The Asia Miner

JAN-FEB 2018

The ASIA Miner - Reporting Important Issues to Mining Companies in the Asia Pacific Region

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Volume 15 • Issue 1 | 2018 | ASIA Miner | 33 Thailand KINGSGATE Consolidated advises that, despite its best efforts, it has been unable to achieve any settlement of its claim against the Kingdom of Thailand for the unlawful expropriation of the Chatree Gold Mine. Accordingly, it has commenced arbitration proceedings against the government under the Australia-Thailand Free Trade Agreement. The company says it is taking this action in order to recover the substantial losses it has suffered, and continues to suffer, as a result of the measures taken by the Thai Government. Up to December 2016, Chatree was Thailand's only active gold mine. Kingsgate, which had operated Chatree since 2001 through its local unit Akara Resources Public Co, argues that the closure of the operation was unlawful, as its mining licence doesn't expire until 2028. Bangkok Post reported that the government has responded by saying the environmental and health concerns related to the mine outweighed its economic benefits. In a statement, Kingsgate announced that it had appointed lead- ing international law firm Clifford Chance to represent it, with Dr An- drew Bell SC as Senior Counsel on the matter. "Such proceedings could take an undetermined time to resolve, and could involve significant expenditure by Kingsgate. As with any legal proceedings, the outcome cannot be guaranteed. It should be noted however, that the commencement of arbitration still allows both parties to engage in dialogue to settle the matter on mutually agreeable terms, at any point in the proceedings. "The Board of Kingsgate believes that the company has excel- lent prospects of successfully recovering very substantial damages against the Kingdom of Thailand, and will vigorously prosecute its claim," the statement concludes. In August 2017, Thailand's government temporarily lifted the mine suspension, but did not show any willingness to offer Kingsgate monetary compensation for the alleged losses the company suf- fered as a result of the closure. Thailand's military regime also declined any indemnification for the expenses the company said it would incur to restart operations, estimated at more than $50 million, assuming a framework for doing so was agreed with authorities. On October 13, Kingsgate announced that it would commence proceedings in the Supreme Court of New South Wales against Zu- rich Australia Insurance and other named insurers under a US$200 million Political Risk Insurance Policy. THE Reung Kiet project in southern Thailand is the only lithium proj- ect in South East Asia outside China. Reung Kiet is held by Pan Asia Metals, a private Singapore company that plans to list on London's AIM market in the first half of 2018. Even though initially focusing on Reung Kiet, Pan Asia is also con- sidering other projects, including the high-grade Khao Soon Tung- sten Project in the country's southeast. Managing Director Paul Lock said, "We've been working in South East Asia for five years. Our key focus is to identify projects which are relatively advanced but pre-drill, and we like Thailand because of the low country costs in terms of labour, energy and infrastruc- ture." The area in which Reung Kiet and Khao Soon are located is not unfamiliar with mining, as until the 1980s it was a major tin produc- ing region. Work on Pan Asia's prospects identified lithium minerali- sation as long ago as the 1960s. This mineralisation was initially mined for tin and was shown at the time to contain grades of between 3% and 4% lithium oxide in concentrate at a time when lithium grades were of less immediate significance. 50 years later, however, with lithium batteries becoming increas- ingly popular, these grades are being viewed in a new light. "Our lithium occurs across more than 2.5km of strike," Paul Lock told Proactive Investors. "We now have our own rock chip and channel samples that show grades averaging around 1.5% lithium oxide. And it's in mica, not spodumene, which means that instead of roasting you can do an acid leach, which on the cost curve will be cheaper." Ahead of next year's AIM listing, Pan Asia has embarked upon a US$1.5 million pre-IPO fundraise to get the drill rigs turning at Re- ung Kiet and at Khao Soon. "With that US$1.5 million we can add a lot of value," Paul Lock said. "We're ready to drill as soon as we get the first US$500,000. The idea is to move both assets up to the status of strong explora- tion targets, and potentially with inferred resources by the time we get to IPO." Pan Asia initial focus on lithium Kingsgate commences Chatree arbitration The sun sets on the open pit at Kingsgate Consolidated's Chatree Gold Project in December 2016.

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