Kingston Reports $11 Million Metal Sales, 50% Resource Increase Amid Pit Closure

Pearse South Pit Failure Forces Strategic Overhaul

On 1 June 2026, Kingston Resources (ASX:KSN) encountered a significant operational hurdle when a wall failure in its Pearse South open pit abruptly halted mining activities. The instability, attributed to a soft graphitic shale exacerbated by rainfall, led to immediate suspension of mining and removal of personnel and equipment from the pit. With remediation options deemed unfeasible due to time and ore sterilisation concerns, Kingston has decided not to resume open pit operations at Pearse South.

This disruption wiped out an expected $39 million in gross revenue between June and September, forcing a strategic pivot away from relying on open pit cash flow to fund underground ramp-up. Instead, the company will focus on an intensive drilling campaign to build a larger mining inventory before resuming underground production.

Intensive Drilling Program and Resource Growth

Kingston plans to drill 25,000 metres in FY27 targeting resource expansion, infill drilling, and near-mine exploration. The Southern Ore Zone (SOZ) Mineral Resource Estimate has already surged by 50% to 6.54 million tonnes, with measured and indicated tonnage up 38% to 3.05 million tonnes. This increase adds 0.8 million tonnes of material suitable for potential Ore Reserve conversion, pending further studies.

Recent drilling results have confirmed high-grade polymetallic mineralisation at SOZ and Red Terror, extending mineralisation beyond existing resource boundaries. Notably, hole KSNDDH085 returned 22.1 metres grading 1.62 g/t gold, 1.47% copper, 8.98% lead, 3.13% zinc, and 132 g/t silver, underscoring the polymetallic potential. Red Terror drilling also revealed standout intersections including 8.55 metres at 23.8 g/t gold and 0.91% copper.

Financial Restructuring and Capital Raising

The operational setback triggered significant cost restructuring, with 111 employees made redundant and 18 contractors terminated. Staff and corporate costs for the quarter included $2.4 million in redundancy payments. Despite these challenges, Kingston bolstered its balance sheet by raising $12.9 million through a $4.4 million placement and an $8.47 million fully underwritten entitlement offer priced at 3.5 cents per share.

Kingston’s largest shareholder, Farjoy Pty Limited, increased its stake to 25.09% following the capital raise. As of 30 June 2026, the company held $11.74 million in unrestricted cash, which will rise to approximately $22.7 million post-quarter with the addition of a $10 million deferred payment from the Misima Gold Project sale and entitlement offer proceeds, less redundancy costs.

Processing Plant on Care and Maintenance

The processing plant has been placed in care and maintenance mode to conserve cash and prioritise capital allocation towards exploration and resource studies. The plant’s polymetallic capabilities remain a key asset, with flotation and CIL circuits able to produce multiple metal concentrates and gold doré. Kingston intends to complete engineering studies to right-size the plant ahead of recommencing underground mining.

An underground mining crew remains on site to rehabilitate historical developments and prepare drill platforms, supporting the transition back to production. The company anticipates a high volume of assay results from ongoing drilling during the September quarter, which will inform updated resource and reserve estimates.

Kingston’s Outlook Amid Uncertainty

Managing Director Andrew Corbett acknowledged the disappointment of the quarter but emphasised Mineral Hill’s strategic value, highlighting its growing resource base, multi-metal processing infrastructure, and exploration upside within the mining leases. The company’s near-term plan focuses on expanding the resource base and preparing for underground production, though timing remains uncertain pending further drilling and engineering outcomes.