Zurich-led insurers and Australian mining company Kingsgate have settled a long-running claim over Thailand’s expropriation of the Chatree gold mine in an agreement worth at least $82 million.

Kingsgate Executive Chairman Ross Smyth-Kirk says the settlement is an “excellent outcome” and the company and its insurers will continue to work together to pursue a claim under the Thailand-Australia Free Trade Agreement (TAFTA).

“I realise that it has been a long recovery process for our loyal shareholders, but this settlement transaction provides material upside for our company,” he said.

The Sydney-based miner says a claim under its political risk policy, lodged after the Thai Government ordered the mine’s closure in 2016, was originally denied by the Zurich-led syndicate of Australian and international providers.

Kingsgate started proceedings in the Supreme Court of NSW in October 2017 seeking the maximum liability cover of $US200 million ($279 million) under the policy.

The settlement announced yesterday includes a cash payment of $US55 million ($76.8 million) to be made by mid-April. Insurers will also contribute up to $US3.5 million ($4.9 million) towards the cost of the TAFTA arbitration, with a sharing arrangement agreed for future distributions of TAFTA claim proceeds.

The Chatree open pit mine, about 280km north of Bangkok, started commercial operations in 2001 and produced more than 1.8 million ounces of gold and 10 million ounces of silver before it was expropriated by the Thai Government.

The company also experienced a disruption in 2015 as it addressed disputed environmental issues, so later raised its policy cover from $US30 million ($41.8 million).

“It [was] increased considerably because we sensed more of an atmosphere that was concerning,” Mr Smyth-Kirk told insuranceNEWS.com.au. “It was a big increase and a big policy, but everything was above board.”

Kingsgate commenced proceedings against Thailand under the TAFTA treaty at the end of 2017, while noting that the claim process could take some time to resolve and the option remained open to settle on mutually agreeable terms at any point.

Mr Smyth-Kirk says a tribunal hearing on the TAFTA claim is currently scheduled to be held in Hong Kong in November, and will be heard under Singaporean law.

A Zurich spokesman told insuranceNEWS.com.au the company has no comment to make on the claim settlement.