By Barry FitzGerald
SYDNEY-BASED Thai gold producer Kingsgate Consolidated has blasted lazy acceptance by institutional shareholders of voting directions from corporate governance advisory groups.
The criticism came as a non-binding advisory vote on the acceptance of Kingsgate's remuneration report scraped through at the group's annual meeting yesterday.
Kingsgate chairman Ross Smyth-Kirk told the meeting that, ''unfortunately'', corporate consultant RiskMetrics had ''seen fit to recommend to its institutional clients that they vote against'' acceptance of the remuneration report.
''Whilst this is consistent with its recommendations for most companies, its analysis of your company is particularly flawed,'' Mr Smyth-Kirk said. ''That this tick-a-box mentality is so unquestioningly accepted by some institutions is even more disappointing and evokes emotional responses which open the issue to abuse.''
After the meeting, Mr Smyth-Kirk said he was not surprised by the seemingly blind acceptance of voting advice. ''It's like all of their decisions,'' he said. ''Everything relies on consultants. The institutions are getting further and further away from making decisions themselves.''
A former investment manager, Mr Smyth-Kirk also took time at the meeting to attack the Federal Government's proposed emissions trading scheme, even though it will have no impact on the group's Chatree goldmine in Thailand.
After acknowledging that the proposed Australian scheme gave the Thai mine a competitive advantage, Mr Smyth-Kirk said the ''unbelievable rhetoric'' about the scheme seemed to ''ignore the disastrous effects it is going to have on Australian companies and on the economy''.
Meanwhile, Kingsgate said its production from Chatree this financial year would range from 120,000 ounces to 140,000 ounces of gold. Mr Smyth-Kirk said that if the gold price was to hold at anywhere near its present levels, record profits would result. At current prices, Kingsgate is enjoying cash margins of $US700-$US750 an ounce.
Kingsgate expects to finalise expansion plans for Chatree next month. The plan is to increase treatment capacity from 2.4 million tonnes a year to 5 million, taking annual gold production to 220,000-250,000 ounces.
Kingsgate shares closed 47¢ higher at $9.