Kingston Resources Raising Up To $13.5 Million To Accelerate Hard Rock Mining In Cobar Basin

Kingston Resources Ltd (ASX: KSN) will fast-track its plans to significantly increase production at the Mineral Hill Project in central NSW following a fully subscribed $8.1 million share placement.

The placement of 124.5 million shares was completed at $0.065 per share to institutional and sophisticated investors.

Additionally, the company will offer existing shareholders the opportunity to participate in an entitlement offer based on 1 new share for every 6 shares held, raising proceeds of $5.4 million.

The new funds will be used for the transition to open-pit mining at Pearse, underground resource development drilling, processing plant commissioning, and general working capital.

133% increase in payable metal

Kingston Resources is producing gold from its Mineral Hill gold and copper mine in NSW and is developing the 3.8Moz Misima Gold Project in PNG.

Pearse open pit mining at Mineral Hill is set to start in the current quarter with underground mining and copper production in FY26.

Kingston’s profitable Tailings Mining Project is also scheduled for completion over the next two months to enable the transition to hard rock mining at Mineral Hill.

The company expects these high-margin, very profitable operations to deliver a substantial 133% increase in payable metal to ~7kt CuEq (copper equivalent) in FY25.


Proportion of forecast payable metal in FY24 and FY27

Work has already begun on re-optimising both pits using the latest spot metal pricing, ensuring Kingston maximises the value it extracts from this valuable resource.

The projects are highly leveraged to the gold price, and Kingston expects them to positively impact its financial position.

The combination of high gold grades and recent strength in spot gold prices of A$3,200/oz) present the potential for a significant upside in operating cash flow from Pearse.

These high-grade gold pits have the potential to materially transform the balance sheet and set the company up for long-term success with underground mining at Mineral Hill.

Operating cash flow surges

Kingston Managing Director and CEO Andrew Corbett said:

“Operating cash flow from the project has reached $24m as of 31 December 2023. The focus at Mineral Hill team will now shift to extracting the remaining high-grade tailings inventory and making the final preparations for the transition to open pit mining.”

During the March quarter. production is expected to be around 3000oz with a strong performance during January and March.

Corbett said the company aims to self-manage and self-perform all aspects of the operation at Mineral Hill to maximise the operating margin. This includes transitioning the current mining team from the Tailings Project over to the Pearse open pits.

The Mineral Hill processing plant is one of two operating plants in the Cobar region capable of producing multiple concentrates and precious metal dore.

The refurbishment budget is at a very low capital intensity, with a budget of $12.5m ($7.5m spent) and forecast copper equivalent output of approximately 7kt in FY25.

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