8
Finance Report
www.kingsgate.com.au
Finance 
Report
Summary
Kingsgate has recorded the following financial 
performance for the year to 30 June 2013:
〉〉 Revenue of $329.3 million.
〉〉 EBITDA (before significant items) of $115.8 
million.
〉〉 Profit before tax and significant items of 
$17.2 million.
〉〉 Loss after tax and significant items of $323.7 
million. This includes a net tax benefit of 
$20.6 million, relating to the Challenger Gold 
Operations (“Challenger”) impairment.
〉〉 Non-cash asset impairments and other 
significant items of $356.8 million pre-tax, 
with $311.9 million principally relating to 
Challenger ($291.3 million post-tax).
〉〉 No final dividend has been declared. An 
interim dividend of 5 cents per share was 
declared for the half year to 31 December 
2012. 
Earnings
The lower realised gold price of US$1,588 per 
ounce (2012: US$1,663 per ounce), lower gold 
sales of 195,948 ounces (2012: 204,145 ounces) 
and industry wide cost pressures had a negative 
impact on the underlying earnings of the Group. 
The lower gold price and changes to mine oper-
ating plans also resulted in a major impairment 
to the carrying value of a number of Group 
assets, particularly the Challenger Mine. The 
impairments were the major contributor to the 
after tax loss of $323.7 million for the year.
The fall in gold sales reflected a 24% decrease in 
production at Challenger compared to the prior 
year due to lower grade and volume of ore 
mined. The lower production at Challenger was 
offset by a 10% increase in gold production at 
the Chatree Gold Mine (“Chatree”), reflecting 
increased throughput from the expanded 
Chatree processing plant and higher grade ore 
mined.
Cost of sales
Cost of sales before depreciation increased by 
14% to $195.1 million compared to last year and 
largely reflects increased throughput and 
production from Chatree due to the first full 
year of operation of Plant #2. The total unit cash 
costs for Chatree for the year were US$767/oz 
(US$620/oz excluding royalties), up from 
US$618/oz in 2012. The total unit cash costs for 
Challenger for the year were US$1,135/oz (2012: 
US$862/oz), with the increase mainly due to the 
lower throughput and lower production from 
the Challenger Mine. On a unit cost basis, total 
cash costs for the Group were US$888/oz, up 
from US$720/oz last year.
Depreciation and amortisation 
The increase in depreciation and amortisation to 
$85.6 million (2012: $67.6 million) reflects 
amortisation of the higher capitalised develop-
ment costs at the Challenger Mine, depreciation 
of Plant #2 at Chatree and commencement of 
amortising the capital cost of the Chatree 
Tailings Storage Facility #2.
Impairment and write-downs
Following a strategic review of Challenger, a 
new mine plan focussing mainly on the 
Challenger West orebody was implemented 
effective 1 July 2013.
Based on the revised plan Challenger is expected 
to generate positive cash flows though, as a 
result of this plan together with the continuing 
low gold price environment, the estimated 
future cash flows no longer supported the full 
recovery of the carrying value. For this reason, 
the Group has recorded a pre-tax impairment 
charge of $311.9 million ($291.3 million post 
tax) related to the carrying value of the prop-
erty, plant and equipment and mine properties 
at Challenger so that the carrying value reflects 
recoverable value.
A review of the carrying value of all regional 
greenfield exploration projects was also 
conducted which resulted in the write down of 
$6.1 million, primarily against the Barton West 
Mineral Sands project in South Australia and the 
write down of $14.3 million against the carrying 
value of exploration projects in Thailand that fall 
outside the Chatree Mine area of influence.
The impairment and write-downs are non-cash 
items and therefore have no impact on the 
Company’s cash position. The written down 
asset values do not create any concern with