Kingston drilling results to feed into resource upgrade
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Kingston Resources Limited (ASX:KSN) has advised that latest diamond drill core assays from resource definition drilling at the Ewatinona deposit, part of the 2.8 million ounce Misima Gold Project in PNG, have returned significant zones of mineralisation.
These included 14 metres at 1.6 g/t gold from 163 metres and 12 metres at 1.3 g/t gold from 22 metres.
There were also some higher grade intersections such as 4 metres at 2.5 g/t gold from 144 metres and 2 metres at 4.7 g/t from 95 metres.
This means that all five holes drilled by the company at the site have intersected the mineralised structures that confirm the excellent tenor and continuity of the resource in the East Ewatinona area.
Assays are pending for several additional holes that tested the western extension of the resource.
As a backdrop, Misima was operated as a profitable open pit mine by Placer Pacific between 1989 and 2001, producing over 3.7 million ounces before it was closed when the gold price was below US$300.
Kingston is the first company that has had the opportunity to bring the project back into production, and there could be a better time to do it with the gold price approximately six times what it was when the mine was closed.
Canaccord price target set at 470% premium to current share price
With the gold price now hovering in the vicinity of US$1750 per ounce, there is the prospect of developing a high margin operation that could be fast-tracked if management chooses to opt for a staged development.
Canaccord resource analyst Reg Spencer is upbeat about the company’s prospects, having identified it as a promising emerging gold play in December.
Factoring in higher gold prices, he has upgraded his price target from 60 cents per share to 80 cents per share, representing upside of 66 cents per share relative to the company’s current trading range.
The Misima Project offers outstanding potential for additional resource growth through exploration success targeting extensions and additions to the current 2.8 million ounce resource base.
Results from the drilling program will contribute to an updated mineral resource ahead of the commencement of feasibility studies for the Misima Gold Project.
With the resource definition drilling program now completed, work on the resource upgrade is underway.
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