Investors in Kingsgate Consolidated Ltd. (ASX:KCN) were allowed to gasp for air on Friday after being underwater on the stock due to problems with its mine in Thailand.
The Australian-listed company shot up 49% to AUS$0.32 a share - three cents off a 52-week high - at the height of trading after the Thai government announced that a December 2016 suspension of the Chatree mining complex north of Bangkok had been lifted. The shares later settled to 28.5 cents by the end of the session. It's the highest Kingsgate's stock has been for 18 months.The order was issued to address conflicts between the mine operator, Akara Resources, and residents over environmental and health issues linked to the mine.
The company's market cap has tumbled to AUS$64.8 million from a heady $1.1 billion at the end of 2010. Chatree is its only mine after selling an Australian operation in 2016 and was also Thailand's largest and only operating gold mine - up to the end of 2016.
According to Kingsgate the military junta lifted the temporary suspension issued in December 2016 and also advised a local unit that an application to renew its metallurgical processing license can go ahead.
The closure, which affected 1,004 employees, was issued by the military regime under Section 44 of legislation to suspend gold mine operations from January 1, according to the Bangkok Post. Under the order, licenses for new and existing exploration concessions could not be issued. The mine's concessions were good until 2028.
The order was issued to address conflicts between the mine operator, Akara Resources, and residents over environmental and health issues linked to the mine.
In 2015 authorities ordered a 44-day suspension of activities at Chatree after random urine and blood tests showed above-standard arsenic and manganese levels in people living close to the mine.
But Kingsgate executive chairman, Ross Smyth-Kirk, said at the time that arsenic and manganese had not been used or stored at Chatree at any time in its history, The Sydney Morning Herald reported.
The open-pit mine started operations in 2001.
Bloomberg reports that the Thai government will not offer compensation for losses related to the mine closure nor assist with costs associated with a restart, which is expected to cost over $50 million and take five months.