Kingston Resources Ltd (ASX:KSN) shareholders have today given the green light to the acquisition of the Mineral Hill Mine in central NSW which will see KSN transition into an operating mining company.
At the company’s Annual General Meeting shareholders approved the issuance of shares to the vendor under the terms of the proposed acquisition.
The acquisition is expected to complete on or before the end of January 2022 upon satisfaction of the remaining customary conditions precedent.
Production ramp-up
First gold from the project within the prolific base and precious metals producing Cobar Basin was poured in September 2021 and production is being ramped up from the processing of existing tailings, with full production on track for early 2022.
Production is forecast to total 40,000 ounces at an average all-in sustaining cost (AISC) of A$1,550-1,650/ounce over 29 months and Mineral Hill is expected to deliver positive free cash flow by early 2022.
Kingston Resources managing director Andrew Corbett said: “The Kingston board would like to thank our shareholders for their continued support and for their strong vote of confidence today for the Mineral Hill transaction.
“The Mineral Hill operational team is continuing to ramp up production throughout this transition period, and we look forward to working closely with them to deliver positive cash flow from the project from early 2022.”
Exploration restart
“In addition, work has commenced on designing and planning an immediate restart of exploration and resource drilling post settlement of the transaction,” Corbett said.
"Exploration at Mineral Hill is one of the key pillars underpinning our aspiration to become a leading diversified mid-tier gold and base metal producer in the Asia-Pacific region.
“Strategically, the processing plant is ideally located within the Cobar Basin to take advantage of both internal and external near-mine opportunities.
"The attractive deal metrics, near-term cash-flow and significant gold and copper exposure make for a fantastic strategic fit with our cornerstone asset, the 3.8-million-ounce Misima Gold Project in PNG.”
The assets acquired as part of the transaction include two processing circuits, a number of developed gold and polymetallic deposits alongside an extensive exploration portfolio.
Mineral Hill Mine is 516 kilometres west of Sydney in the Cobar Basin of central NSW.
SPP close extended
Kingston Resources has also extended the closing date of its share purchase plan (SPP) to 5pm AEST on January 31, 2022.
The company is offering existing eligible shareholders the opportunity to participate in a SPP to raise up to $4 million at the same issue price as the institutional placement, being $0.20 per share.
Kingston has secured binding commitments from institutional and sophisticated investors for the placement totalling $14 million.
Proceeds of the equity raising, together with existing cash reserves of approximately A$5 million, will be used to complete the Mineral Hill acquisition, fund associated transaction costs and environmental bonds, provide working capital to continue the ramp-up in gold production and fund a planned aggressive near-term exploration and development program.
Funds will also contribute to ongoing development activity at the Misima Gold Project.