Kingston Resources : Half Yearly Accounts

About this update from Kingston Resources Ltd.

KINGSTON RESOURCES LIMITED ABN 44 009 148 529 Half Yearly Financial Statements 31 December 2024 Kingston Resources Limited and its Controlled Entities CONTENTS Page No. ➢ Corporate Directory 2 ➢ Directors' Report 3 ➢ Consolidated Statement of Financial Position 12 ➢ Consolidated Statement of Profit or Loss and Other Comprehensive Income 13 ➢ Consolidated Statement of Cash Flows 14 ➢ Consolidated Statement of Changes in Equity 15 ➢ Notes to the Financial Statements 16 ➢ Directors' Declaration 25 ➢ Independent Auditor's Review Report 26 1 CORPORATE DIRECTORY Kingston Resources Limited for the half year ended 31 December 2024 and its Controlled Entities Corporate Directory DIRECTORS Mick Wilkes (B Eng (Hons), MBA, GAICD) Non-Executive Chairman Andrew Corbett (B Eng (Mining, Hons), MBA, MAICD) Managing Director Anthony Wehby Non-Executive Director Stuart Rechner (BSc, LLB, MAIG, MAusIMM, GAICD) Non-Executive Director COMPANY SECRETARY Vinod Manikandan (CPA, AGIA) REGISTERED OFFICE AND 202/201 Miller Street PRINCIPAL PLACE OF BUSINESS North Sydney NSW 2060 AUSTRALIA Telephone (02) 8021 7492 Email [email protected] Website www.kingstonresources.com.au AUDITORS Hall Chadwick (NSW) Chartered Accountants SHARE REGISTRY Automic Group BANKERS Australia & New Zealand Banking Group Limited Macquarie Group Limited Bank of South Pacific SOLICITORS Ashurst Australia Cowell Clarke Commercial Lawyers Resources Legal Pty Ltd STOCK EXCHANGE Australian Securities Exchange (ASX) The home Exchange is in Perth, Western Australia Secondary Listing - Frankfurt Stock Exchange ASX CODE KSN 2 DIRECTORS' REPORT Kingston Resources Limited for the half year ended 31 December 2024 and its Controlled Entities Directors' Report Your Directors submit their report for the half year ended 31 December 2024. DIRECTORS The names of the Company's Directors in office during the half year and until the date of this report are set out below. Directors were in office for this entire period unless otherwise stated. Mick Wilkes Andrew Corbett Anthony Wehby Stuart Rechner PRINCIPAL ACTIVITIES The Company is an Australian-based Company listed on the ASX. The principal activity of the Group during the period was mineral production and exploration. REVIEW OF OPERATING RESULTS AND OPERATIONS Operating Results Kingston reported a statutory net loss of $2,521,479 for the half year (2023: profit $2,689,226). Review of Operations Kingston commenced open pit mining operations with the initial blast occurring on 11 June 2024. The transition from the previous Tailings Mining operation was completed seamlessly due to the transition of numerous operators into the open pit project. The company has employed 40 new employees, the majority of these being residents of the Lachlan Shire. Open pit ore was initially stockpiled in June, July and August while refurbishment of the crushing and grinding circuits was being finalised. The refurbishment of the processing plant was budgeted to be a $13.2m project and Kingston executed the project solely using in-house expertise which allowed the Company to deliver the project on time and at a total cost 4% higher than the initial budget. Kingston rapidly increased crushing and grinding rates to be running consistently at 50 tonnes per hour, 20% above the original plant design. Weekly gold and silver sales were established as early as September 2024. Figure 1: Pearse North pit prior to the initial blast (facing south). 3 DIRECTORS' REPORT Kingston Resources Limited for the half year ended 31 December 2024 and its Controlled Entities PS PN Figure 2: Pearse North (PN) open pit in July 2024. Pearse South (PS) pit in the background (facing south). Figure 3: Pearse North open pit mining operations by January 2025 (facing north east). OPEN PIT MINING AND PROCESSING Open pit mining and processing was successfully ramped up to full capacity over the December 2024 half. Initial challenges with rock fragmentation and haulage rates were quickly overcome, allowing for an increase in the rate of material movement from October 2024 onwards. Between the first and second quarter, ore and waste mined increased 4 DIRECTORS' REPORT Kingston Resources Limited for the half year ended 31 December 2024 and its Controlled Entities 36% and 58% respectively. Production improved across all metrics across the half as the site was ramped up. Gold produced increased 78% over the two quarters, with 5,201oz sold over the half. The Pearse Ore Reserve estimates used mining cutoff grades of 1.3g/t and 1.5g/t for Pearse North and South respectively. Due to a marked increase in the spot gold price, Kingston has decided to lower the mining cutoff grade to 0.8g/t, resulting in a reduction in mined gold grades. Material Movement Material Moved (kt) 25 20 15 10 5 - Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Dec-24 Figure 4: Monthly material movement from open pit mining at Pearse. Table 1: Open pit mining