The Zone 3 fiscal incentive includes an eight-year tax-free period from first produc- tion, followed by a further five years at half the 30% corporate tax rate. Tax will con- tinue to be paid on production from the existing Chatree plant at half the 30% cor- porate tax rate until November 2014.

The Chatree North plant will be a sepa- rate 2.7-million-mt/y ore processing plant and is being built alongside the current 2.3-million-mt/y Chatree plant. When the new plant is fully operational, Chatree gold production is expected to increase to between 200,000 and 250,000 oz/y. Since mine startup in November 2001, Chatree production has varied between 74,000 and 154,000 oz/y.

Funding of Chatree North's $100-mil- lion construction cost is expected to be pre- dominantly from debt facilities. Already, $25 million has been spent on long-lead capital items and engineering design. Currently, Kingsgate has approximately $36 million in cash and an undrawn $30 million working capital facility with Investec.