Kingsgate full-year profit more than doubles to $73.1m
August 30th, 2010
australianbusinessjournal.com.au
Kingsgate Consolidated says it expects a shake-out to occur in Australia’s mid-tier gold sector that could make it predator or prey.
The comments come as the gold and silver miner’s profit more than doubled to $73.1 million in the year ended June 30 from $32.5m the previous year as its Chatree gold mine in Thailand operated for its first full year amid higher gold prices.
Chairman Ross Smyth-Kirk today also said a planned listing of the subsidiary holding the Chatree mine on the Thai stock exchange is taking longer than expected.
“So it’s doubtful it’s going to be this year,” he said.
“But we’re working towards that, and we’re almost at the stage where we have a full prospectus that can go to the stock exchange.”
With a merger between larger rivals Newcrest Mining and Lihir Gold all but complete, Kingsgate is poised to become Australia’s second largest listed gold miner.
“They’re by far the largest company, then there’s this gigantic gap to us,” chairman Ross Smyth-Kirk told Dow Jones Newswires.
“Now there’s five or six companies probably coming down after us in the few to $100m capitalisation space, and all of them are going to be claiming that they’re the next mid-tier producer.”
“It’s quite clear — we either do something, and we intend to be one of those that goes to that next level, or somebody will try and take us.”
Smyth-Kirk said a number of entities have already come and taken a look at Kingsgate, with no firm offers made, and that Kingsgate is examining opportunities of its own.
“We’re certainly looking at some other projects and some potential acquisitions,” he said.
“But it’s a bit like life in general — you kiss a lot of frogs on the way.”
Kingsgate wants to expand Chatree to double its processing capability to over 5 million metric tonnes a year of mined ore by the September quarter of 2011, by which time Smyth-Kirk said Kingsgate would be able to ramp up annual production to at least 200,000 ounces of gold.
Total production from the Chatree gold mine last financial year was 132,628 ounces of gold and 549,522 ounces of silver. It forecast production of 120,000 to 130,000 ounces of gold in this financial year.
Kingsgate has already spent $US25m on long lead items for the Chatree expansion and has hired Investec to help it raise the other $US100m it needs, potentially from Thai banks.
Kingsgate declared a final dividend of 20 cents a share, up from 15c last year. In late trade, its shares were up 2.4 per cent to $9.88, giving the Sydney-based company a market capitalisation of $995.3m.
Ross Kelly. |
