PERTH (miningweekly.com) – Precious metals miner Kingsgate Consolidated on Wednesday launched a A$70-million share placement to fund its development and exploration expenditure for projects in Chile and Australia during 2012.

“Kingsgate is moving into a new phase of production growth, which will be underpinned by the company’s development pipeline and portfolio of mine and near-mine exploration targets,” said MD and CEO Gavin Thomas.

“In particular, the company is committed to advancing the feasibility studies and project development plans at the Nueva Esperanza and Bowdens projects, as well as progressing the underground exploration programme at the Challenger gold mine.”

The Nueva Esperanza silver-gold project is in Chile, while the Bowdens silver project is in New South Wales.

The miner would place some 9.9-million new ordinary shares to institutional and sophisticated investors at a price of A$7.10 a share. The new shares would be allotted by the end of February.

“It is important that the company remains well funded to continue its aggressive growth plan to take advantage of these opportunities, and to realise the underlying value in its total asset portfolio,” said Thomas.

Meanwhile, Kingsgate also on Wednesday reported that net profit after tax had increased by some 192% during the first six months to December, to reach A$33.9-million.

Earnings before interest, tax, depreciation and amortisation jumped 129% to A$69.6-million.

The strong financial performance was driven by higher gold sales during the six months under review, which topped at 82 940 oz, up 90% from the first half of 2010, as the Challenger mine, in South Australia, came on-stream in February last year. The financials were also driven by the higher realised average gold price, which was up 30% on the corresponding period.

The feasibility study at the Nueva Esperanza project, in Chile, was also progressing well.

The miner said on Wednesday that the production outlook for the second half of 2012 remained strong, as the Chatree operation would benefit from the higher throughput rate.

Gold production for the full year was expected to be between 210 000 oz and 230 000 oz, including between 115 000 oz and 125 000 oz from the Chatree operations, and between 95 000 oz and 105 000 oz from the Challenger mine.

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