and processing summary. Physical Summary Unit Q1 FY25 Q2 FY25 H1FY25 Waste Mined t 413,600 654,080 1,067,680 Ore Mined t 45,136 61,201 106,337 Ore Processed t 43,269 73,717 116,986 Head Grade g/t 1.51 1.56 1.54 Processing Recovery % 89% 89% 89% Gold Produced oz 1,868 3,333 5,201 Gold Sales oz 1,680 3,261 4,941 Silver Sales oz 11,551 22,862 34,413 Average Gold Price $/oz 3,777 4,101 3,991 Gold recovery remained higher than the original forecast of 85%, reaching 89% for the December half. Additionally, the original plan expected an earlier transition to sulphide ore, which has a forecast gold recovery of 78%. Kingston has benefited from a strong momentum in the spot gold price and this resulted in an increase in the realised gold price. Gold and silver sales from Mineral Hill are sold at the daily market price, allowing the company to fully capitalize on the current gold price bull market. Commercial production for the Pearse open pits was declared as of 1 October 2024. During the December quarter, operating costs were $8.8m and sustaining capital was $0.35m, resulting in an all-in-sustaining cost of $2,814/oz (net of silver by-product revenue). UNDERGROUND ORE RESERVE AND LOM UPDATE Kingston released an initial underground Ore Reserve for the Southern Ore Zone during the half and extended life-of- mine (LOM) plan to six years (see ASX released dated 30 September 2024). As part of the release, the Company also issued a revised LOM production target comprising open pit and underground Ore Reserves and a component of 5 DIRECTORS' REPORT Kingston Resources Limited for the half year ended 31 December 2024 and its Controlled Entities Inferred Resources. The first 12 and 36 months of the production target are underpinned by 89% and 80% of Measured and Indicated Resources respectively. Key highlights of the LOM plan include: LOM extended to six years. Open pit mining to the end of CY2025. Revised Ore Reserve estimates for the Pearse open pits based on an updated Pearse North Mineral Resource. Initial Underground Ore Reserve: 0.7Mt for 0.8% Cu, 1.4g/t Au, 20g/t Ag, 1.9% Pb and 1.6% Zn. Ore Reserves in the mine plan of 1.1Mt. Total production target of 2.2Mt. LOM production of 207koz gold equivalent (AuEq) payable. Gold and copper comprise 85% of the payable metal in AuEq terms. The statement of the underground Ore Reserve is a significant development for Kingston, as it materially increases the technical and financial certainty for Mineral Hill. Underground drilling has recommenced to continue infilling and extending the underground resources. Figure 5: Underground production target existing development (orange) and mining designs (multi-coloured). MISIMA GOLD PROJECT Kingston appointed Argonaut PCF Limited ("Argonaut") as exclusive financial adviser to lead and manage a formal strategic process in respect of the Misima Gold Project ("Misima") during the half. The main aim of engaging Argonaut is to crystallise the deep value built at Misima during the Company's ownership. 6 DIRECTORS' REPORT Kingston Resources Limited for the half year ended 31 December 2024 and its Controlled Entities Argonaut has a strong history of successful transactions in the APAC region, particularly within the gold sector of PNG. Argonaut's reputation is well regarded among major international gold and natural resource companies and their team has strong commercial and technical expertise in managing corporate and asset level transactions. A site visit was conducted in December 2024 to complete their own extensive due diligence. Kingston continued to advance the Misima Gold Project during the half, progressing landholder identification studies and ongoing environmental monitoring in support of the Environmental and Social Impact Assessment (ESIA). The company remains deeply engaged with the local community, implementing initiatives aimed at empowering locals in education, health, and business development. Notably, Kingston facilitated a Women in Business program, reaching over 629 women since its inception in 2023, with a focus on empowering women through business training and financial literacy programs. Figure 6: Argonaut site visit conducting due diligence work. CORPORATE On 28 November 2024, the company held its Annual General Meeting (AGM). All resolutions were passed and decided by way of poll. On 9 December 2024, Kingston announced its intention to raise a total of $8.4 million (before cost) by undertaking a $6.4 million Placement and a $2 million fully underwritten Share Purchase Plan (SPP) both at an issue price of $0.075 per share. The Company successfully completed the Placement on 16 December 2024. The fully underwritten SPP was completed on 22 January 2025 with retail shareholders strongly supporting the SPP by subscribing for 61% of the offer and the remaining 39% taken up by the underwriter, Delphi Unternehmensberatung Akteingesellschaft, an existing major shareholder and sophisticated investor. Kingston received applications for 16,126,541 Shares totalling