Announcement PDF QUARTERLY REPORT 30 July 2024 ABOUT KINGSTON RESOURCES Kingston Resources is a gold producer, focused on building a mid-tier gold and base metals company, with current production from the Mineral Hill gold and copper mine in NSW, and advancing its flagship development asset, the 3.8Moz Misima Gold Project in PNG. QUARTERLY ACTIVITIES REPORT For the period ending 30 June 2024 HIGHLIGHTS Mineral Hill Gold & Copper Mine, NSW • Successful completion of Tailings Retreatment Project: o Production of 34,540 oz of gold over the life of the project. o Generated $26 million in operating cashflow. • Commencement of open pit mining: o Blast hole drilling began in May 2024, with the first blast conducted at Pearse North open pit in June 2024. o Substantial volumes of open pit oxide ore trucked to the ROM pad. o Open pit oxide ore commissioning commenced in the last week of July. • Processing plant refurbishment: o The period of significant capital expenditure on the plant is now nearing completion. First gold pour from new open pit ore in August. o Crushing and grinding circuits commissioned in July. o Flotation circuit commissioning expected in August, enabling full processing capability for multiple metal concentrates and precious metal doré. • Resource development and expansion: o Surface drilling delineated high-grade mineralisation over a 400m strike length at the Southern Ore Zone. o Updated open pit Mineral Resource Estimate (MRE) for Pearse North delivers a 30% increase in gold and 67% increase in silver. CAPITAL STRUCTURE Shares on Issue: 707M Market Cap: A$55M Cash:(30 June 2024) A$8.36m DIRECTORS & MANAGEMENT Mick Wilkes Non-Executive Chairman Andrew Corbett Managing Director & CEO Stuart Rechner Non-Executive Director Tony Wehby Non-Executive Director Stuart Hayward Chief Geologist Geoff Merrell GM, Mineral Hill Misima Gold Project, PNG CORPORATE DETAILS ASX: KSN www.kingstonresources.com.au ABN: 11 060 156 452 E:info@kingstonresources.co m.au A: 202/ 201 Miller Street, North Sydney, NSW 2060 LinkedIn: Kingston Resources Limited Twitter: @KSNResources www.kingstonresources.com.au • • Renewed interest due to rising gold price, with ongoing discussions about potential partnerships and development pathways. Technical, environmental and community work continues to advance Corporate • Successful capital raising: o Total funds raised of $13.49m through a $8.83m Placement and $4.66m Entitlement Offer. o Use of funds includes initial waste stripping at the Pearse pits, underground resource drilling, and processing plant commissioning. • Cash balance $8.36M as at 30 June 2024. 1 Kingston Managing Director, Andrew Corbett, said: “I am pleased to report a highly successful and transformative quarter for our operations and projects. Our completion of the Tailings Retreatment Project has yielded $26 million in operating cash flow, underscoring our capability to maximise asset value. The transition to hard rock mining is progressing well, with open pit mining at Pearse North starting in June 2024. With the commencement of crushing and grinding of initial open pit oxide ore in July, leading to gold and silver production in August 2024. The $12.5 million refurbishment of our processing plant is in its final stages and within budget. This includes the flotation plant, which will be commissioned in August, providing us with the full processing capability to produce multiple metal concentrates alongside precious metal doré. Our exploration efforts have also borne fruit, with the confirmation of a new underground lode at the Southern Ore Zone (SOZ) and high-grade mineralisation over a 400m strike length. Additionally, the updated open pit Mineral Resource Estimate (MRE) for Pearse North shows impressive increases in gold and silver resources by 30% and 67%, respectively. The rising gold price has renewed interest in the Misima Gold Project, and we are actively engaged in discussions with multiple parties regarding potential partnerships and development pathways. The project's potential for a pre-tax NPV of $2.2 billion at a US$2,000/oz gold price is a testament to its immense value and strategic importance. Our successful capital raising, through both the Placement and Entitlement Offer, brought in $13.49 million. These funds are earmarked for crucial activities, including transitioning Pearse to open pit mining, underground resource drilling, and processing plant commissioning. Our robust financial position ensures that we are