K92 Mining Announces Strong 2023 Q4 and Annual Financial Results – Record Quarterly Revenue, Net Income, Operating Cash Flow, EBITDA, Production, ORE Mined, ORE Processed and Development; Annual Production, Cash Cost and Aisc Better Than Guidance
Suite 488 - 1090 West Georgia Street
Vancouver, British Columbia
Canada V6E 3V7
Telephone: +1 (604) 416-4445
Facsimile: +1 (604) 608-9110
www.k92mining.com
NEWS RELEASE
K92 MINING ANNOUNCES STRONG 2023 Q4 AND ANNUAL FINANCIAL RESULTS –
RECORD QUARTERLY REVENUE, NET INCOME, OPERATING CASH FLOW, EBITDA,
PRODUCTION, ORE MINED, ORE PROCESSED AND DEVELOPMENT; ANNUAL
PRODUCTION, CASH COST AND AISC BETTER THAN GUIDANCE
Vancouver, British Columbia, April 1, 2024 - K92 Mining Inc. (“K92” or the “Company”) (TSX:
KNT; OTCQX: KNTNF) is pleased to announce financial results for the three and twelve months
ended December 31, 2023.
Production
Fourth Quarter 2023
• Record quarterly production of 39,101 ounces gold equivalent (“ AuEq”), or 33,309 oz gold,
2,728,623 lbs copper and 56,502 oz silver (1) (2).
• Cash costs of US$430/oz gold, second lowest to date, and all-in sustaining costs (“AISC”) of
US$1,062/oz gold (2).
• Record quarterly ore processed of 151,908 tonnes or 1,651 tonnes per day (“tpd”), 21% greater
than the Stage 2A Expansion run-rate and a 25% increase from Q4 2022.
• Record daily throughput achieved on November 19 th of 2,320 tonnes, and a 7 -day throughput
record achieved in November averaging 2,136 tpd, 69% and 56% greater than the Stage 2A
Expansion plant design rates , respectively (3). The records demonstrate not only a significant
immediate opportunity with the Stage 2A plant having considerably greater capacity than
expected, but also the potential for the Stage 3 Expansion process plant, which is based on the
same design throughput parameters, for significantly greater capacity than its 1.2 million tpa
(“tonnes per annum”) design.
• Record amount of ore mined of 155,062 tonnes and record total mined material (ore plus waste)
of 347,529 tonnes, a 39% and 21% increase from Q4 2022, respectively.
Full Year 2023
• Strong annual production of 117,607 ounces AuEq or 100,533 oz gold, 7,690,477 lbs copper
and 160,628 oz silver, beating updated guidance range of 111,000 to 116,000 oz AuEq.
• Cash costs of US$585/oz gold and AISC of US$1,162/oz gold, beating original guidance ranges
for cash cost of $620 to $680/oz gold, and AISC of $1,180 to $1,300/oz gold (2).
• Record annual ore processed of 503,484 tonnes, a 12% increase from 2022.
• Record annual ore mined of 506,318 tonnes, a 13% increase from 2022.
• Strong recoveries achieved during the year of 91.5% for gold and 92.8% for copper.
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Financials
Fourth Quarter 2023
• Record quarterly revenue of US$75.3 million, an increase of 22% from Q4 2022.
• Record net income of US$20.0 million or $0.09 per share, a 51% increase from Q4 2022.
• Strong cash and treasury bill position of US$ 79.1 million as of December 31 , 202 3 while
remaining debt-free.
• Sales of 33,273 oz gold, 3,061,956 lbs copper and 63,301 oz of silver. Gold concentrate and
doré inventory of 5,285 oz as of December 31, 2023, a decrease of 781 oz over the prior quarter.
• Record operating cash flow (before working capital adjustments) for the three months ended
December 31, 202 3, of US $38.6 million or US$0. 16 per share, and record earnings before
interest, taxes, depreciation and amortization (“ EBITDA”) (2) of US$40.7 million or US$0.17
per share.
Full Year 2023
• Record annual revenue of US$200.3 million, an increase of 6% from 2022.
• Annual net income of US$33.2 million or $0.14 per share.
• Annual sales of 97,355 oz gold, 7,512,951 lbs copper and 159,202 oz of silver.
