
–
25,614
Total financial liabilities
48,372
31,217
12,559
5,736
452
49,964
1
Primarily related to pre-production royalties and water rights payable in respect of the Nueva Esperanza Gold/Silver Project in Chile and the
contingent consideration (refer Note 15).
Notes to the Consolidated Financial Statements
85
Notes to the Consolidated
Financial Statements
continuedu
28. Auditors’ remuneration
2024
$
2023
$
Audit and other assurance services
PricewaterhouseCoopers Australian Firm
Audit and review of the financial reports
495,750
555,000
Related Practices of PricewaterhouseCoopers Australian Firm
Audit and review of the financial statements
252,879
179,609
Total remuneration for audit services
748,629
734,609
Other services
PricewaterhouseCoopers Australian Firm
Service fee on Nueva Esperanza Project
59,160
–
Employee related tax service
13,260
–
Related Practices of PricewaterhouseCoopers Australian Firm
BOI report
–
4,039
Total remuneration for non-audit related services
72,420
4,039
Taxation services
PricewaterhouseCoopers Australian Firm
Tax compliance services
37,230
50,000
Related Practices of PricewaterhouseCoopers Australian Firm
Tax compliance services
30,340
10,630
Review tax ruling of doré sales
–
10,630
Total remuneration for tax related services
67,570
71,260
29. Earnings per share
2024
Cents
2023
Cents
Basic earnings per share
77.5
2.06
Diluted earnings per share
76.8
2.04
$’000
$’000
Net profit used to calculate basic and diluted earnings per share
199,761
4,738
Number
Number
Weighted average number of ordinary shares used as the denominator: basic
257,751,692
229,916,383
Adjustment for dilutive effect
2,500,000
2,500,000
Weighted average number of ordinary shares used as the denominator: diluted
260,251,692
232,416,383
Notes to the Consolidated Financial Statements
86
www.kingsgate.com.au
30. Parent entity financial information
As at, and throughout the financial year ending 30 June 2024, the parent entity of the Group was Kingsgate Consolidated Limited.
Summary of financial information
2024
$’000
2023
$’000
Results of parent entity
Loss for the year
(26,772)
(49,188)
Other comprehensive loss
-
-
Total comprehensive losses
(26,772)
(49,188)
Financial position of parent entity at year end
Current assets
875
6,081
Total assets
23,983
29,888
Current liabilities
108,833
87,966
Total liabilities
108,833
87,966
Total equity of the parent entity comprising:
Issued capital
727,307
727,307
Reserve
10,432
10,432
Accumulated losses
(822,589)
(795,817)
Total equity
(84,850)
(58,078)
Contingent liabilities of the parent entity
There are cross guarantees given by Kingsgate Consolidated Limited, Dominion Mining Limited and Gawler Gold Mining Pty Ltd as described in Note 31. No
liability was recognised by the parent entity or the Group in relation to this guarantee, as the fair value of the guarantees is immaterial.
As at 30 June 2024, the parent entity had no contractual commitments for the acquisition of property, plant or equipment.
31. Deed of cross guarantee
Pursuant to ASIC Corporations (wholly-owned Companies) Instrument 2016/785, the wholly owned subsidiaries listed below are relieved from the Corporations Act
2001 requirements for preparation, audit and lodgement of financial reports, and Directors’ Reports.
It is a condition of the Class of Order that the Company and each of the subsidiaries enter into a Deed of Cross Guarantee (“Deed”). The effect of the Deed is
that the Company guarantees to each creditor payment in full of any debt in the event of the winding up of any of the subsidiaries under certain provisions
of the Corporations Act 2001. If a winding up occurs under other provisions of the Corporations Act 2001, the Company will only be liable in the event that after
six months any creditor has not been paid in full. The subsidiaries have also given similar guarantees in the event that the Company is wound up.
The subsidiaries subject to the Deed are:
〉
Dominion Mining Limited; and
〉
Gawler Gold Mining Pty Ltd.
The above companies represent a ‘closed group’ for the purpose of the Class Order, and as there are no other parties to the Deed of Cross Guarantee that are
controlled by Kingsgate Consolidated Limited, they also represent the ‘extended closed group’.
