Welcome, ladies and gentlemen. The appointed time has arrived, and clearly we've got our online audience all primed, and we have the necessary quorum. I declare the Kingsgate Annual General Meeting of Shareholders for 2024 open. I would just like to acknowledge that this building that you're in, a new site for our meeting, was designed by Francis Greenway, the architect for Governor Lachlan Macquarie, made in 1810 to 1821. Lachlan Macquarie's gravesite in Scotland, he is referred to as the Father of Australia. My name is Ross Smyth-Kirk. I'm the Chairman of Kingsgate Consolidated, and it gives me pleasure to chair this hybrid meeting. We appreciate your participation today, both in person and virtually via the Automic platform.
Now, if we experience any technical issues today, which I've got to admit every time I'm involved with anything we usually do have, it may be required, depending on the number, a short recess or an adjournment may be required, depending on the number of shareholders being affected. If this occurs, I shall advise you accordingly. If an adjournment is required, the meeting will be reconvened in accordance with the company's constitution. I seek your consent for such an adjournment should this be necessary. Are there any objections to that? There aren't. Thank you. I'll take it as meeting consent. I would now like to introduce you to my fellow directors seated at the table. In the middle there is Nucharee Sailasuta, visiting from Thailand. And I might say her son, Dr. North, and his lovely wife, Khun Cherry, are also in attendance.
There's Jamie Gibson, our Managing Director and CEO.
Good afternoon.
And Independent Director, Peter Warren. Now, also in attendance from Kingsgate, and there's quite a list of them here. I'll have to work out where everybody is. But there's Stephanie Wen, General Counsel and Company Secretary. Where is Stephanie? Oh, there. Dan O'Connell, our new Chief Financial Officer. Jill Terry, our new General Manager, Geology. Bronwyn Parry, General Manager, Corporate and External Relations. Mina Abrahams, Chief of Staff. Olivia Shang, Group Financial Controller. Mary Zhang, Senior Financial Accountant. Corinne Roach, Corporate Affairs and Admin Officer. And our two part-time employees. Yuraphat Uraithan from Thailand. Commercial and Business Analyst. And Kaden Ma, Paralegal. So we have quite you've virtually met the whole of the head office departments here. We only have a very small office, and we're all here.
Representatives from the company's auditors from PricewaterhouseCoopers, Craig Thomason, and Francois Bruder, are in attendance, as well as representatives from our new company share registry, Automic Proprietary Limited. For those present who haven't registered, please do so with the company's share registry, Automic Now. They are located at the table just by the entrance, but it's over there. For our virtual attendees, you can participate in a live webcast of the meeting and have the ability to ask questions and submit votes in real time. To vote during this meeting, please ensure you have registered your shareholding with Automic. If you haven't done so yet, you can follow the instructions displayed on your screen to register and log in. Now, the company has received valid proxy votes from shareholders, and as required by the Corporations Act, I will provide the details to you immediately preceding consideration of each resolution.
Voting for all resolutions will be conducted by a poll, which will take place after all resolutions have been read. I will run through the poll procedure in detail before conducting the poll. The results from today's meeting will be released to the ASX and also made available on the company's website as soon as practicable later today. I intend to vote in favor of the relevant resolutions for all discretionary proxy votes held by myself as Chairman. The proxy votes have been independently collated and confirmed by Automic Proprietary Limited and have been reviewed by the company. Shareholders, you've been issued with attendance or voting cards before today's meeting. When I call for questions, could anyone wishing to ask a question or make a comment, please raise your yellow or blue card.
Wait for an attendant to provide you with a microphone to speak and stand and state your name, then ask your question or make your comment. For those attending online who wish to ask a question, please do so by taking yourself off mute and using the Q&A icon on your screen, which will open a new window where you can type your question. Make sure to start with your shareholding SRN or HIN, which will help us identify you as a shareholder. If you would prefer to ask your question verbally, type your SRN and HIN followed by, "I'd like to speak." While you can submit questions at any time, I will address them during designated points throughout this meeting. Due to time constraints, we might not be able to answer all questions today. Any unanswered questions will be addressed at a later date via email.
We will try and make the meeting as quick as possible, despite covering everything, because we have been warned of potential blackouts due to the terrible energy policy of our current governments. Anyway, while you can, any questions should be addressed to me as Chairman. Please limit questions and comments to one or two at a time. Non-shareholder visitors holding a red card do not have a right to ask questions or make comments. I will now like to give my Chairman's address. As has been reported on numerous occasions over the last few months, the company's flagship mine, Chatree, is currently ramping up to full production capacity. The September quarter marked a steep step change in production, with month-on-month improvements continuing. With two good months in October and November, this current quarter should again be higher than the last.
This has been achieved while reshaping the pit to accommodate access to the lower levels of higher-grade material and still using some of the lower-grade ore in the low-grade stockpiles. The contribution of the low-grade stockpile will continue to decrease as we get further into the main ore body. The ore body, while significant in size, has always been a complex one for geologists to interpret, and over the next six months or so, grades will be variable. However, our mine personnel have a good handle on it and have been able to even out much of the variability factors. Particularly pleasing has been the handling of some carbonaceous ore found in the pit so far, which, while often of a higher grade, may exhibit a lower recovery rate.
Our people have been able to handle this expertly and have achieved high recovery rates without affecting the rest of the ore coming out of the mine. Quite rightly, your company has achieved plaudits from many of its peers in the mining industry with a quite amazing feat of being completely out on our feet and being able to rejuvenate and reopen the mine against all odds. Ours is a unique story, and as is widely recognized, would have been unlikely to have been achieved without the efforts of the current management. We have had great support throughout from the majority of our long-suffering shareholders who have understood the difficulties encountered on our long journey. Everything these days takes longer to do than it once did. It just takes longer in Thailand.
Amazingly, a small group of dissident shareholders have seen fit to create mischief on social media in a campaign of vitriol and personal abuse and harassment that at times has reached way beyond acceptable behavior. Criticism is acceptable. Abuse is not. As the old saying goes, anyone who hasn't made a mistake has never done anything. It is indeed a strange tactic for shareholders to publicly denigrate the company and its officers and not understand that their actions may affect the market and the company's shares. I have been opposed to explain that it was unlikely that the market would properly value your company until we could prove that we could achieve optimum production again. But undoubtedly, actions like this have had an unnecessarily detrimental effect on the share price of your company, despite there being little of substance or rationality to their complaints.
That the bulk of you all shareholders have continued to stick by us is of great comfort to all of us, as we clearly have a few more loose ends to tie up before we can be totally confident of the long-term future of the mine. Finally, I would like to thank my fellow directors for their support and contributions over a long and extremely difficult period of time, buoyed by the fact that we can see the light at the end of the tunnel. We are confident that production will increase over coming months, and shareholders can be assured that as production and profitability increase, aided by higher throughput and the likelihood of continued high prices for gold and silver, that they will be rewarded for their patience and perseverance.
Also, we acknowledge the wonderful contributions of our loyal employees at head offices in Sydney, at the Chatree mine in Thailand, and in Chile. Without them, none of the achievements of the last few years would have been possible. With their continued support, the immediate outlook for the company looks incredibly bright and rewarding for all concerned. Thank you very much. I'd now like to listen to a presentation delivered by Jamie Gibson, our Managing Director and CEO. Jamie, go ahead.
Thanks, Ross. And good afternoon, ladies and gentlemen. I'm really pleased to have an opportunity to present to you the Kingsgate Story at our AGM today. I'm just going to switch over to a handheld microphone because I might actually go down on the floor. The screen they give me, I find, as I get older, I find it harder to see some of the details, and I'll point back towards this one. But hopefully, you should be able to see me. Oh, there we go. How's that for seamless? Okay. The first thing to note is forward-looking statements because I will be making a few. Okay, let's get straight into it. So Kingsgate, I appreciate we've had a lot of our shareholders for a long time, but since the last AGM, we've picked up some new shareholders.
So I thought it might be a good opportunity just to refresh what the asset is, what the key metrics are for Kingsgate today. As you can see there, the capital structure, market cap's around AUD 360 million. We have about 260 million shares on issue, and I'll talk a little bit more about that in a minute. We've got AUD 45 million in cash, bullion and doré, $71 million in debt. Our share register underneath it, and maybe this is an interesting comparison for you, in 2016, before we were closed, Kingsgate's share register was approximately 60% institutional or funds. Now, because of the situation that we've had in Thailand, it's only 20% institutional or funds. Obviously, 80% retail-based, and we're very grateful for that support. But I'll explain a little bit more about the institutional component. And I want to give a special shout-out to the Canaccord guys.
