Kingsgate hopes to land a litigation financier to maintain the fight against Thailand
Link copied to
Embattled miner Kingsgate Consolidated is in talks with an as-yet unnamed “international litigation financier” to help fund its legal fight against Thailand.
Kingsgate (ASX:KCN) has been fighting the Thai government and its insurers over the premature closure of its Chatree gold mine.
Chatree was closed after the Thai government decided not to renew the metallurgical licence after 2016. Kingsgate’s lease for Chatree was due to run to 2028.
The decision was based on what Kingsgate claimed were unsubstantiated reports of environmental damage and public health impacts due to the operation.
Chatree was Thailand’s biggest gold mine, employing almost 1000 workers. The open-cut mine began production in 2001.
Kingsgate began legal action against its insurers in October 2017 over a $US200m ($280.2m) political risk insurance policy it was denied when Chatree was closed.
The company is still battling it out in court.
Kingsgate is also pursuing claims against the Thai government under the Australia-Thailand Free Trade Agreement.
If the company gains the support of a litigation financier, it would get back what it has spent so far in legal costs, and future funding would allow it to see its lawsuit through to the end.
Kingsgate has taken several steps to fund its legal battle, including securing another $2m from lender Investec Australia Finance — increasing its loan to $22m.
The company is also still trying to sell its Nueva Esperanza gold and silver project, but has struggled to get bids worth better than the current book value.
Kingsgate told investors late Friday that a “number of parties” are currently completing due diligence on the project.
The company has been contacted for comment.