Kingsgate Consolidated shares jump on new high-grade find in Thailand
Chatree Gold Mine processing plant refurbished as gold prices near (inflationary) record highs
Source: iStock
Mentioned
KEY POINTS
- Kingsgate has hit gold in exploratory drilling 20km south of its Chatree gold mine
- The mine is set to begin producing concentrate in the coming weeks and months with major refurbishments complete
- Gold price is near all time highs, though, the commodity often tracks inflation
Shares in ASX-listed gold miner Kingsgate (ASX:KCN) were up 5.6% in afternoon trades following the company’s report of a potential new gold zone identified 20km south of its existing Chatree project in Thailand.
The exploration team turned a Reverse Circulation (RC) drill rig onto the target with those drills returning high-grade gold. RC drilling captures rock chips from underground in a chamber.
Kingsgate operates the Chatree Gold Mine through its Thai-registered subsidiary Akara Resources.
What did Kingsgate find?
Investor information provider Undervalued Equity classifies high-grade gold as that in concentrations exceeding five grams per tonne of ore (5g/t). Many Australian projects boasting 4g/t resources are also considered high-grade.
On Wednesday, Kingsgate reported:
26m @ 3.02g/t gold from 81m depth
07m @ 5.77g/t gold from 125m depth
01m @ 1.71g/t gold at 195m depth
There is one other important thing to note: the company only drilled one hole.
But signs are promising
“While it is too early to describe these results as a new discovery, their significance is derived from several significant factors,” the company explicitly wrote.
Kingsgate is interested in this new area due to:
Effectively unexplored acreage (“to date there is no other drilling nearby”)
Electromagnetic data suggests a possible mineralisation system
Similar geological conditions to that at its Chatree Gold Mine
The company has also previously found gold at-surface (1m depth) at another target closer to Chatree within a 10km radius.
Refurbishment at Chatree complete
The company recently finished refurbishing its gold processing facilities on-site after over a year of work.
Kingsgate has already locked in a downstream refiner and is currently working towards “restoring value” of the Chatree Gold Mine, where equipment had deteriorated. The project was something of a “fixer upper.”
“The mill feed chutes have been refurbished and high voltage power has been reconnected to both mills...the crushing, grinding and leaching circuits are now complete,” the company wrote in its latest quarterly.
“The reagents and consumables required to process the ore are being delivered in preparation for start-up.”
Those reagents include liquid cyanide, needed in gold mining. During leaching, crushed gold ore is introduced into the solution which is separated from waste rock material.
Kingsgate's six month charts at close