well-equipped to execute our strategic initiatives. I would like to extend my heartfelt thanks to the exceptional team at Mineral Hill for their hard work and dedication this quarter. Their efforts have been instrumental in achieving these critical milestones. Additionally, I want to express my deep gratitude to our loyal shareholders for their unwavering support, and to our new shareholders for joining us on this exciting journey. In summary, this quarter has been pivotal for our company. We have achieved significant milestones in both our mining operations and corporate activities, setting a strong foundation for continued growth and value creation. I look forward to building on this momentum in the next quarter.” MINERAL HILL MINE Open Pit Mining Commences Open pit mining commenced at Pearse North during the quarter, with the initial blast on 11 June and the first oxide ore delivered to the ROM pad (See ASX Announcement on 18 June 2024). This marks a significant step towards Kingston's goal of becoming a regionally significant producer, following the successful completion of the tailings retreatment project in May. Kingston's commitment to local employment and purchasing continues, with 25 new employees, mostly local Condobolin based residents, joining the Mineral Hill team in mining, processing, and geology over the reporting period. During the transition, Kingston expanded training for staff, including registered training in Certificate III in Resource Processing or Surface Extraction. Kingston remains dedicated to building a multi-skilled and flexible owner-operator team, driving growth and increasing production potential at Mineral Hill. www.kingstonresources.com.au 2 Figure 1: First blast at Pearse North open pit. Figure 2: Pearse North open pit mining operations. www.kingstonresources.com.au 3 Figure 3: Open pit excavation and haulage. Processing Plant Refurbishment and Commissioning The plant refurbishment has been a major technical and financial success for Kingston. Rapid advancements are being made in every area of the operation. The project has been completely managed in-house with our own expertise. This has had a huge impact on the capabilities of our organisation, creating a workforce that has a diversified skillset. Key areas of focus during the quarter include the re-lining of the ball mills, alignment of the conveyer belts, refurbishment of the crusher circuit and fine ore bins and the modernisation of the motor control circuits (electrical control). The stockpiled oxide ore from Pearse North was fed into the comminution circuit in July and gold and silver doré sales are expected to commence in August. Bringing the Mineral Hill processing plant back to full capability is creating immense value for the region. The plant is the only facility in the southern Cobar Basin with the ability to produce multiple metal concentrates and precious metal doré. www.kingstonresources.com.au 4 Low grade ore Crusher High grade ore Figure 4: Stockpiled oxide ore on the ROM pad. Figure 5: Kingston Board of Directors inspecting the Mineral Hill processing plant commissioning activities. www.kingstonresources.com.au 5 Southern Ore Zone Resource Definition Drilling Exploration work remained focused on the underground resources at the Southern Ore Zone (SOZ). In particular, drilling programs aimed at increasing confidence in the current Mineral Resource estimates and exploring for extensions to the mineralisation. Infill and extensional drilling into the Southern Ore Zone returned consistent high-grade polymetallic assays over 400m of strike. This complemented drilling results in the March quarter which confirmed the discovery of a new lode in the footwall, outside the current Mineral Resource footprint. Figure 6: Mineral Hill regional geology, resources and infrastructure. www.kingstonresources.com.au 6 Confirmation of the Main Underground Lode over 400m. Additional infill and extensional drilling was completed during the March quarter and final assay results were reported in the June quarter. The drilling clearly illustrates the high-grade nature of the deposit and the region’s metal endowment (see ASX announcement on 9 April 2024). Drill holes KSNDDH020, 21, 22 and 23 targeted the upper areas of the deposit where high grade polymetallic mineralisation had been modelled. The main lode in this part of the deposit (A-lode) has now been traced continuously over 400m strike and 200-250m down dip. Significant intersections include: • 9m @ 3.14% CuEq from 214m (KSNDDH020): o • 4m @ 2.38% CuEq from 228m (KSNDDH020) o • Including 3m @ 8.13% CuEq from 217m Including 3m @ 4.67% CuEq from 191m 7.0m @ 3.76% CuEq from 164m (KSNDDH022): o Including 3m @ 6.18% CuEq from 165m • 8.0m @ 2.06% CuEq from 173m (KSNDDH023) • 10.2m @ 2.73% CuEq from 187.8m (KSNDDH023) Figure 7: Drill core from KSNDDH021 (4m wide sulphide rich breccia lode (estimated true width of 2m) within a broader 31.6m wide brecciated and veined lode zone from 175.3mdh). www.kingstonresources.com.au 7 Figure 8: Cross section for drill holes KSNDDH020 and 21. Drilling from the underground drill platforms will commence in the December quarter of 2024. Drilling will aim to extend the life of mine and improve the confidence in areas currently classified as Inferred Mineral Resources. The program will be the first round of underground drilling in over nine years. The identification of new lodes and extensions presents a significant opportunity of growth for the company. Pearse North Mineral Resource Update Over the quarter, significant activities were undertaken at Pearse North. The Mineral Resource Estimate (MRE) for the deposit increased substantially, with gold and silver resources rising by 30% and 67%, respectively, to 292 kt @ 3.2 g/t Au and 34 g/t Ag, totalling 30 koz of gold and 318 koz of silver (see ASX Announcement on 7 May 2024). The geometry of the mineralisation was remodelled using a 0.5g/t cutoff and using the trend of antimony anomalism as a guide. This resulted in higher confidence in the continuity of mineralisation and an increase in estimated tonnage. The MRE itself employs a 1g/t Au cut off grade (see below). Table 1 Pearse North Mineral Resource Estimate at 1.0g/t Au Cut Off Classification Indicated Inferred Total Tonnes kt 270 22 292 Grade Au g/t 3.2 2.9 3.2 Grade Ag g/t 34.2 29.1 33.9 Metal Au koz 28 2 30 Metal Ag koz 297 21 318 * Due to rounding to appropriate significant figures, minor discrepancies may occur, tonnages are dry metric tonnes. www.kingstonresources.com.au 8 Figure 9: Plan view of Pearse North mineralisation wireframe outlines, block model and pit design (horizontal section at 310m AHD +-5m). An update of the life of mine (LOM) schedule is currently being completed, which will include updated Ore Reserve estimates for the Pearse Pits and a maiden Ore Reserve for the Southern Ore Zone (SOZ). The inputs to the Ore Reserves will include the latest Pearse North MRE, updated metal pricing for all deposits and a planned update of the SOZ MRE (currently being finalised). The sequencing will be consistent with the LOM plan disclosed to the ASX on 27 June 2023 and will comprise open pit mining from the Pearse Pits and underground mining from SOZ and Jack’s Hut. This will be the most comprehensive level of technical work undertaken at Mineral Hill in recent history and will enabling all stakeholders to have clarity on the longterm future of the asset. There will continue to be numerous opportunities to extend the LOM and grow the proportion of Ore Reserves in the mine plan. www.kingstonresources.com.au 9 Tailings Production Kingston made the transition from the Tailings Project to open pit mining during the quarter. Elevated levels of copper in the tailings feed and additional water in the tailings work areas made it challenging to maintain optimal densities and sustainable recoveries through the CIL. This validated the need to accelerate the transition to open pit mining and capitalise on the high gold and silver grades in the pits. The Tailings Project has been a highly successful operation for Kingston, representing a model case for successful tailings retreatment. In addition to the substantial cash flow benefits from the project, depleting the tailings also enabled TSF1 to be emptied for re-use in the mine’s upcoming phase of hard rock mining, resulting in a major future cost saving for the Company. The project delivered a total of approximately $26.4 million in operating cash flow over the life of the project from production of 34,540oz of gold in doré. In FY24 alone, the average feed grade was 1.30g/t with a total of 505,845 tonnes processed. Gross revenue totalled $39.27m and operating cashflow was $9.99m. Table 2: Full year FY24 production summary. FY24 Tonnes Processed (t) 505,845 Average Feed Grade (g/t) 1.30 Processing Recovery (%) 56% Gold Production (oz) 11,818 Gold Sales (oz) 12,461 Silver Sales (oz) 16,266 AISC (A$/oz) $2,291 Realised Gold Price (A$/oz) $3,165 Sales (A$m) $38.67 Operating Cashflow (A$m) $9.99 Table 3: Tailings Project full operating summary. Project Summary Tonnes Processed (Mt) 1,428,491 Average Feed Grade (g/t) 1.22 Processing Recovery (%) 56% Gold Sales (oz) 34,540 Silver Sales (oz) 46,612 Safety, Environment and Sustainability Kingston has been implementing extensive new measures on safety, training and hazard management at Mineral Hill. With the transition to open pit mining, updated mining procedures have been put in place and a range of explosives management plans and protections have been implemented. Training on site has intensified with the employment of additional staff in the mining and processing departments. Aligned with our commitment to providing local employment opportunities, we have commenced a traineeship program to provide our employees with nationally recognised qualifications. We continue to upgrade the skills of our workforce with on-the-job training focused on areas such as working from height, working in confined spaces, first aid and blast procedures. www.kingstonresources.com.au 10 The company had two lost time injuries during the quarter and the Mineral Hill TRIFR was 4.1.Kingston Resources is committed to the principles of sustainability and has commenced reporting on important aspects of environment, social, and governance. We are compiling sustainability disclosures in the form of a set of universal, comparable sustainability metrics focused on people, planet, prosperity and principles of governance. This universal sustainability framework allows the company to align its mainstream reporting to performance against key indicators. We continue to look for opportunities to enhance transparency on the topics which are material to our business. MISIMA GOLD PROJECT Kingston advanced numerous technical, environmental and community projects at the Misima Gold Project during the quarter. Near-mine surface mapping and inspections were undertaken to firm up exploration models. Additionally, further environmental data was collected for the environmental impact statement (EIS). The company is partnering with the local PNG government representatives and related financial institutions to deliver a Women in Business program, which aims to increase the financial literacy of women on the island. Women are encouraged to develop business plans for their own business ideas so that they can advance their idea through to funding and eventual launch. The program has had high engagement and groups in the broader community are also expressing interest in being involved. At a corporate level, discussions are progressing with numerous groups to move the Misima Gold Project towards development. The primary aim is to partner with an experienced and credible mining company that has the balance sheet and expertise to assist in a joint development. The recent strength in the gold price is firming up the base case presented in the DFS. From sensitivity analysis undertaken in the DFS1, a gold price of US$2,400/oz and AUD:USD exchange rate of 0.65 is forecast to deliver a NPV of approximately A$2.2bn pre-tax. The project has a long history of profitable production when Placer Dome operated the mine and the community remains well engaged to return the project back to full production. Figure 10: Women in Business program on Misima Island. 1 See ASX Announcement on 6 June 2022 www.kingstonresources.com.au 11 CORPORATE During the quarter, Kingston completed a successful $13.49 million capital raising. The institutional component garnered approximately $8.83 million, with $8.1 million from a private placement ("Placement") and $730k from the accelerated institutional portion of the entitlement offer. An additional $4.66 million was raised through the retail component of the entitlement offer, which was fully underwritten by existing shareholder and sophisticated investor, Deutsche Balaton Aktiengesellschaft, an associate of Delphi Unternehmensberatung Akteingesellschaft. The funds raised from the Placement and Entitlement Offer are being used for transitioning to Pearse open pit mining, conducting underground resource development drilling, commissioning the processing plant, and general working capital. During the quarter, CEO and Managing Director Andrew Corbett actively engaged with the investment community by participating in two prominent resources conferences. Presentation were given in May and June for the RIU Sydney Resources Round-up and the Gold Investment