K92 Mining Announces Strong Q2 Production Results - Record MINE & Mill Throughput, Significantly Exceeding Stage 2 Expansion
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 Q2 PRODUCTION RESULTS - RECORD MINE
& MILL THROUGHPUT, SIGNIFICANTLY EXCEEDING STAGE 2 EXPANSION
• Record plant throughput of 108,853 tonnes processed during the quarter or 1,196 tpd,
significantly exceeding the Stage 2 Expansion run -rate and a 44% increase from Q2
2021. Record mine throughput with 114,471 tonnes mill feed mined during the
quarter or 1,258 tpd, an increase of 59% from Q2 2021.
• Strong metallurgical recoveries of 91.0% for gold and 90.9% for copper, ahead of the
installation of the additional flotation cells planned for Q4 2022, which will double
rougher tank capacity.
• Record daily mill tonnes processed achieved on June 29, of 1,559 tonnes and record
monthly average mill throughput achieved in June of 1,251 t pd. During May and
June, 48% of days (29 days) exceeded 1,300 tpd. Subsequent to quarter end, on July
6, a new daily mill tonnes processed record was achieved of 1,638 tonnes.
• Strong quarterly production in the second quarter of 26,085 oz of gold equivalent
(“AuEq”)(1) or 22,934 oz gold, 1,229,961 lbs copper and 25,224 oz silver. Kainantu is
well positioned to meet its guidance of 115,000 to 140,000 oz AuEq, with a strong
second half of the year planned via higher throughput rates and stoping sequence
mining higher grade.
• Significant advancement of the twin incline in Q2, with incline #2 (6m x 6m) advanced
to 1,276 metres and #3 (5m x 5m) advanced to 1,317 metres as of June 30, 2022. Year-
to-date, twin incline development has exceeded budget by 38%. Overall mine
development was 1,826 m, an increase of 75% and 19% from Q2 2021 and Q1 2022,
respectively.
Note (1): Gold equivalent for Q2 2022 is based on the London Metal Exchange quarterly
spot average price : gold $ 1,870 per ounce; silver $2 3 per ounce; and copper $ 4.32 per
pound.
Vancouver, British Columbia, July 12, 2022 - K92 Mining Inc . (“K92” or the “ Company”)
(TSX: KNT; OTCQX: KNTNF) announces production results for the second quarter (“Q2”) of
2022 at its Kainantu Gold Mine in Papua New Guinea, of 26,085 oz AuEq or 22,934 oz gold,
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1,229,961 lbs copper and 25,224 oz silver. Sales during the second quarter were 23,674 oz gold,
1,349,816 lbs copper and 27,033 oz silver.
During the second quarter, Kainantu delivered its third consecutive quarter at Stage 2 Expansion
run-rate throughput, processing a record 108,853 tonnes, an increase of 44% from Q2 2021. Mine
performance was also strong, exceeding mill throughput, with a record 114,471 tonnes of total mill
feed mined, an increase of 59% from Q2 2021.
Importantly, i n June, the mill delivered a monthly average throughput record of 1,2 51 tpd,
significantly exceeding the Stage 2 Expansion target of 1,100 tpd. During May and June, 29 days
(48% of the period) exceeded 1,300 tpd throughput and a daily record of 1,559 tonnes was set on
June 29, 2022. Subsequent to quarter end, on July 6, a new daily mill tonnes processed record was
achieved of 1,638 tonnes. The plant continues to demonstrate much higher throughput rates than
the Stage 2 Expansion design (400,000 tpa / 1,100 tpd) and potentially higher than the Stage 2A
Expansion design run-rate (500,000 tpa / 1,370 tpd).
As an update on the Stage 2A Expansio n, the new filter press is installed and operational, the
additional TC -1000 secondary crusher was installed in late 2Q and is currently being
commissioned, while the new flotation tanks are scheduled to arrive in Q4 2022. The estimated
growth capital cost for the plant expansion is US$2.5m and was approved in October 2021 (see
October 7, 2021 press release: K92 Mining Announces Stage 2A Expansion to Increase
Throughput +25% to 500,000 Tonnes Per Annum at Kainantu Gold Mine).
