What?
Kingsgate Consolidated Limited (ASX: KCN) on Wednesday morning requested a trading halt citing uncertainty around an order to temporarily cease operations at the company's Chatree mine in Thailand.
The Chatree mine, located 280 kilometres north of Bangkok, was Thailand's first and largest gold mine when it began production in 2001 and is operated by 48% owned Kingsgate subsidiary Akara Resources.
Why?
By mid-Wednesday morning, multiple news agencies had released articles suggesting that the local Thai authorities had ordered Kingsgate to shut down the mine for a minimum of 30 days following the presence of above-standard arsenic and manganese in the urine and blood of villagers nearby.
Media reports indicate that over 700 local villagers were tested and in excess of 300 presented with elevated levels of arsenic and manganese.
What now?
Local and international media is reporting that the company has informed workers and shut the mine, however the company is yet to release a formal statement at the time of writing.
Kingsgate Executive Chairman Ross Smyth-Kirk is quoted saying that: "We are shocked and amazed at the temporary suspension order at the Chatree Mining Complex, situated in central Thailand which is internationally recognised as one of the safest gold mines in the world"
There are 6,000 residents living in the vicinity of the mine, however there may be something else going on. My Smyth-Kirk noted that arsenic and manganese are not or have ever been used or stored at the Chatree Mining operation.
Shareholder concern
Shareholders are rightfully concerned about this latest revelation following the generally poor performance of the company over the last three years. The stock reached a peak of $7.71 in early 2012 and hit a low of 61 cents earlier this year.
Operational problems have plagued the company for years and this latest setback will be surely see the share price plummet when trading resumes on Friday morning.
