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Kingston Resources expects more discoveries after shallow gold found at Misima

SNL Image
The Misima gold mine in Papua New Guinea around 1993.
Source: Kingston Resources

Kingston Resources Ltd. has experienced a rare thing in modern mining — a shallow high-grade gold discovery — at its Misima gold project in Papua New Guinea and expects more to come as it builds up to feasibility studies starting in mid-2020.

The junior's ASX share price shot up as much as 16% on Sept. 18 after it announced a new zone of shallow, high-grade gold mineralization at its Abi prospect in the Quartz Mountain area of the Misima gold project.

It is the latest in a string of achievements at Misima in the past six months. Kingston identified a gold-mineralized stockpile of up to 81,000 ounces in March before announcing an A$8.3 million raise to fund exploration there.

Managing Director Andrew Corbett said in an interview that Kingston has always known Misima is an "elephant," and investors are now starting to understand how big it is and that it is likely to grow with multiple exploration targets.

Kingston is diamond drilling near-surface oxide targets at Umuna East, a different area on the property from where Abi is, before moving to Misima North. A rig will then return to Quartz Mountain for additional infill and extension drilling to underpin an updated mineral resource estimate due in mid-2020.

The company's share price has risen between hitting a 12-month low June 27 and Aug. 12, though it is moderated somewhat as Sandfire Resources NL slightly reduced its substantial holding.

A diamond drillhole along strike to the southeast of the 220,000-ounce Ewatinona resource returned results including 23.6 meters at 2.91 g/t gold from 7.4 meters and 13.5 meters at 4.6 g/t gold from 17.5 meters.

Such results, combined with geological mapping, indicate there are multiple mineralized structures that have not been fully tested by historical drilling.

SNL Image

Kingston Resources Managing
Director Andrew Corbett.
Source: Kingston Resources

Corbett said the discovery at surface was "unusual" considering Kingston has a 2.8-million-ounce historical resource that is deeper, hence the significant level of interest reflected in the share price lift.

Kingston expects there to be a big open pit at Umuna, which is where all the ounces came from last time it was mined — for 15 years by Placer Dome Inc. until closure in 2004.

Kingston will start feasibility studies once the maiden JORC resource is out, which is the company's focus as it has "slowed down" progress at its Livingstone gold project in Western Australia, where the maiden resource has been pushed back from this year to 2020.

While Kingston is "just as excited" about Livingstone, where about 2,500 meters of reverse circulation was drilled in recent weeks, "Misima is so big that it's the company-making project."

Corbett considers the Sept. 18 announcement a "very material" one" as it showed that while Misima is "supposedly a well-explored project ... it is actually underexplored."

"We're just showing that these new targets we've been talking about are very real," Corbett said, adding that the plan is to make more such discoveries.

Kingston has expanded surface exploration for Umuna and Ewatinona-style gold-silver mineralization at Quartz Mountain to a broader region framed by the Ewatinona, Kobel and Maika pits and the historical Placer processing plant location.