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Gold miner Akara getting ready to be listed on SET

Pakorn

Pakorn

Subsidiary of Kingsgate seeks listing to cover debt, expand production capacity

Akara Resources, a Thai subsidiary of Australia-based Kingsgate that operates the Kingdom's biggest gold mine, is in the process of listing on the Thai bourse, said chief executive officer Pakorn Sukhum.

He said the company had already filed its application and was waiting for approval from the Securities and Exchange Commission. The listing is expected to be finalised next year.

Akara plans to list on the Stock Exchange of Thailand to mobilise funds to pay down debt as well as to expand its production capacity, explore for new mineral resources, and use as working capital.

Chatree Gold Mine is located in the border area of Phichit and Phetchabun. Between November 2001 and June this year, more than 1.3 million ounces of gold and 5.8 million ounces of silver were produced.

During the company's latest fiscal year ending in June 2013, 133,681 ounces of gold was produced, higher than the target.

Total production cost after depreciation and amortisation is US$952 per ounce of gold produced.

Evaluated as best practice firm

Mike Monaghan, Akara Resources' chief operating officer and general manager, said the company had been evaluated as a best-practice company as compared with the world's other best gold mines in Australia and Canada. He said the company had put the right people into the right places and the right jobs.

"Here we employ only four foreign experts, very few compared with Laos, which employs about 200. This is a good indicator of the company's capability," he said.

Pakorn said: "In the long term we would like to refine the gold ourselves, and the company's directors and shareholders are studying that. In order to prepare for the coming AEC [Asean Economic Community], we want Thailand to be the hub of gold refining." However, the company needs to study whether the volume produced would make self-refining cost-effective.

Future challenges of the company are government support for the mining industry and education of the public on the benefits of mining, he added. Monaghan said Akara had a strict policy to live peacefully with the community.

"We give precedence to the community around the mine. All people in community must have better lives than before when there was no mine here," he said.

Monaghan offered his opinions about the direction gold prices would take. He said that in the short term gold would be in trouble, with the price perhaps staying around $1,100-1,200 per ounce. However, in the long term, say by around 2020, the price is expected to rebound to $2,000.

He said that if looked at in a positive way, the decline in the gold price was a good opportunity for the company to grow. For example, the firm has to strengthen its future potential, such as decreasing its production costs.




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