They're actually here, Duncan and Tom. We appreciate you coming. We've picked up coverage from them and Wilsons recently. And the importance of picking up the coverage, particularly from the Canaccord guys, is they, and you may have seen it, they rated us, I think, the most undervalued gold stock on the ASX that they cover based on their metrics. And that's something we'd certainly like to live up to. And just that note in itself helped prompt some larger institutional buying and things like that. Why that's important to us, you've seen our share price. It's very volatile. It shouldn't be because the fundamentals remain strong. So we'd like to get some more institutional holders into the register as well to try and level out a little bit of the stock price volatility. So that's why it's important to us.
Of course, our key asset you may be familiar with is the Chatree gold mine in Thailand, and I'll talk a little bit more in detail about that shortly. The other one is the Nueva Esperanza gold-silver project in the highly prospective Maricunga Belt in Chile, and we're doing a lot of work on looking to unlock the value for that as well, so we'll talk a little bit more about that as we go. Just where am I pointing that? Okay, just the key metrics of Chatree, so you would mostly be familiar with the fact that it was closed at the end of 2016. The Thai government didn't renew a key license that we needed, so we were able to work through the Thailand-Australia Free Trade Agreement to restore the asset to us.
The point I would like to make there is everything we did was fully in accordance with Thai law and permits and processes. The licenses and permits were restored to us a couple of years ago. Since then, we've been working flat out to bring the mine back into production. You're starting to see the fruits of the labor of that over recent months. So what is it? It's a really large, low-grade epithermal gold deposit. We've got 1.3 million ounces in reserve, 3.4 million ounces in resource. It's right in the middle of the Loei Fold Belt, which is a really large gold belt in the Indochina block. It starts up in Lao, which is well known for very high-grade copper and gold deposits, bends through the middle of Thailand, obviously curves down into Cambodia.
Kingsgate has first and only move of advantage because we are the largest Australian company up there, but we've also been there for the longest amount of time. Kingsgate itself was listed on the ASX back in 1988, principally discovered the Chatree gold deposit in the early 1990s, built the plant, kicked off production in 2001, and over the history of the mine, when it was operating, as you know, close to 2 million ounces of gold, 10 million ounces of silver in 2001 to 2016, which was really fantastic. Now that we've got it back, as I say, we have been putting it back together. The processing plant there is a big one because it is a low-grade asset, so on average, look, the nameplate, as you know, there's two processing plants that sit parallel, side by side, plant number one, plant number two.
They're standard carbon and leach flow sheets. There's nothing tricky about them. And they operate at a nameplate capacity of 5 million tonnes. Pleased to say we're above that. And I'll talk a little bit more about that in a minute. The other thing that we have, and this has always been a point of difference for us, is we have a really highly educated local Thai workforce. So when the mine was operating previously, up to 2016, we had more than 90% of our workforce were from villages within 5 to 10 kilometers of the mine. Pleased to say, as we ramp up now, we're over 80%. We'd like to get it back up to 90%. Pleasingly, a lot of the Thai people that worked with us previously went and did other things, but they kept in contact with us.
So we actually got a whole lot of them back when we got the asset back. So that was really pleasing for us as well. What you would have seen as well, now that we have got it back, we put out our first production guidance in the best part of a decade, 80-90,000 ounces with an all-in cost of $1,650-$1,800. Now again, this is transformational. This is a ramp-up. We are getting back up as we go. FY26, 27, 28, we'll be looking at getting up well over the 100,000 ounces a year back to our steady state historical production. But so far, and as Ross rightly says, last month was good. This month should be the best that we've had since the restart. And we're looking at finishing with a really strong quarter.
And of course, there's a lot of downward pressure on the all-in cost as well. And I'll talk about that a little bit more in a minute as well. So just wanted to give you a quick update. Where are we today? So that was the asset. That's what it was. This is what we're doing. So as we said, highest production last month since we've been back. November's on track to be higher than that again. This next one, really pleasing. So in the history of Chatree, we've never done a blast bigger than the one we did on the 18th of November, 1,220 holes. And we got 176,000 bank cubic meters of material. So just to put that into sort of layman's terms, that's about 10 or 12 days' worth of processing all right there, just out of one blast. So we're very proud of that.
The important thing to note about that, it's under the noise and vibration limits for the community. We're very careful to make sure we maintain that. We're very pleased to be able to do that. As I said, processing plants are going well. We're actually above the annualized rate of five million tonnes, and we'll look to continue to ratchet up that as we go. Ross touched on the carbonaceous ore, and you can see it. I know it's not a very clear slide. If you can see, this is basically the mining blocks for the A Pit for this week. This is A Pit West over here. It's pointing to the north. It basically matches this picture up here. I guess the key takeaways from this is that the pink area is the carbonaceous ore. We've run trials on that just through plant one.
You don't mix it all around so that you don't get the other plants offline. But we've had recoveries as high as 89%, better than the ordinary oil that's going through the plants at the moment. And we're continuing to do work on that. The red blocks in that, or the darker colored blocks in that, are the good grade zones. Some of those are better than one gram per tonne. And we'll be getting into that shortly. So you can see it as we get deeper, as we go down, we're getting into better grade. It's going to help the throughput. It's going to help the ounces. It's going to help put downward pressure on the cost. So we're very, very happy about that as well. What else is happening? Dewatering the A Pit North. Now, I know you. Oops, sorry. I'll just go back.
I know you can't see it in this picture, but it's just in behind there. For those of you that might have seen an aerial schematic of the Chatree mine, there's one A Pit Central in the middle. That's the first swimming pool. The one to the north of that is A Pit North. That's the second smallest swimming pool. That's probably the best way to describe it. So that's ahead of schedule. We're also rolling out software that'll help optimize our processing and efficiencies. The regional exploration program's kicked off, and I'll talk a little bit more about that on the next slide. And just on the bottom left, the first three cyanide Isotainers have arrived. And I guess the key takeaway from that is one of the biggest costs to mining is the reagents, the cyanides, and the chemicals that you use to process the ore.
This program and this software and these Isotainers will help us really finely tune the balance of cyanide so we can get it down. That will put downward pressure on the all-in cost. That's a really important cost-saving initiative for us. In fact, I was talking to the general manager of Chatree the other day, and he tells me this is one of 32 cost or efficiency-saving projects that he's working on currently to both improve throughput and put downward pressure on prices. We'll be looking forward to talking about the results of that as well. That's what's happening at Chatree today, this week. It's all systems go. Things are looking very positive.
In fact, just I want to call out too, just on the picture on the left, as you may know, and I'll talk about it next slide, we bought some new Caterpillar equipment this year. In fact, more than half of our 777 trucks are in this one photo. And I was talking to our General Manager, Geology, Jill Terry, before. Said even she's probably never seen that many trucks in one go. So we're very pleased. It's very busy. The ramps are very busy. It's an exciting time to be at Chatree. Just moving on, just wanted to recap the year in review. What have we done since you saw us last? So here's what we've done since you saw us last. 37,000 ounces of gold. Admittedly, a lot of that was stockpiled, obviously.
That's switching over now as we're getting down into the pit, and we've got new equipment. Plant number two, continuing to perform well above its capacity. Very happy with that. Plant number one came online in June this year. We got the first gold pour out of it, and that's been ramping up nicely as well. As I mentioned, we got 41 pieces of new Caterpillar equipment, and the big part of that is a lot of fuel efficiency savings in that as well, compared to the older Caterpillar equipment. So that'll definitely help us with the all-in cost profile. We picked up a debt facility from Nebari to ensure that we could fund the restart, so that saw us through.
And look, the point I make on that is now that both operating plants are fully refurbished and we've got new mining equipment, there shouldn't be a lot of capital spend going forward. There shouldn't be a lot of CapEx outside of some sustaining CapEx on the TSF and things like that. So that, again, should help us in terms of really tight capital management. Really good work from the finance and audit team here to reverse the value of Chatree as well. As you may remember, when the asset was closed in 2016, it had a book value of several hundred million written down to zero. It's important to get this back because it does signify the underlying value of the asset, and it's an important metric for a whole range of reasons to do with financing and otherwise.