• Record operating cash flow (before working capital adjustments) for the twelve months ended
December 31, 202 3, of US$ 82.1 million or US$0. 35 per share, and record earnings before
interest, taxes, depreciation and amortization of US$84.1 million or US$0.36 per share (2).
Growth
• During the quarter, K92 announced its updated Kora and Judd resource estimates. The updated
Kora resource estimate reported a Measured and Indicated Resource of 2. 3 million ounces at
10.24 g/t AuEq and an Inferred Resource of 3.9 million ounces at 8.60 g/t AuEq, representing
increases of +8% and +58% from the previous resource estimate respectively. The updated Judd
resource estimate reported a Measured and Indicated Resource of 0.35 million ounces at 8.68
g/t AuEq and Inferred Resource of 0.56 million ounces at 7.72 g/t AuEq, representing increases
of +167% and +211% respectively.
• Subsequent to year end, results from the first two holes from K92’s maiden drill program at the
Arakompa project recorded significant near-surface mineralization, with 4 high -grade lodes
intersected in hole KARDD0002 . Between the high -grade lodes, the tonalite to dioritic host
rock is overprinted with porphyry style mineralization increasing the potential for bulk mining.
The target size of Arakompa is very large, with mineralization demonstrated from drill holes,
rock samples and surfa ce workings for at least 1.7 km of strike, hosted within a ~150-225 m
wide mineralized intense phyllic altered package, and exhibits a vertical extent of +500 m .
Arakompa is sparsely drilled, with K92’s maiden drill results representing the first drilling on
the project completed in 32 years. A total of 18 holes were drilled historically, with the vast
majority shallow. Highlights from the maiden drill program include:
- KARDD0002 recording 7.20 m at 24.76 g/t AuEq, 5.70 m at 9.94 g/t AuEq, 5.30 m at 6.06
g/t AuEq and 3.60 m at 3.38 g/t AuEq (4).
- KARDD0002 recording a bulk intersection of 219.8 m at 1.59 g/t AuEq with a higher grade
core of 149.4 m at 2.12 g/t AuEq, starting at 5.2 m from surface.
Other historic highlights reported include:
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- 004DA92 recording 4.00 m at 32.03 g/t AuEq
- 013AD92 recording 4.00 m at 20.21 g/t AuEq
- 016AD92 recording 6.30 m at 14.96 g/t AuEq
- 010AD92 recording 9.20 m at 10.67 g/t AuEq
• The twin incline is now effectively complete , with incline #2 (6m x 6.5m) advanced to 2,863
metres and #3 (5m x 5.5m) advanced to 2,838 metres as at December 31, 2023 . Overall mine
development during the fourth quarter was 2,649 metres, an increase of 19% from Q4 2022 and
a quarterly record.
The Company’s annual consolidated financial statements and associated management’s discussion and
analysis for the year ended December 31, 2023 are available for download on the Company’s website
and under the Company’s profile on SEDAR+ (www.sedarplus.ca). All amounts are in U.S. dollars
unless otherwise indicated.
See Figure 1: Quarterly Production, Cash Cost and AISC Chart
See Figure 2: Quarterly Total Ore Processed, Development Metres Advanced and Total Mined
Material Chart
See Figure 3: Process Plant Throughput Performance, Daily Records and Near-Records
John Lewins, K92 Chief Executive Officer and Director, stated, “In 2023, K92 once again took a major
step forward in numerous areas, delivering a strong finish to the year with multiple records achieved
both financially and operationally, including, but not limited to, record production, development,
material movements, earnings per share, cash flow per share, and revenue. With the strong fourth
quarter, K92 exceeded the top end of its updated production guidance range and delivered better cash
costs and all-in sustaining costs than the original guidance range. 2023 also delivered a significantly
expanded resource base, with the combined Measured and Indicated resource at Kora and Judd
increasing by +13% to 2.6 Moz AuEq at 10.0 g/t AuEq and the Inferred resource increasing by +70%
to 4.5 Moz AuEq at 8.5 g/t AuEq, firmly placing Kainantu in an elite category of large high-grade gold
systems globally.
