K92 Mining Achieves Strong GOLD Equivalent Production of 22,261 OZ IN Q3, Commissioning of Stage 2 Expansion Plant & Multiple Throughput Records Exceeding Design
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
October 13, 2020 Vancouver, British Columbia
K92 MINING ACHIEVES STRONG GOLD EQUIVALENT PRODUCTION OF 22,261
OZ IN Q3, COMMISSIONING OF STAGE 2 EXPANSION PLANT & MULTIPLE
THROUGHPUT RECORDS EXCEEDING DESIGN
• Q3 production achieved 21,298 oz of gold, 488,020 lbs copper and 7,127 oz silver for
a total of 22,261 gold equivalent (“AuEq”) oz, a 16% increase from Q3 2019.
• Successfully completed commissioning of Stage 2 process plant, doubling throughput
capacity from 200,000 tpa (~550 tpd) to 400,000 tpa (~1,100 tpd).
• During commissioning, the mill has demonstrated capacity above the design of 1,100
tpd, including 5 consecutive days averaging almost 1,200 tpd . Mining also achieved
multiple consecutive material movement records exceeding 1,100 tpd of plant feed
and is on track to consistently deliver 1,100 tpd of plant feed from underground by
year-end.
• Record tonnage of 64,702 tonnes treated in Q3 2020, a 102% increase from Q3 2019
and quarter-end mill stockpile of ~18,000 tonnes.
• Positive gold grade reconciliation versus resource model continued in Q3, with gold
head grade of 11.29 g/t and copper at 0.38%. Plant feed g rades were deliberately
lowered during Q3 to minimize potential gold losses during the commissioning period.
• Financial position remains strong and balance sheet has continued to strengthen
during Q3 and throughout the COVID-19 pandemic.
Vancouver, British Columbia, October 13, 2020 - K92 Mining Inc. (“K92” or the “Company”)
(TSX-V: KNT; OTCQX: KNTNF) is pleased to announce production in the third quarter (“Q3”),
of 22,261 oz AuEq at its Kainantu Gold Mine in Papua New Guinea.
During Q3, K92 produced 21,298 ounces of gold, 488,020 pounds of copper and 7,127 ounces of
silver, or 22,261 AuEq oz (based on a gold price of US$1, 500/oz; silver price of US$1 7.75/oz;
copper price of US$2.70/lb). The quarter also achieved record mill throughput of 64,702 tonnes
following successful commissioning of the Stage 2 process plant expansion to double throughput
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from 200,000 tpa (~550tpd) to 400,000 tpa (~1,100 tpd), including 5 consecutive days significantly
above design, averaging almost 1,200 tpd.
Mining operations in Q3 focused on Kora’s K1 and K2 veins and comprised development tonnes
on the K1 vein on five levels, K1 vein long hole stoping (modified AVOCA method) on the 1205
and 1225 mRL level, K2 vein development tonnes from the 1170 mRL level and K2 vein long
hole stoping (modified AVOCA method) on the 1185 mRL level. Importantly, Q3 marked the
second full quarter of long hole stoping, which commenced in March 2020 on the K1 vein. To
date, long hole stoping has performed to design on both the K1 and K2 veins and has provided a
notable positive impact on operational flexibility, including multiple consecutive days exceeding
1,100 tpd of plant feed from underground in Q3. Long hole stoping is planned to increase through
2020 and K92 remains on track to consistently achieve throughput of 1,100 tpd of plant feed from
underground by year end.
The blend of K1 and K2 material provided an average head grade to the process plant for Q3 of
11.29 g/t Au and 0.38% Cu. Plant feed grades were deliberately lowered during the commissioning
period to minimize the potential for gold losses. Gold head grades continued to deliver a positive
grade reconciliation. Grades are expected to increase in Q4 as higher -grade mining areas are
reprioritized.
In Q3, underground infrastructure development encountered significant mineralization in the Judd
#1 Vein (“J1 vein”), one of four known veins in the Judd vein system. As a result, the infrastructure
drive was modified to develop along the J1 vein, providing a bulk sample to be treated during Q4.