Of course, we're working on extending the life of the current tailings storage facility number two to give us another five to seven years operating without having to do anything else there. Again, it's important for CapEx. That's what we've done. Some of the key highlights, not all of them, but certainly the main ones. Just want to jump over to exploration. This bit's really exciting. What have we done over the year in terms of exploration? Actually, before I start on that, I just want to give a quick shout-out. One of the things we didn't have on the list of highlights that we've done for the year is we're actually building a really crack technical team, expert team. Jill Terry's come on as the General Manager of Geology. Dan O'Connell's come on as our Chief Financial Officer. We've actually got Hamish Gillespie-Jones as well.
We didn't mention him in the first round, but he's there at the back doing some excellent work on some energy efficiency for us as well. And we're seeing some really meaningful differences inside the company, how we think about things, how we operate, how we report, all of that sort of thing. So big welcome to them, and your efforts have been really appreciated. I've got Jill sitting next to me in case I make any mistakes here, but this is what we've done. We've spent a lot of time over the last 12 months drilling the highly prospective areas near the mine. As I say, you can see the schematic there on the left. Chatree's the brown area, sort of centre left. You can see the exploration areas that we have both on the Phichit on the left-hand side and the Phetchabun side on the right.
Many of you would know maybe that we actually span three provinces. You can kind of see the boundary line there. It's Laos to the north. We do have some engagement with them, but primarily it's Phichit and Phetchabun. And you can see the prospects that we've been working on over the course of the year. And it confirms our theory that the Chatree system does extend down to the southeast. We're confirming that. So that's where a lot of the work's been done. You can see it. We've drilled six kilometers of reverse air blast holes. We've done 20 kilometers of reverse circulation and diamond drilling. And in fact, this year, I think, Jill, we're planning to do twice as much as that. So we're spending $4.3 million on really proving that up. We've been doing a whole range of other testing.
You can see the rock tip samples there. You can see some of the areas. One of the things I do want to call out on that thing is we got forestry permits as well. And this is the thing that people sort of forget. You know, it's not just mining leases and things like that to enable exploration and other access. You need to get some of these permits. That also signifies the ongoing excellent relationship we have with the government. And we've also given up a couple of areas that weren't as prospective or that we don't need as part of the future growth plan. So that's the high-level footprint. I just want to zoom in now just on a couple of bits. You've heard us talk about this a lot. And if you can see this thing up on the left, that's Chatree itself.
That's the processing plants here. This shows you how close this southeastern complex is. In fact, it's closer. I've said it a few times, closer than parts of the A Pit that we're mining now. So that's where the work is. These two cross-sections on the right-hand side compare to these zones here. So I guess the key takeaway, this is a bit, it's always hard to see the intersections, isn't it? But the bit to take away from this is the pink is the mineralization zone. It's open at depth in all directions. And what we'll be doing this year, we'll be focusing on going down at depth to look at the structural integrity, to see whether the mineralization, confirm the mineralization, and continue to build inventory. We're going to do some infill drilling on it too. We'll be looking at posting a resource on that in calendar 2025.
We think it's pretty special. You can see already some of the results that we've got there. That's a big part of it, happy to take some questions on that a little bit later. We're putting a lot of effort into getting that done, and we think that certainly that's the organic growth. That's the near-mine future for Chatree. We're also working concurrently on getting that permitted into a mining lease as well. There's a whole stream of work going on that, and you can see it. You can see what we've got planned and all of that sort of thing. The key takeaway is big mineralization zone. We want to confirm that it extends at depth. It's plunging in all directions. We want to prove that up. We want to bring it into the inventory, and we want to post a resource on it.
So that's what we're working on. Very exciting 25 coming up. Of course, it wouldn't be a mine without ESG in the community. And we talk about this a lot. And this is really important to us because one of the things we always get is you must have been closed because you didn't do the right thing by the community and things like that. And I do talk about this a lot. This is what we've done just in the last year. Again, I've already mentioned our local workforce, how important that is. I think I said at one previous presentation, there's more than 5,000 households within five to ten kilometers of the mine. Our head of community relations tells me we've been to all of them. They got to 2,600 just in the last year alone.
Some of you may have seen previous presentations where we've posted pictures of town hall meetings where we have 1,000 people turn out. Wherever we are around the mine, we need to bring the local community. We need them to vote for us, a little bit like an AGM. We've had some very successful support over the years. Always better than 80%. In recent years, it's been better than 90% in terms of all of that. Again, it's because we've built the relationships, not just the employment. We do other things. Macroeconomic support. We give health checks. You know, we recycle waste. We've been planting trees. We've had a water filtration system there since Ross was young. I've seen photos of you out there with brown hair doing it. So we've kept a really good, two years ago.
So we've kept a really good relationship with the local community the whole time. And that's been really important. So it's always upsetting for us when I hear things and say, "Oh, you mustn't have managed them properly," all of that. We could have had thousands of people on the street protesting the closure. We didn't. We've maintained good relationship with them. This is why. And a big thanks to our community relations team. We've got about 30 or 40 people up there working around the clock, doing all the engagement, doing all the permitting, doing all the mapping so that the community is fully aware of what we're doing. And of course, most of them are our employees, so that really helps as well. Important to note. Okay. Okay, just jumping across the Pacific. This is our other project.
Look, a question we get on this one just before I talk about it a little bit is, well, what are you doing with it? Why is it taking a little while and all of those sorts of things? The thing with Nueva Esperanza, and some of you know the history, Kingsgate picked this up in 2011. It was a patchwork piece of ground from Anglo and Kinross. We thought, really interesting. It's obviously in the world's largest underdeveloped silver projects. It was the largest silver project mine itself in the late 1990s. We've just been conserving our money, of course. We've been putting it all into Chatree, all into the Chatree restart, everything else. We got it to pre-feasibility stage in 2016. I think the assumptions then, I think at around $19-$20 US an ounce silver, it was profitable, $30 an ounce should be.
Obviously, we've got to update some of the assumptions, but we just didn't want to stretch ourselves thin. The focus was getting Chatree right. Now that we're starting to ramp up Chatree, we're starting to rebuild our executive team, getting some more capability on Board . We're having another good look at that. We have been approached to do something with it out of North America. We make no secret of that, but in terms of the workstream and how that goes, we've got to do an updated reserve and resource, which we're working on, and then we're looking at updating the assumptions for feasibility and the whole workstream that comes out of that. That'll include some more exploration work next year, and then what a deal structure might look like if we go ahead and do something at North America. But I can assure you work is happening on.
In fact, three weeks ago, the Chilean government were here in Australia for IMAC. We met with the vice minister and all of the agency heads that we needed to talk to, and we've asked that if we could accelerate and obviously rebuild that relationship in terms of other things that we need for this project. Bearing in mind that it is permit-ready, we've kept it in good order, and we've also got water and power options there as well, which is something that's very important in that part of the world, so we do like it. You will hear more about it. We appreciate it's taken us a little while, but again, we've been conserving resources to make sure Thailand goes well, but this is a very exciting project, and in fact, because silver, where it is, the fundamentals are strong, we've had a lot of interest in it.
So we'll certainly be moving to unlock some of its value as well. And again, look, I always try and put our value proposition out there. Look, it's a crowded marketplace. A lot of gold producers, a lot of people have got interesting stories. A lot of people are in difficult jurisdictions, a lot of people in good jurisdictions. I guess what makes us a little bit different is because we don't actually have a local asset. But what is good about Chatree is it is a proven asset. Between 2001 and 2016, it was one of the best low-cost gold mines in the world. It's a huge system. If it's managed properly, it should be there 50 to 100 years. We've got it. We're ramping it up. We know we can make it run better. We've got financial strength. We funded the restart. We're making money.
And we've got a tight capital structure. And this is the point I really want to reiterate as well. When I said on the second slide, there's only 260 million shares on issue for Kingsgate. And that's incredible considering Kingsgate's been listed since 1988. You know, we haven't been quick to go to the equity market and all of that sort of thing because the Board 's always been really focused on keeping the capital structure tight, giving meaningful returns to shareholders and things like that. So we've managed through with debt and other facilities at times when it has been difficult. In fact, we went about six years with no money and Chatree helped us there. So we're very grateful for that. But that's an important one to remember. And I've mentioned a few points about their focused, disciplined capital management.
As I say, we've got Dan O'Connell on board who is already driving meaningful change in terms of reducing spending, cutting out some duplication, and really ratcheting down that all-in cost. We've got 32 efficiency projects running at the Chatree level to do that. And he's looking everywhere else to squeeze margins and save money. Unlocking growth. As I said, we've got our first production guidance out. That'll continue to get better from here. We're coming into some better grade as we go deeper. So we feel like it'll be a good quarter. As I said, really aggressive exploration program underway. Jill's going to be busy. In fact, we don't expect to see Jill until this time next year. She'll be flat out proving up that reserve and that resource for those other, for the A Pit and for the southeast corner.