to $1,209,494. The funds raised will be strategically allocated to accelerate surface exploration, drill underground resource extension targets, and expand resources to drive production growth at Mineral Hill. 7 DIRECTORS' REPORT Kingston Resources Limited for the half year ended 31 December 2024 and its Controlled Entities MINERAL RESOURCES TABLE Mineral Hill (NSW, Australia) Table 2: Mineral Hill Mineral Resource summary, prepared by Mr S. Hayward of Kingston Resources Ltd. Rounding errors may occur. Resource Tonnes Au Ag Cu Pb Zn Au Ag Cu Pb Zn Category kt g/t g/t % % % koz koz kt kt kt Measured 233 2.01 11 1.2% 0.5% 0.4% 15 81 3 1.2 0.8 Indicated 4,501 1.13 29 1.1% 1.9% 1.1% 164 4,556 47 77 46 Inferred 3,020 1.81 18 0.9% 0.9% 0.7% 175 1,727 25 26 20 Total 7,755 1.42 26 1.0% 1.4% 0.9% 354 6,364 75 104 67 Table 3: Mineral Hill Mineral Reserve summary, prepared by Mr J. Wyche of Australian Mine Design and Development Pty Ltd. Rounding errors may occur. Reserve Tonnes Au Ag Cu Pb Zn Au Ag Cu Pb Zn kt g/t g/t % % % koz koz kt kt kt Proved - - - - - Probable 1,100 2.2 31 0.8% 1.9% 1.6% 74 1,087 5.5 13 11 Total 1,100 2.2 31 0.8% 1.9% 1.6% 74 1,087 5.5 13 11 Misima Gold Project (PNG) Table 4: Misima Gold Project Mineral Resource summary, prepared by Mr S. Hayward of Kingston Resources Ltd. Rounding errors may occur. Deposit Classificati Cutoff Tonnes Gold Silver Au Moz Ag Moz on g/t Au Mt g/t Au g/t Ag Umuna Total Indicated 0.3 93.5 0.78 4.3 2.4 13.1 Resource Inferred 0.3 64.1 0.58 3.8 1.2 7.5 Umuna TOTAL 157.6 0.70 4.1 3.6 20.5 Cooktown Stockpile Inferred 0.5 3.8 0.65 7.0 0.1 0.9 Cooktown Stockpile 3.8 0.65 7.0 0.1 0.9 Ewatinona Total Indicated 0.3 4.2 0.88 2.6 0.12 0.3 Resource Inferred 0.3 3.4 0.74 3.2 0.08 0.3 Ewatinona TOTAL 7.6 0.81 2.8 0.2 0.7 Misima Indicated 97.7 0.79 4.3 2.5 13.4 Inferred 71.3 0.59 3.8 1.4 8.7 Misima TOTAL 169 0.71 4.1 3.8 22.1 Table 5: Misima Gold Project Ore Reserve summary, prepared by Mr J. Wyche of Australian Mine Design and Development Pty Ltd. Rounding errors may occur. Tonnes Gold Silver Au koz Ag koz Mt Au g/t Ag g/t Ewatinona Probable 3.9 0.8 2.4 100 300 Ewatinona Total 3.9 0.8 2.4 100 300 Umuna Probable 71.7 0.8 4.6 1,784 10,603 Umuna Total 71.7 0.8 4.6 1,784 10,603 Probable 75.6 0.8 4.5 1,944 10,938 Misima Total Reserve 75.6 0.8 4.5 1,944 10,938 8 DIRECTORS' REPORT Kingston Resources Limited for the half year ended 31 December 2024 and its Controlled Entities COMPETENT PERSON'S STATEMENT 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 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 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 matters based upon the information in the form and context in which it appears. Kingston publicly reports Exploration Results and Mineral Resource estimates in accordance with the ASX Listing Rules and the requirements and guidelines of the 2012 edition of the Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves - the JORC Code. Kingston's governance for public reporting of Exploration Results and Mineral Resource estimates includes important assurance measures. All reports are signed-off by appropriate JORC Competent Persons with JORC Code Table 1 Checklists as required. Exploration Results and Mineral Resource estimates are also peer reviewed (either by Kingston technical staff or suitably qualified external consultants) before Board approval and ASX release. FINANCIAL POSITION At 31 December 2024 the consolidated entity had net assets of $94,788,138 (30 June 2024: $90,781,524) and $9,893,172 in cash (30 June 2024: $8,357,776). On 16 December 2024, the Company issued 85,333,334 Placement shares at $0.075 raising $6,400,000 (before costs). SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS Other than reported above in the Review of Results and Operations, there were no significant changes in the state of affairs of the Company during the reporting period. DIVIDENDS There were no dividends paid, recommended, or declared during the current or previous financial half-years. OPTIONS AND PERFORMANCE RIGHTS During the half-year ended 31 December 2024 Directors and employees of the Company were granted options and performance options. Please see Note 10 for details. EVENTS AFTER THE BALANCE DATE On 9 December 2024, the Company announced its intention to undertake a fully underwritten SPP to raise $2 million (before cost) at an issue price of $0.075. The SPP was fully underwritten by Delphi Untemehmensberatung Akeingsellschaft an existing major shareholder and sophisticated investor. The SPP shares were issued on 22 January 2025, with 16,126,541 shares issued to SPP applicants raising $1,209,494 (before cost) and 10,540,080 Shares allocated to the underwriter raising $790,506. Other than the above, there has not been any matter or circumstance that has arisen after balance date that has significantly affected, or may significantly affect, the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial periods. 9

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