Showcase on the Gold Coast. The Company’s closing cash balance at 30 June 2024 was $8.36 million in unrestricted cash and a further $7.4 million in restricted cash (environmental bonds). The consolidated group cash flow for the quarter is summarised below: Net cash from/(used in) Gross revenue ($m) 6.05 Production cost ($m) (5.70) Staff cost ($m) (2.29) Administration and corporate cost ($m) (0.61) Net interest payment ($m) (0.23) Net cash used in operating activities($m) (2.77) Exploration and development expenditure ($m) (0.41) Net cash flow from investing activities ($m) (5.22) Net cash flow from financing activity ($m) 12.13 During the quarter, the Company made payments totalling $172,000 to associates or related parties reflecting fees, wages, and superannuation paid to Directors. Cash backed rehabilitation security bond was increased by $161,000 during the quarter to $7.408M. www.kingstonresources.com.au 12 Table 4: Tenement Schedule (ASX LR 5.3.3) as at end of quarter Tenement Project Name & Location Status Ownership Type Title Area EL1747 Misima, PNG Live 100% EL 180 km2 EL1999 Mineral Hill, NSW Live 100% EL 17 UNITS EL8334 ML5240 Mineral Hill, NSW Mineral Hill, NSW Live Live 100% 100% EL ML 100 UNITS 32.37 HA ML5267 Mineral Hill, NSW Live 100% ML 32.37 HA ML5278 Mineral Hill, NSW Live 100% ML 32.37 HA ML332 Mineral Hill, NSW Live 100% ML 22.36 HA ML333 Mineral Hill, NSW Live 100% ML 28.03 HA ML334 Mineral Hill, NSW Live 100% ML 21.04 HA ML335 Mineral Hill, NSW Live 100% ML 24.79 HA ML336 Mineral Hill, NSW Live 100% ML 23.07 HA ML337 Mineral Hill, NSW Live 100% ML 32.27 HA ML338 Mineral Hill, NSW Live 100% ML 26.3 HA ML339 Mineral Hill, NSW Live 100% ML 25.09 HA ML340 Mineral Hill, NSW Live 100% ML 25.79 HA ML1695 Mineral Hill, NSW Live 100% ML 8.779 HA ML1712 Mineral Hill, NSW Live 100% ML 23.92 HA ML1778 Mineral Hill, NSW Live 100% ML 29.05 HA ML5499 Mineral Hill, NSW Live 100% ML 32.37 HA ML5621 Mineral Hill, NSW Live 100% ML 32.37 HA ML5632 Mineral Hill, NSW Live 100% ML 27.32 HA ML6329 Mineral Hill, NSW Live 100% ML 8.094 HA ML6365 Mineral Hill, NSW Live 100% ML 2.02 HA www.kingstonresources.com.au 13 About Kingston Resources Kingston Resources is currently producing gold from its Mineral Hill gold and copper mine in NSW and is developing the 3.8Moz Misima Gold Project in PNG. The Company’s objective is to establish itself as a mid-tier gold and base metals company with multiple producing assets. • • • • • • • • • • Mineral Hill Mine, NSW (100%) Mine plan out to the end of 2027: Open pit and underground mining. Significant upside: Current life of mine only utilises 22% of the current 8.9Mt of Mineral Resources. Infrastructure excellence: Extensive existing infrastructure with all permits and approvals in place. Exploration potential: Exceptional upside within current Mining Leases (ML) and Exploration Licenses (EL). Current Focus: Open pit mining at Pearse and finalisation of the Plant refurbishment for gold/silver dore and concentrate production. Misima Gold Project, PNG (100%) DFS Validation: potential for a robust, scalable, and low-cost open pit operation. Production Potential: Anticipated gold production of ~2.4Moz over a 20Year Mine Life (Avg. 128kozpa). Strong Financial Viability: Pre-Tax Net Present Value (NPV) of A$956 million (based on a US$1,800/oz Gold Price). Gold Price Upside: Highly leveraged to the upside of the gold price, amplifying potential returns. Current Focus: Prioritising ESIA reports, strategic funding & development strategies. Mineral Hill is a gold and copper mine located in the Cobar Basin of NSW. In June 2023, the Company updated its life of mine plan, including both open pit and underground mining until 2027. The processing plant currently operates a CIL, and work is well advanced to recommission the existing crushing, grinding and flotation circuits for gold, copper, lead and zinc concentrate production. The Company is focused on meeting near mine production targets located on the existing MLs. The aim is to extend the mine’s life through organic growth and consider regional deposits that could be processed at Mineral Hill’s processing plant. Misima hosts a JORC Resource of 3.8Moz Au and an Ore Reserve of 1.73Moz. Placer Pacific operated Misima as a profitable open pit mine between 1989 and 2001, producing over 3.7Moz before it was closed when the gold price was below US$300/oz. The Misima Project also offers great potential for additional resource growth through exploration