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Metal Tiger In Talks With Thai Government For Restart Of Kingsgate’s Gold Mine There, Elaborates On Its Thai Plans

Metal Tiger In Talks With Thai Government For Restart Of Kingsgate’s Gold Mine There, Elaborates On Its Thai Plans
Talks between the Thai government and some other possible backers and the London-listed Metal Tiger has started, the company said, even as it fights on with its dispute with Australian gold miner Kingsgate Consolidated before a shareholder meeting early next year in Sydney.
The AIM-listed Metal Tiger had planned an emergency voting of the investors for replacement of the board of directors of Kingsgate. In its response the Australian company attempted to win support of the investors through a letter to its shareholders overnight. Metal Tiger owns 6.7 per cent stake in the ASX-listed gold mining company.
Metal Tiger has "no credible operating plan" and the wish of Metal Tiger to take over the Thai negotiations might come to an end "without any compensation", said Kingsgate. The Australian company is at loggerheads for a long time with the government of Thailand in relaliton to closing down of its flagship Chatree gold mine in the country.
"No mainstream lender would lend money to re-open Chatree after it has been arbitrarily closed", Kingsgate said in its shareholder letter. The letter added that given the history of the company, any debt against the Chatter mine by the board would show that it is not "competent".
"Although Metal Tiger has no definable plan, it almost certainly would resort to what it has done before, and issue hundreds of millions of shares to the point where your shares would have very little value."
Metal Tiger on the other hand has said that it expects the Thai government to be "responsive" to the "positive proposals" that have been made in the already ongoing talks about the renewal of the mining application for Chatree.
"Substantial value" is possible to be created for Kingsgate shareholders by continuing the mining in the gold reserves that still remain at Chatree as well as by conducting a strategy of exploring highly prospective gold properties that have been earlier dug by Kingsgate, said the proposed new board that is proposed to be composed of experienced mining engineer Neville Bergin and veteran Aussie boardroom operator Dick Warburton in addition to three Metal Tiger directors.
And "given the circumstances surrounding the recent closure, which may include a compensation claim for loss of earnings", advantageous standings with the Thai government in relation to restarting the Chatree mine is being sought to be negotiated by the proposed new board.
Debt at competitive rates from multiple Asian banks and private debt funds would be possible to be obtained after the completion of and obtaining of new mining, processing and exploration licenses, believes the new proposed board which is also extremely confident after it held "several meetings with highly credible financial advisors". Additionally, "once the new board has been appointed, with a view of making a substantial equity investment" have been completed, expressions for conducting due diligence have been expressed by "sovereign wealth funds, private equity funds, major family offices and brokers", according to the proposed new board.
Metal Tiger assured that proposed board intends "limit dilution of value for existing Kingsgate shareholders, including Metal Tiger" even as the proposed board anticipates that the costs of restarting the mine would be more than that US$50m estimated by Kingsgate.
"Equity finance will be required and this can be raised at both the asset and corporate level, subject to the most competitive financing terms. In addition, non-dilutive forms of financing will be solicited including gold streaming.

Christopher J. Mitchell

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