And of course, Nueva, we want to do something with that. I feel that we don't get any value for that on our balance sheets, basically a handbrake. You know, we don't get any share price recognition for it as well. So it's important that we bring that forward. But we don't want to cripple the Chatree asset by doing that. So that's why we're doing it in a staged way. So that, I think, is my presentation. And happy to take questions from there. Thank you.
I t's not good. Vito Interlazzi, I want to stand up because I've got things on my lap. My main question, I think everyone else wants to know, what is the current ore grade going into the pit and how much is going into processing after that? What's the ore grades?
Thanks, Vito. Look, we get asked that question a lot and it's important.
Look, probably the first thing to say is as we go deeper down into the pit, the grade does vary. But I was talking with Jill earlier, and I think we've got our run of mine now to 0.5 grams or 0.6, 0.6 grams or greater. So that doesn't affect our sort of throughput into the plants. But having said that, there are periods, and the idea of showing you that mining block for this week with the colours where there's areas that are over one gram, there are periods when you go over that. In fact, Jill told me just before today when we were catching up, I actually found a block as well. And I just make sure I get this right, Jill, between 40 and 90 grams per tonne, I think, assay results. So obviously, exactly. So we know there's some higher grade blocks again.
I think we maybe just have started on the top of that. But I think about it as greater than sort of 0.6 as we go. We're hitting some better zones as we go down, as evidenced by that block. It'll change as we get deeper. It gets better as we get deeper. Sure. Well, look, this week, I think we had some around 0.8, 0.9 this week. And there's some even higher grade stuff coming over the next week.
D on't worry, it's not three.
I'm disappointed.
How long will it take you to get, say, ML approval for anything going into the southeast?
Thanks, Keith. And as part of that process, we started on this a little while ago. Like any mining jurisdiction, it's not quick. We're estimating two to three years because we've got to get landholder approval and things like that. Now, we have a team.
In fact, we have a project manager on that area as well. There's a lot of resources going into it. I don't want to give you a definitive answer because it may change, but I can assure you it's a priority. We've already started the discussions with the government and everything else. So we'll keep you posted. We'd like to think we could do it quicker than that because we've been there a long time. But there's just a few residual things with landholders and things like that that we're currently negotiating. And I'm just reminded that, of course, we've got nine years production without doing anything else. Obviously, we'd like to build inventory. But yes, that's a top priority because we see that as our key organic growth pathway.
Good afternoon, Mr. Managing Director. Pardon my voice. It's a bit poor at the moment.
But basically, as I read your reports, I expected approximately now a report from Cube Consulting of West Perth on the resource or reserves on the A Pit and also on Nueva, the whole resource and reserve. When is that going to come out?
Yes, so we are on track. I might just get Jill Terry, our geologist, to talk through the detail and what's taken a little bit longer. Jill, if you wouldn't mind, please.
Okay, so I guess, not trying to be too technical, but there is quite complex geology, as we have mentioned. And so we wanted to do this updated estimate properly. And we had those discussions when we were scoping with Cube. That has involved modeling many, many lithological units to actually get the result that we need.
And that is a simple and transparent resource estimate that we can hang our hat on that will inform a reserve that we will have much higher confidence in terms of what we are planning and then delivering what we plan. So again, it was in the hands of the consultants in terms of how long that was going to take to do that modeling. Because it was very complex, we did lose some ground in terms of our original schedule for that. My initial intent was that we would have completed that work by the time we put out the annual report in October. But it was more complex than we expected. So I had a discussion with Cube only last week. And we are still on track to deliver before the end of this calendar year. So it will happen.
But I think the really important piece is that we got it right and that we did it properly. Meaning before December. Before the end of December, yes.
I've got a few questions to ask. Last year, I asked, when can shareholders expect to return to dividends? And you replied, in two to three years' time. Now, one year has passed and the company has returned to full production. Are we on track to receive regular dividends within one to two years' time?
We would certainly hope so. It's very hard to define. But I'm glad that I was that conservative last year.
So do we take it that we're still on track?
Yes, as you can see, we've had some delays and some things taken longer than we expected.
Yes, I mean, the whole thing is, and I keep pointing out, we have to get that A Pit into a workable mining pit. It wasn't. It needs quite a lot of work to get it there. What we're doing at the moment is pulling back on things, expanding the areas. While we're doing that, we're getting some grade. I said before, it's quite variable. Over the next six to 12 months, whatever, we will have that in proper shape. As we've said before, the production levels have been going up each month in the last few months and look like continuing that way. We would be very hopeful of being able to be in that position in that kind of time frame. I would even hope sooner, but nevertheless, no commitment on that.
Next question.
When I visit the Kingsgate page on the ASX website, there's a glaring weakness that stands out. It says, last paid dividend, April 2013. Now, that's not a good look for Kingsgate. Not an invitation for new investors. And not paying a dividend for 11 years, I mean, won't generate much enthusiasm from new investors. So what I'm proposing and what I think Kingsgate should do is declare a one-off special dividend in February 2025, just a one-off, to celebrate its return to full production. And that will reset the ASX website page on dividend information and, you know, restore credibility to Kingsgate's reputation as a successful gold miner. It would have a positive impact on the share price. And I would myself propose a special dividend of AUD 0.05, but, you know, I leave it to the Board to work that out.
We certainly take it on Board .
As you probably know, I've got a few shares as well. I would be happy for a dividend. That period, as you said, we were closed for eight years. I think it was a little bit difficult to do anything in that period. If you go right back and think you want to go back into history, if you go right back, we set a precedent in the mining area in the early 2000s in paying dividends to shareholders. I think that we have a history of showing that we try to look after shareholders. And that will continue while I'm still here.
My immediate concern is resetting the ASX website page because that's not a good look the way it stands now. That's why I suggested a one-off special dividend. Since we have returned to full production, we can celebrate that.
I hear.
But you have to consider, to pay a dividend, you have to make profit and have quite a bit of cash there sitting there to pay it out. Otherwise, you can't operate. So it's a matter of juggling at the moment. We got $45 million there. No, that was for a small period. There's probably, well, Dan, what would the latest cash figures be?
Oh, look, there's variability through the period, but look, they should be broadly aligned with what we've disclosed. Look, I'm with Ross. My background is being very positive on looking after shareholders, both in terms of dividends, but it can't be at the expense of the overall balance sheet and making sure we build a sustainable business and really grow the business for the benefit of all shareholders.
So capital management is all about balancing up the opportunities we have being a holder of some fabulous assets that we can get a great return by investing in and returning those cash to shareholders. And you can rest assured that as soon as we don't feel like we can get you an excellent return, we'll be looking to return any of those excess funds.
Thanks, Dan.
Right. Now, regarding the Nueva Esperanza project in Chile, how long would it take to get a definitive feasibility study and what will it cost?
So when we got that project, the pre-feasibility stage in 2016, and there was a range of cost assumptions that went with that. Obviously, with inflation and the world, that's moved on. So you'd likely think that some of those assumptions will come out higher.
The first thing we need to do that, though, is an updated reserve and resource. So that's what we're working on in terms of stages. So we're on track, as Jill said, to have that before the end of this calendar year. And then we'll put out some timing next year on the work stream. But we need that first, and that'll determine how long the rest of this will take. I'd like to think it wouldn't be as long as, say, a normal process because we have got it to pre-feasibility stage. There's already a lot of the backend work's been done. It would be largely updating those assumptions, different sensitivity, like different price ranges. Obviously, silver's not where it was when we did it. Neither is gold. In fact, I forgot to say, sorry, I just want to add this about Nueva Esperanza.
I know some of you have heard me say it before. It's become to our attention recently that in a lot of the original work that was done at Nueva Esperanza, and this obviously predates Kingsgate's ownership of it as well, but it was never properly assayed for gold. We think, you know, as part of our work program going forward, we'll be looking to build gold endowment in it. I don't know why that is. We've spoken to Kinross and people over the years. Just back to your original question, we'll put out a timeframe on it as soon as we've got some more information on the resource. I'm just asking a rough estimate. Are we talking about three years, five years, more? Look, I'd like to think we could do it quicker than both those timeframes, but it may take two years or it depends.
