Kingsgate signs A$82m HoA with insurer
PERTH (miningweekly.com) – The share price of ASX-listed Kingsgate Consolidated increased by more than 53% on Monday, on news that the company had settled for more than A$82-million in its legal dispute with its political risk insurer.
The company had political risk insurance in place in 2016 when the government of Thailand expropriated its Chatree gold mine.
Kingsgate on Monday said that the binding heads of agreement (HoA) now signed with its insurance provider would comprise a cash payment of $55-million, which will be made in mid-April, the requirement for the insurer to contribute up to $3.5-million on future costs towards the arbitration with the Thai government around the expropriation of the Chatree gold mine, and a sharing arrangement between Kingsgate and the insurer on the future distribution of the claim proceedings against the Thai government.
Kingsgate executive chairperson Ross Smyth-Kirk told shareholders that the settlement transaction provided material upside for the company, providing sufficient funds to pay out the full corporate debt facility, and providing the company with liquidity to maximise the value of its Nueva Esperanza project through either further development or sale.
Furthermore, the insurer also provided commitment under the HoA to work alongside Kingsgate to fully prosecute the claim against the Thai government.
Kingsgate shares were trading at a high of 28c a share on Monday, up from a low of 22c a share.
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