Kingsgate Faces $13M Legal Provision Despite Record Profit and Dividend
Kingsgate Consolidated Limited has reported a spectacular half-year performance with a 3,491% jump in net profit and a doubling of revenue, driven by higher gold and silver production. The company also declared its first interim dividend in years, signalling confidence in its growth trajectory.
- Gold production rises to 44,879 ounces, silver to 363,382 ounces
- Revenue doubles to $283.3 million, net profit soars to $88.1 million
- Chatree Gold Mine operates above capacity with improved processing
- Interim unfranked dividend of 10 cents per share declared
- New US$25 million standby loan facility refinances existing debt
Robust Production and Financial Performance
Kingsgate Consolidated Limited has delivered an exceptional half-year result for the six months ended 31 December 2025, with gold and silver production significantly increasing. The Chatree Gold Mine in Thailand produced 44,879 ounces of gold and 363,382 ounces of silver, contributing to a 108% rise in revenue to $283.3 million. This operational success translated into a staggering 3,491% increase in net profit after tax, reaching $88.1 million.
The company’s processing plants exceeded their nameplate capacity, operating at an annualised rate of approximately 5.7 million tonnes, up from the previous 5 million tonnes. Improvements such as the installation of a custom gearbox for the SAG mill and the addition of a new Caterpillar excavator have enhanced mining rates and processing efficiency.
Strong Balance Sheet and Cash Flow
Kingsgate’s balance sheet strengthened considerably, with total cash balances rising 170% to $104.8 million. Operating cash inflows surged to $96.8 million, reflecting higher sales volumes and metal prices. The company also fully repaid its previous term facility and secured a new US$25 million standby loan facility with Nebari Natural Resources Credit Fund II, providing financial flexibility for ongoing operations and development projects.
Inventories increased due to higher stockpiles and gold-in-circuit, supporting future production. The company maintained a disciplined approach to capital expenditure, investing $27.7 million primarily in mine development and equipment upgrades.
Dividend Declaration and Corporate Developments
For the first time in recent years, Kingsgate declared an interim unfranked dividend of 10 cents per share, payable on 10 April 2026. This move signals management’s confidence in the company’s cash generation and outlook. The dividend record date is set for 17 March 2026.
On the corporate front, Kingsgate’s Thai subsidiary, Akara Resources, achieved ISO certifications for quality, environmental, and occupational health and safety management systems, underscoring the company’s commitment to operational excellence and sustainability.
Advancing the Nueva Esperanza Project
Beyond Thailand, Kingsgate is progressing its Nueva Esperanza silver-gold project in Chile’s Maricunga Belt. The company has engaged with Chilean government officials and is updating pre-feasibility studies, including new drilling and metallurgical testwork. This project represents a significant growth opportunity in a prolific mining region.
Legal Provision and Arbitration Closure
Kingsgate recorded a $13.2 million legal provision related to a dispute with political risk insurers following the termination of arbitration under the Thailand-Australia Free Trade Agreement. While the arbitration was formally closed without an award, ongoing commercial discussions with insurers continue, introducing some uncertainty around the final financial impact.
Overall, Kingsgate’s half-year results reflect a company capitalising on operational improvements, strong commodity prices, and strategic financial management, positioning it well for the remainder of FY26.
Bottom Line?
Kingsgate’s record half-year profit and dividend declaration mark a turning point, but investors will watch closely how legal and project developments unfold.
Questions in the middle?
- How will ongoing negotiations with political risk insurers resolve and impact future earnings?
- What are the timelines and capital requirements for advancing the Nueva Esperanza project?
- Can Kingsgate sustain production above nameplate capacity amid fluctuating metal prices?
