Kingsgate is confident of beating Thailand with several financiers interested in its court stoush
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Kingsgate Consolidated says it has been talking to a number of litigation funders for some time and is confident it has two very strong cases.
Stockhead reported yesterday that the junior miner was 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.
While chairman Ross Smyth-Kirk could not name the interested party, he did say Kingsgate had received “various proposals” from a “number of funders”.
“Nearly everybody that has looked at it has been rather keen to [fund it],” he told Stockhead.
“Everybody that’s seen anything on our case thinks we have two very good cases.”
Typically litigation financiers won’t back a legal pursuit unless they are confident it has a high chance of success.
The way it works is the litigation financier provides the plaintiff with the cash to cover the cost of its lawsuit in exchange for a cut of the judgment or settlement proceeds.
The Chatree mine 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.
“I can tell you the whole international investment and mining community are watching it because most companies that deal in other countries, particularly if they’ve got mines, all have to take out these insurance policies,” Mr Smyth-Kirk said.
“And everybody is querying: well if what has happened to Kingsgate isn’t covered by them, what is? Are these people selling us dud policies?”
“We’re very confident of our case.”
The New South Wales Supreme Court case against Zurich Insurance Australia, and other insurers, is due to be heard in early June.
Meanwhile, Kingsgate’s claims against the Thai government under the Australia-Thailand Free Trade Agreement aren’t due to be heard until November.
Mr Smyth-Kirk, who was in Singapore yesterday, said the proceedings were due to take place in Singapore but will now take place in Hong Kong.
He estimates it will take about four to six weeks for Kingsgate to finalise a deal with the litigation financier.