Why Kingston’s $95M Misima Sale Could Transform Its Copper Future

• Sale of Misima Gold Project to Ok Tedi for $95 million total consideration
• Upfront payment of $50 million with deferred payments and a 0.5% gross revenue royalty
• Proceeds to fully repay $15 million debt facility and fund Mineral Hill expansion
• Transaction completion expected in Q1 FY26, pending regulatory approvals
• Kingston to focus on copper production growth and exploration at Mineral Hill

Strategic Divestment Unlocks Value

Kingston Resources Limited (ASX: KSN) has entered into a binding agreement to sell its Misima Gold Project in Papua New Guinea to Ok Tedi Mining Limited for a total consideration of $95 million. This deal, comprising an upfront payment of $50 million, deferred payments totaling $20 million, and a 0.5% gross revenue royalty on future gold production, marks a significant milestone for Kingston, whose current market capitalisation stands at $76 million.

The transaction is designed to materially strengthen Kingston’s balance sheet, enabling the full repayment of a $15 million secured debt facility. This financial reset positions the company to accelerate growth initiatives at its Australian-based Mineral Hill operations, particularly targeting copper production growth slated for 2026.

Focus Shifts to Mineral Hill Expansion

With the divestment of Misima, Kingston is pivoting towards expanding its footprint in copper and gold production at Mineral Hill. The company plans to intensify exploration activities, including drilling programs targeting brownfields sites such as Parker’s Hill, Jack’s Hut, and EOZ, as well as greenfield exploration on adjacent tenements. This strategic focus aims to extend mine life beyond 2030 and unlock additional production sources from existing underground infrastructure.

Kingston’s Managing Director, Andrew Corbett, highlighted the significance of the deal, noting that the sale delivers up to $70 million in cash while retaining exposure to Misima’s future production through the royalty arrangement. He expressed confidence in Ok Tedi’s capability to advance Misima towards a production restart, aligning with the Papua New Guinea mining giant’s vision for the region.

Transaction Details and Conditions

The sale agreement includes a 0.5% gross revenue royalty on gold and copper production from Misima after 500,000 ounces of gold have been produced, with Ok Tedi holding a buy-back right for $25 million. Completion of the transaction is expected in the first quarter of FY26, subject to regulatory approvals from Papua New Guinea’s Independent Consumer & Competition Commission and the renewal of key exploration licenses.

Ok Tedi Mining Limited, a well-established operator of the Ok Tedi Mine, the longest-running open-pit copper, gold, and silver mine in PNG, brings significant operational expertise and financial strength to the project. The company generated US$1.5 billion in revenue in 2024 and maintains a robust cash position, underscoring its capacity to advance Misima’s development.

Outlook and Market Implications

Kingston’s divestment of Misima represents a strategic realignment, allowing it to emerge as a well-funded Australian copper and gold producer with enhanced flexibility to pursue growth opportunities. The transaction not only unlocks latent value for shareholders but also reduces operational costs and debt servicing burdens associated with Misima.

Looking ahead, Kingston’s intensified exploration and development efforts at Mineral Hill could position the company for a step-change in production scale and long-term returns. Meanwhile, Ok Tedi’s stewardship of Misima is expected to expedite the project’s return to production, benefiting local communities and stakeholders in Papua New Guinea.

Bottom Line?

Kingston’s $95 million Misima sale sets the stage for a copper-focused growth surge while keeping a foothold in PNG’s gold sector.

Questions in the middle?

• How quickly will Ok Tedi advance Misima towards production restart?
• What exploration results can Kingston deliver at Mineral Hill to extend mine life?
• Will the regulatory approvals and license renewals proceed smoothly to enable timely transaction completion?