Kingsgate Consolidated Ltd has announced Thursday that it has been granted tax concessions by the Thai government for its new processing plant at the company's flagship Chatree gold mine in Thailand.

Under the concessions, Kingsgate is poised to enjoy an eight-year tax-free period to commence upon roll out of first production and would be followed by another five years break at half the 30 percent corporate tax.

The company said that its board has given a go signal to start developing the 2.7 million tonnes per annum (MTPA) Chatree North processing plant, to be built alongside the already operational 2.3 MTPA Chatree processing plant for about $US100 million or $A119.3 million.

Kingsgate said that it is in the process of finalising engineering and construction arrangements for the expansion project while funding facilities would be initiated shortly, which would be sourced from debt arrangements.

The company said that it has so far shelled out $US25 million or $A29.8 million for long lead capital items and engineering design for the projects while at present, it still boasts a cash holdings of $US36 million or $A42.9 million with an undrawn working capital facility of $US 30 million or $A35.7 million.

Kingsgate said that its new processing plant should increase the company's combined total ore processing capacity to more than five million tonnes per year and upon reaching full operational status, gold production levels should spike up from 200,000 to 250,000 ounces each year.

As of 1425 AEST, Kingsgate shares were trading at $9.45, gaining 76 cents or 8.75 percent.