Kingston Resources
(ASX:KSN) has inked a $10 million debt facility deal with PURE Asset Management to fuel the company’s growth initiatives at Mineral Hill, a New South Wales-based gold and copper mine.
Mineral Hill is located in the Cobar Basin of New South Wales, which is 175 kilometres from Dubbo. The mine was added to Kingston’s portfolio in January this year after the company acquired it from US-based Quintana MH Holdings Co for around $22.7 million in cash and shares.
Investors have been watching the progress of this acquisition since November last year. From the unveiling of the deal to the commencement of drilling, the anticipation has continued to build. Today, the gold and copper miner provided a strategic update on the project.
Despite the severe thunderstorms and strong rain in April and May, significant progress has been made. Tailings processing, which is processing of the waste products from mining, delivered positive cash flow in May and June, with gold sales in the June quarter 32 per cent above March quarter levels.
The board and management team have also deepened their understanding of the asset and see upside potential at the site. The results have buoyed the company’s belief that the growth of the site will underpin Kingston’s position as a key gold and copper producer.
To assist with the momentum, the funding from the debt facility will be provided in two tranches. The first $5 million tranche has been banked by Kingston, and the second tranche of $5 million is scheduled to be received by November this year. This means that the miner has four months to meet progress milestones to access the balance of the credit facility.
Given the progress so far, the funding will enable short-term work plans to be executed and will assist with the mining restart. This will support the delivery of a five-year-plus mine life at Mineral Hill. The capital has been earmarked for refurbishments at the site’s processing plant and at its Southern Ore Zone (SOZ) underground deposit, further mining studies and all technical programs across several open pits.
Kingston Resources managing director Andrew Corbett, said “with the conclusion of our highly successful initial drilling program at Mineral Hill, the team is now very excited to be turning towards future production growth with work now underway on Resource and Reserve updates, mine design, and plant refurbishment”.
“We are fortunate to be able to leverage the brownfield nature of our operations at Mineral Hill. The partially mined open pit at Pearse South, a developed underground at SOZ, an existing plant, and current approvals all contribute to what we anticipate will be a relatively low-cost, high return, re-start of hard rock mining at Mineral Hill”.
Shares are trading 3.4 per cent higher to 9.1 cents.
