Kingsgate Consolidated Profits Soar as CEO Sees Good Value in Silver

Published: March 01, 2012

Australian based mining company Kingsgate Consolidated Ltd. (OTC:KSKGY and ASX:KCN) reported its latest half year results for 2011 on Wednesday, February 22nd.

The firm’s net profits attributable to members grew by a whopping 192 percent to $33.988 million for the half-year period that concluded on December 31st of 2011 compared with the $11.581 million result seen for the same period of 2010.

The firm’s directors declared a 10 cent dividend to reward shareholders of record as of March 6th, 2012, payable on March 21st.

Kingsgate Operates Chatree and Challenger Gold Mines

Kingsgate is the second largest publically traded mining company in Australia, and it operates the low cost Chatree gold mine in central Thailand and the Challenger underground gold mine in in Southern Australia.

The firm estimated that its gold production at those locations for the upcoming half year period would be on the order of 115,000 to 125,000 ounces at Chatree and 95,000 to 105,000 ounces at the Challenger mine, with a total forecast gold production of 210,000 to 230,000 ounces.

Kingsgate CEO Likes Silver as Company Expands Silver Production

While currently primarily a gold mining company, Kingsgate’s management has recently taken considerable steps to expand and diversify the company’s mining activities into silver exploration and production, where margins currently seem healthier than in gold mining.

Kingsgate CEO Gavin Thomas recently said in an interview with CNBC that, “Silver is a fantastic opportunity…I see there’s a lot of upward price (for the metal), because of the lack of supply.” He also said that he thinks silver could rise to $50.00 per ounce over the coming two years, as he sees growing Chinese and Indian popular interest in purchasing silver due to gold’s much higher price.

The company already owns 70% of Laguna Resources NL, which is studying the Arqueros silver and gold project within Central Chile’s Maricunga Gold Belt. Furthermore, last August, Kingsgate announced the purchase of the Bowdens Silver Project in New South Wales, Australia for A$75 million from Canadian mining company Silver Standard, which completed on September 23rd of 2011.

Although silver sales brought in less than ten percent of Kingsgate’s total revenue last year, CEO Thomas anticipated that silver would, “account for 25-30 percent of the company’s revenues in four years from now once our mines in New South Wales and Chile are in full operation.”

By Dr. Jeffrey Lewis
Silver Coins Are The Investment Opportunity Of A Lifetime

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Kingsgate Consolidated Profits Soar as CEO Sees Good Value in Silver

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