Kingston Resources Ltd (ASX:KSN) is closing in on production from the Misima Gold project in Papua New Guinea after completing a Definitive Feasibility Study (DFS) which confirms the company’s “compelling economics”, including a total lifetime de- mining revenue (LOM) of A$6.1 billion.
The DFS outlines the potential for a large-scale, long-life, low-cost operation, with a reserve of 1.73 million ounces, a net present value (NPV7) of $956 million and production gold forecast of 2.4 million ounces of gold and 5.6 million ounces of silver over 20 years at forecasted all-in sustaining costs (AISC) LOM of A$1,217 per ounce gold.
Leading independent consultants were engaged on all key aspects of the project and the parameters set by DFS were consistent with the company’s Pre-Feasibility Study (PFS), confirming the technically sound and low-risk nature of the project .
Autonomous mining and processing operation
Kingston plans to leverage Misima’s strong production history to build a 6.1 million tonne per year carbon-in-leach (CIL) processing facility and modern infrastructure on the footprint of the historic mine.
This will establish a new stand-alone long-lived gold mining and milling operation, underpinned by two main sources of ore – a reduction of the existing open pit at Umuna and an expansion of the small existing pit at Ewatinona in the Quartz Mountain area.
The long mining and processing history, advantageous metallurgy and simplicity of the flow sheet give Kingston a high degree of confidence in the technical and commercial viability of the project.
Kingston also reports an increase in the probable ore reserve at the JORC Misima Gold Project to 76 million tonnes at 0.79 g/t for 1.73 million ounces, a 28% increase from the previous reserve.
“I am extremely pleased to report such fantastic results from our Definitive Feasibility Study,” said Andrew Corbett, Managing Director of Kingston Resources.
“Delivering such a high quality study alongside a 28% increase in reserves is a watershed moment for the Misima Gold project, Kingston shareholders and all stakeholders, especially the Misima community who have strongly supported our progress. “
“Kingston’s survey and geological teams have done an outstanding job in carrying out such a comprehensive work program in a challenging operating environment. The foundations for a return to gold production at Misima are now firmly established and we look forward to continuing to progress Misima towards first production,” he said.
“DFS confirms a robust, large-scale, long-lived, low-cost operation, delivering total production of 2.4 million ounces at an extremely attractive all-in average sustaining cost of A$1,217 per ounce.
“While cost inflation had significant and widespread impacts, the economics of the project are compelling, with a pre-tax free cash flow of A$2.7 billion, a pre-tax NPV of A$956 million Australians and an IRR of 22%.
“These are exceptional results that make Misima one of the best undeveloped projects in the Asia-Pacific region.
“We now look forward to the next stage of Misima’s progress. Discussions have begun regarding the review of strategic options for the development of the project which will demonstrably improve returns for shareholders.
“In the short term, we expect to conclude the Environmental and Social Impact Assessment (ESIA), with our applications for mining lease and environmental approval to be filed shortly thereafter.”
There will be a number of ongoing work programs while the application process is ongoing.
In the meantime, Kingston has begun examining strategic alternatives to help accelerate the development of the project, including an evaluation of a range of financing and ownership options.
Kingston has also begun to engage financial advisory groups to help advance these funding and strategic options with the appointment of a formal advisor expected in the near term.