It depends how complex and how much data we've got. But because we have got a basis to start, I'd like to think we could do it certainly quicker than that. And what is the approximate cost estimate? Just a ballpark. So the pre-feasibility, and again, you've got to bear in mind this is eight years old now. And obviously, it was done on a different silver price and a whole range of things like that. I think the capital spend was around $205-206 million to build it, to operate it. I think the production profile was between 90 and 100,000 ounces a year, gold equivalent, and things like that. Obviously, there were things that didn't take into account some of the power options that we now have. There's a national power line that goes past now. We've kept the water boards in good order as well.
There's been some changes to the water policy in Chile, so we're just working those things out as well. But I don't think, you know, we can rely on those assumptions. We'll update them, but we'll be working on it
and just like make some comment on silver, like it's going to play a critical role in the renewable space. I'm focused on the renewables here, including solar cells and electric vehicles. Now, The Silver Institute has put out some information, silverinstitute.org, saying in 2022, it took 118 million ounces of silver to produce the photovoltaic cells, the solar cells and one year later, the consumption was 193 million ounces. That is a 64% increase in the consumption of silver for solar cells alone so that's a massive thing and the other thing is the electric vehicles.
There are estimates put forward that a single electric vehicle requires one to two ounces of silver for the connection between the battery and the components. So that is going to be a massive uptake of silver. So I think the next boom in renewables is going to be silver, and we should be poised for that. And it is my suggestion that we should be developing this Chile resource on our own and not as a JV or not as a spinoff, because then we'll be just a spectator with someone else reaping the benefits. I think this development should be done 100% Kingsgate-owned.
Look, we hear you and we share your sentiments on silver. We've always liked silver. You know, we originally had the Bowdens silver asset as well. We've always been bullish on silver. We think that the fundamentals are there for a continued rise in silver.
We hear what you're saying about Nueva. Look, while it's a little bit early to talk about structure, Kingsgate is working on the premise that we would maintain the majority ownership or at least be able to dictate what we do with it. Maybe to give you some comfort on that, we make no secret of it. When we were going through our issues with Thailand, we looked to monetize that asset, and we didn't. We had offers for it. One of the reasons we didn't take any of those is that some of those deals didn't give us the cash we needed to get through our Thai situation. Now that we have kept it and we've kept it in good order, we won't be giving it away for free.
Thank you. Oh, thank you.
The Court's Lease.
What are the Board 's plans for that lease? You fought so hard to get it. We haven't seen much in the way of drilling results. It's an odd shape to sort of fit into the mine plan. What are the Board 's proposals in relation to the ore within that lease?
Thanks, Aidan.
We might give that to Jill. Yeah, that area is known as the A Pit West now. Yeah.
Yeah, thank you. Look, we haven't done any major additional drilling there. Again, we are waiting for the resource estimate to be delivered, and that will then inform us in terms of areas within that estimate that we need more information to improve our confidence. So I guess it's a progressive process that we wait for the resource estimate that will tell us the work that we need to do in that space.
That way, we don't waste money drilling if we don't need to. Timing, well, I guess because we've said that the estimate will be released in December, we will look at that data at that point in time. We will then schedule in drilling where we need to. In fact, we were just talking about that this morning. So it is on our list of things to do. But again, we follow a process to make sure that we spend our dollars wisely on geology drilling.
I think it suffices to say that there will be some ore coming through that court's lease. But the main thing about the court's lease was for us to get proper access to the higher grade ore at the lower down in the pit. Because it needed to be done to get to that lower grade, the higher grade ore.
So that's why it was so important at the time and why we got into this ridiculous shape. It's almost like a carrot going down. So we have to expand that. But Jill's being a bit conservative on that. There will be some ore coming through at times through what was in the court's lease, I think.
Oh, yeah. Thanks, Mr. Chairman. I enjoyed your acknowledgment of country to kick off the proceeding. Could I ask you specifically about TAFTA? So as we know, sovereign risk is front and center in gold mining. How would you describe the current situation in terms of negotiations with the Kingdom of Thailand in regards to your claim?
Thank you very much for the question. What doesn't seem to be quite appreciated by some of our shareholders is that we see the TAFTA situation as an asset.
We've basically used it in our negotiations with the Thais as an insurance policy. We negotiated all of the licenses and all of the permits that we could get. We were asked to say what other things we needed and what needed to be done. And there was a number of other things. They have completed some of those things. There are still some of them outstanding. An answer to your question about your point about the current government, this current government that we've got is much, much more commercial than the previous ones. There's no doubt. But it's Thailand. It's been quite volatile. Even with this new government, there's been a number of changes in things. We've got a new, we just got to know the minister for our thing, and suddenly something happened, and we got a new minister.
For people, as I said to the Board earlier, I've got a rather cynical story about Thai politics in the last six months, but it takes about five minutes or so to go through, but I won't do it here. But there's been a number of people going to the Constitutional Court and trying to change things and have changed a couple of things over recent months. There's currently one before the court at the moment that's claiming that Thaksin Shinawatra has too much power and too much influence on the ruling Pheu Thai Party. How that will pan out, we don't know. But the trouble is we get into a situation and we're encouraging negotiations. We get a couple of points ahead, and then suddenly everybody's looking at their backside again and looking after their own interests. So at the moment, as of today, it's quiet.
We didn't know for a few months ago, for a while when ministers were changed, who we were dealing with again. But the general attitude by this government is totally different. They have shown that they are commercially oriented. They understand that they need overseas investment into their country. They've always had overseas investment. They've got a lot of major companies from around the world operating there. And they know that our situation is an impediment to getting stuff in. So they know that. The trouble is that there are other things that come in at the same time. And you will note that they agreed to extend the negotiations for another year, only recently. And that clearly is in their mind that they know that there's other things that are going to be happening over time. So we're doing all we can.
As I said, we had some of the best, say, six months ago, we had some of the best meetings we've ever had up there. They even had a very, very senior person apologize to us for what had happened, and that's unheard of. So we've made enormous progress, but we're caught up in their volatile political situation at the moment. So that will change, but I'm sorry, I can't add much to that.
Sorry, can I ask a supplementary question to that? What's the attitude of the Australian federal government to your claim? And what involvement have they had through the last several years through the process?
Throughout the years up there, we've had very, very good relations with the Australian government, with the Australian ambassador. Each, I think we've been through about eight. They've been as helpful as they could be to varying degrees at different times.
The current one has been very helpful. But as far as government participation in anything, they could help us and do things before we started the TAFTA negotiations. Once the TAFTA case started, they were not able to be involved. So they're very supportive. They understand we are still the largest Australian investor into Thailand. And we get a seat at any meetings or anything that anybody wants on anything up there. But it's through diplomatic circles. But they're quite helpful.
Hi. You've mentioned that we're at one of the most undervalued gold miners in the world, and our share price is being heavily manipulated. And you've dangled this carrot of buybacks for a long time now. When is this actually going to occur?
I think I've expressed on a number of occasions that I approve of buybacks and would like to do them.
The fact is that you do need to have a reasonable amount of cash to do everything that you need to do in a situation we're in before we could do buybacks. We would like to do so. Well, first off, we were restricted with our borrowings that we had. In the last borrowing negotiation, we made sure that we had an exclusion in there that we could do buybacks and dividends, provided that we did certain other things, kept a certain level of cash, etc. That's there in this current one. There's a few other little things here and there that are preventing it. A lot of people just think, Oh, you've got AUD 1 million, you can go and do AUD 1 million. By the way, that's not the case. It's got to be done prudently.
My new CFO, Dan, down here is also a fan of them, but he's on me all the time on restrictions on things and how we have to be very, very careful.
Yeah, look, I agree with Ross. I've got a history of being focused on returning cash to shareholders through both dividends and buybacks over a long period of time in different roles. In terms of looking after shareholders' interests, I think that focusing on the ramp-up and making sure the ramp-up's successful and our balance sheet remains strong are equally critical to being successful. And you've got to make sure those things are taken care of before you then move into doing a buyback. So it's multifaceted.
And so really, I think at the moment, we're really focused on the ramp-up and making sure the balance sheet remains robust and then focusing, as Ross says, on doing a buyback.
50%. Is that realistic? So we're voting on a buyback of up to 50% of the shares like we did last year. So with what you know about the company and the expectations, is this realistic or not?
Oh, look, if that question's to me, I'll answer it to say, based on normal operations, I wouldn't expect a buyback of that size, and that would be highly abnormal. But what it does do is add flexibility if there are other liquidity events for whatever reason to enable a buyback.
