Kingston - Major New High Grade Gold Discovery

Has Kingston Resources just made WA’s next high-grade gold discovery?

SpecialReport:Kingston Resources (ASX:KSN) has just pulled off a rare feat – two high-gradegold discoveries on opposite sides of the Asia-Pacific in less than afortnight.

And, in theprocess the Sydney-based company may have put itself in contention to join thelist of up-and-coming high-grade WA gold stories, following in the footsteps ofmarket darlings such as Bellevue Gold (ASX:BGL) and Spectrum Metals(ASX:SPX).

Perhapsbetter known for its 2.8-million-ounce Misima gold project in PNG, Kingstontold the ASX this morning it had confirmed a “significant high-grade golddiscovery” at its Livingstone project, located 140km north-west of Meekatharrain WA’s Bryah Basin.

The companyhas received assays from a maiden reverse circulation (RC) drill program at theKingsley prospect, where it encountered significant shallow mineralisation overa 2km zone in air-core drilling last year.

The reasonfor Kingston’s interest in the project is not hard to see.

The air-coreprogram hit some promising zones for this relatively early stage ofexploration, including 4m at 76.25 grams per tonne (g/t) from 88m, 28m at2.26g/t including 8m at 5.57g/t from surface and 5m at 6.56g/t from 49m including1m at 21.8g/t.

The recent RCdrilling was designed to test beneath and along strike from these positiveearly results.

And theprogram has come up trumps, confirming and extending the shallow mineralisationand hitting both shallow oxide zones and deeper primary mineralisation belowthe air-core results.

Best resultsincluded 5m at 3.68g/t from 12m and 10m at 11.95g/t from 20m, 2m at 13.88g/tfrom 71m and 3m at 11.39g/t from 95m and 2m at 5.32g/t including 1m at 9.64g/tfrom 88m.

The companysays the mineralisation remains open both along strike and at depth.

“It’s earlydays but it’s clear from the very limited drilling we’ve done so far that wehave a potentially large, high-grade system on our hands at Kingsley,” Kingstonmanaging director Andrew Corbett said.

“The systemremains wide open to the north-west and east, with a further 1.2km strikelength of known mineralisation still to be tested, and further drilling isneeded at depth as we work towards a maiden JORC Mineral Resource.

“The nextstage for us is to do some diamond drilling to give us structural informationon the orientation of the lodes and controls on the mineralisation.

“That willhelp us to more accurately target the next phase of RC drilling.”

Secondhigh-grade discovery in a fortnight

TheLivingstone discovery is the second exploration breakthrough in under afortnight for Kingston, which has raised over $8m this year to fast-track goldexploration at its two key projects.

At thepreviously mined 2.8Moz Misima project in PNG, the company recently announcedthe discovery of a new zone of shallow high-grade gold mineralisation at theAbi prospect, in the Quartz Mountain.

The companyhas been actively targeting this area for additional, potentially shallowounces that could contribute early ore feed to its mine plan.

Diamond holeGDD044 at Abi returned a notable result of 23.6m at 2.91g/t from 7.4m including13.5m at 4.5g/t.

The discoverywas supported by high-grade rock chip results of up to 9.97g/t and high-gradechannel sample results including 1m at 30.4g/t and 2m at 33.5g/t.

Drilling iscontinuing at Misima with a second diamond rig set to begin operating nextmonth.

Leadinganalyst values Kingston at 6c per share

ProminentMelbourne-based resource analyst Cathy Moises from Patersons Securities wasimpressed by the Misima discovery, saying the stock has “clear upsidepotential”.

In a researchnote issued last week, Moises puts a 6c valuation on Kingston (currently tradingat 2.2c).

“We have longcommented that quality historic mines tend to continue to perform well evenunder restart conditions,” Moises wrote.

“Misima wasone of the best mines we ever had the pleasure to cover, when it was under theoperatorship of Placer Pacific, consistently delivering above expectations andat the bottom quartile of the industry cost curve.

“Theseresults, whilst too early to call until a few more holes are finalised, arefurther vindication of the quality of the exploration portfolio associated withMisima.”

Moises saysthe newly discovered Abi zone is located along strike to the south-east of thecurrent 220,000oz Ewatinona Resource.

“This is thethird hole into the deposit, with the first two viewed as narrowly missing themineralised zone. Three further holes are awaiting assays,” she said.

“Followingthe recent successful capital raising, Kingston has mobilised a second drillingrig to accelerate exploration at Misima.”

Patersonssays that Kingston’s $38m market capitalisation, with a 2.8Moz gold resource,values the resource at a low $13.6/oz, which compares to Breaker Resources(ASX:BRB) with a market capitalisation per resource ounce at $63.2/oz andBellevue Gold at $199/oz.

“Kingstonremains our top recommendation within the junior advancedexploration/development space.”