www.kingsgate.com.au
Chairman’s Review
2
The past twelve months has been another 
challenging year for the resources industry  
with weakening commodity prices and a cost 
structure that more reflected boom times. The gold 
price drifted lower during the year until April when 
it underwent a major fall of around US$200 per 
ounce and then continued to weaken through to 
late June when it bottomed at a 34 month low at 
around US$1,200 per ounce. Subsequently, there 
has been a small recovery in the gold price that has 
been helped by a weakening Australian dollar to 
improve the position of Australian based gold 
producers. Kingsgate is one of many resource 
companies whose earnings and share price perfor-
mance has been affected by the weakening gold 
price and the downturn in the global industry. 
Kingsgate had a mixed year of transition in 2013 
with the completion and final permitting of the 
major expansion at Chatree in Thailand but also 
undergoing a major restructure at the Challenger 
mining operations, caused by the lower gold price 
and ongoing price volatility. In the weak and 
uncertain metal price environment, Kingsgate 
moved quickly to reduce all non-essential expend-
iture on its operations and on the development 
projects. Additionally, the Board and senior 
management have participated in the cost 
reduction initiatives through the implementation 
of a 10 percent cut to Directors fees, and an 
effective 20 percent cut to senior management 
remuneration.
The lower metal prices and industry cost pressures 
had a negative impact on the underlying earnings 
of the Group of $17.2 million and also contributed 
to non-cash impairments to the carrying value of  
a number of Group assets, particularly assets 
relating to the Challenger Gold Operations.  
The impairments were the major contributor to 
the after tax loss of $323.7 million for the year. 
With lower earnings and the current uncertainty 
and volatility in the metal markets the Board 
decided not to pay a final dividend. Note that 
your Company did pay an interim dividend of  
5 cents per share following the first half of the 
financial year.
Chatree had a strong year producing 133,681 
ounces of gold. The good production performance 
was achieved despite some operational hurdles 
with slower than anticipated Government 
approvals to allow full utilisation of the expanded 
plant. The Chatree mine lease area is also 
surrounded by highly prospective exploration 
ground that is currently under application. Any 
discoveries within these application areas should 
substantially extend the mine life at Chatree.
Challenger gold production of 66,216 ounces was 
24 percent lower than last year due to additional 
dilution and depletion at Challenger Deeps and a 
shortfall in planned development. Following the fall 
in the gold price, a strategic review of Challenger 
was implemented that has resulted in a new mine 
plan to focus primarily on the higher grade 
Challenger West orebody. The new mine plan will 
be implemented during the first three months of 
the 2014 financial year.
The development projects continued to advance 
during the year. At Nueva Esperanza, the feasibility 
work shifted to focus on identifying the lowest 
cost and lowest power consumption development 
alternatives. This included reviewing a heap leach 
process option with on-site power generation. 
Further work is expected to be completed in the 
current financial year. At Bowdens, the feasibility 
work has confirmed the optimum process route. 
Completion of the technical feasibility study 
including mine planning, infrastructure and metal-
lurgy, and lodging of the Environmental Impact 
Statement (“EIS”) are scheduled for 2014.
The Board of Kingsgate is determined to re- 
establish the path to building shareholder wealth 
via profits and dividends despite a difficult 
external environment. Shareholders can look 
forward to a steady performance from Chatree