A consolidated statement of profit or loss and other comprehensive income, a summary of movements in consolidated accumulated losses, and consolidated
statement of financial position, comprising the Company and controlled entities which are a party to the Deed, after eliminating all transactions between
parties to the Deed of Cross Guarantee, is set out as follows:
Notes to the Consolidated Financial Statements
87
Notes to the Consolidated
Financial Statements
continuedu
Statement of profit or loss and other comprehensive income
2024
$’000
2023
$’000
Corporate and administration expenses
(8,742)
(7,333)
Royalties
(518)
–
Other income and expenses
14,040
10,867
Foreign exchange gain/(losses)
(3,539)
6,410
Impairment losses – Nueva Esperanza Project
(3,840)
(490)
Impairment reversal – Chatree Gold Mine
2,091
–
Intercompany loan write-off
(24,114)
(54,689)
Loss before financial costs and income tax
(24,622)
(45,235)
Finance income
22
53
Finance costs
(2,059)
(4,120)
Net finance costs
(2,037)
(4,067)
Loss before income tax
(26,659)
(49,302)
Income tax expense
–
–
Loss after income tax
(26,659)
(49,302)
Total comprehensive loss for the year
(26,659)
(49,302)
Loss attributable to:
Owners of Kingsgate Consolidated Limited
(26,659)
(49,302)
Total comprehensive loss attributable to:
Owners of Kingsgate Consolidated Limited
(26,659)
(49,302)
Summary of movements in consolidated retained earnings
Accumulated losses
At the beginning of the financial year
(795,930)
(746,628)
Loss for the year
(26,659)
(49,302)
At the end of the financial year
(822,589)
(795,930)
Notes to the Consolidated Financial Statements
88
www.kingsgate.com.au
31. Deed of cross guarantee continued
Statement of financial position
2024
$’000
2023
$’000
ASSETS
Current assets
Cash and cash equivalents
372
5,403
Receivables
175
141
Other assets
330
541
Total current assets
877
6,085
Non-current assets
Restricted cash
140
–
Property, plant and equipment
72
24
Investment in subsidiaries
22,032
23,781
Exploration, evaluation and development
864
–
Total non-current assets
23,108
23,805
TOTAL ASSETS
23,985
29,890
LIABILITIES
Current liabilities
Payables
89,825
87,778
Provisions
664
302
Borrowings
17,436
–
Lease liabilities
161
–
Total current liabilities
108,086
88,080
Non-current liabilities
Lease liabilities
741
–
Provisions
8
1
Total non-current liabilities
749
1
TOTAL LIABILITIES
108,835
88,081
NET LIABILITIES
(84,850)
(58,191)
EQUITY
Contributed equity
727,307
727,307
Reserves
10,432
10,432
Accumulated losses
(822,589)
(795,930)
TOTAL EQUITY
(84,850)
(58,191)
89
Directors’ Declaration
Directors’
Declaration
In the Directors’ opinion:
a)
the financial statements and notes that are set out on pages 48 to 88 and the Remuneration
Report in the Directors’ Report, are in accordance with the Corporations Act 2001, including:
(i)
giving a true and fair view of the Group’s financial position as at 30 June 2024 and of its
performance for the financial year ended on that date; and
(ii)
complying with Australian Accounting Standards, the Corporations Regulations 2001 and
other mandatory professional reporting requirements.
b)
The Consolidated Entity Disclosure Statement as at 30 June 2024 set out on page 52 is true and
correct;
c)
there are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable; and
d)
at the date of this declaration, there are reasonable grounds to believe that the members of the
extended closed group identified in Note 31 will be able to meet any obligations or liabilities to
which they are, or may become, subject by virtue of the Deed of Cross Guarantee described in
Note 31.
Note 1 confirms that the financial statements also comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board.
The Directors have been given the declarations required by section 295A of the Corporations Act 2001
from the Chief Executive Officer and Chief Financial Officer for the financial year ended 30 June 2024.
This declaration is made in accordance with a resolution of the Directors.