Sorry, I think you can rest assured that I'll be keeping Dan on his toes on the ability to do something like that in the near as soon as we possibly can. But he's even more conservative than I am. So it's an interesting situation at the moment.
Can I just chip in a point of information? Buybacks are not guaranteed to improve share prices. Quite a few of them have occurred. And what's happened is the company ends up paying a fairly high price, and then its share ends up trading much lower a couple of years later. So it's no guarantee that you can improve your share price. You get far more points, in my opinion, for paying dividends than doing buybacks. That's my view.
Yeah, I agree, Keith. However, in our situation, I think it would. And I think even the announcement of doing it probably would.
But it's one of these things. I understand the arguments for and against. It's a bit like the arguments for and against shorting, I suppose.
Paul Griffiths. Just a brief question for you, Mr. Chairman. Is there any possibility of developing a joint venture for the development of Nueva Esperanza with a reputable company?
Yes, Paul, thank you very much. We've had ongoing discussions with a number of companies for a long time. And when we were in America earlier this year, as silver was rising, a number of the majors approached us again to look at it. And a couple of them have said they were going to go up there. I'm not sure if they've been up there. Some of them have. There is a distinct possibility that something. The trouble with Nueva Esperanza has always been that it's got a high upside exploration potential. There's no doubt.
It's a little bit small at the moment for a major company. And they understand they're going to have to spend quite a bit of money on exploration as well. So it's one of those things they've got to develop, I think. But I think it's still seventh or eighth largest undeveloped silver deposit in the world at the moment. But yes, it's not out of the question. There certainly has been some interest from majors.
If there's no more questions in the room, we can go to some online questions. So there's a question here about what has been spent on the Nueva Esperanza project to date, the cost of purchase, water, and salaries. A general answer to the nearest 10 million will help inform us.
We'd have to take that on notice and come back.
We obviously had the asset for 13 years, and for a lot of years, it was on care and maintenance. So if that shareholder would like to provide their details, we can provide a written answer to that.
Will do. Next question. Where are we currently at with the all-in sustaining cost? We're currently 62% above guidance.
Oh, that's working. Thank you. Look, we always expected the first quarter to be above and probably well above the target zone. So as we've flagged, we're in ramp-up. We only had the mining fleet for a small portion of that quarter. The full mining fleet was only available to operate in the current quarter.
So you will have seen, actually, recently we released some information in relation to October month end, where you saw there was a huge turnaround in terms of the amount of ore sourced from the pit versus ore sourced from the lower-grade long-term stockpiles. So the net impact of having the mining fleet on hand, having the higher-grade material going into the mill, and drawing less off the stockpiles is there's less non-cash, I call it, stockpile costs going into the All-in Sustaining Cost. There's higher grades and higher gold production, as we've spoken about. The months keep improving. And our sales are catching up as well, if you like. And as we all know, All-in Sustaining Cost is a function of sales.
So we're definitely seeing decreases in the All-in Sustaining Cost across the Board .
The only exception to call out is the fact that the gold prices have been higher than when we set the budget, and the silver prices, so the royalty will sit a little bit higher, but overall, it's still absolutely trending down in the right direction. W e're seeing production ramp up, and we are maintaining our guidance both in terms of production and costs.
And there's a very, very active operation of everybody up there looking for places where they can cut costs and make more efficiencies.
No, that's a great point, and even on top of that, absolutely. We're very focused on costs in every aspect of the business. As you'll appreciate, cyanide's a huge cost, and we're dosing well below what we thought we would and still getting great recoveries, so yeah, there's some really positive stories in there as well.
And everyone can attest to the focus on costs. As Jamie called out, there's 32-odd cost reduction projects.
Great. Another question. We've covered a bit about Nueva already, but anything further about this one? What structural alternatives have you thought about for Nueva, sale, partial sale, or spin-off to realize value for shareholders? Is there anything further to add on this question?
Look, I think all options are on the table, but look, prefaced by these, that it'll be the option that returns or benefits shareholders the most.
Great. Another question about reserve and resource update timing, which Jill has addressed. And then there's quite a long question here from Stephen. So this is a formal question for the auditor when we deal with the accounts. A question on the accounts.
When do we last run a full tender for the audit job, and when are we next intending to tender our external audit work, and there's a secondary question? Could PwC's current partner, Craig, please comment as to why we are still carrying negative equity of AUD 84 million after racking up accumulated losses of AUD 822 million? This doesn't bear much resemblance to the market's assessment that our equity is worth AUD 352 million. Could the Chair and CEO also please comment on this disparity between book and market value?
Thank you for the question. The disparity between the market value and the book value is simply because when you do an impairment reversal, it reverses the value back based on the written down value, which is based on the old historical cost. So it's a very different concept to market value, which is based on the share price.
Great.
And then one further question. How confident are you with reducing royalties as part of TAFTA? They seem unsustainable.
Look, that is one of the areas that we're working on. And look, it is commercially sensitive, that. So I won't say anything more about it in this forum, but it's certainly something that we are engaging with the government on. And as soon as we can say something, we wil l.
Great. And another related question with a similar answer. In your discussions with the Thai government thus far, what has been their attitude towards the existing royalty structure and rate? Similar answer.
Look, the thing to say, because we're the only gold mine in Thailand, there's not a lot of, I guess, governmental knowledge or understanding of the process and the operation.
There is acknowledgment, though, that obviously, and I know our shareholders know this, that our royalties at these gold prices are approximately one quarter of our all-in sustaining cost. So you can see what we can be and hopefully will be if we can get meaningful change on it. But look, it's about us educating them too that if we can get some relief in this area, that obviously helps us grow the asset, and it helps us return some of that revenue back into Thailand. So it's effectively a win-win situation. But again, just because of the sensitive nature, and as the chairman pointed out, we're also in the early stages of taking this up with the newest government, the one that came in in August. So I don't want to prejudice anything that we're working on by saying too much here.
Great.
I think that's all the online questions for now.
Just in relation to plant number one, how long before you think it'll be fully ramped up? And are there any current limitations to that process?
Thanks, Peter. That is a really important question. So just to delineate a little bit, obviously, plant number two has been running very well for a long time. Plant number two was built and commissioned in 2011. So it's 13 years old. Whereas for people that may not know, plant number one is the original plant, the one that was built there in 2001. So it is a little bit older. And I think from memory, actually, even the SAG and the ball mill are in reverse order. So we've done a little bit of creative engineering to make that work over the years. It doesn't cause any issues with productivity.
But it just meant that we ramped it up a little bit slower than plan number two. When the guys turned on plan number two last year, they were able to get it up to nameplate and better within sort of four to six weeks. Because plan one is another generation older, particularly with some of the gearboxes and things, we just wanted to ease into those. We've actually got, as we mentioned, part of these 32 programs that we've got on efficiency. One of them is looking at some modifications to plan one to do that. So look, in the very near future is the answer. In fact, the guys are going to do some increased throughput through it in December. And we've got contingencies for that. But we're just going a little bit slower just because it's a different animal to plan number two.
We don't want to have any unplanned downtime or any maintenance issues that might stop us having what should be an otherwise very strong quarter.
Speaking of plan number one, how many megatons per annum is going through it right now?
So as I may have mentioned, the combined nameplate capacity is five. Plan number two is 2.7. Plan number one is 2.3. I think it's close to its capacity. It may be just under it at the moment. And again, there's times when it goes over it. There's times when it goes under it. Part of this improvement process is changing some things in it. But we're going to put it back up to its nameplate maybe fractionally over from the start of December. So again, appreciate it's only been operating five months. We're just making sure we don't blow it up.
I've been debating this for a long time, but I'm not really sure whether it's normal practice. Would it be feasible to do the refining ourselves rather than offload it to someone else who also makes a profit over there? Like we can keep the money for ourselves if we could separate the gold and silver ourselves.
Look, I like that question, and I like the idea of that, so just to give everybody a little bit of history, when Chatree was operating previously, we were able to send our doré to Heraeus, a refinery in Hong Kong, and that worked quite well. What happened during the shutdown? The Thai government changed the gold policy, and one of those changes was that gold produced in Thailand must be refined in Thailand, so that's how we come to have PMR.
But certainly, internally, we've looked at how you could refine it yourself. One of the things we'd like to do is make sure if we do do it, do it in areas they've got special concession areas in Thailand where they've got tax exemptions and things like that. In terms of talking to our metallurgy team, they tell me it's only two or three steps further on from where we are in terms of the doré. And I know the chairman's going to say this as soon as I stop talking, but the margins really aren't in the refining. There's no real money to be made doing it yourself. Plus, there's a whole lot of extra risk at the moment when the doré goes in the back of our international courier van. It becomes their problem, which is good and not our problem.
