Kingston Resources has completed a $13.5 million capital raising to accelerate hard-rock mining activities at its projects in the Cobar Basin of New South Wales.
Proceeds will be used to transition the Pearse underground gold mine to an open-pit scenario and commission the Mineral Hill processing plant for concentrate production.
The raising was conducted via a placement and accelerated non-renounceable entitlements offer to institutional and sophisticated investors.
The placement will see the issue of 124.5m shares at $0.065 each to raise $8.1m, while the entitlements offer will run on the basis of one new share for every six Kingston shares to issue a further 82.9m shares and raise $5.4m.
The institutional component of the entitlements offer raised $731,000.
The retail component of the offer will be underwritten by existing major shareholder Delphi Unternehmensberatung Akteingesellschaft and is subject to final approval by the supervisory board of German investment company Deutsche Balaton and the Kingston board.
Pearse open pit plan
Open pit mining at Pearse will consist of a new pit at Pearse North and the cutback and deepening of an existing pit at Pearse South.
Total open pit production is forecast to be 258,000 tonnes grading 3.72 grams per tonne gold and 57g/t silver at a gold price of $2,571 per ounce and all-in sustaining cost of $1,339/oz.
Mining is scheduled to commence in June and will be completed over an 11-month period using in-house capabilities.
Mineral Hill plant
The Mineral Hill processing plant is one of two operating plants in the Cobar region capable of producing multiple concentrates and precious metal dore.
Kingston’s refurbishment budget for the plant sits at $12.5m alongside forecast copper equivalent output of approximately 7,000t in financial year 2025.
Crushing and grinding of open pit oxide ore from the Pearse pits is scheduled to commence shortly after production start-up.
The company remains “strategically well-placed” to participate in any regional consolidation opportunities.
Game-changing move
Managing director Andrew Corbett said the commencement of open-pit mining at Pearse would be a game-changing move for Kingston.
“Work has already begun on re-optimising both pits using the latest spot metal pricing, ensuring we maximise the value we extract from this valuable resource,” he said.
“These projects are highly-leveraged to the gold price and we expect them to make a significant impact on our financial position.”
“We [have forecast] high margin, very profitable operations to deliver a substantial 133% increase in payable metal for financial year 2025.”
The combination of high gold grades and recent strength in spot gold prices (currently around $3,200/oz) could result in significant operating cash flow from Pearse.
“These high-grade gold pits have the potential to materially transform [Kingston’s] balance sheet and set us up for long-term success with underground mining at Mineral Hill,” Mr Corbett said.
Mineral Hill deposits
Situated over a 2.5km trend, Mineral Hill is a prolific system of deposits with extensive growth potential in gold, copper and polymetallic resources.
In November, Kingston announced the near-mine discovery of a new footwall lode at the project’s Southern Ore Zone.
The discovery shed new light on the possibilities of additional ore bodies being discovered and an extension to the life-of-mine inventory.
Mr Corbett said the existing underground development in place at Mineral Hill provides material advantage and allows new discoveries to be accelerated into the mine plan.
