$12.9 Million Capital Raise Fuels Mineral Hill Expansion and Drilling Push
Kingston Resources secures $12.9 million through placement and entitlement offer to fund a 25,000m drilling program and plant expansion at its Mineral Hill polymetallic mine, bolstering cash reserves to $32.3 million ahead of a planned operational restart.
- Placement and entitlement offer raise $12.9 million at $0.035 per share
- 25,000m drilling program targets resource growth at Southern Ore Zone and Jack’s Hut
- Plant expansion studies aim to double processing capacity to 700ktpa
- Post-raise cash position strengthened to $32.3 million including $10 million Misima payment
- Major shareholder Farjoy may increase stake to 30.1% post capital raising
Capital Raising to Back Mineral Hill Growth
Kingston Resources (ASX:KSN) has announced a $12.9 million capital raising, combining a $4.4 million placement with an $8.5 million fully underwritten entitlement offer priced at 3.5 cents per share. The raise aims to bankroll a sizeable 25,000-metre drilling campaign alongside studies to expand the Mineral Hill processing plant in New South Wales’ south Cobar region.
The company’s cash pile will swell to $32.3 million post-raise, factoring in a $10 million payment due in July 2026 from the sale of its Misima Gold Project. This fortified balance sheet positions Kingston to pursue an ambitious exploration and development agenda, targeting a longer life of mine and a larger production base.
Drilling Program Focused on Resource Expansion
The drilling program will deploy multiple rigs underground and at surface to extend known mineralisation and test new targets. Initial efforts will concentrate on extensional drilling at the Southern Ore Zone (SOZ) and Jack’s Hut, both areas with well-defined mineralisation. A fresh exploration target at Parker’s Hill East will also be probed.
This marks the first large-scale exploration push at Mineral Hill since the 1980s, aiming to convert inferred resources into measured and indicated categories and grow the ore reserve base. The program dovetails with ongoing efforts to enhance the mine’s resource profile and underpin a future operational restart.
Strategic Plant Expansion to Support Future Mining
Kingston’s Mineral Hill facility is the sole polymetallic processing plant in the south Cobar Basin capable of producing gold doré, combining flotation and carbon-in-leach (CIL) technologies. The plant currently processes up to 350,000 tonnes per annum but holds permits allowing expansion to 700,000 tonnes per annum.
Expansion studies underway will evaluate optimal processing rates aligned with expected underground mining outputs. The plant is winding down stockpile processing and will enter care and maintenance shortly, awaiting the next phase of production.
Shareholder Structure and Underwriting Details
The placement attracted firm commitments from institutional and sophisticated investors, including Kingston’s largest shareholder Farjoy Pty Limited, which is set to increase its stake from 17.6% to potentially 30.1% if it fully subscribes and takes up sub-underwriting rights. New shares issued will raise the total shares on issue to approximately 1.21 billion.
The entitlement offer is fully underwritten by Argonaut Corporate Finance Limited, subject to customary conditions including ASX approvals and market stability. The offer targets shareholders in Australia, New Zealand, the EU (excluding Austria), Hong Kong, and Singapore.
Looking Ahead: Execution Risks and Opportunities
Kingston’s pivot to a resource expansion and plant upgrade strategy follows the earlier cessation of Pearse South open pit mining due to operational challenges. The company’s Managing Director Andrew Corbett emphasised the strategic value of Mineral Hill’s polymetallic processing capabilities and the potential for a larger, optimised mine life.
Investors will be watching closely as drilling results emerge and plant expansion studies progress, both critical to validating the economic case for a mine restart. The capital raising provides a robust financial runway, but execution risks remain around exploration success, permitting, and market conditions.
Bottom Line?
Kingston’s $12.9 million capital raise provides a solid financial platform to advance Mineral Hill’s resource growth and plant expansion, but the path to a profitable restart hinges on drilling outcomes and operational execution.
Questions in the middle?
- Will the 25,000m drilling program deliver meaningful resource upgrades to justify plant expansion?
- How quickly can Kingston transition from care and maintenance to full-scale operations post-expansion?
- What impact will Farjoy’s potential increased stake have on corporate governance and strategic direction?