So rest assured, we're looking at ways that we can value add. One of the things we have looked at and we haven't done probably as much work as we would like is whether there's any value-add industries. Because we refine gold in Thailand, it's very revered there, obviously, as part of the Thai culture, which is great. And similar, is there some advantage in doing a bit of horizontal work on coins and other commemorative things? But of course, the bottom line there is we don't want it to impact our cash flow, but maybe there's some value-add opportunities over time. So we've looked at it. If we can make it feasible, it's on the table.
What kind of cost would it involve to do it ourselves, like setting up the plant or whatever it is, like approximately ballpark?
Look, the cost to actually build the refinery is very low, right? It'd be a factory license. It'd be a very small footprint. I've been down and I've toured PMR's refinery and things like that. That's actually not part of it. It's just the margins itself. Unless you've got really, really high throughput, millions of ounces to get the small margin, that's where you make the money. It wouldn't be really economic for us, let's say, 120,000 ounces unless we could maybe value add or do something like that, but it wouldn't be a huge cost, but then it comes with its own liability, as I say, because it's our gold then. We've got to look after it. We've got to manage it. We've got to then on-sell it from there.
Thank you.
There's a couple more online questions that have come through.
The management team have been expanded with positive results. Are there similar plans for refreshment of the bo
ard? Did you repeat the question?
Oh, didn't hear it. Okay. The management team has been expanded with positive results. Are there plans for similar refreshm ent of the Board ?
It's always an area that we're looking at. Clearly, we do need a rejuvenation of the Board at some stage. But those asking about it probably don't really appreciate the things that we've been through over the last six or eight years. One of our directors sitting at the table today was actually named in a court case and had a problem where he could have been sent to jail. Isn't that correct, Peter? I was advised for many years, for a number of years, not to go up there because it was too dangerous.
We have preferred to try and get the thing running properly and up and running and show that it can be done before we got other people with the same liabilities as we've had for all this time.
Next question. What is the timeframe for a Thai IPO? What would hold this back? And is this still part of the strategic direction of Kingsgate?
An interesting question. We've said that it's always a fallback position. And in the negotiations with the government, we have kept that as one of the things that they have agreed that they would assist with. We have had preliminary discussions in recent times with various people about proceeding with it at the moment. There is a lot of work to be done. There was a lot of work done previously on getting prospectus together.
We're able to use some of the work from that, but a lot of it has to be upgraded. It's certainly one of the areas that we're keeping our eye on and watching. Unfortunately, the focus has been on getting the whole business up and running and production up to full production. It's there in the background, and it will continue to be something that we look closely at over the next six to 12 months.
In your presentation this afternoon, you mentioned ramping up production to over 100,000 ounces by FY28. Is this in line with what you have previously guided? Do you expect production to only be around 100,000 ounces in 2028?
Look, I think as far as we can turn, the guidance remains current.
Probably the best way to answer it is if we hit some exciting patches or better, we'll update the guidance as we go. Again, we're looking at these things conservatively. We are taking market signals. One of the things you don't want to do is say things that might not happen. We're being conservative. Based on the ore body, the work we're putting in, we think it's a reasonable guidance. If there are material changes at such time, we'll update the market to reflect that. What, if anything, has to get paid back to Zurich? Just in relation to this, again, as part of our journey over the last eight years, Kingsgate was able to survive for a period on some funding that it received under a political risk insurance policy from a Zurich syndicate of insurers. I think there were six of them.
That was worth $55 million. Probably the thing to say, because again, that's a commercial agreement we have with the insurers, is that our relationship with the insurers is good. It's not a contingent liability on our books. And we'll maintain our relationship with the insurers until such time as that situation changes. But there's nothing that needs to be done immediately about it.
One further question. Do you believe the share is significantly undervalued? If yes, do you think it makes any sense to pay even a dollar of dividend in preference to using those shares to buy back undervalued shares? And then a second question. In attracting institutional shareholders, how important do you think it is to demonstrate a thorough understanding and discipline in allocating capital?
Second question first, really important. And that goes back to what I was saying during the presentation.
We're very grateful for the retail support we've had over the years because you've kept us going, and it's been really positive. One of the things we do, we look at our share price swings around wildly for no fundamentally shouldn't be in terms of the operation and where we're at shouldn't be the case. We have probably had some larger holders that have been waiting for gold price to improve or share price to improve that have exited. But we want to, and this is why we've been talking, particularly focusing on some institutional investment is to get them on because if they take a decent position and accumulate, then they should put a bit of stability in the share price.
Of course, that's a good market signal to have as well because if you've got some funds that are recognized in the gold space that have taken a piece of you, then the positivity flows on, and then you find that they start accumulating as well. Sorry, but it's just the first part of the question again.
Do you believe the share is significantly undervalued? If yes, do you think it makes sense to pay even a dollar of dividend in preference to using those funds to buy back undervalued shares?
Yes, we've always thought the share price is undervalued. As I said, our colleagues at Canaccord have done a fantastic note with a whole range of metrics, and you can carve it up where we sit on. This is one of the things. Just want to share a bit of feedback.
We've talked to a lot of investors in recent times, and one of the main things that comes out of that is just the valuation, that we are undervalued for what we are by peer comparison, and they all scratch their head as to why. One of the reasons we need to spend a bit of time with these people is the Thai story is a difficult story. It's not easy to succinctly summarize because if you put a presentation out and then you've got an eight-year gap, it's like a job gap on your resume. What did you do for those eight years, well, nothing because we were closed, so you've got to explain that eight years of nothing, and a lot of the risk committees and credit committees of these funds and investors, they shy away from that.
So you've got to give them comfort that if they're going to take a position in your company, that you've got your house in order and that you've taken every possible step to mitigate the risk of them coming on Board . And that's what we're trying to do. There's definitely been some come on. We'd like to get some more. But I think what's important for us is that we continue to show operationally that we're doing the right thing. We look to get another good quarter out. As Dan said, we'll be looking to reduce the cost. Ounces coming up. Jill's working her finger to the bone on the exploration. I think in terms of capital structuring, that's been on the Board 's mind, whether it's a dividend or buyback. And Ross very politely put it before.
Look, there are some internal processes that take a little bit of management around that. One thing is we have a debt facility. Yes, they'll let us do it, but there are internal metrics that we must keep in good order as well because I'm sure as shareholders, you would be pretty upset if we came out with a market release saying we've acquired some shares, but we've breached our covenants and things like that. So you'd appreciate we've got to do things that will keep our value at the highest possible level.
It's certainly something we'll continue to assess, particularly if we had the ability to pay a dollar share dividend, that would be fine.
Yes, Ross. This is probably more to the accounting side. There was an online tender for auditor. You're doing 32 cost reduction programs. Have you thought about a tender for the auditor?
The fee seems to me astronomical.
Yep. So we're always thinking, look, take a step back. I think tenders are the best way to get value for money. Absolutely. Coming in, I'm very focused on making sure all our finance processes are where they need to be before we go out to tender so that we're well set and well positioned to get the best value. So I would say, yeah, I think it's good governance to always be reviewing your auditor and to take it out to tender to make sure you are still in a competitive environment. What I will say is that coming in, I've found PwC to be an excellent auditor as well. I've worked with all the different accounting firms, all the large accounting firms over time.
We've had some very complex issues to deal with in recent times, and they've been very helpful. So there's been an element of complexity and unusual transactions driving that cost. And I think what we're looking to do is make sure we get ourselves streamlined before we do go and do a tender because I think that's a healthy thing to do on a regular basis. There's sort of outrageous statements online of what it's costing the company, and it's a burden.
What would it cost us last year just to hang on to Chile?
So look, in simple terms, there are a very small number of people in Chile, and we have had only a small amount of activity. One thing that is disclosed in our accounts is that there is a royalty payable that is a significant cost.
And so we are always focused on looking at opportunities to reduce costs, but that would be the principal cost, that royalty at the moment. In terms of the royalty, look, it's disclosed in the accounts. Yeah, so you can have a look, but I'm happy to answer that here. There's an annualized royalty of $2 million a year as a prepayment. Look, I've made it my business to just I've got a plan of what I think we need to do. We're all aligned around that. I try not to get distracted by the noise online. So I have had a look once, but I switched off and hadn't looked again. It can be addictive.
