Kingston Resources’ chairman backs company in $13m raising to advance Misima gold project
Diamond drilling at Kingston Resources’ Misima project returned 13.5m at 4.6g/t gold from 17.5m.
Kingston Resources’ (ASX: KSN) chairman Mick Wilkes has put his own money behind the company by subscribing for $500,000-worth of shares in a $13 million raising to advance Misima towards production.
The company has received binding commitments from institutional investors to subscribe for $12.5 million in shares at $0.26 each.
Mr Wilkes’ participation will bring the amount of funds raised to $13 million.
According to Kingston, the $12.5 million placement will introduce a number of new institutions to the company’s register.
The $0.26 issue price is an 11.2% discount to Kingston’s 10-day volume weighted average price.
Kingston managing director Andrew Corbett said the company was “delighted” with the response it had received from investors.
“We’re now looking forward to taking the next steps at Misima.”
Misima gold project
Funds from the raising will be used to advance Kingston’s flagship Misima gold project in Papua New Guinea.
This will include a $1.65 million payment to take Kingston’s ownership in the project up to 100%.
Proceeds will also go toward infill and extensional drilling as well as mining and environmental studies.
Mr Corbett also said the company plans to release updated reserve and resources next year.
Last month, Kingston revealed a prefeasibility study for Misima with “compelling” economics.
Underpinning the study is an ore reserve of 1.35 million ounces of gold and resources of 3.6Moz.
The study assumes a 17-year mine life to produce 130,000oz of gold annually.
It estimates an all-in sustaining cost of A$1,159/oz of gold produced.
Based on a gold price of US$1,600/oz, the study forecasts life of mine revenue of A$4.9 billion to generate life of mine free cash flow of $1.5 billion.
With the spot gold price current hovering at US$1,835/oz, this could substantially boost these revenue figures.
“The coming 12 months is set to be an exciting and busy period for Kingston as Misima moves into the definitive feasibility study and approvals, and with continued drilling activity planned to further improve the already compelling project economics,” Mr Corbett said.