Increase in Kingsgate’s Gold Reserves
KINGSGATE’S GOLD RESERVES INCREASED THIS YEAR
Gold reserves at Kingsgate’s (ASX:KCN) Chatree Mine in central Thailand increased by 14 per cent to 30 June this year.
Ore Reserves increased to 1.5 million ounces of gold in 37.1million tonnes of ore at a grade of 1.2 grams tonne gold. The ounces of gold mined were replaced by the reserve increase at almost twice the mining rate of last year.
“We’re playing catch-up at present as the drilling only restarted late last year after access was gained to the new mining leases,” said Gavin Thomas, Managing Director and CEO of Kingsgate.
“These are interim figures and I expect continued growth in resources and reserves from our aggressive drilling program over the next 2 to 3 years.’
Reserve calculations were performed using the average gold price over the prior three years when gold was about $US 750/ounce.
“Should current gold prices persist until next year, the 3 year average will be approximately US$900/ounce which will be used for future calculations”, Mr Thomas said.
Modelling indicates there is significant potential for the total Chatree gold deposit within the open pits to be substantially larger at current gold prices – above 2 million ounces – without affecting the grade of the gold ore. Work is in progress on pit designs at higher gold prices of up to $US950/ounce in order to establish possible cut-backs and alternative mining situations.
A long term drilling program has commenced to determine the untested potential of the high-grade gold “feeder zones” beneath the main pit which could enlarge the open pits and potentially support an underground operation.
“Previous high grade drill results are likely to extend deeper. Similar high grade epithermal gold veins have developed into multi-million ounce gold resources and Kingsgate intends to aggressively define this potential”, Mr Thomas said.
Kingsgate will continue to be a low cost gold producer.
It has a strong cash flow and is forecast to produce 120,000 – 140,000 ounces of gold at the Chatree mine to June 2010.
Read the ASX release here - www.kingsgate.com.au/news-desk