A couple more online questions.
If the TAFTA Tribunal were to hand down their ruling today, would the award be based on the value of the assets at the time of the incident in 2016, or would the award be based on the value of the assets controlled today?
We don't absolutely know the answer to that, but because we don't know if an award was brought down, what the figure would be. What has happened is the Tribunal has made a decision. It was based on earnings rather than on a value of a thing. I wasn't happy with the values that they were putting on it. But that would have accumulated quite a bit of interest since that time as well. The real answer is there would be a figure that is there in the judgment.
It is unlikely. If we can get a complete agreement with the Thai government on the things that we have asked for and we get that finalized, that that agreement, that decision would come down.
Great. And just one further question. What does the Board believe the total value of the Kingsgate business is worth currently?
As with anything, it's what someone will pay for it, isn't it?
Okay, great.
I mean, it's certainly undervalued. There's no doubt about that. And while we don't spook our stock, you'd only have to read the Canaccord report to see that probably the price should be closer to AUD 3 than AUD 2, wouldn't it?
Canaccord have a target price of AUD 3.40?
I think in the interest of time, we can probably stop with the questions for now. If there's any further after the resolutions, we can addres s them then.
Thank you.
I appreciate it so much for trying to have a quick meeting. All right. I'd like now to move on to the formal business of the meeting. To shareholders who are voting online, I now declare the voting portal open. Is there some notification that comes there or something to them? No? All right. The last meeting of shareholders was the Annual General Meeting held on the 30th of November 2023. The directors are satisfied as to the correctness of those minutes, which have been signed as a true and correct record and are available for inspection. I now refer to the notice of meeting dated 16th of October 2024, which I'll now table. Unless there are any objections, I'll take the notice of meeting as read. You will note that the formal business of the meeting comprises the following matters.
Firstly, to receive and consider the company's financial report and the reports of the directors and the auditor for the financial year ended 30th of June 2024, then to consider and if thought fit to pass the following resolutions. Resolution 1, to re-elect Ross Smyth-Kirk as the director of the company. Resolution 2, approval of a non-market buyback of up to 50% of its shares. And Resolution 3, approval of remuneration report for the year ended 30th of June 2024. The first item of business is to receive and consider the director's report, auditor's report, and accompanying statements of the company as set out in the 2024 annual report.
It is no longer necessary for the meeting to formally approve financial statements, but I now ask for any questions on the financial statements or questions to our auditor on the conduct of the audit and their audit report. If there's no questions, are there any questions online on that?
No further questions online.
All right. Thank you. We'll now move on to resolution one. I'll hand over the meeting to Jamie Gibson to chair this as this resolution involves the re-election of myself. Thanks, Ross.
The first resolution is the re-election of Ross Smyth-Kirk as a director. Resolution one is to consider and if thought fit to pass the following resolution as an ordinary resolution.
That Ross Smyth-Kirk, a director of the company ceasing to be a director in accordance with the company's constitution and the ASX listing rules and being eligible and having signified his candidature for office be re-elected as a director of the company. Proxies received in respect of this resolution are as displayed on the screen. Do you want me to read out each of the numbers, or can everybody see those? Can see them? Good, because they're long and I can't see them. As previously stated, voting on all resolutions is to be conducted by way of a poll after all resolutions have been read. Are there any questions on this resolution? Are th ere any questions online?
No.
Okay. I will now hand back the meeting to our chairman, Ross Smyth-Kirk.
Thank you, Jamie.
The second resolution is the approval of the on-market buyback of up to 50% of its shares. Resolution two is to consider if thought fit to pass the following resolution as an ordinary resolution. That for the purposes of section 257C of the Corporations Act 2001 and for all other purposes, approval is given for the company to buy back up to 128,875,846 of the company's issued shares at the election of the Board and otherwise on the terms and conditions set out in the explanatory memorandum. Proxies received in respect of this resolution are as displayed on the screen. As previously stated, voting on all resolutions will be conducted by way of a poll after all resolutions have been read. Are there any questions on this resolution? Are there any questions online?
No online questions.
Thank you.
The next resolution to consider is the approval of the remuneration report. Resolution three is to consider and if thought fit to pass the following non-binding resolution as an ordinary resolution to adopt the remuneration report for the year ended 30th of June 2024. Proxies received in respect of this resolution are as displayed on the screen. Are there any questions on this resolution? Yes, sir.
Sorry. Thanks, Mr. Chairman. I'm just looking at the number of shares against, and it seems sort of very high, and I'm just wondering if you can comment on that. It's almost 25% against, which I think I kind of made a comment in my original address.
Sorry?
I'm sorry about that. I came in a bit late.
I apologise.
There was a considered effort by a couple of aggrieved individuals that went on social media and tried to drum up support for a resolution against our remuneration. It was based on some spurious things, and a lot of the things that they did were not acceptable. I'm very surprised that there are enough gullible other people that went along with them, but nevertheless, to attack us, to be one of the lowest-paid executive people in the mining business, in fact, in anywhere on a listed company, and have gone without for probably 20 years or something, it's quite extraordinary. My usual thing is to come here and hear from some shareholders, and I know at least one of them's here today, as to why don't you pay yourselves properly. I find it quite amazing, quite stupid, and really, are we supposed to pay? Are we supposed to take nothing?
Are we or what?
I was just going to say that I thought you guys were doing a great job. So that's why I wasn't here at your original, and I was just shocked.
Thank you very much. I appreciate it.
Can I just add a few things to that, Ross, that might help everybody?
Sure. Look, just in relation to remuneration, look, it's always a sensitive issue and things like that. Look, given the situation we've been in, we haven't had short-term or long-term incentives for the better part of eight years, and it wouldn't have been appropriate too because we were just fighting for survival. So everything went towards surviving. And as I think I've said it before, I've certainly said it on a webinar. Look, I took a redundancy through that so they could pay me less and I could come back.
The remuneration this year was based on a report from Alto Partners, so we do actually take it seriously. Now, they're a specialist mining recruitment firm. They did an analysis of 15 peer companies, mining companies like us with similar market caps and similar executive structures. I don't think we have the slides, but Ross and I both come out in the bottom 10% of that in terms of what we're remunerated for the size of the company and what we've done. Look, and the other thing, and I'm going to say this, is that I delayed any payment for nearly four months this year, and this can be verified by Mary Zhang, our independent accountant there, to make sure we had enough money to get the Nebari facility away, then all spare dollars were going into Chatree.
I find it disappointing when people particularly make false assumptions about our intentions towards remuneration and things like that. Next year, we'll be looking at, I guess, linking our remuneration to performance. We're coming back to being a proper mining operator. I've already spoken to Dan O'Connell about how we do that. Ross himself, Ross was on about 150 or 60 grand through most of that. As you heard him say today, there were times when he could have got arrested in Thailand and done all these things. I think you need to understand where we're coming from when you see things like this.
Again, thank you very much for your comments. It is disappointing that the voting there is as high as it is.
We'll see what happens with the voting here in the room and online as to how it changes from there. And let's hope that people are more sensible next year. Is there any other questions at all? No questions online? We'll now move on to the poll. As previously stated, voting on all resolutions is conducted by way of a poll. I'll now conduct an overview of the poll voting process and invite Automic to conduct the poll. For those attending virtually, you have the ability to submit votes on the Automic system. Please ensure that you have registered your shareholding with Automic. If you haven't done so yet, you can follow the instructions displayed on your screen to register and log in. For those in attendance at registration, those shareholders entitled to vote were provided with a yellow admission card.
Please ensure the yellow card is completed by marking for, against, or abstain on each resolution. Are there any questions regarding the voting process? Are there any questions online? No. Thank you for your attention. If there are no further questions, I remind shareholders the voting portal is still open on all items of business. I will provide a warning before closing the voting. So the ladies are going around now, so anybody who hasn't voted, if you haven't lodged proxies or whatever, please give your voting papers to the ladies as they come around. Of all persons who intend to vote, I now voted. Anyone else that hasn't voted? Yeah? How about online? Is it all in? Finished? Finished? Good. I therefore declare the poll closed.
The results from today's meeting will be released to the ASX and also made available on the company's website as soon as practicable later today. So it looks like we've got a whole lot of breath. Ladies and gentlemen, this finishes the formal business of the meeting, and unless there are any further questions, I'll declare the meeting closed. On behalf of the Board , I'd like to thank you for your support, and I now declare the meeting closed. Thank you for your attendance and participation.