Doubling in share price reflects Kingston’s strong quarter

By Trevor Hoey. Published at Oct 31, 2019, in Mining

When Kingston Resources Limited (ASX:KSN) released its quarterly activities report on Thursday morning, managing director Andrew Corbett accurately summed up the company’s progress in the September 2019 quarter in saying it had been a ‘’very active and successful period for the company’’.

During the September quarter Kingston had success on multiple fronts as projects in both Papua and New Guinea and Australia showed promising potential.

The accelerated drilling campaign being undertaken at the company’s 2.8 million ounce Misima Gold Project in Papua and New Guinea has paid dividends with shallow high-grade gold mineralisation in proximity to existing resources, as well as new discoveries indicating that the company is well on its way to upgrading the size of the mineral resource.

Resource upgrades on the horizon

Examining the prospects for across-the-board resource upgrades and maiden resource estimates, Corbett said, ‘’Compilation of historical reconnaissance RC drilling completed by Placer and surface geochemistry by Placer and Kingston has highlighted a number of target zones defining multiple potential parallel mineralised trends.

‘’These results, combined with geological mapping, indicate the presence of multiple mineralised structures that have not been fully tested by historical drilling and remain a focus of ongoing exploration.

‘’The ongoing work programs in the Quartz Mountain area continue to add to the company’s confidence that there is upside to the resource base in the region enhancing its attractiveness as a potential starter pit area.”

Indications regarding the commercial viability of establishing a starter pit would be extremely well received as this would generate cash flow for further exploration, and potentially a full-scale redevelopment of the project.

Three-pronged approach pays dividends

Looking specifically at the areas targeted during the quarter, Ewatinona was a standout with intersections of 20 metres and 15.7 metres grading 1.8 g/t gold and 1.6 g/t gold respectively.

The high-grade gold discovery at Abi was another highlight, featuring intersections such as 23.6 metres at 2.9 g/t gold from 7.4 metres, including 4.3 metres at 11.6 g/t gold, also close to surface.

Drilling is now underway at Umuna East and Misima North.

These two sites along with Ewatinona are shown on the following map...

Drilling has commenced at Umuna East and Misima North.

It is also worth noting the four kilometre untested strike which extends to the north, a continuation of the trend that underpins the current 2.6 million ounce Umuna resource which remains open at depth.

The potential upside in Kingston wasn’t lost on investors as its shares doubled from 1.3 cents in mid-July to hit a high of 2.6 cents in September.

While some of these gains have been given up in October, this can mainly be attributed to volatility in equity markets, and possibly an overreaction to a slight retracement in the gold price.

Livingstone could be the driver in December quarter

There was similar exploration success at the Livingstone Gold Project in Western Australia where 17 holes were drilled across a length of 2375 metres.

The drilling was designed to confirm and extend the shallow zones of mineralisation intersected in previous air-core drilling.

The drilling showed mineralisation and grade continuing at depth, as indicated below.

Mineralisation and grades continue at depth.

Kingston recently started an 800 metre diamond drilling program at Livingstone which is aimed at developing an enhanced structural model of the Kingsley prospect which lies within Livingstone.

Management views Kingsley as a potentially large, high-grade gold system with a combination of broad zones of high-grade oxide mineralisation close to surface, together with high-grade intercepts at depth.

The deeper diamond holes will help in more accurately defining the extent of gold mineralisation, both along strike and at depth, feeding into the delivery of a maiden Mineral Resource Estimate.

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

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S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

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