Cashed-up Kingston Resources is expecting to complete a pre-feasibility study later this year for the Misima gold project in Papua New Guinea’s Milne Bay Province. With the gold price riding high, investors believe the project is a promising one.
Misima operated as an open pit gold mine from 1989 to 2004. Credit: Placer Dome.
Misima was an open pit gold mine from 1989 to 2004. Australian miner Kingston Resources is aiming to reopen the mine by replicating the design used by Placer Dome, its previous operator.
To raise funds for the project, Kingston completed its A$8.4 million capital raising in July, including a A$2 million (K5 million) share purchase plan (SPP), which closed more than 50 per cent oversubscribed.
‘Haul roads, port, airstrip in place, and the pit, plant, camp, waste dump, port locations are all unchanged,’ a company report says. ‘The geotechnical and metallurgical information is well understood. The pre-feasability study is underway and the aim is to complete it at the end of 2020.’
The company claims that its project on Misima Island in Milne Bay Province has 3.2 million ounces of gold and 18.2 million ounces of silver.
‘I think the higher the gold price stays, the more likely people are to factor in a higher long-term price. Kingston has over three million ounces.’
Kingston’s share price has been strong, despite the capital raising, trading at A$0.26 cents, up from A$0.19 cents six months ago. The company is currently valued at almost A$60 million (K151 million).
Gold price
Acova Capital’s Michael Evans
Michael Evans, Director of Acova Capital, says investor sentiment for gold miners is strong because of the current high gold price.
‘[Misima] is years away from production but it certainly looks like a very cheap option.’
Evans tells Business Advantage PNG the geopolitical friction between the US and China means that the gold price will stay high for a longer period of time.
‘I think the higher the gold price stays, the more likely people are to factor in a higher long-term price. Kingston has over three million ounces. I don’t think you get many stocks trading that cheaply on a dollar-per-ounce basis for gold reserves that are in the ground and in one location.’
‘They have come up the learning curve pretty fast in Papua New Guinea.’
Learning curve
Evans also observes that Kingston Resources is adapting to circumstances in PNG.
‘They have come up the learning curve pretty fast in Papua New Guinea. Things have taken a little longer than they would like to get everything done. That has probably been a frustration for management and shareholders alike.’
Evans says he has a buy recommendation on the stock.
‘It is just very cheap on a dollar-per-ounce in the ground basis. You can’t buy anything like it. At these gold prices, it would print a lot of money.
‘Kingston wouldn’t need to do any more exploration. They would just need to prove up what they have got to a higher category. I think the market can expect a pretty impressive pre-feasibility study before the back end of this year.’
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Who are they to come and continue to steal from us, this mining is not going to eventuate until and unless the past issues are resolved then they can start operations there, otherwise forget about it….
Chiluba, I understand that whatever issues remain from previous Placer days would need to be discussed AND resolved before any progress towards further mining could be carried out, but I am not sure that all parties are aware of what issues are still outstanding. The infrastructure initiated and provided by MML was substantial I know, so I believe any current concerns would need to be rectified prior to further development, but that development would benefit the Misima Islanders greatly, if the way forward was negotiated at the outset, and adhered to, for the benefit of all parties. Cheers.
Best of British luck with this one…Placer milked every last possible gram from the site, but understandable with the current Gold price why someone can’t still make a killing from any residual, but away from the original pit methinks. That has been maxed out a long time ago.