PERTH (miningweekly.com) – The Thai government has awarded ASX-listed Kingsgate Consolidated the four outstanding mining leases required to operate the Chatree gold mine, signaling the imminent restart of the project.

Kingsgate on Wednesday said that the three leases comprised three Chatree South leases and the Quartz lease, which had been pending approval since 2011 and was required to fully optimise the A Pit.

Each of the leases has been awarded for a period of ten years, starting from the end of December 2021.

Furthermore, the company noted that all the necessary steps for the renewal of the metallurgical processing licences have now been completed and approved.

These approvals enable the restart of the Chatree gold mine.

Kingsgate was forced to place its Chatree gold miner on care and maintenance at the start of 2017, after the Thai government in 2016 announced that all gold mining in the country would cease.

Since then, the company has been focused on ways to remedy the situation.

Kingsgate previously told shareholders that it was working to optimise the re-start process by assessing a number of options, one of which includes an initial refurbishment of Chatree North to access the current low grade stockpiled ore for processing which has around 6.6-million tonnes of ore, and contains in the order of 73 000 oz of gold and 780 000 oz of silver.

It is anticipated that this could generate sufficient cash flow to fund various other works including the development of the Quartz lease, the cut back of the A Pit, refurbishment of the first plant, and implementation of an expanded exploration programme focusing on resource to reserve delineation as well as regional grassroots exploration programs.

The company said on Wednesday that work is being finalised on the capital expenditure required for the restart which is anticipated to include the refurbishment of both Plants 1 and 2, which together, will have a total yearly throughput capacity of over five-million tonnes. In addition, a specialist recruitment agency has been appointed to manage the appointment of the critical technical staff required to operate the mine.

Focus is also now being directed to upgrade and report Kingsgate’s mineral resources and ore reserves statement. Following the approval of the metallurgical processing licence, an updated Joint Ore Reserves Committee-compliant reserve statement is in the process of being finalised.

In addition, Kingsgate has been investigating possible financing options including dialogue with potential lenders to expedite the restart of the mine.

Meanwhile, TSX-V listed TDG Gold has informed Kingsgate that it is unable to proceed with the acquisition of the Nueva Esperanza project in Chile, citing recent drilling successes at their Toodoggone Production Corridor. TDG intends to now focus its efforts on building that resource.

The two companies in November struck a deal under which Kingsgate will have been paid C$25-million on the completion of the transaction, and the company will be issued 14% of TDG’s outstanding common shares, calculated on a post-closing basis.

A further C$6.25-million is payable to Kingsgate within three months of completion of a definitive feasibility study, and a payment of C$5-million or 10-million TDG shares would be due to Kingsgate on a construction decision.

Furthermore, the company would be paid either C$5-million or 10-million in TDG shares at the one-year production anniversary, and a further payment of C$8.75-million at the two-year production anniversary.

Kingsgate said on Wednesday that it has been approached by other parties that have expressed an interest in acquiring the project should the deal with TDG not proceed. These parties will be followed up in due course.

“The main focus remains on re-starting the Chatree gold mine as soon as possible. This also gives us options to consider with respect to Nueva Esperanza, as it remains a premier silver/gold exploration project in its own right,” Kingsgate’s executive chairman Ross Smyth-Kirk said.