The metals exploration company reports a 39% jump in the flagship project’s indicated resource, bringing the estimated gold ounces in this category up to 2.5 million.
Overall, Misima’s global resource saw a 6% increase to 3.8 million gold ounces after an infill and extensional drilling program.
There’s also potential for an ore reserve update in the near future as Kingston prepares to deliver the Misima definitive feasibility study (DFS) early next year.
“A great result”
Speaking to the resource update, Kingston managing director Andrew Corbett thanked the company’s geological team.
“This is a great result for Kingston shareholders, with the substantial upgrade in resource classification firmly establishing Misima as one of the most exciting new mid-tier gold development opportunities in the Asia-Pacific region.
“The increase in overall ounces, and particularly the 39% increase in indicated ounces to 2.5 million ounces, establishes a fantastic platform for the ongoing DFS work to build upon.
“Our refined geological model for the Umuna deposit represents a key step forward for the project and further reinforces the potential for Misima to be a large-scale, long-life, low-cost gold mine.
“The team has significantly advanced its understanding of the mineralisation at both Umuna and Ewatinona and we are all looking forward to building on this knowledge and delivering on the continued growth potential as we advance Misima towards development.”
Updated mineral resource
Following the resource update, Misima’s global resource now stands at 169 million tonnes, grading at 0.71 g/t gold and 4.1 g/t silver for 3.8 million gold ounces and 22.1 million silver ounces.
Specifically, the 39% increase in indicated gold ounces means this category now hosts 97.7 million tonnes of resource at 0.79 g/t gold and 4.3 g/t silver for 2.5 million gold ounces and 13.4 million silver ounces.
Kingston’s latest infill and extensional drilling campaign added roughly 200,000 gold ounces to the global mineral resource, while significant tonnage increases were also recorded across the indicated and overall resource categories.
Ultimately, the Misima resource update focused on updating the geological model at the Umuna deposit and incorporating infill and extensional drilling data while maintaining the pre-feasibility study (PFS) assumptions around cut-off grade.
Given the stronger gold price environment, the resource is now reported within a US$1,800 pit shell, compared with the November 2020 resource, which was reported within a US$1,700 pit shell.
More details on the updated mineral resource are in the table below:
New exploration potential
Promisingly, some of the new mineral resources at Misima include near-surface material from Umuna East, a gold prospect near the high-priority Umuna deposit.
As Umuna remains open in several directions and at depth, Kingston intends to conduct further exploration over a suite of follow-up drill targets at the deposit.
Recent work has also confirmed two more exploration targets at the project’s historical Placer starter pits, dubbed Kobel and Maika.
These are located between the Umuna and Ewatinona deposits, although neither target has seen follow-up exploration in recent years.
Ore reserve upside
Moving ahead, the expanded indicated resource at Misima could be converted to an ore reserve under the upcoming DFS.
The idea is supported by the earlier pre-feasibility study, where 71% of this resource category was converted to reserve status.
Misima currently hosts a 1.35 million ounce ore reserve — a statistic that underpins a 10-year life of mine that’s founded on reserve ounces alone.
As a result, any increase in reserve could stand to extend the project’s mine life.
DFS on the way
Kingston’s DFS for the flagship gold project is expected in the first quarter of 2022.
It hopes to update the project economics outlined in the PFS, which include:
- The study proposed that Misima could produce an average 130,000 gold ounces per annum over a 17-year mine life at a mean all-in sustaining cost of A$1,159 per ounce;
- Misima is poised to generate A$4.9 billion in revenue over its lifetime, as well as A$1.5 billion in free cash flow;
- The PFS calculated a pre-tax net present value (NPV8%) of A$822 million and a 33% internal rate of return (IRR) based on a US$1,600 per ounce gold price;
- Based on a US$1,900 per ounce floor price, however, the economics improve to a $1.28 billion pre-tax NPV8% and 48% IRR; and
- Misima’s payback period is calculated at 4.7 years based on a US$1,600 per ounce gold price, but that reduces to 2.75 years at US$1,900 per ounce.
Next on the agenda
Commenting on the company's future plans, Corbett said: “Looking ahead, there are considerable operational and economic benefits to be unlocked by focusing on Ewatinona and Umuna.
“Both areas leverage off previous mining access which remains in place, they have both been mined historically, and had a combined total of over 90 million tonnes of ore processed through a standard carbon in leach plant.
“In November last year, we completed our PFS on Misima, which demonstrated robust project economics and provides the foundation for the current DFS, due for completion by March next year.
“On the ground, drilling is currently focused on completing the geotechnical program required for the DFS, which will then transition to focusing on high-grade shallow exploration targets at Umuna East, Kobel/Maika and Abi.
"Our permitting, environment and community team, led by Geoff Callister, is on track to complete the environmental and social impact assessment and submit applications for the Misima Project approvals alongside the DFS results in March 2022.
“Community support and engagement remains a priority for Kingston and the Misima people, and we acknowledge and are grateful for the ongoing support we are receiving.”