success targeting extensions and additions to the current Resource base. For further information regarding the Misima Mineral Resource and Ore Reserve estimate, see ASX announcements on 24 November 2020 and 15 September 2021 and 6 June 2022. Further information is included within the original announcements. The Mineral Hill Mineral Resource estimate outlined below was released in ASX announcements on 18 November 2021 (TSF), 15 March 2023 (Pearse South), 14 May 2024 (Pearse North), 24 November 2022 (Southern Ore Zone), 21 March 2023 (Jack’s Hut) and 13 September 2011 (Parkers Hill by KBL). The Ore Reserve estimate outlined below was released in ASX announcements on 18 November 2021 (TSF), 15 March 2023 (Pearse South and Pearse North). Further information is included within the original announcements. Kingston is not aware of any new information or data that materially affects the information included in this announcement. All material assumptions and technical parameters underpinning the Mineral Resources and Ore Reserve estimates continue to apply and have not materially changed. www.kingstonresources.com.au 14 This release has been authorised by the Kingston Resources Limited Board. For all enquiries, please contact Managing Director, Andrew Corbett, on +61 2 8021 7492. Mineral Resources and Ore Reserves Misima JORC 2012 Mineral Resource & Ore Reserve summary table Resource Category Cut-off (g/t Au) Tonnes (Mt) Gold Grade (g/t Au) Silver Grade (g/t Ag) Au (Moz) Ag (Moz) Indicated 0.3 97.7 0.79 4.3 2.5 13.4 Inferred 0.3 71.3 0.59 3.8 1.4 8.7 Total 0.3 169 0.71 4.1 3.8 22.1 Reserve Cut-off (g/t Au) Tonnes (Mt) Gold Grade (g/t Au) Silver Grade (g/t Ag) Au (Moz) Ag (Moz) Probable 0.3 75.6 0.79 4.2 1.73 4.1 Mineral Hill JORC 2012 & JORC 2004 Mineral Resource & Ore Reserve summary table Resource Category Measured Tonnes (kt) 228 Gold Grade (g/t) 2.11 Silver Grade (g/t) 11 Cu % 1.3% Pb % 0.5% Zn % 0.3% Au (koz) 15 Ag (koz) 80 Cu (kt) 3 Pb (kt) 1.2 Zn (kt) 0.7 Indicated 4,893 1.08 28 1.2% 1.7% 1.1% 169 4,361 47 70 42 Inferred 3,098 1.17 23 0.7% 1.4% 1.2% 117 2,253 22 42 38 Total 8,220 1.14 27 1.0% 1.6% 1.1% 302 6,693 72 113 81 Reserve Category Proved Tonnes (kt) - Gold Grade (g/t) 0.00 Silver Grade (g/t) 0 Cu % Pb % Zn % Au (koz) - Ag (koz) 0 Cu (kt) Pb (kt) Zn (kt) Probable 697 1.95 57 44 470 Total 697 1.95 57 44 470 1. 2. 3. 4. 5. Due to rounding to appropriate significant figures, minor discrepancies may occur, tonnages are dry metric tonnes. Probable Ore Reserves are derived from Indicated Mineral Resources. The Ore Reserves do not include, or depend upon, Inferred Mineral Resources. The Ore Reserves form part of the Mineral Resources. Total Mineral Resources account for mining depletion of the Tailings Project as at 23 April 2024 Competent Persons Statement and Disclaimer The information in this report that relates to Exploration Results and Mineral Resources is based on information compiled by Mr. Stuart Hayward BAppSc (Geology) MAIG, a Competent Person who is a member of the Australian Institute of Geoscientists. Mr. Hayward is an employee of the Company. Mr. Hayward has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr. Hayward confirms that the information in the market announcement provided is an accurate representation of the available data and studies for the material mining project and consents to the inclusion in this report of the matters based upon the information in the form and context in which it appears. The Competent Person signing off on the overall Misima Ore Reserves Estimate is Mr John Wyche BE (Min Hon), of Australian Mine Design and Development Pty Ltd, who is a Fellow of the Australasian Institute of Mining and Metallurgy and who has sufficient relevant experience in operations and consulting for open pit metalliferous mines. Mr Wyche consents to the inclusion in this report of the information pertaining to the Misima Ore Reserve in the form and context in which it appears. The Competent Person signing off on the overall Pearse Opencut Ore Reserves Estimate is Mr John Wyche BE (Min Hon), of Australian Mine Design and Development Pty Ltd, who is a Fellow of the Australasian Institute of Mining and Metallurgy and who has sufficient relevant experience in operations and consulting for open pit metalliferous mines. Mr Wyche consents to the inclusion in this report of the information pertaining to the Pearse Opencut Ore Reserve in the form and context in which it appears. www.kingstonresources.com.au 15