K92 Mining Achieves Record Annual and Quarterly Production, with 29,820 OZ GOLD Equivalent Produced IN Q4
Suite 488 – 1090 West Georgia Street
Vancouver, British Columbia
Canada V6E 3V7
Telephone: +1 (604) 687-7130
Facsimile: +1 (604) 608-9110
www.k92mining.com
NEWS RELEASE
January 13, 2021 Vancouver, British Columbia
K92 MINING ACHIEVES RECORD ANNUAL AND QUARTERLY PRODUCTION,
WITH 29,820 OZ GOLD EQUIVALENT PRODUCED IN Q4
• Record quarterly production in Q4 of 29,820 oz of gold equivalent (“AuEq”) (1) or
28,809 oz gold, 493,584 lbs copper and 10,395 oz silver, representing a 26% AuEq
increase from Q4 2019.
• Record annual production of 98,872 oz AuEq or 95,109 oz gold, 1,853,078 lbs copper
and 36,067 oz silver, representing a year-over-year AuEq increase of 20%.
• Record quarterly plant throughput with 68,932 tonnes processed, representing a
127% increase from Q4 2019.
• Record quarterly mining material movements and development metres, with 207,600
tonnes of total material movements (mill feed and waste) and 1.9 km of development
advance, respectively in Q4. Mining operations achieved beginning of year target of
1,100 tpd by year -end, despite the challenges of the COVID-19 pandemic. This
resulted in a ~3,000 tonnes stockpile increase from the previous quarter to ~21,000
tonnes at 11.8 g/t AuEq at year-end.
• Positive gold and copper grade reconciliation versus resource model in Q4, with gold
head grade of 14.2 g/t and copper head grade of 0.36%. Head grades also benefitted
from less dilution than planned, particularly from long hole stoping.
• Financial position remains strong and balance sheet has continued to strengthen
during Q4 and throughout the COVID-19 pandemic.
Note (1): AuEq production for 2020 is based on a gold price of US$1,500/oz; silver price of
US$17.75/oz; copper price of US$2.70/lb.
Vancouver, British Columbia, January 13, 2021 - K92 Mining Inc. (“K92” or the “Company”)
(TSX: KNT; OTCQX: KNTNF) is pleased to announce record production in the fourth quarter
(“Q4”) at its Kainantu Gold Mine in Papua New Guinea of 29,820 oz AuEq, or 28,809 ounces of
gold, 493,584 pounds of copper and 10,395 ounces of silver. Annual production also achieved a
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record of 98,872 oz AuEq or 95,109 oz gold, 1,853,078 lbs copper and 36,067 oz silver ,
representing year-over-year AuEq production growth of 20%.
The fourth quarter achieved record mill throughput, processing a total of 68,932 tonnes. The record
mill throughput and production was achieved despite five days of downtime for mill reline
maintenance and a further five days treating a lower grade bulk sample from Judd Vein
development. The ramp-up of the mill following the commissioning of the Stage 2 Expansion has
progressed well, sequentially improving through the fourth quarter, with m etallurgical
performance also improving, achieving recoveries of 91.70% for gold and 90.60% for copper.
Further improvements are expected through 2021 from additional optimization to the flotation
circuit, re-commissioning of the drum scrubber and introduction of the gravity circuit.
Mining operations achieved record material movements and development in the fourth quarter
with 207,600 tonnes of total material movements (mill feed and waste) and 1.9 km of development
mined. Importantly, the underground mine achieved the beginning of year target of reaching 1,100
tpd (mill feed) by year-end, despite the challenges of the COVID-19 pandemic. As a result, during
the quarter, stockpiles increased ~3,000 tonnes to ~21,000 tonnes at 11.8 g/t AuEq at year-end.
In Q4, mining operations focused on Kora’s K1 and K 2 veins and Judd’s J1 vein, for a total of
seven levels mined. On the K1 vein, development tonnes were mined on five levels and long hole
stoping (modified AVOCA method) was mined from five sublevels (1150, 1170, 1205, 1225 and
1245 mRL level). On the K2 vein, development tonnes were mined from two sublevels and long
hole stoping (modified AVOCA method) on the 1185 mRL level. J1 vein mining was from the
1235 mRL development. Importantly, Q4 marked the third full quarter of long hole stoping, which
commenced in March 2020 on the K1 vein. Long hole stoping has performed well for both the K1
and K2 vein with less dilution than expected from both veins in Q4, particularly the K1 vein. The
combination of additional levels developed through 2020 and strong performance from long hole
stoping has provided a notable positive impact on operational flexibility.
The blend of K1, K2 and J1 vein material provided an average head grade to the process plant for
Q4 of 14.2 g/t Au and 0.36% Cu. Both gold and copper head grades delivered a positive grade
reconciliation.
The new twin incline development made considerable progress in Q4 with the #2 (6m x 6m) incline
now advanced 194 metres and the #3 (5m x 5m) incline advanced 200 metres at year-end. The
rates of development achieved are consistent with meeting the 30-month project schedule.
Following the establishment of a comprehensive COVID-19 Management Plan, the Kainantu Mine
has continued to operate during the pandemic, with a significant focus on health and safety and
risk-mitigation. The COVID-19 Management Plan includes establishing a Government recognized
testing lab facility utilizing qualified medical personnel on site, establishing quarantine and
isolation facilities for incoming staff, and implementing enhanced hygiene, disinfecting and
training systems and procedures . On March 20, 2020 , the Government of Papua New Guinea
declared a COVID -19 State of Emergency (“SOE”) (see March 23, 2020 press release - K92
Announces C OVID-19 Operational Update and Response Plan ) and on June 1 6, 2020 , the
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Government of Papua New Guinea lifted the SOE (see June 16, 2020 press release - K92 Mining
Inc. Provides Operations and Stage 2 Expansion Update After Lifting of PNG COVID-19 State of
Emergency), resulting in a further easing of restrictions. After the lifting of the SOE, Kainantu has
experienced a signi ficant improvement in the movement of personnel, with exploration and
development projects resuming.
