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Kingsgate banks Thai law will save mine

AAP logoAAP 10/12/2016 Ron Corben

Australian executives Kingsgate Consolidated Ltd are hoping a new Thai mining bill passed by parliament will save its mining operations from closure at the end of the year.

Kingsgate's Thai offshoot, Akara Resources' mine in Chatree, 280km north of Bangkok, faces a December 31 shutdown after a May 10 order by the Thai cabinet for all gold mining operations in Thailand to cease.

Kingsgate chairman Ross Smyth-Kirk says executives, have been lobbying for months to salvage the mine from closure, but so far have not been formally notified of the new legislation.

"We are totally mystified. We've had no notification, no notice that there was anything going on in parliament about (the new bill)," Smyth-Kirk told AAP.

"We'll have to wait for some kind of official (notice)."

In recent developments, Kingsgate chief executive officer, Greg Foulis, said the company was notified by the Thai Department of Primary Industries and Mines a new Thai government committee was developing a new Mineral Management Policy.

Foulis said the committee was also "considering" the renewal of the mine's metallurgical licence due to expire on December 31.

Thailand's National Legislative Assembly (NLA) passed a new Mineral Bill on Thursday, replacing existing laws dating back to 1966 covering royalty payments and mining operations.

The new bill decentralises and streamlines the mining licence process involving local and regional authorities along with "relevant committees" approving or overseeing operations.

The order to close all gold mines in Thailand had followed lobbying by environmental groups that said the mining operations had led to pollution, affecting the health of local communities.

But Kingsgate executives, backed by independent Thai government reports, said there was no evidence the Australian-owned mine damaged the local environment, or the health of workers and nearby residents.

Akara Resources said in a December 8 statement it stepped up mining, producing 18,697 ounces of gold and 17,117 of gold solid in November.

Payments had resulted in sharp fall in Kingsgate's Group total debt to $A13 million, down from $A72 million as at September 30, 2016.

"As previously stated, Kingsgate reasonably expects that Chatree related debt will be fully repaid before December 31, 2016," Foulis said.

But Foulis called for urgent clarification on the mine's future as "stopping operations will result in the loss of over 1000 direct and contractor jobs", he said.

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