K92 Mining Announces Upsized Senior Secured Credit Facilities of up to US$150 Million and Offtake Agreement with Trafigura
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 UPSIZED SENIOR SECURED CREDIT FACILITIES OF
UP TO US$150 MILLION AND OFFTAKE AGREEMENT WITH TRAFIGURA
Vancouver, British Columbia, June 19, 2024 - K92 Mining Inc. (“K92” or the “ Company”)
(TSX: KNT; OTCQB: KNTNF) is pleased to announce that K92 and its Papua New Guinea
subsidiary, K92 Mining Limited (“K92 PNG”), have entered into two separate credit facilities (the
“Credit Facilities ” and individually the “ Canadian Credit Facility ” and the “ PNG Credit
Facility”, respectively) with Trafigura Pte Ltd (“Trafigura”). The Credit Facilities replace the
previous loan agreement with Trafigura announced in September 2023 ( see September 26, 2023
press release ) (the “ 2023 Loan Facility”) and upsize, on an aggregate basis, the 2023 Loan
Facility amount from US$100 million to US$120 million, with an accordion feature to increase
the aggregate amount available under the Credit Facilities to US$150 million (the “ Accordion
Feature”). The key terms of the Credit Facilities are set out below.
The Credit Facilities may be used for general corporate purposes, working capital purposes, and
capital expenditure. No hedging is required for the Credit Facilities. All conditions precedent for
advance of US$100 million under the Canadian Credit Facility have been satisfied , with the
remaining US$20 million subject to a Condition Precedent under K92’s control and expected to
be satisfied later this month, with the funds for the additional US$20 million available January 1,
2025. The Accordion Feature will become effective b y mutual agreement between K92 and
Trafigura. The 2023 Loan Facility has been terminated and the parties have entered into an
agreement to release all security therewith . The Credit Facilities further strengthen K92’s strong
financial position, with US$73.4 million in cash and treasury bills and no debt as at March 31,
2024.
In addition, K92 PNG and Trafigura have entered into a new offtake agreement for the purchase
by Trafigura of 100% of K92 PNG’s copper/gold concentrate s produced at the Kainantu Gold
Mine in Papua New Guinea (the “New Offtake Agreement ”), replacing the amended offtake
agreement announced on September 26, 2023 which did not come into effect (the “Amended and
Restated Offtake Agreement”). Key terms of the New Offtake Agreement remain substantially
the same as the Amended and Restated Offtake Agreement described in the Company’s
September 26, 2023 press release. K92 is pleased to confirm the New Offtake Agreement has
received regulatory approval in Papua New Guinea subject to compliance with certain conditions,
including but not limited to, K92 PNG observing the conditions of its gold export license.
John Lewins, K92 Chief Executive Officer and Director, stated, “The closing and upsizing of the
loan to up to US$150 million is an important financial de -risking milestone for delivering the
Stage 3 and 4 Expansions which will transform K92 and the Kainantu Gold Mine into a Tier 1
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Mid-Tier Producer. Importantly , this boost to liquidity enables K92 to confidently continue to
rapidly advance multiple high priority exploration targets concurrently.
We would also like to acknowledge our relationship with Trafigura, which has been our offtake
counterpart since the start of operations at the Kainantu Gold Mine. These agreements further
reinforce our strong relationship. The New Offtake Agreement also secures long-term competitive
terms and provides security and confidence in our income from the sale of our concentrate
product.”
Key Terms
1. Credit Facilities
Up to an aggregate US$150 Million Senior Secured Credit Facilities
• 4-year term for each facility from the date of signing.
• Competitive interest rates.
• Nine month interest-only repayment grace period for the PNG Credit Facility. Interest-only
repayment grace period up to 1 July 2025 for the Canadian Credit Facility.
• No hedging conditions.
• The Canadian Credit Facilit y is secured, inter alia, by a pledge of the shares of K92
Holdings International Limited and a conversion right in connection with the shares of the
Company (the “Security”). Should an event of default occur under the Canadian Credit
Facility, Trafigura has, among other rights, the right to accelerate repayment of the
Canadian Credit Facility, realize upon the shares of K92 Holdings International Limited
(which holds indirectly through K92 PNG the Kainantu Gold Mine in Papua New Guinea)
and convert all or any portion of the Canadian Credit Facility into common shares of the
Company, up to a cap of 4.5% of the issued an d outstanding common shares of the
Company.
• US$30 million Accordion Feature to increase the aggregate amount available under both
Credit Facilities to US$150 Million with competitive interest rates, no hedging conditions
and secured by the same Security.
• The Accordion Feat ure must be exercised within 12 months of the first draw under the
Canadian Credit Facility.
• K92 has, among other things, guaranteed the obligations of K92 PNG under the PNG
Credit Facility.
2. New Offtake Agreement
• The term of 7 consecutive calendar years , commencing January 1, 2026, and continuing
either until December 31, 2032 or until a minimum quantity of 600,000 dry metric tons of
concentrate has been delivered to Trafigura.
• Competitive industry terms in relation to all metrics at London Metals Exchange spot
prices.
• Attractive payment arrangements which provide for upfront payment on delivery of
concentrates to port of dispatch and provision of certain shipping documents.
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• Amended and improved metals payabilities for deliveries of concentrates, which includes
amending penalties, treatment and refining charges, and transport charges, all of which are
better than the assumptions outlined in the Kainantu Integrated Development Plan
Definitive Feasibility and Preliminary Economic Assessment cases ( see September 12,
2022 press release – K92 Mining Inc. Announces Robust Kainantu Gold Mine Integrated
Development Plan).
• The original offtake agreement dated July 1, 2019 (as referred to in the September 26, 2023
press release) will be performed prior to the New Offtake Agreement coming into effect
and/or upon the New Offtake Agreement ceasing to be effective.
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 estimated use of proceeds of the Credit
Facilities and the Accordion Feature; and (ii) the satisfaction of the conditions precedent to the Credit
Facilities including the satisfaction of the additional conditions for the Accordion Feature.
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
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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 other 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 future social, economic and political conditions, i ncluding
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”.
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 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 statem ents 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.