Kingston Resources Ltd (ASX:KSN) has looked back on the 2021 financial year, a period spent primarily focusing on developing the 3.6-million-ounce Misima Gold Project play in Papua New Guinea (PNG).
Over the period, the metals exploration company moved to 100% ownership of its cornerstone precious metals asset, while a geological study also took place over the Livingstone Gold Project in Western Australia.
In the year to come, Kingston is working towards a definitive feasibility study (DFS) for Misima, which will build on a pre-feasibility study (PFS) completed late last year.
As it embarks on further exploration and development in the new financial year, Kingston has $11 million in the bank to support future operations.
“Overcoming significant challenges”
Speaking to the 2021 financial year, Kingston Resources non-executive chair Mick Wilkes said it had been a challenging period, with the ongoing pandemic affecting markets and businesses all over the world.
“Despite this, the company completed the pre-feasibility study for the proposed project development at Misima Island.
“The company also made excellent progress on the environment and social impact assessment (ESIA) and the definitive feasibility study (DFS).
“In addition to the project development and permitting studies, a substantial drilling program was completed at Misima which led to a significant increase in the size and confidence in the gold resource.
“Andrew and his team have overcome significant challenges in PNG created by the restrictions due to COVID-19, and on behalf of the board I would like to extend our appreciation to all employees for their continued hard work and resilience in these trying times.”
Financials
Over the 2021 financial year, Kingston expensed $1.4 million on operating activities, up roughly $400,000 on the FY20 result.
The rising gold developer recorded a near $2 million loss for over FY21 as it continued to develop its precious metals assets in PNG and Australia.
Kingston’s net asset’s totalled $40.7 million, up from FY20’s $27.4 million result.
The gold explorer ended the financial year with $11 million in cash, nearly double the $6.5 million tabled in the year prior.
This was fuelled by two capital raises over the period — a 12.5-million-share placement to raise $2 million and a 48-million-share capital raise to secure a further $12.5 million.
Advancing Misima Gold Project
Kingston’s cornerstone gold asset is central to its vision to become a mid-tier producer, with the company moving to 100% ownership in March this year.
The Misima Gold Project lies 600 kilometres from Port Moresby, Papua New Guinea’s capital city.
So far, Kingston has completed a pre-feasibility study at the foundational gold project, with a definitive feasibility study set to finalise before year’s end.
The precious metals asset is also home to 24.2 million silver ounces and a 6.5-million-ounce silver reserve.
In Misima’s pre-feasibility study, Kingston outlined a 17-year mine life, with the gold asset expected to produce 130,000 gold ounces every year at an all-in sustaining cost of $1,159 per ounce.
The flagship project is calculated to have a $822 million pre-tax net present value with a 33% internal rate of return.
It’s anticipated Misima will require around $283 million in capital expenditure, including a $37 million contingency.
Kingston hit a significant milestone at Misima just last week, bolstering the project’s indicated gold resource by 39%.
The asset’s total gold resources increased to 3.8 million ounces, marking a 6% jump thanks to the recent infill and extensional drilling program.
Commenting on the progress at Misima, Wilkes said: “The management and board of your company remain steadfast in our commitment to value creation through the development of this world-class asset.
“During my 10 years living and working in PNG during the 1990s, I was very impressed with how well the Misima Mine operated.
“Misima was arguably a jewel in the crown for Placer Pacific, the former owner and operator, because of how efficiently it ran and what a great place it was to work …
“I have no doubt that if we re-create the operating environment that existed then, the Misima mine will return to its status as a leading gold producer in PNG and indeed the South Pacific region.”
Progress at Livingstone
Misima isn’t the only project Kingston has its eyes on: the gold-producing hopeful is also invested in a West Australian precious metals asset.
Livingstone Gold Project lies just 40 kilometres north of Meekatharra and spans 240 square kilometres across the western Bryah Basin.
The rising gold developer currently has a 75% stake in the project, where the Kingsley prospect was discovered back in 2018.
Livingstone hosts a JORC 2004-compliant inferred mineral resource, with 989,000 tonnes at 1.57 g/t gold for 49,900 contained ounces.
Kingston’s majority-owned project also includes a number of high-grade, historical drilling intersections, strong soil anomalies and historical workings — all of which indicate excellent potential for additional discoveries.
Gold prices remain robust
While Kingston is yet to reach producer status, the gold price continues to impact its developing operations.
Although gold prices rose considerably last year at the height of the pandemic, the yellow metal’s stellar performance has pared back somewhat over 2021 as global economies continue their recovery.
Speaking to the commodity’s performance, Wilkes continued: “Gold prices have come off a little this year but remain strong at around US$1,800 per ounce.
“This continued strong gold price underpins the assumptions for the DFS, which I believe are conservative.
“Continued global uncertainty with the pandemic, geopolitical tensions, and huge budget deficits being run by governments across the world provide a strong outlook for gold over the medium to long term.
“For these reasons, I remain confident in the future of the gold mining industry and the success of Misima.”