K92 Mining Announces Q1 Production Results and Record Plant Throughput at the Kainantu GOLD MINE
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
K92 MINING ANNOUNCES Q1 PRODUCTION RESULTS AND RECORD PLANT
THROUGHPUT AT THE KAINANTU GOLD MINE
• Record quarterly plant throughput with 73,221 tonnes processed, representing a 54%
increase from Q1 2020. Throughput included six consecutive weeks in January and
February achieving an average throughput of ~1,000 tonnes per day (“tpd”), with 18
days exceeding 1,100 tpd, 8 days exceeding 1,200 tpd, and a daily record of 1,315 tpd
over this period.
• Quarterly production in Q1 of 18,654 oz of gold equivalent (“AuEq”)(1) or 17,774 oz
gold, 426,153 lbs copper and 7,925 oz silver.
• Long hole stoping continu ing to perform well and to design on both the K1 and K2
veins, with stoping operations interrupted for ~3 weeks in March and recommenced
near the end of the quarter, following an incident involving an underground loader,
which prevented backfilling operations. Production from four high grade stopes were
deferred to Q2, resulting in the plant treating a larger amoun t of lower grade
stockpile material during Q1 , while benefiting Q2 production (see March 18, 202 1
press release – Kainantu Operations and COVID -19 Update ). Operations were also
impacted from mid -January to late -February due to a shortage of bulk emulsion
explosives as a result of unforeseen COVID-19 international shipping logistical issues
compounded by increasing global transport restrictions as a result of the Beirut
Incident. This was addressed through utilizing less productive alternative explosives
(ANFO and packaged explosives) and supplementing mill feed from lower grade
stockpiles. A significant shipment of bulk emulsion explosives arrived on site in late -
February, the supplier has diversified sources and is expected to commence domestic
production in May, nearby in Lae, to totally mitigate this issue.
• Strong f inancial position with balance sheet strengthening during Q1. During the
quarter, K92 fully repaid the outstanding loan balance of US$5 million and increased
its cash balance by US$15 million, ending the quarter with a historically high cash
balance of US$66 million.
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Note (1): AuEq production for 2021 is based on a gold price of US$1,800/oz; silver price of
US$25/oz; copper price of US$3.25/lb. 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, April 16, 2021 - K92 Mining Inc. (“K92” or the “ Company”)
(TSX: KNT; OTCQX: KNTNF) announces production in the first quarter (“Q1”) at its Kainantu
Gold Mine in Papua New Guinea of 18,654 oz AuEq, or 17,774 oz of gold, 426,153 lbs of copper
and 7,925 oz of silver.
During the first quarter, the operation took a significant step forward towards ramping up to run -
rate Stage 2 Expansion throughput, delivering record mill throughput of 73,221 tonnes processed,
including 6 consecutive weeks averaging ~ 1,000 tpd in January and February , with 18 days
exceeding 1,100 tpd, 8 days exceeding 1,200 tpd, and a daily record of 1,315 tpd over this period.
This was achieved despite multiple short-term challenges:
Firstly, in mid-January until the end of February, the operation was impacted by a shortage of bulk
emulsion explosives due to unforeseen COVID -19 international shipping logistic al issues,
compounded by increasing global transport restrictions as a result of the Beirut Incident . The
operation addressed this shortage by : i) implementing alternati ve but less optimal explosives
(ANFO and packaged explosives), which impacted productivities for stoping and development ,
and; ii) supplementing mill feed from lower grade stockpiles. By late February, a significant
shipment of bulk emulsion explosives arri ved on site. The supplier has diversified sources and is
expected to commence domestic production in May, nearby in Lae, to totally mitigate this issue.
Secondly, in March, the operation was impacted by an incident involving an underground loader,
which p revented backfilling operations for approximately 3 weeks (see March 18, 2021 press
release – Kainantu Operations and COVID-19 Update). This resulted in production from four high
grade stopes being deferred to the second quarter, and the plant treating a significantly larger
amount of lower grade stockpile material during the first quarter in addition to a non-optimal mill
feed head grade blend in March that impacted recoveries and throughput. Stoping operations and
mining of high -grade stopes recommenced in late March. Additionally, on March 17, 2021, the
Government of Australia announced a temporary short-term restriction on travel between Papua
New Guinea and Australia due to COVID -19. The restriction included the suspension of
movement of the resource sector’s expatriate fly-in fly-out workforce between Papua New Guinea
and Australia . The Company has engaged with the Australian Government through the PNG
Chamber of Mines and Petroleum on the re -establishment of FIFO movement and at this point
anticipates that restrictions to be lifted by the end of April. These events are not expected to impact
K92 meeting its production guidance for 2021.