Table 1 – Q4 & 2020 and 2019 Annual Production Data
2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 2020
Tonnes Processed T 127,190 47,421 49,311 64,702 68,932 230,365
Feed Grade Au g/t 20.8 13.6 17.6 11.3 14.2 14.0
Feed Grade Cu % 0.37% 0.36% 0.54% 0.38% 0.36% 0.40%
Recovery (%) Au % 93.7% 93.00% 92.10% 90.70% 91.70% 91.80%
Recovery (%) Cu % 92.8% 91.70% 91.10% 90.20% 90.60% 90.90%
Metal in Conc Prod Au Oz 79,838 19,240 25,762 21,298 28,809 95,109
Metal in Conc Prod Cu T 432 154 241 221 224 841
Metal in Conc Prod Ag Oz 22,984 7,678 10,867 7,127 10,395 36,067
Gold Equivalent Production Oz 82,256 19,944 26,847 22,261 29,820 98,872
Note - Gold equivalent for 2019 is based on the following metal prices: gold $1,300 per ounce; silver $16.50 per
ounce; and copper $2.90 per pound. Gold equivalent for 2020 is based on the following prices: gold $1,500 per ounce;
silver $17.75 per ounce; and copper $2.70 per pound.
John Lewins, K92 Chief Executive Officer and Director, stated, “We are especially pleased with
the performance of the Kainantu Gold Mine during the fourth quarter, achieving record
production. Importantly, the quarter was underpinned by record mill throughput, mine material
movements and mine development.
The fourth quarter represented the first full quarter of the Stage 2 Expansion, after completing the
commissioning of the plant expansion in late -Q3. The mill has continued to ramp -up well, with
both throughput and recoveries improving through the quarter , and particularly strong
performance in December. Both throughput and recoveries are expected to continue to improve
as we optimize the circuit and recommission the drum scrubber and gravity circuit.
Underground m ining operations have delivered strong per formance on multiple fronts and
achieved the beginning-of-year target of 1,100 tpd mill feed by year-end. This target was achieved
through progressively improving our operational flexibility by executing on our underground
development plan to open up the mine vertically and laterally, and executing on long hole stoping
for both the K1 and K2 veins. We are pleased to report that long hole stoping has delivered lower
dilution than planned, particularly from the K1 vein. Less dilution than expected combined with a
generally persistent positive gold grade reconciliation to date has contributed to another quarter
of solid head grades.
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2020 represents our third consecutive year of production growth and 2021 promises to continue
that record with our first full year of the Stage 2 Expansion . Exploration activities have ramped
up considerably, ending 2020 with 10 drill rigs on site and an eleventh rig expected to arrive
shortly. The drill rigs are targeting the Judd, Karempe, Kora and Kora South vein systems, and
the Blue Lake porphyry.
Lastly, I would like to once again, highlight the exceptional commitment of our workforce and the
quality of the Kora Deposit. The significant steps taken forward at Kainantu, including
commissioning the Stage 2 Expansion, achieving our year -end mine throughput goals , record
development, doubling our drill rig fleet and strengthening our financial position, d espite the
challenges of the COVID -19 pandemic, has been extraordinary. The support of all levels of
Government in Papua New Guinea, especially during the COVID -19 pandemic, has also been a
major positive factor in all of our achievements to date.”
Qualified Person
K92 mine geology manager and mine exploration manager, Andrew Kohler, PGeo, a qualified
person under the meaning of Canadian National Instrument 43-101 – Standards of Disclosure for
Mineral Projects, has reviewed and is responsible for the technical content of this news release.
Data verification by Mr. Kohler includes significant time onsite reviewing drill core, face
sampling, underground workings, and discussing work programs and results with geology and
mining personnel.
On Behalf of the Company,
John Lewins, Chief Executive Officer and Director
For further information, please contact David Medilek, P.Eng., CFA at +1-604-687-7130.
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TERM IS DEFINED IN POLICIES OF THE TSX VENTURE EXC HANGE) ACCEPTS
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news
release includes certain “forward -looking statements” under applicable Canadian securities
legislation. Forward-looking statements are necessarily based upon a number of estimates and
assumptions that, while considered reasonable, are subject to known and unknown risks,
uncertainties, and other factors which may cause the actual results and future events to diffe r
materially from those expressed or implied by such forward -looking statements. All statements
that address future plans, activities, events, or developments that the Company believes, expects
or anticipates will or may occur are forward-looking information, including statements regarding
the realization of the preliminary economic analysis for the Kainantu Mine, expectations of future
cash flows, the planned plant expansion, production results, cost of sales, sales of production,
potential expansion of resources and the generation of further drilling results which may or may
not occur. Forward -looking statements and information contained her ein are based on certain
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factors and assumptions regarding, among other things, the market price of the Company’s
securities, metal prices, exchange rates, taxation, the estimation, timing and amount of future
exploration and development, capital and operating costs, the availability of financing, the receipt
of regulatory approvals, environmental risks, title disputes, failure of plant, equipment or
processes to operate as anticipated, accidents, labour disputes, claims and limitations on
insurance coverag e and other risks of the mining industry, changes in national and local
government regulation of mining operations in PNG , mitigation of the C OVID-19 pandemic,
continuation of the lifted state of emergency, and regulations and other matters. There can be n o
assurance that such statements will prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements. Accordingly, readers should not place
undue reliance on forward-looking statements. The Company disclaims any intention or obligation
to update or revise any forward-looking statements, whether as a result of new information, future
events or otherwise, except as required by law.