During the quarter, long hole stoping continued to perform to the design, with operations focused
on Kora’s K1 and K2 veins, and Judd’s J1 Vein for a total of 9 levels mined. Mining on Kora was
conducted on the 1150, 1170, 1205, 1225, 1265 and 1285 levels, and Judd on the 1235, 1265 and
1285 levels.
The operation delivered head grades of 8.2 g/t AuEq or 7.2 g/t gold, 0.56% copper and 9.9 g/t
silver in Q2. Gold grades were below budget due to stope sequencing. Metallurgical recoveries
averaged 91.0% for gold and 90.9% for copper during the quarter and we see further upside once
the flotation tanks are installed that will double the rougher tank capacity. Q3 2022 will also mark
the first quarter with the gravity circuit fully operational and utilized as the dore export license was
granted in late April 2022. The strong throughput and higher grade stoping sequence planned for
2H 2022, well positions Kainantu to achieve its 2022 production guidance of 115,000 to 140,000
oz AuEq.
Twin incline development made significant progress, advancing 58% above budget during Q2. As
of June 30, 2022, incline #2 (6m x 6m) advanced to 1, 276 metres and #3 (5m x 5m) advanced to
1,317 metres. Year-to-date, twin incline development has advanced 38% above budget. Overall,
mine development performed well, advancing 1,826 metres in Q2 (including the twin incline) , a
75% increase from Q2 2021, the 2nd highest quarter on record.
Figure 1 for Quarterly Total Mill Throughput, Development Metres Advanced and Total Mined
Material Chart
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Figure 2 for New TC-1000 Crusher Installed and Being Commissioned
COVID-19 Operational Resiliency
The Kainantu Gold Mine operates under a comprehensive COVID -19 Management Plan that has
continuously operated during the pandemic. A considerable focus is on health and safety and risk-
mitigation. Under the COVID -19 Management Plan, K92 has: established a Government -
recognized testing lab facility utilizing qualified medical personnel on site; set up quarantine and
isolation facilities for inc oming staff; and implemented enhanced hygiene, disinfecting and
training systems and procedures. Additional controls were implemented in 2021, requiring external
COVID-19 testing prior to travel and quarantine at site in addition to testing on arrival at site before
reporting to quarantine. A focus has been supporting Government efforts at a national, provincial
and local level through the 1.5 million PGK (Papua New Guinea Kina) COVID -19 Assistance
Fund and a further 1.0 million PGK of additional assistance funding to Eastern Highlands
Province.
In addition to its various control measures, K92 continues to make considerable progress
increasing resiliency through vaccinations of our expatriate and PNG national workforce, with
vaccinations continuing to be administered on site. Over 75% of our workforce (employees and
contractors) have received at least one vaccine dose. The Company is in close communications
with the provincial and national health authorities of Papua New Guinea and the Government of
Australia, in addition to the Papua New Guinea Chamber of Mines and Petroleum to deliver an
effective pandemic response.
Table 1 – Q2 2022 & 2021 Annual Production Data
Q2 2021 2021 Q1 2022 Q2 2022 H1 2022
Tonnes Processed T 75,667 336,221 99,611 108,853 208,463
Feed Grade Au g/t 10.3 9.8 8.3 7.2 7.7
Feed Grade Cu % 0.76% 0.51% 0.76% 0.56% 0.66%
Recovery (%) Au % 88.3% 89.4% 90.9% 91.0% 90.9%
Recovery (%) Cu % 87.2% 88.8% 91.1% 90.9% 91.0%
Metal in Conc Prod Au Oz 22,153 95,055 24,152 22,934 47,085
Metal in Conc Prod Cu T 498 1,531 692 558 1,250
Metal in Conc Prod Ag Oz 14,914 70,792 28,142 25,224 53,365
Gold Equivalent Production Oz 25,015 104,196 28,188 26,085 54,273
Note - Gold equivalent for Q2 2022 is based on the London Metal Exchange quarterly spot average price: gold $1,870
per ounce; silver $23 per ounce; and copper $4.32 per pound. Gold equivalent for Q1 2022 is based on the London
Metal Exchange quarterly spot average price: gold $1,879 per ounce; silver $24 per ounce; and copper $4.53 per
pound. Gold equivalent for 2021 is based on the following prices: gold $1, 800 per ounce; silver $25 per ounce; and
copper $4.35 per pound.
