Kingston Resources Secures $95M from Misima Divestment to Boost Mineral Hill
Kingston Resources has agreed to sell its Misima Gold-Silver Project for $95 million, bolstering its balance sheet to accelerate growth at the Mineral Hill gold-copper operation. The transaction positions Kingston to expand production and exploration in the southern Cobar Basin.
- Binding agreement to divest Misima Project to Ok Tedi Mining for $95 million
- Upfront $50 million cash payment with deferred payments and 0.5% gross revenue royalty
- Proceeds to repay $15 million debt and fund Mineral Hill expansion
- Mineral Hill mine life extended with underground development and drilling programs
- Strategic processing facility in southern Cobar Basin supports regional growth
Strategic Divestment Strengthens Kingston's Position
Kingston Resources Limited has taken a decisive step to sharpen its focus on the Mineral Hill gold-copper project by entering into a binding agreement to divest its Misima Gold-Silver Project to Papua New Guinea's Ok Tedi Mining Limited. The $95 million transaction, comprising upfront and deferred cash payments alongside a 0.5% gross revenue royalty on future production, significantly strengthens Kingston's financial footing.
This divestment not only provides Kingston with an immediate $50 million cash injection but also includes deferred payments totaling $20 million and an uncapped royalty valued at approximately $25 million. The royalty commences after 500,000 ounces of gold or equivalent production, ensuring Kingston retains upside exposure to Misima's future success.
Fueling Growth at Mineral Hill
With the proceeds, Kingston plans to fully repay its $15 million secured debt facility, eliminating ongoing interest costs and enhancing balance sheet flexibility. This financial strength enables the company to accelerate infill and extensional drilling programs at Mineral Hill, which boasts a six-year mine life and is fully approved for operations.
Mineral Hill is strategically located in the southern Cobar Basin and hosts both open pit and underground ore reserves. The company is expanding underground development, with drilling targeting resource extensions to increase mine life beyond six years. Surface exploration is also underway to identify new open pit and underground targets within existing mining licenses.
Unlocking Regional Potential
Kingston's Mineral Hill processing facility is the only one operating in the southern Cobar Basin, positioning the company as a regional hub for processing third-party ore and pursuing accretive growth opportunities. Plans include doubling production capacity from 360,000 to 700,000 tonnes per annum, aiming for approximately 70,000 ounces of gold equivalent production annually.
The company is also exploring greenfields targets on exploration license EL 8334, with promising geochemical and geophysical signatures suggesting significant upside potential. This regional focus complements the ongoing brownfields expansion at Mineral Hill, including resource updates at Parkers Hill and extensions at Jack’s Hut and the Southern Ore Zone.
Transaction Outlook and Market Impact
The transaction is expected to complete in the first quarter of fiscal 2026, subject to regulatory approval from the Independent Consumer & Competition Commission and other customary conditions. Kingston’s management team, with extensive mining and financial expertise, is confident this strategic pivot will unlock shareholder value by focusing on Mineral Hill’s growth trajectory.
Overall, Kingston Resources is positioning itself as a more focused and financially robust gold-copper producer, leveraging its existing assets and infrastructure to capitalize on exploration and production opportunities in a prolific mining region.
Bottom Line?
Kingston’s divestment of Misima sets the stage for a focused, well-capitalized push to expand Mineral Hill’s footprint and production profile.
Questions in the middle?
- How will the deferred payments and royalty from Misima impact Kingston’s future cash flows?
- What are the key risks in relying on inferred resources for Mineral Hill’s production targets?
- Could Kingston pursue further acquisitions to complement Mineral Hill’s growth strategy?
