Australian explorer Kingston Resources (ASX: KSN) has agreed to sell its 75% interest in the Livingstone gold project in Western Australia to Metal Bank (ASX: MBK) for a total consideration of up to $10 million.
The transaction will see Kingston realise significant value for exploration work completed at the project to date, while retaining exposure to any future exploration upside as Metal Bank seeks to expand the existing gold resource of 49,900 ounces.
Funds from the sale will be used for ongoing work at the priority Misima gold project in Papua New Guinea, where Kingston is preparing a definitive feasibility study and project approvals.
Terms of sale
Under the terms of the sale, Kingston will divest all of the issued capital in wholly-owned subsidiary Westernx Pty Ltd (Livingstone’s holding company) to Metal Bank.
The total consideration package will include: $2.5 million cash; $1 million in Metal Bank equity, comprising approximately 125 million shares; 62.5 million Metal Bank options, exercisable at $0.016 each; and milestone payments of up to $4 million cash upon the identification of pre-determined resource quantities up to 500 kilo-ounces gold equivalent.
Kingston managing director Andrew Corbett said the Livingstone sale will keep the company’s focus on Misima.
“We are pleased to have reached agreement with a well-credentialed, well-funded and capable counterparty to divest this project on attractive terms,” he said.
“With the increased level of activity at Misima, the board decided [we] would realise greater value through this sale in a structure which incorporated ongoing exposure to the project’s upside [and] we look forward to seeing what Metal Bank can deliver.”
Bryah Basin location
The Livingstone exploration project spans over 30 kilometres of prospective geological strike on the western limb of the highly-prospective Bryah Basin, near the town of Meekatharra.
It has an existing inferred resource of 49,900oz gold as well as a number of high-grade drilling intersections, strong soil anomalies and historical workings which are believed to indicate “excellent potential” for additional discoveries.
Best historic intersections have been 18 metres at 7.85 grams per tonne gold from 68m, 5m at 20.5g/t gold from 3m, and 14m at 3.49g/t gold from 2m.