In addition, a drilling program has commenced on Judd (see September 3, 2020 press release –
K92 Mining Announces Bulk Sample Preliminary Results at Judd Vein System and Commencement
of Phase 1 Judd Drill Program ). There are currently two drill rigs targeting Judd from
underground, and the underground development drive continues to be advanced to the South. Judd
is located on the mining lease and runs parallel to and approximately 200 metres to the North East
of Kora. A portion of the Judd material mined has already been processed and blended with Kora
material.
The twin incline project made considerable progress in Q3, including completing surface ground
support, two portals and portal ground support steel sets. Development has also now advanced
through weathered ground into competent fresh rock. See Fig 1 for a photo of the Twin Inclines.
The Kainantu mine continues to operate during the COVID-19 pandemic, with a significant focus
on health and safety and risk -mitigation. 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
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 significant improvement in the movement of personnel, with exploration and
development projects resuming.
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Table 1 – Q3 & H1 2020 and 2019 Annual Production Data
2019 Total Q1 2020 Q2 2020 Q3 2020 YTD 2020
Tonnes Processed T 127,190 47,421 49,311 64,702 161,434
Feed Grade Au g/t 20.8 13.6 17.6 11.3 13.9
Feed Grade Cu % 0.37% 0.32% 0.54% 0.38% 0.41%
Recovery (%) Au % 93.7% 93.0% 92.1% 90.7% 91.9%
Recovery (%) Cu % 92.8% 90.7% 91.1% 90.2% 90.7%
Metal in Conc Prod Au Oz 79,838 19,240 25,762 21,298 66,300
Metal in Conc Prod Cu T 432 136 241 221 599
Metal in Conc Prod Ag Oz 22,984 6,937 10,867 7,127 24,931
Gold Equivalent Production Oz 82,256 19,863 26,847 22,261 68,972
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 extremely pleased to
have successfully completed the commissioning of our Stage 2 Plant Expansion, which represents
an important milestone for the Company and a positive step-change in our throughput capabilities,
doubling from 200,000 tpa (~550 tpd) to 400,000 tpa (~1,100 tpd). The performance of the
expanded plant to date has exceeded expectations on throughput , with the plant achieving 5
consecutive days significantly above design, averaging almost 1,200 tpd . Recoveries have also
been solid post-commissioning and have been steadily increasing through late Q3 and into Q4 as
our team fine-tunes the circuit.
Mining operations have also been tracking well, b enefiting from an expanded fleet and a
significant boost to operational flexibility, with long hole stoping now firmly established on the K1
and K2 veins. During Q3 , multiple consecutive daily records were achieved, with underground
plant feed material movements exceeding 1,100 tpd and a solid quarter -end stockpile of ~18,000
tonnes. Kainantu remains on track to meet its goal of consistently achieving 1,100 tpd of plant feed
from underground by year-end.
We are especially excited about the remainder of thi s year for Kainantu. The fourth quarter is
expected to deliver our strongest quarterly production to date, benefitting from the completion of
the Stage 2 Plant Expansion in Q3. Exploration activities are also ramping up considerably, with
nine drill rigs n ow on site, and one more rig expected to arrive by end of year. Drill rigs are
currently targeting the Judd, Karempe and Kora vein systems, with exploration on Kora South
planned to commence this quarter. The second drill program is also scheduled to comme nce at
Blue Lake this quarter. We expect to provide exploration updates on our vein field exploration
programs near-term.
I would like to, once again, highlight the exceptional commitment of our workforce and the quality
of the Kora Deposit. Despite the challenges of the COVID -19 pandemic, we continue to take
significant steps forward towards increasing production and exploration activities, while also
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strengthening our financial position. 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, fa ce
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.
NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT
TERM IS DEFINED IN POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS
RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
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 differ
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 economi c analysis for the Kainantu Project , 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 herein are based
on certain factors and assumptions regarding, among other things, the market price of the
Company’s securities, metal prices, exchange rates, taxation, the estimation, timing an d 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, accide nts, labour disputes, claims and limitations on
insurance coverage and other risks of the mining industry, changes in national and local
government regulation of mining operations in PNG , mitigation of the Covid -19 pandemic,
continuation of the lifted state of emergency, and regulations and other matters. There can be no
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.
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Figure 1 – Kainantu Twin Inclines