Has Kingston Resources just made WA’s next high-grade gold discovery?
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Special Report: Kingston Resources (ASX:KSN) has just pulled off a rare feat – two high-grade gold discoveries on opposite sides of the Asia-Pacific in less than a fortnight.
And, in the process the Sydney-based company may have put itself in contention to join the list of up-and-coming high-grade WA gold stories, following in the footsteps of market darlings such as Bellevue Gold (ASX:BGL) and Spectrum Metals (ASX:SPX).
Perhaps better known for its 2.8-million-ounce Misima gold project in PNG, Kingston told the ASX this morning it had confirmed a “significant high-grade gold discovery” at its Livingstone project, located 140km north-west of Meekatharra in WA’s Bryah Basin.
The company has received assays from a maiden reverse circulation (RC) drill program at the Kingsley prospect, where it encountered significant shallow mineralisation over a 2km zone in air-core drilling last year.
The reason for Kingston’s interest in the project is not hard to see.
The air-core program hit some promising zones for this relatively early stage of exploration, including 4m at 76.25 grams per tonne (g/t) from 88m, 28m at 2.26g/t including 8m at 5.57g/t from surface and 5m at 6.56g/t from 49m including 1m at 21.8g/t.
The recent RC drilling was designed to test beneath and along strike from these positive early results.
And the program has come up trumps, confirming and extending the shallow mineralisation and hitting both shallow oxide zones and deeper primary mineralisation below the air-core results.
Best results included 5m at 3.68g/t from 12m and 10m at 11.95g/t from 20m, 2m at 13.88g/t from 71m and 3m at 11.39g/t from 95m and 2m at 5.32g/t including 1m at 9.64g/t from 88m.
The company says the mineralisation remains open both along strike and at depth.
“It’s early days but it’s clear from the very limited drilling we’ve done so far that we have a potentially large, high-grade system on our hands at Kingsley,” Kingston managing director Andrew Corbett said.
“The system remains wide open to the north-west and east, with a further 1.2km strike length of known mineralisation still to be tested, and further drilling is needed at depth as we work towards a maiden JORC Mineral Resource.
“The next stage for us is to do some diamond drilling to give us structural information on the orientation of the lodes and controls on the mineralisation.
“That will help us to more accurately target the next phase of RC drilling.”
The Livingstone discovery is the second exploration breakthrough in under a fortnight for Kingston, which has raised over $8m this year to fast-track gold exploration at its two key projects.
At the previously mined 2.8Moz Misima project in PNG, the company recently announced the discovery of a new zone of shallow high-grade gold mineralisation at the Abi prospect, in the Quartz Mountain.
The company has been actively targeting this area for additional, potentially shallow ounces that could contribute early ore feed to its mine plan.
Diamond hole GDD044 at Abi returned a notable result of 23.6m at 2.91g/t from 7.4m including 13.5m at 4.5g/t.
The discovery was supported by high-grade rock chip results of up to 9.97g/t and high-grade channel sample results including 1m at 30.4g/t and 2m at 33.5g/t.
Drilling is continuing at Misima with a second diamond rig set to begin operating next month.
Prominent Melbourne-based resource analyst Cathy Moises from Patersons Securities was impressed by the Misima discovery, saying the stock has “clear upside potential”.
In a research note issued last week, Moises puts a 6c valuation on Kingston (currently trading at 2.2c).
“We have long commented that quality historic mines tend to continue to perform well even under restart conditions,” Moises wrote.
“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.
“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 says the newly discovered Abi zone is located along strike to the south-east of the current 220,000oz Ewatinona Resource.
“This is the third hole into the deposit, with the first two viewed as narrowly missing the mineralised zone. Three further holes are awaiting assays,” she said.
“Following the recent successful capital raising, Kingston has mobilised a second drilling rig to accelerate exploration at Misima.”
Patersons says that Kingston’s $38m market capitalisation, with a 2.8Moz gold resource, values the resource at a low $13.6/oz, which compares to Breaker Resources (ASX:BRB) with a market capitalisation per resource ounce at $63.2/oz and Bellevue Gold at $199/oz.
“Kingston remains our top recommendation within the junior advanced exploration/development space.”