In Q1, mining operations focused on Kora’s K1 and K2 veins and Judd’s J1 Vein, for a total of 7
levels mined. Mining of Kora was conducted on the 1150, 1170, 1185, 1225, 1245 and 1265 levels
and Judd on the 1235 level. Importantly, Q1 marked the fourth full quarter of long hole stoping
(modified AVOCA method), which commenced in March 2020 on the K1 vein. Long hole stoping
has continued to perform to design for both the K1 and K2 vein s. The combination of additional
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levels developed through 2020 and Q1 2021 and strong performance from long hole stoping has
provided a notable positive impact on operational flexibility.
The new twin incline development made considerable progress in Q1 with the #2 (6m x 6m) incline
now advanced 363 metres and the # 3 (5m x 5m) incline advanced 370 metres as at March 31,
2021. Focus on the twin incline was reduced after the COVID-19 Papua New Guinea and Australia
travel restrictions were initiated.
Following the establishment of a comprehensive COVID-19 Management Plan, the Kainantu Mine
has continued to operate during the pand emic, with a significant focus on health and safety and
risk-mitigation. Under t he COVID -19 Management Plan , K92 established a Government
recognized testing lab facility utilizing qualified medical personnel on site, quarantine and
isolation facilities for incoming staff, and implemented enhanced hygiene, disinfecting and
training systems and procedures. Additional protocols include a requirement for external COVID-
19 testing prior to travel to quarantine at site. The Company’s first priority is to protect the health
and well-being of our personnel and local communities.
Table 1 – Q1 2021 & 2020 Annual Production Data
Q1 2020 Q2 2020 Q3 2020 Q4 2020 2020 Q1 2021
Tonnes Processed T 47,421 49,311 64,702 68,932 230,365 73,221
Feed Grade Au g/t 13.6 17.6 11.3 14.2 14.0 8.5
Feed Grade Cu % 0.36% 0.54% 0.38% 0.36% 0.40% 0.31%
Recovery (%) Au % 93.00% 92.10% 90.70% 91.70% 91.80% 88.88%
Recovery (%) Cu % 91.70% 91.10% 90.20% 90.60% 90.90% 86.20%
Metal in Conc Prod Au Oz 19,240 25,762 21,298 28,809 95,109 17,774
Metal in Conc Prod Cu T 154 241 221 224 841 193
Metal in Conc Prod Ag Oz 7,678 10,867 7,127 10,395 36,067 7,925
Gold Equivalent Production Oz 19,944 26,847 22,261 29,820 98,872 18,654
Note - Gold equivalent for 2021 is based on the following prices: gold $1,800 per ounce; silver $25 per ounce; and
copper $3.25 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, “Despite multiple short term and
unexpected events in the quarter as a result of COVID-19 travel restrictions, loader incident and
international bulk emulsion shipping issues, the operation has continued to make considerable
progress. On the process plant, we continue to test the ultimate throughput potential and it appears
to be greater than the 1,100 tpd nameplate as demonstrated with several throughput records
achieved during the quarter. On stoping, long hole continues to perform to design with competent
hanging wall and footwalls, and high-grade stoping recommenced in late March. On development,
outside of the period impacted by the short term COVID-19 travel restrictions, advance rates have
been rapid throughout the mine and at the twin incline. Financially, K92 is in its strongest position
ever, paying down the last $5 million of debt and increasing cash to historic levels to $66 million
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at the end of the quarter. And lastly, on exploration, we continue to make progress drilling multiple
vein and porphyry systems.”
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.
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 even ts 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 economic 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 her ein 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 and amount
of future exploration and development, capital and opera ting 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 Covid -19 pandemic,
removal of travel restrictions, 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 forwa rd-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.