Kingston’s high-grade drilling gives Mineral Hill restart case fresh momentum

High-grade drilling expands Mineral Hill targets

Kingston Resources Limited (ASX:KSN) has opened a potentially important chapter at Mineral Hill with high-grade intersections across three deposits, including 19.0 metres at 13.0% copper equivalent at Red Terror and 22.1 metres at 7.6% copper equivalent at the Southern Ore Zone. The results are exploration intersections rather than a new resource or reserve, but they have strengthened the company’s case for testing extensions around an existing underground mine and processing complex.

At SOZ, hole KSNDDH085 returned 22.1 metres from 209 metres at 1.62 grams per tonne gold, 1.47% copper, 8.98% lead, 3.13% zinc and 132 grams per tonne silver. Kingston said the result extends mineralisation beyond the current resource, with the lode remaining open to the east, south and at depth. The intersection is reported at an estimated true width of about nine metres, an important qualification because most drilling lengths in the release are downhole measurements.

The SOZ result builds on the July SOZ extension drilling, which had also indicated that the Upper A Lode remained open east and south. Kingston drilled 4,370 metres underground during the September quarter, including extension and infill holes at SOZ, Jack’s Hut and Red Terror. The broader FY27 program totals 25,000 metres, with about 60% allocated to underground and surface extension work and the balance to infill drilling.

Jack’s Hut moves towards a second ore source

Jack’s Hut is the more immediate mine-planning story. Eight infill holes at the southern end of the historical underground workings broadly supported the existing geological model, including 9.3 metres at 3.2% CuEq in KSNDDH093 and a 13.0-metre interval at 2.92% CuEq in KSNDDH091. The deposit has its own portal and decline, separate from the SOZ workings, and Kingston is targeting it as a second ore source in a future life-of-mine plan.

That work continues the Jack’s Hut infill drilling, previously reported as supporting the location and continuity of mineralisation. A surface rig is expected at Mineral Hill in November to test deeper extensions below the current Jack’s Hut resource. Updated Mineral Resource estimates for Jack’s Hut and SOZ are targeted for the March quarter of 2027, while an underground Ore Reserve update is planned for the June quarter.

Cash has been rebuilt, but mining has not restarted

Kingston finished the quarter with A$14.543 million in cash and cash equivalents and reported zero debt. The balance was supported by the A$10 million deferred payment from the sale of the Misima Gold Project and approximately A$7.4 million of net entitlement-offer proceeds. Those inflows helped offset A$7.34 million in production costs, A$2.67 million in staff and corporate costs, and A$5.47 million of underground-related and other non-current asset expenditure.

The quarter’s cash usage is difficult to read as a clean measure of ongoing costs: Kingston said much of the spending related to one-off creditor settlements, redundancy payments and the transition to care and maintenance after open-pit mining ceased. It paid A$8.8 million in outstanding liabilities and A$1.3 million in redundancy costs during the period. Meanwhile, Argonaut is assessing strategic alternatives intended to maximise shareholder value, but Kingston explicitly said there is no certainty that a transaction or other outcome will result.

Technical studies will determine the restart equation

The next phase is less about headline grades than converting them into a workable underground plan. Kingston is progressing stope design and scheduling, paste-fill studies, metallurgical sampling at Jack’s Hut, tailings-storage planning and early work on processing-plant optimisation or expansion. It says the aim is to establish a clearer basis for Mineral Hill’s potential mine life, production scale and capital requirements, rather than announcing a restart decision.

Red Terror offers another high-grade target, with KSNDDH080 returning 8.55 metres at 23.80 grams per tonne gold, 0.91% copper and 16 grams per tonne silver. The mineralisation remains open to the north and down dip, although historical channel and drill results cited as evidence for a northern extension have not been independently verified and are being provided for geological context only. Results from ongoing SOZ drilling and the planned surface campaign will therefore matter more than the historical hints when Kingston comes to update its resources.