Ross Smyth-Kirk OAM
Director
Dated at Sydney on 19 September 2024
On behalf of the Board
Directors' Declaration
90
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Independent Auditor’s Report
Independent auditor’s report
To the members of Kingsgate Consolidated Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Kingsgate Consolidated Limited (the Company) and its
controlled entities (together the Group) is in accordance with the Corporations Act 2001, including:
(a)
giving a true and fair view of the Group's financial position as at 30 June 2024 and of its
financial performance for the year then ended
(b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The financial report comprises:
•
the consolidated statement of financial position as at 30 June 2024
•
the consolidated statement of changes in equity for the year then ended
•
the consolidated statement of cash flows for the year then ended
•
the consolidated statement of profit or loss and other comprehensive income for the year then
ended
•
the notes to the consolidated financial statements, including material accounting policy
information and other explanatory information
•
the consolidated entity disclosure statement as at 30 June 2024
•
the directors’ declaration.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999
Liability limited by a scheme approved under Professional Standards Legislation.
91
continuedu
Independent Auditor’s Report
continuedu
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
structure of the Group, its accounting processes and controls and the industry in which it operates.
Audit scope
Key audit matters
•
Our audit focused on where the Group made
subjective judgements; for example, significant
accounting estimates involving assumptions and
inherently uncertain future events.
•
The Australian engagement team directed the
involvement of the Thai component audit team,
which audited the financial information of Akara
Resources Public Company Limited.
•
The component auditor in Chile, operating under
instructions, also performed specified audit
procedures over the Group’s Chilean operations’
financial information.
•
The Australian engagement team determined the
required level of involvement in the work
performed by the Thai and Chilean component
audit teams, in order to be satisfied that sufficient
appropriate audit evidence had been obtained for
our opinion on the Group financial statements as a
whole
•
Amongst other relevant topics, we communicated
the following key audit matters to the Audit and
Risk Committee:
− Reversal of impairment in relation to Chatree
Gold Mine
− Asset retirement obligations in relation to
Chatree Gold Mine
•
These are further described in the Key audit
matters section of our report.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report for the current period. The key audit matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. Further, any commentary on the outcomes of a
particular audit procedure is made in that context.
Key audit matter
How our audit addressed the key audit matter
Reversal of impairment in relation to Chatree Gold
Mine
(Refer to note 3(i) and note 5(j)) $228.7 million
During the year, the refurbishment of Chatree Plant #1
We performed the following procedures, amongst
others:
>performed a site visit to inspect the existence of the
mining assets and production activities at Chatree Gold
Mine;
Independent Auditor's Report
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Independent Auditor’s Report
Key audit matter
How our audit addressed the key audit matter
was completed, and the Group has acquired new
mining equipment. The mining operation has resumed
in May 2024. The gold price has increased significantly
since the time of the previous impairment in 2015.
Management considered this to be an indicator for
reversal of previously impaired mining assets. Based
on the impairment model prepared, a reversal of
impairment of $228,699,000 was recognised in relation
to Chatree Gold Mine.
The reversal of the impairment at Chatree Gold Mine
and associated disclosures is considered to be a key
audit matter due to the significance of the reversal to
the consolidated statement of profit or loss and other
comprehensive income, and the significance of the
Chatree mine assets to the consolidated statement of
financial position, and the significant judgments
involved in determining the recoverable amount of the
mining assets.
>evaluated the Group’s assessment of impairment
reversal indicator by inspecting the material contracts,
gold price and production results;
>considered whether the cash flows used in the
impairment model were reasonable by comparing:
- the volume of the ore to be processed to the ore
reserve statement;
-the gold and silver grade and recovery to the
historical data and ore reserve statement;
-the royalty rates to Thai government's official
document;
-a sample of forecast operating costs and overheads
to the most recent budget, relevant historical costs
incurred and contract rates;
-capital costs to the purchase agreement and
historical costs incurred; and
-gold and silver price to the commodity forward price
curve
>engaged internal valuation experts to assess whether
the discount rate appropriately reflected the risks of the
CGU;
>assessed management's assessment of the existence
and condition of the mining assets subject to
impairment reversal; and
>evaluated the reasonableness of the disclosures
made in note 3(i) and 5(j), including those regarding the
key assumptions and sensitivities to changes in such
assumptions, in light of the requirements of Australian
Accounting Standards.
