Directors’ Report 42 Directors’ Report Directors Review of operations and results  Operational performance Principal activities Dividends Your Directors present their report on the Group consisting of Kingsgate Consolidated Limited and the entities it controlled at the end of, or during, the year ended 30 June 2013. The following persons were Directors of  Kingsgate Consolidated Limited during the  whole of the financial year and up to the date of  this report. The principal activities of Kingsgate  Consolidated Limited are mining and mineral  exploration in Australia, South East Asia and  South America.  Dividends paid to members during the financial  year were as follows: Kingsgate is a gold mining, development and  exploration company based in Sydney, Australia.  Kingsgate owns and operates two gold mines,  the world class Chatree Mine in Thailand and the  underground Challenger Mine in South Australia.  In addition, the Company has two advanced  development projects, the Nueva Esperanza  Silver / Gold Project, in the highly prospective  Maricunga Gold / Silver Belt in Chile, and the  Bowdens Silver Project in New South Wales,  Australia. From this operating and development  platform, Kingsgate aims to build value for all  shareholders. Group gold production was 199,897 ounces, a  decrease of 4% on the previous corresponding  year. The contribution from Chatree was  133,681 ounces with 66,216 ounces from  Challenger.  Chatree gold production was 10% higher than  the previous corresponding period as a result of  an increase in throughput from the expanded  Chatree process plant and access to higher  grade oxide ore from Q Prospect.  Challenger gold production was 24% lower than  the previous corresponding year given additional  dilution and depletion at Challenger Deeps and a  shortfall in planned development. This resulted  in lower ore tonnes from the mine that was  supplemented by low grade stockpiled ore.  Following the fall in the gold price a strategic  review of Challenger was implemented that has  resulted in a new mine plan to focus primarily on  the higher grade Challenger West orebody. The  new mine plan will be implemented during the  first three months of the 2014 financial year. A lower gold price and industry wide cost pres- sures had a negative impact on the underlying  earnings of the Group which contributed to a  major impairment to the carrying value of a  number of Group assets, particularly assets  relating to the Challenger Gold Operations.  Impairments totalling $332,808,000 were the  major contributor to the after tax loss of  $323,726,000 for the year.  The development projects continued to advance  during the year. At Nueva Esperanza, the feasi- bility work shifted to focus on identifying the  lowest cost and lowest power consumption  development alternatives. This included  reviewing a heap leach process option with  on-site power generation. Further work is  expected to be completed in the December  quarter 2013. At Bowdens, the feasibility work  has confirmed the optimum process route.  Completion of the technical feasibility study  including mine planning, infrastructure and  metallurgy, and lodging of the Environmental  Impact Statement (“EIS”) are scheduled for  2014. www.kingsgate.com.au 2013  $’000 2012  $’000 Final dividend declared for the year ended 30 June 2012 of 10 cents per fully paid share paid on 1 October 2012 15,148 6,829 Interim dividend declared for the year ended 30 June 2013 of 5 cents per fully paid share paid on 12 April 2013 7,591 15,196 Total dividends  22,739 22,025 〉 Ross Smyth-Kirk Chairman 〉 Peter Alexander Non-Executive Director 〉 Craig Carracher Non-Executive Director 〉 Peter McAleer  Non-Executive Director 〉 Gavin Thomas  Executive Director