Page 48 - gmj142-Jan-Mar2-mag-web

REGIONAL ROUNDUP

Who’s in town for Kingston?

by Mark Andrews

y ASX peer comparison, only Cardinal Resources Ltd has more Corbett said. “The capex
Bgold resource ounces in the bag than Kingston Resources Ltd. number includes $99 million
A heated battle for control of Cardinal was nearing the knockout for the processing plant, other
stage at the time of print (see page 43) and there may now be site works $61 million. On the
contenders starting to think about getting their knuckles wrapped fleet we are owner-operator,
ready to enter the ring for Kingston. and we are intent on focusing
on owner-operator at the start
Although the company has just released a PFS on the Misima
of this project. There is a pre-
gold project in PNG, the asset is far from a greenfields play and the
strip involved at $32 million,
premise for Placer Dome’s success at the historic mine appears to
we are doing a cut back on
be replicable.
a historical pit as there is
Misima was mined for 15 years, averaging 230,000 ozpa gold at obviously some waste and Mick Wilkes became chairman
a cost of $US218/oz, according to Placer reports from 1989-2004. movement at the start which of Kingston on December 1
Kingston is looking to mine and process the same orebody from comes into play.”
the same locations, while also using the established road and rail
A 16MW power plant is part of the design at Misima, with renewable
facilities to its advantage.
energy options also being assessed.
Revitalising the Placer blueprint means the route to the start of
Given the decade-long PNG experience and familiarity with
an estimated 130,000 ozpa gold production at $1,159/oz AISC for
Misima-style projects Mick Wilkes brings to Kingston as chairman,
an initial 17 years is fairly simple and well-priced at $283 million
Corbett is comfortable with owner/operator model to be pursued.
(including $37 million contingency).
Ahead of starting DFS activities, Kingston aims to produce a
Other key financials of the November PFS on Misima included life- resource update at Misima in mid-2021. Infill and extensional
of-mine free cash flow of $1.5 billion, (using $1,600/oz gold price), drilling is targeted for completion by the end of Q1, with resource
$822 million pre-tax NPV, 33% IRR and 4.7-year payback on a to reserve conversion to be followed by regional exploration in the
project headed towards granted approvals followed by funding and hope of discovering additional ounces.
construction scenarios by the end of 2022.
Current resources at Misima total 144mt @ 0.78 g/t for 3.6 moz
“Based on those numbers we should keep cracking on and get gold and reserves of 48mt @ 0.87 g/t for 1.35 moz.
this project built,” Kingston managing director Andrew Corbett said
Umuna hosts 3.3 moz in resource alone, with drilling to an average
during a webinar presentation on the PFS.
depth of 119m giving rise to potential at depth, while the deposit
Corbett said going all the way at Misima would be the start of remains open to the north and south.
Kingston’s rise to the ASX mid-tier gold ranks and as one of Asia
Kobel and Maika, historically mined by Placer and subject to little
Pacific’s next large-scale, low-cost producers.
modern exploration, Umuna East, Abi, Ewatinona and Misima
Given the compelling economics and clear path to production North are some of the key near-surface exploration targets
outlined by Kingston at Misima, GMJ asked whether the project interesting Kingston.
was starting to attract third-party interest.
“We are focused on the JORC resource and reserve upgrade in
“Good question, I don’t know. It should be because it is a great
Q2 and then that feeds into the DFS and mining studies. We have
project and it is big,” Corbett said.
lost six months of drilling [COVID-related] in our schedule so that is
“The best value for shareholders is to continue advancing the why we are rolling straight into DFS now; we need to catch up that
project to development. Are external guys looking at it? I don’t drilling,” Corbett said.
know, I can’t answer that.”
“Baseline work and environmental [studies] are underway and that
At a throughput rate of 5.5 mtpa, there is potential to push more leads into project approvals. Our strategy is to submit the EIS and
tonnes through the mill at some stage, with Corbett signalling mining licence by the end of 2021/early 2022 aiming for approval
potential to produce 150,000 ozpa gold from about year three or and funding by the end of 2022. All things going well that is when
four. we want to have an approved project and then looking at funding
Under Placer, the coarse grind project peaked at 7 mtpa. and construction.”
“It is a very simple processing flowsheet, it is a very simple layout The company is assessing economic opportunities for the high-
and most importantly all the earthworks are in place. The ROM is grade Livingstone gold project (Homestead 49,000oz gold
going in the same spot, the CIL circuit is all the same as Placer. We resource) on the western limb of the Bryah Basin in Western
don’t need to do earthworks, it is all down-hill ore using gravity, so Australia, which could provide a potential source of funding for
it is low-cost strategy, with a port in place and haul road in place,” Misima.

Page 48