Kingston Resources Ltd (ASX:KSN) has raised $8.1 million in a share placement and is eyeing off an additional $5.4 million in a non-renounceable entitlement offer with the funds expected to lay the foundation for a long-term critical minerals operation in central New South Wales.
The accelerated non-renounceable entitlement offer (ANERO) is being offered on the basis of one new share for every six KSN shares held with the $13.5 million to be used to advance additional development at the Mineral Hill Project in the resource-rich Cobar Basin.
Of the total funding generated, $8.8 million (the placement funding plus a further $750,000 from the institutional component of the entitlement offer) will go to transitioning to open pit mining at the Pearse Project, underground resource development drilling, processing plant costs and general working capital.
The retail component of the entitlement offer will be fully underwritten by Delphi Unternehmensberatung Akteingesellschaft, an existing major shareholder and sophisticated investor.
“Excellent” strategic position
“We are immensely grateful for the support we have received from both new and existing shareholders,” Kingston Resources managing director and CEO Andrew Corbett said.
“Their confidence is a validation of our work as we move forward with our plans to significantly increase production with Pearse.
“There is currently a lot of activity in the Cobar region and Kingston is in an excellent strategic position with an operating processing plant and outstanding exploration upside potential.
“The Tailings Project has been a highly successful operation for the company and the entire team should be very proud of what has been delivered.
“Shortly after Kingston acquired the project in January 2022, the site team made operational improvements such as increasing the throughput rate and managing feed densities to maximise monthly gold production. Operating cash flow from the project has reached $24 million as of December 31, 2023.”
Kingston Resources says the Tailings Mining Project is expected to be completed over the next two months, which will enable the transition to hard rock mining at Mineral Hill.
The refurbishment of the existing processing plant is also nearing completion, ready to produce concentrate once mining begins.
Transition to open pit mining
“The focus at Mineral Hill will now shift to extracting the remaining high-grade tailings inventory and making the final preparations on the transition to open pit mining.
“Production during the March quarter is expected to be around 3,000 ounces with strong performance during January and March, after lower grades and recoveries were experienced in February.
“We remain focused on our company strategy to self-manage and self-perform all aspects of the operation at Mineral Hill.
“This includes transitioning our current mining team from the Tailings Project over Pearse open pits, ensuring we maximise the operating margin for Kingston shareholders.
“This approach has also been used with the process plant refurbishment. By managing this work program in-house and using our highly capable site team we have managed to refurbish the processing plant on budget and at a leading low capital intensity.”
Kingston says it expects to see a 133% year-on-year increase in payable metal produced by its assets once Pearse has been converted to an open pit mine, representing about 7,000 tonnes of copper equivalent metal.
The company plans to begin open pit mining at Pearse in the current quarter, with underground mining and copper production to begin in financial year 2026.