John Lewins, K92 Chief Executive Officer and Director, stated, “The second quarter once again
marked another major step forward for the Kainantu Gold Mine. Mill throughput and mill feed
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delivered from the underground mine were both records, increasing 9% and 14% quarter-over-
quarter and 44% and 59% versus Q2 2021, respectively. Development was also strong, increasing
19% from the previous quarter, and the 2nd highest on record.
The performance at the mill is particularly impressive; at an average of 1,196 tpd in Q2, it is not
only significantly exceeding the 1,100 tpd Stage 2 Expansion run -rate but it is also showing the
potential to exceed the Stage 2A Expansion run -rate of 1,370 tpd. In June, mill throughput
averaged 1,251 tpd with a daily record of 1,559 tonnes processed on June 29. Last week, on July
6, another new daily record was set with 1,638 tonnes processed . Importantly, the Stage 2A
Expansion plant’s two major outstanding upgrades have not yet been commissioned, with the
additional TC-1000 crusher recently installed and the additional flotation cells, which will double
rougher tank capacity, planned for installation in Q4.
The strong throughput and a higher grade stoping sequence planned for the second half of 2022
bodes well for the operation and we are well positioned to meet our annual production guidance
of 115,000 oz to 140,000 oz AuEq.
Beyond production expansions, exploration is also a major focus for K92. There are 10 drill rigs
currently operating, focusing on resource growth. With our financial position the strongest it has
ever been by a significant margin, we expect to increase our exploration budget near-term.”
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 M r. Kohler includes significant time onsite reviewing drill core, face
sampling, underground workings, and discussing work programs and results with geology and
mining personnel.
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.
The Company commenced an expansion of the mine based on an updated Preliminary Economic
Assessment on the property which was published in January 2019 and updated in July 2020. K92
is operated by a team of mining company professionals with extensive international mine-building
and operational experience.
On Behalf of the Company,
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John Lewins, Chief Executive Officer and Director
For further information, please contact David Medilek, P.Eng., CFA at +1-604-416-4445
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news
release includes certain “forward -looking statements” under applicable Canadian securities
legislation. 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, identified by words such as
“expect”, “plan”, “anticipate”, “proje ct”, “target”, “potential”, “schedule”, “forecast”,
“budget”, “estimate”, “intend” or “believe” and similar expressions or their negative
connotations, or that events or conditions “will”, “would”, “may”, “could”, “should” or
“might” occur. All such forwar d-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 assumptions 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. Su ch factors include, without
limitation, Public Health Crises, including the COVID-19 Pandemic; 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 weather 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; the fact that a feasibility studying
of mineral reserves demonstrating economic and technical viability has not been prepared for the
Kainantu Mine; 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 operat ions, including development and exploration activities; 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 price and market for outputs, including gold, silver and
copper; inability of the Company to identify appropriate acquisition targets or complete desirable
acquisitions; 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 conflict in Ukraine; 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 future social, eco nomic and
political conditions, including relationship with the communities in 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 e ncountered in the future and/or the anticipated economics of production,
should mining occur. 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.
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Although we have attempted to identify important factors that could cause actual results 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 Total Mill Throughput, Development Metres Advanced and Total Mined Material Chart
Figure 2: New TC-1000 Crusher Installed and Being Commissioned