Kingston Resources (ASX: KSN) is a rapidly growing ASX-listed gold company with a world-scale resource base, an advanced development asset, a highly-regarded management team led by Chairman Mick Wilkes, and a clear vision to create a leading ASX-listed mid-tier gold producer operating in the Asia-Pacific region.
The Company is aiming to leverage its world-class 3.6Moz Misima Gold Project in PNG as the cornerstone asset to realise this vision, with Misima currently on a clear trajectory towards development following the completion of a highly successful Pre-Feasibility Study in late 2020.
The Misima Project, located on Misima Island, was previously owned and operated by Canadian mining company, Placer Dome Inc., producing 3.7Moz between 1989 and 2004. The mine averaged production of 230,000ozpa for 15 years at an extremely low all-in sustaining cost (AISC) of US$218/oz, placing it firmly in the bottom 10% of the global cost curve. The mine was closed in 2004 due to the low prevailing gold price (sub US$300/oz).
Kingston acquired Misima in late 2017, and has since moved rapidly towards a re-start of mining operations, delivering a 3.6Moz Resource and 1.35Moz Reserve inventory with the 2020 Pre-Feasibility Study forecasting gold production of ~130,000 ounces per year at an all-in cost of A$1,159 per ounce over an initial 17-year mine life.
The Study projected life-of-mine revenue of almost A$5 billion, free cash-flow of A$1.5 billion, a pre-tax net present value of A$822 million and an Internal Rate of Return of 33% based on a conservative gold price of US$1,600 per ounce. At the current spot gold price of US$1,900/oz, these numbers jump to A$1.28 billion and 48%.
The proposed mining operation is based on a conventional Carbon-in-Leach plant fed by the cornerstone Umuna Open Pit, as well as a starter pit at the nearby Ewatinona deposit.
Importantly, the operating characteristics of the Misima Project are already well understood, with Kingston holding all the operational data from Placer’s historical mining operation.
Supported by a recent $13 million capital raising, the Company is on-track to deliver a Definitive Feasibility Study for the Misima re-development in the second half of CY2021, with drilling also continuing to further expand the existing Resource and Reserve inventory.
The Misima Project offers an outstanding redevelopment opportunity, with key attributes including:
A proven production track record, with extensive historical mining and processing data providing a clear, low-risk blueprint for future redevelopment plans.
Simple, low-cost processing including very soft ore and coarse grind size – these features underpin the low forecast AISC of A$1,159/oz reported in the November 2020 Pre-Feasibility Study.
A highly-skilled local workforce, with over 100 Misimans (mostly ex-Placer) working FIFO around other mines in PNG.
Existing high-quality local infrastructure, including ports, a functioning commercial airstrip, roads and power.
A very positive relationship with local landowners and communities, with strong local support for the mine development.
Misima – Current Activities
Kingston is currently undertaking extensional and in-fill drilling within the existing 3.6Moz Misima Resource area.
The main Umuna Resource (133Mt @ 0.78g/t Au for 3.3Moz) is drill-constrained with outstanding potential to increase ounces at depth and to the north. Drilling completed to date has also been very shallow, with an average hole depth of ~119m and only 9% of holes exceeding 200m.
Recent drilling highlights from the Umuna deposit include:
40m @ 3.17g/t Au and 10.88g/t Ag from 234m, incl. 6m @ 14.06g/t Au and 13.33g/t Ag from 268m
27m @ 1.08g/t Au and 4.09g/t Ag from 129m
56m @ 1.01g/t Au and 7.10g/t Ag from 110m
10m @ 1.25g/t Au and 1.40g/t Ag from 92m
10m @ 1.76g/t Au and 1.50g/t Ag from 151m
In addition to Umuna, exploration is also focused on near-surface mineralisation, with the aim of identifying further near surface, higher grade ounces for early years mill feed. Key exploration targets include:
Kobel & Maika: Historically mined by Placer with limited modern exploration since mine closure
Umuna East: Near-surface oxide target successfully drilled in 2019 exploration program
Abi: Follow-up discovery hole, which returned 23.6m @ 2.91g/t Au from 7.4m, incl. 13.5m @ 4.60g/t Au from 17.5m
Ewatinona: 200koz Resource, mineralisation open at depth and along strike
Misima North: >4km untested strike, structural targets with potential for Umuna repeats
First results from this program are expected to be reported in Q1 2021.
Metallurgical and geotechnical test work programs required to confirm and expand data for input into the Definitive Feasibility Study (DFS) are also underway or due to commence shortly, with the Definitive Feasibility Study expected to commence by mid-2021.
Livingstone Gold Project, WA
In addition to its flagship Misima Gold Project, Kingston also holds the Livingstone Gold Project, located near Meekatharra in WA. The Livingstone Project is emerging as a shallow, high-grade gold opportunity, with an existing JORC 2004 Resource at the Homestead deposit of 49,000oz at 1.6g/t Au from surface.
Recent RC drilling at Homestead returned high-grade results, delivering best intercepts including:
- 17m @ 3.07g/t Au from 14m, including 1m @ 7.94g/t Au from 16m and 2m @ 9.36g/t Au from 24m (KLRC104)
- 7m @ 3.32g/t Au from 27m, including 1m @ 9.74g/t Au from 27m & 2m @ 5.08g/t Au from 30m (KLRC105)
- 11m @ 1.00g/t Au from 104m, including 1m @ 4.97g/t Au from 111m (KLRC107)
- 4m @ 1.10g/t Au from 10m (KLRC105)
- 11m @ 1.18g/t Au from 31m (KLRC108)
- 4m @ 1.06g/t Au from 71m (KLRC108)
Kingston has also made a new discovery a few kilometres further west of the Homestead Resource area at the Kingsley prospect. Drilling at Kingsley has delivered high-grade intercepts including:
- 1m @ 100.25g/t Au from 88m
- 15m @ 4.66g/t Au from surface
- 10m @ 11.95g/t Au from 20m
- 22m @ 3.65g/t Au from 20m
Kingston is currently conducting a project-wide geological study of the Livingstone tenement package that integrates all historical data as well as new information gained during Kingston’s tenure. The geological study is designed to place the numerous individual prospects in the Livingstone area into a wider geological context, enhancing the understanding of the relationship between mineralisation at the various deposits, incorporating them within a mineral systems model and identifying and ranking areas that are highly prospective at both a deposit and district scale.
Upcoming News Flow
- Ongoing results from Misima exploration programs, which will continue throughout CY2021.
- Mineral Resource update for the Misima Gold Project targeted for delivery by mid-2021.
- Commencement of Misima Definitive Feasibility Study, with ongoing results from geotechnical and metallurgical testwork.
- Ongoing results from exploration programs at the Livingstone Gold Project in WA.
- Project Approvals for the Misima mine development expected in 2021, with funding and construction to then follow.
Kingston Resources is in a unique position among gold juniors, with a large-scale Resource, significant exploration upside, an asset with a proven low-cost mining history, and a leadership team experienced in developing large scale mines.