Looking ahead, we are very excited for 2024 as we continue to advance the transformation of Kainantu
and K92 into a Tier 1, mid-tier producer in 2025. Concurrent with our transformative expansion works,
we also remain focused on exploration, both near-mine and regionally, with very encouraging results
to date, particularly from Arakompa in late-February reporting high-grade drill results including 7.20
m at 24.76 g/t AuEq, 5.70 m at 9.94 g/t AuEq, 5.30 m at 6.06 g/t AuEq and 3.60 m at 3.38 g/t AuEq and
a bulk intersection of 219.8 m at 1.59 g/t AuEq with a higher grade core of 149.4 m at 2.12 g/t AuEq,
starting at 5.2 m from s urface. Importantly, this is the first time that any drilling has been completed
on Arakompa in 32 years with only very limited and shallow drilling completed historically. The second
drill rig has already commenced drilling at Arakompa and we look forward to providing exploration
updates on our various targets in due course.”
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Mine Operating Activities
Three months ended
December 31, 2023
Twelve months ended
December 31, 2023
Operating data
Gold head grade (Au g/t) 7.4 6.8
Copper grade (%) 0.87% 0.75%
Gold equivalent head grade (AuEq g/t) 8.7 7.9
Gold recovery (%) 91.7% 91.5%
Copper recovery (%) 93.6% 92.8%
Gold ounces produced 33,309 100,533
Gold ounces equivalent produced (1) (2) 39,101 117,607
Tonnes of copper produced 1,238 3,488
Silver ounces produced 56,502 160,628
Financial data (in thousands of dollars)
Gold ounces sold 33,273 97,355
Revenues from concentrate and doré sales US$75,316 US$200,255
Mine operating expenses US$11,692 US$40,038
Other mine expenses US$13,684 US$39,473
Depreciation and depletion US$10,563 US$31,877
Statistics (in dollars)
Average realized selling price per ounce, net US$1,898 US$1,869
Cash cost per ounce (2) US$430 US$585
All-in sustaining cost per ounce (2) US$1,062 US$1,162
Notes:
(1) Gold equivalent in 2023 is calculated based on: gold $1,950 per ounce; silver $23.37 per ounce; and copper $3.83
per pound. Gold equivalent in Q4 2023 is calculated based on: gold $1, 974 per ounce; silver $ 23.20 per ounce;
and copper $3.71 per pound.
(2) The Company provides some non -international financial reporting standard measures as supplementary
information that management believes may be useful to investors to explain the Company’s financial
results. Please refer to non-IFRS financial performance measures in the Company’s management’s discussion and
analysis dated April 1 , 202 4, available on SEDAR + or the Company’s website, for reconciliation of these
measures.
(3) Daily tonnes processed record achieved on day with 23.7 hours of plant operation. 7-day tonnes processed recorded
achieved with 95.5% plant availability. 2023 budget annual average plant availability is 94.2% .
(4) Gold equivalent exploration results are calculated using longer -term commodity prices with a copper price of
US$4.00/lb, a silver price of US$22.50/oz and a gold price of US$1,750/oz.
Mineral resources that are not mineral reserves do not have demonstrated economic viability.
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Conference Call and Webcast to Present Results
K92 will host a conference call and webcast to present the 202 3 fourth quarter and annual financial
results at 8:30 am (EDT) on Tuesday, April 2, 2024.
• Listeners may access the conference call by dialing toll -free to 1-800-319-4610 within North
America or +1-604-638-5340 from international locations.
The conference call will also be broadcast live (webcast) and may be accessed via the following link:
https://services.choruscall.ca/links/k92mining2023q4.html.
Qualified Person
K92 Mine Geology Manager and Mine Exploration Manager, Mr. 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.
Technical Report
The Integrated Development Plan (“IDP”) for the Kainantu Gold Mine Project in Papua New Guinea
is included in a Technical Report, titled, “ Independent Technical Report, Kainantu Gold Mine
Integrated Development Plan, Kainantu Project, Papua New Guinea” dated October 26, 2022, with an
effective date of January 1, 2022.
About K92
K92 Mining Inc. is engaged in the production of gold, copper and silver at the Kainantu Gold Mine in
the Eastern Highlands province of Papua New Guinea, as well as exploration and development of
mineral deposits in the immediate vicinity of the mine. The Company declared commercial production
from Kainantu in February 2018 and is in a strong financial position. A maiden resource estimate on
the Blue Lake copper-gold porphyry project was completed in August 2022. K92 is operated by a team
of mining company professionals with extensive international mine -building and operational
experience.
