KCN 1.05% 48.0¢ kingsgate consolidated limited.

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  1. 130 Posts.
    KINGSGATE CONSOLIDATED LIMITED. 2003-03-24 ASX-SIGNAL-G

    HOMEX - Perth

    +++++++++++++++++++++++++
    MINE EXPANSION
    The board of directors of Kingsgate has approved a USD8 million expansion of the Chatree Gold Mine in Thailand.

    Throughput will be increased by 50% to 1.8 million tonnes per year. The purpose of the expansion, which in the original feasibility was to 1.5 million tonnes per year, is to address declining gold grades with depth.

    The expansion will include the addition of 2 further CIL tanks, doubling the capacity of the cyanide etoxification circuit, the addition of a high ratio SAG mill and the conversion of the existing low ratio SAG mill to a ball mill.

    The engineering design is being undertaken by Ausenco Ltd and the additional capacity is scheduled to be commissioned in January, 2004. Construction management will be undertaken by a team of Ausenco and Kingsgate staff.

    The expansion will be funded from cash flow.

    EXPLORATION DRILLING RESULTS. PROSPECT "A"

    The current drilling program at Prospect A was extended by 3,000 metres to 14,000 metres due to continuing positive results. The program will now be completed in early April. An updated resource
    estimate and a first reserve estimate should be completed in April/May, 2003.

    A list of mineralised drill intersections, individually greater than 10 gram metres gold, received since the December quarterly report released on 24 January, 2003, is attached.

    The results of the drilling program to date indicate that Prospect A contains substantial gold mineralisation which will add considerably to the life of the Chatree Gold Mine. Included in this mineralisation are a number of higher grade zones.

    Mining Leases have been applied for and an environmental Impact Assessment, groundwater, geotechnical, metallurgical and other studies are underway. Any ore mined from Prospect A would be
    processed at the existing Chatree CIL plant located 1 kilometre to the south.

    Mineralisation consists of low sulphidation epithermal quartz carbonate stockworks and fault breccia fill similar to that being mined at Chatree. The mineralisation outcrops over a length of 1,300 metres and is hosted by a 100 metre thick stratigraphic unit striking North-North-West and dipping east at about 35 degrees.

    A first resource estimate for Prospect A was announced to the ASX on 1 August, 2002 as follows:

    Resources in the Indicated and Inferred categories:
    8.9M tonnes @ 2.0 g/t Au 24 g/t Ag (1g/t Au cut)
    5.3M tonnes @ 0.8 g/t Au 13 g/t Ag (0.7-1g/t cut)

    Total resources at 0.7 g/t Au cut:
    14.1M tonnes @ 1.6 g/t Au 20 g/t Ag containing,
    706,000 ounces of gold and 8,989,000 ounces of silver.

    The forward strategy is to commence mining at Prospect A as soon as mining leases are granted and to blend the higher grade portion of the ore into the Chatree mill feed. The timing of grant of mining
    leases is not able to be defined however the first reserve estimate to be announced in May, 2003 will be an important advance in that process.

    Information in this report which relates to mineralisation is based on information compiled by Michael Garman who is a Corporate Member of The Australasian Institute of Mining and Metallurgy and who has
    relevant experience as a Competent Person, as defined in the AustralasianCode for Reporting of Identified Mineral Resources and Ore Reserves, in relation to the mineralisation being reported on.

    The report is issued with Michael Garman's permission.

    J Falconer
    COMPANY SECRETARY
 
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