PERTH (miningweekly.com) – Gold miner Kingsgate Consolidated has deflated shareholder hopes that a new Mineral Bill introduced by the Thai National Legislative Assembly could save the Chatree mine.
In May, the Thai government announced that the Chatree mine had to cease operations by the end of December. While not giving any reason for the forced closure, the government has said that the decision to suspend operations at the mine is in no way a reflection on the way that Kingsgate operated the mine.
The Bill allows gold mines to operate legally in the country, despite the government’s decision.
However, Kingsgate told shareholders on Monday that the new Mineral Act had to be approved by the King of Thailand within 90 days, and will then not become effective for a further 120 days.
Furthermore, the Act would only be effective for miners that already held a metallurgical licence, allowing them to continue operations without the further need for one.
Kingsgate said that in light of this, the legislation would not be effective to allow the company to continue operations beyond its December 31 deadline.
Kingsgate said that although the company would seek urgent clarification from the Thai government in relation to the new legislation, the company had no choice but to place the mine on care and maintenance.
The mine would be placed on care and maintenance at the end of the month and the company had started to terminate staff and contractor employment.
In order to resume operations at Chatree, a significant amount of time and capital expenditure would be required, as well as the granting of additional licences and approvals, the mining company reported.