Asset retirement obligations in relation to Chatree
Gold Mine
(Refer to note 3(ii) and note 17) $35.9 million
During the year, the Group engaged a mining
consultant to conduct a full review of the rehabilitation
plan. The Group recognised provisions for restoration
and rehabilitation obligations of $35,871,000 as at 30
June 2024.
This was a key audit matter as the calculation of these
provisions requires judgement by the Group in
estimating the magnitude of possible works required for
the removal of the infrastructure and rehabilitation
works, the future cost of performing the work, when
rehabilitation activities will take place and the economic
assumptions such as inflation and discount rates
To assess the Group's restoration and rehabilitation
obligations, we performed the following audit
procedures, amongst others:
>evaluated the Group's rehabilitation and restoration
cost forecasts including the process by which they
were developed;
>checked the mathematical accuracy of the underlying
calculations;
>considered the competence and objectivity of the
Group's experts who reviewed the closure plan and
associated cost estimates;
>assessed the reasonableness of the Group's
significant judgemental assumptions and key data used
93
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Independent Auditor’s Report
continuedu
Key audit matter
How our audit addressed the key audit matter
relevant to such liabilities.
in the closure plan and associated cost estimates;
>evaluated the expected timing of restoration and
rehabilitation activities against the life of mine plan;
>benchmarked key market related assumptions
including inflation and discount rates against external
market data; and
>assessed the reasonableness of the note disclosure
in note 3(ii) and note 17 in light of requirements of
Australian Accounting Standards.
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report for the year ended 30 June 2024, but does not include the
financial report and our auditor’s report thereon. Prior to the date of this auditor's report, the other
information we obtained included the the director's report. We expect the remaining other information
to be made available to us after the date of this auditor's report.
Our opinion on the financial report does not cover the other information and we do not and will not
express an opinion or any form of assurance conclusion thereon through our opinion on the financial
report. We have issued a separate opinion on the remuneration report.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
When we read the other information not yet received, if we conclude that there is a material
misstatement therein, we are required to communicate the matter to the directors and use our
professional judgement to determine the appropriate action to take.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report in accordance
with Australian Accounting Standards and the Corporations Act 2001, including giving a true and fair
view, and for such internal control as the directors determine is necessary to enable the preparation of
the financial report that is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
Independent Auditor's Report
94
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Independent Auditor’s Report
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing
and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
auditor's report.
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in the directors’ report for the year ended 30 June
2024.
In our opinion, the remuneration report of Kingsgate Consolidated Limited for the year ended 30 June
2024 complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian Auditing Standards.
PricewaterhouseCoopers
Craig Thomason
Sydney
Partner
19 September 2024
95
continuedu
Shareholder Information
Substantial shareholders
The following table details Company’s substantial shareholders
Name
Number of
ordinary shares
%
HSBC Custody Nominees (Australia) Limited
23,526,138
9.13
BNP Paribas Noms Pty Ltd
20,218,402
7.84
Citicorp Nominees Pty Limited
19,537,283
7.58
Number of Security holders and Securities on issue
The Company has issued the following securities:
a) 257,751,692 fully paid ordinary share held by 8,487 shareholders; and
b) 9,486,589 unlisted options held by 3 option holders.
Voting rights
a) Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote.
b) Options
No voting rights.
Distribution of Security Holders
Fully Paid Ordinary Shares
Size of Holding
Holders
Shares
%
1 – 1,000
3,778
1,477,546
0.57
1,001 – 5,000
2,337
5,906,302
2.29
5,001 – 10,000
807
6,224,898
2.42
10,001 – 100,000
1,267
38,794,091
15.05
100,001 +
298
205,348,855
79.67
Total
8,487
257,751,692
100.00
Unmarketable parcel of shares
The number of shareholders holding less than a marketable parcel of ordinary shares is 2,004 based on the Company’s closing share price of $1.39 on
