Kingston Resources (ASX:KSN) has been kicking goals at its 2.8-million-ounce gold project on Misima Island in PNG in recent weeks but the short-term focus is about to switch to its Livingstone gold project in WA.

The company notched up an interesting discovery last year at the Kingsley prospect at Livingstone, 140km north-west of Meekatharra, and follow-up drilling got going in early August, with first assays due any day now.

The results could be worth looking out for given it could be argued that Kingston’s current market value of $35m at 2c a share is all about Misima, with little if anything included to cover the upside at Livingstone.

The 2018 drilling program at Kingsley outlined a near-surface zone of mineralisation over a strike length of more than 800m, with the campaign limited to the oxide zone.

The mineralisation remained open at depth, along strike and to the north.

Best results from that program included a high-grade 4m hit grading 76.25 grams per tonne (g/t) gold from 88m and 28m grading 2.26g/t (including 8m at 5.57g/t) from surface.

A 50,000oz gold resource was previously outlined at another prospect at Livingstone, with Kingsley expected to add to the story, particularly if the infill component of the current drilling program comes up trumps.

The real game changer though will be if the deeper component of the latest drilling program has confirmed primary mineralisation at depth below the shallower oxide zone.

Livingstone’s development credentials are enhanced by its proximity to “hungry’’ treatment plants owned by others.

But first, the scale of the potential resource at Kingsley and elsewhere on the western Bryah Basin tenements will need to be determined.

While the story at Livingstone unfolds, Kingston’s main event remains its big-time gold production potential at Misima.

Misima was previously mined between 1989 and 2001 by Placer Dome, acquired by fellow Canadian miner Barrick Gold for $US12 billion ($17.7 billion) in 2006 to create the world’s biggest gold miner.

The mine was a star performer, with average annual gold production of 230,000oz at a cost of just $US218/oz.

It was closed because access to life-extending resources required investment in a cutback of the open pit, something that could not be justified by the miserable sub-$US300/oz gold price at the time.

Misima now sports a November 2017 resource estimate of 82.3 million tonnes grading 1.1g/t gold compared with the 1.5g/t under Placer Dome’s ownership, remembering though that the gold price is now a very supportive $US1516/oz.

The current resource base is among the biggest of any junior gold company on the ASX and is seen by Kingston as providing a “solid backbone’’ for a return of Misima to production.

But it first wants to de-risk the project by adding nearby open pit deposits to provide an early source of low-cost cashflow.

Kingston reported some success on that front last week with the discovery of a new zone of shallow high-grade mineralisation at the Abi prospect in the Quartz Mountain area of the Misima project.

Best results included 23.6m grading 2.91g/t gold from 7.4m, including 13.5m grading 4.6g/t from 17.5m.

Cathy Moises, mining analyst at Patersons (the broker has raised funds for Kingston in the past), has a 6c valuation on the stock, triple its current level.

In a note released in response to the Abi news, Moises said that quality historic mines tended to continue to perform well under restart conditions.

“Misima was one of the best mines we ever had the pleasure to cover, when it was under the operatorship of Placer Pacific, consistently delivering above expectations and at the bottom quartile of the industry cost curve,” Moises said.

“These results, whilst too early to call until a few more holes are finalised, are further vindication of the quality of the exploration portfolio associated with Misima.”

Moises noted that Kingston’s current market capitalisation values the Misima resource at a low $13.60/oz compared with Breaker Resources’ (ASX:BRB) $63.20/oz for its Bombora gold deposit, and Bellevue Gold’s (ASX:BGL) $199/oz for its namesake project.

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