On Behalf of the Company,
John Lewins, Chief Executive Officer and Director
For further information, please contact David Medilek, P.Eng., CFA , President and Chief Operating
Officer at +1-604-416-4445
CAUTIONARY STATEMENT REGARDING FORWARD -LOOKING INFORMATION: This news
release includes certain “forward-looking statements” under applicable Canadian securities legislation. Such
forward-looking statements include, without limitation: (i) the results of the Kainantu Mine Definitive Feasibility
Study, and the Kainantu 2022 Preliminary Economic Assessment, including the Stage 3 Expansion, a new
standalone 1.2 mtpa process plant and supporting infrastructure; (ii) statements regarding the expansion of the
mine and development of any of the deposits; (iii) the Kainantu Stage 4 Expansion, operating two standalone
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process plants, larger surface infrastructure and mining throughputs; and (iv) the potential extended life of the
Kainantu Mine.
All statements in this news release that address events or developments that we expect to occur in the future are
forward-looking statements. Forward -looking statements are statements that are not historical facts and are
generally, although not always, id entified by words such as “expect”, “plan”, “anticipate”, “project”,
“target”, “potential”, “schedule”, “forecast”, “budget”, “estimate”, “intend” or “believe” and similar
expressions or their negative connotations, or that events or conditions “will”, “wo uld”, “may”, “could”,
“should” or “might” occur. All such forward -looking statements are based on the opinions and estimates of
management as of the date such statements are made. Forward -looking statements are necessarily based on
estimates and assumption s that are inherently subject to known and unknown risks, uncertainties and other
factors, many of which are beyond our ability to control, that may cause our actual results, level of activity,
performance or achievements to be materially different from those expressed or implied by such forward-looking
information. Such factors include, without limitation, Public Health Crises, including the COVID -19 virus;
changes in the price of gold, silver, copper and other metals in the world markets; fluctuations in the price and
availability of infrastructure and energy and other commodities; fluctuations in foreign currency exchange
rates; volatility in price of our common shares; inherent risks associated with the mining industry, including
problems related to weat her and climate in remote areas in which certain of the Company’s operations are
located; failure to achieve production, cost and other estimates; risks and uncertainties associated with
exploration and development; uncertainties relating to estimates of mineral resources including uncertainty that
mineral resources may never be converted into mineral reserves; the Company’s ability to carry on current and
future operations, including development and exploration activities at the Arakompa, Kora, Judd and ot her
projects; the timing, extent, duration and economic viability of such operations, including any mineral resources
or reserves identified thereby; the accuracy and reliability of estimates, projections, forecasts, studies and
assessments; the Company’s ability to meet or achieve estimates, projections and forecasts; the availability and
cost of inputs; the availability and costs of achieving the Stage 3 Expansion or the Stage 4 Expansion; the ability
of the Company to achieve the inputs the price and market for outputs, including gold, silver and copper; failures
of information systems or information security threats; political, economic and other risks associated with the
Company’s foreign operations; geopolitical events and other uncertainties, such as the conflicts in Ukraine,
Israel and Palestine ; compliance with various laws and regulatory requirements to which the Company is
subject to, including taxation; the ability to obtain timely financing on reasonable terms when required; the
current and futur e social, economic and political conditions, including relationship with the communities in
Papua New Guinea and other jurisdictions it operates; other assumptions and factors generally associated with
the mining industry; and the risks, uncertainties and other factors referred to in the Company’s Annual
Information Form under the heading “Risk Factors”.
Estimates of mineral resources are also forward-looking statements because they constitute projections, based
on certain estimates and assumptions, regarding the amount of minerals that may be encountered in the future
and/or the anticipated economics of p roduction. The estimation of mineral resources and mineral reserves is
inherently uncertain and involves subjective judgments about many relevant factors. Mineral resources that are
not mineral reserves do not have demonstrated economic viability. The accu racy of any such estimates is a
function of the quantity and quality of available data, and of the assumptions made and judgments used in
engineering and geological interpretation , Forward-looking statements are not a guarantee of future
performance, and actual results and future events could materially differ from those anticipated in such
statements. Although we have attempted to identify important factors that could cause actual r esults to differ
materially from those contained in the forward-looking statements, there may be other factors that cause actual
results to differ materially from those that are anticipated, estimated, or intended. 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.
Figure 1: Quarterly Production, Cash Cost and AISC Chart
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Figure 2: Quarterly Total Ore Processed, Development Metres Advanced and Total Mined Material Chart