30 September 2024.
Shareholder
Information
as at 30 September 2024
Shareholder Information
96
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Shareholder Information
Options
The number of options on issue:
Exercise Price
Expiry Date
Number of Options
Number of Holders
Unlisted options
$2.00
12 May 2027
2,500,000
1
Unlisted options
$2.07
18 Jan 2027
6,986,589
2
20 largest shareholders of quoted ordinary shares
Shareholder
Number of shares
%
1
HSBC Custody Nominees (Australia) Limited
23,526,138
9.13
2
BNP Paribas Noms Pty Ltd
20,218,402
7.84
3
Citicorp Nominees Pty Limited
19,537,283
7.58
4
BNP Paribas Nominees Pty Ltd
9,250,596
3.59
5
BNP Paribas Nominees Pty Ltd
9,172,438
3.56
6
J P Morgan Nominees Australia Pty Limited
5,846,593
2.27
7
Arinya Investments Pty Ltd
4,954,944
1.92
8
Clawson Holdings Pty Ltd
4,856,760
1.88
9
Miningnut Pty Ltd
2,910,000
1.13
10
Mr Russell Phillip Quinn
2,883,724
1.12
11
Mr Andrew Lenox Hewitt
2,459,303
0.95
12
Leaver Trading Pty Ltd
2,390,000
0.93
13
Wyong Rugby League Club Ltd
2,330,000
0.90
14
Mr Ian Gillespie-Jones
2,180,009
0.85
15
Mr Jay Evan Dale Hughes
2,000,000
0.78
16
Mr Philip Storr
1,700,000
0.66
17
Jamari Pty Ltd
1,585,834
0.62
18
Frank Markert Pty Ltd
1,456,087
0.56
19
Balzac Investments Pty Limited
1,389,321
0.54
20
G Ritchie SF Pty Ltd
1,366,000
0.53
Total Top 20
122,013,432
47.34
Other
135,738,260
52.66
Total ordinary shares on issue
257,751,692
100.00
On-Market Buy-back
There is currently no on market buy-back.
Design & Production > apmgraphics.com.au > 1800 806 930
97
Corporate Information
Directors
Ross Smyth-Kirk OAM Executive Chairman
Jamie Gibson
Managing Director &
Chief Executive Officer
Nucharee Sailasuta
Non-Executive Director
Peter Warren
Non-Executive Director
General Counsel &
Company Secretary
Stephanie Wen
Stock Exchange Listing
Kingsgate Consolidated Limited is a Company
limited by shares, listed on the Australian
Securities Exchange (ASX) under the code KCN.
The Company’s shares also trade in the United
States of America over-the-counter (OTC) as an
American Depository Receipt (ADR) under the
code OTC: KSKGY.
Registered Office and
Principal Business
Address
Kingsgate Consolidated Limited
Suite 12.07 – Level 12
14 Martin Place
Sydney NSW 2000
Australia
Tel:
+61 2 8256 4800
Email: info@kingsgate.com.au
Web: www.kingsgate.com.au
Thailand Office
Akara Resources Public
Company Limited
No. 99 Moo 9, Tambon Khao Chet Luk
Amphur Thap Khlo
Phichit 66230
Thailand
Tel:
+66 56 614 500
Fax:
+66 56 614 190
Email: admincgm@akararesources.com
Web: www.akararesources.com
Share Registry
Automic Group
Level 5
126 Phillip Street
Sydney NSW 2000
Australia
Postal address:
GPO Box 5193
Sydney NSW 2001
Australia
Tel:
1300 288 664 (within Australia)
Tel:
+61 2 9698 5414 (outside Australia)
Email: hello@automic.com.au
Web: www.investor.automic.com.au
Auditor
PricewaterhouseCoopers
One International Towers Sydney
Watermans Quay
Barangaroo NSW 2000
Australia
Tel:
+61 2 8266 0000
Fax:
+61 2 8266 9999
Corporate
Information
Kingsgate Consolidated Limited
ABN 42 000 837 472
Corporate Information
Shareholder Information
98
Suite 12.07 – Level 12
14 Martin Place
Sydney NSW 2000
Australia
Tel:
+61 2 8256 4800
Email: info@kingsgate.com.au
Web: www.kingsgate.com.au