Australian Securities Exchange (ASX)-listed mining company Kingston Resources has entered into a binding definitive agreement with Ok Tedi Mining to divest its Misima gold project in Papua New Guinea for a total consideration of A$95m.
The transaction terms include an upfront payment of A$50m, A$10m in deferred cash payable 12 months after completion of the transaction and another A$10m payable upon the final investment decision (FID) on the project by Ok Tedi.
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Additionally, a 0.5% uncapped gross revenue royalty is payable on gold and copper production from Misima, commencing after the first 500,000oz of gold is produced. Ok Tedi retains a buyback right for the royalty at A$25m.
The transaction aligns with Kingston’s strategy to realise value for its shareholders and expedite the project’s production restart.
Mining operations at the Misima gold mine began in 1989. The mine stopped open-pit production in 2001 and closed in 2004.
The transaction enables Kingston to repay its A$15m debt to Pure Asset Management and save up to A$4m annually in costs related to the Misima project and debt servicing.
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By GlobalDataThe sale is not contingent on financing or further shareholder approval and is subject to conditions such as approval from the Independent Consumer & Competition Commission of Papua New Guinea and the renewal of exploration licence EL 1747.
The transaction is expected to close in the first quarter of fiscal year 2026 (Q1 FY26).
The completion of this deal will enable Kingston to concentrate on the Mineral Hill gold and copper mine in New South Wales, Australia, which the company acquired from Quintana MH in 2021.
The company aims to start underground production at Mineral Hill in 2026 and extend the mine life beyond 2030, leveraging the financial gains from the transaction for further exploration and potential production increases.
Kingston’s exploration efforts will focus on identifying a second underground ore source to extend current mine life, initiating surface exploration near the mine and greenfield exploration at EL 8334 for new discoveries.
The company also remains open to engaging with owners of nearby mineral resources for third-party processing opportunities.
Kingston managing director Andrew Corbett said: “The sale of Misima concludes a comprehensive global strategic process that commenced in November 2024. This deal will deliver Kingston up to $70m in cash plus ongoing exposure to the future large-scale production profile of Misima through an gross revenue royalty, unlocking significant value for our shareholders.
“The total consideration is greater than Kingston’s current market capitalisation whilst we retain 100% of the Mineral Hill gold and copper operation. Kingston will now intensify the focus on growth and development projects at Mineral Hill and target copper production in 2026.”
