K92 Mining Inc. Provides Operations and Stage 2 Expansion Update After Lifting of Png COVID-19 State of Emergency
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 INC. PROVIDES OPERATIONS AND STAGE 2 EXPANSION UPDATE
AFTER LIFTING OF PNG COVID-19 STATE OF EMERGENCY
• Operations have delivered strong performance despite the ongoing COVID-19 State
of Emergency (“SOE”) in Papua New Guinea (declared on March 2 0), with gold
equivalent production on track to exceed 1Q 2020 . On June 16 , the SOE ended,
resulting in a further easing of some restrictions.
• The process plant has performed well, with daily throughput of over 700 tonnes
achieved on numerous days. As a result, throughput for 2Q is expected to meet or
exceed 1Q 2020, despite lower running time associated with the SOE and other
production impacts.
• Stage 2 plant commissioning to double throughput from 200,000 tpa to 400,000 tpa
expected to commence in first half 3Q and targeting completion by end 3Q.
• Twin incline and surface exploration activities have resumed.
• Movement of personnel has improved significantly, with expatriates arriving onsite
after quarantine in early June and open movement of PNG nationals.
• Stage 3 Preliminary Economic Assessment targeting completion in July.
Vancouver, British Columbia, June 16, 2020 - K92 Mining Inc . (“K92” or the “ Company”)
(TSX-V: KNT; OTCQX: KNTNF) is pleased to provide an update on its operations and Stage 2
Expansion at its producing underground Kainantu Gold Mine (“Kainantu”) in Papua New Guinea.
Mining Operations
In March 2020, Kainantu achieved a major milestone, commencing the first long hole stope
utilizing the modified AVOCA method. This is particularly significant since previous mining had
been exclusively from lower productivity and higher cost development and cut and fill stoping.
The first stope was from the K1 Vein, and to date, long hole stoping activities have performed in-
line with design and have been increasing, providing a notable positive impact on operational
flexibility.
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Mining operations have also benefited from further additions to Kainantu’s mining fleet. The
Papua New Guinea COVID-19 State of Emergency declared on March 20, 2020 has seen limited
impact to freight , with the arrival of a third Sandvik LH517i underground LHD loader with
Automine, a third CAT AD45B 45t underground truck and two Terex Articulated Surface Haul
Trucks, since its declaration. The equipment joins a significantly expanded and modernized fleet
since the decision to proceed with the Stage 2 Expansion on March 13, 2019 (see Press R elease:
K92 Mining to Expand Kainantu Gold Mine, PNG) . See Figure 1 for recent mining equipment
received.
Twin incline activities have recently recommenced with the easing of restrictions from the SOE.
Ground support for the portal is underway, with portalling and the installation of steel sets expected
to commence in the first half of 3Q 2020.
Processing
The process plant has achieved multiple daily throughput records during 2Q 2020, significantly
exceeding the 200,000 tpa / ~550 tpd nameplate capacity, with over 700 tpd achieved on multiple
occasions. The strong performance of the process plant and underground mine to date are expected
to result in gold equivalent production exceeding Q1 2020.
Preparations are also being made to recommence Stage 2 commissioning near-term, to double
plant throughput capacity from 200,000 tpa to 400,000 tpa. All of the equipment is installed , and
commissioning is expected to commence in first half 3Q, with completion targeting end of 3Q.
Exploration
Underground drilling activities continued during the SOE, and surface exploration activities have
recently recommenced as restrictions have eased. Surface drill rigs will be focusing on the
Karempe and Kapore targets. Importantly, exploration activities and the number of targets drilled
concurrently are expected to significantly increase in the second half of 2020, with three additional
drill rigs (one underground and two surface) in transit and expected to arrive during the second
half of 3Q 2020. The two surface rigs are currently planned to drill Kora and Blue Lake. The
underground rig will provide additional capacity to drill Kora and Kora South. Underground
development has made considerable progress advancing towards Kora South, with a new dri ll
cuddy allowing drilling to the edge of the mining lease currently being developed and scheduled
to be operational in early July.
COVID-19 Mitigation and Response Plans
To date, Papua New Guinea has confirmed 8 cases of COVID-19, with all cases recovered and the
last recorded case on April 23, 2020. There have been no known cases of COVID-19 amongst our
workforce or local communities. K92 remains determined to do our part to combat the COVID-19
Pandemic, with a COVID -19 Management Plan, that includes occupational health, hygiene and
safety, business continuity, travel, supply chain, statutory compliance, communications, testing,
risk assessment and contingency planning. We have also established a COVID-19 Assistance Fund
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(see April 21, 2020 Press Release: K92 Mining Inc. Announces COVID-19 Assistance Fund). See
Figure 2 for images highlighting some of Kainantu’s COVID-19 systems and procedures.
The Government of Papua New Guinea ended the COVID-19 State of Emergency on June 16 ,
resulting in a further easing of some of the restrictions, particularly around domestic movement.
Papua New Guinea remains vigilant in protecting its country from COVID -19, and its response
will now be under the National Pandemic Act 2020. The Act enables the government to quickly
impose restrictions on the advice of health and medical expert s and maintain the operation of the
COVID-19 National Control Centre.
John Lewins, K92 Chief Executive Officer and Director, stated, “We are very pleased with the
resiliency and strong performance of the Kainantu Gold Mine during what has been a challenging
period globally for the mining industry due to the COVID-19 Pandemic. This would not have been
possible if it weren’t for the exceptional dedication, resourcefulness and preparedness of our
workforce. The support of all levels of Government in Papua New Guinea has also been a major
factor.
It is worth highlighting that our non-local employees, both expatriate and national, were given the
choice to go back to their families ahead of the State of Emergency declaration and almost all of
them decided to stay on site. They went above and beyond what is expected from them, with many
staying on site for over three months to make sure the mine performed before returning home for
a very well deserved break.
We believe their efforts have set the stage for a very exciting second half of 2020 in terms of both
production expansion and exploration. Our process plant is performing well and o ur Stage 2
expansion commissioning to double mill throughput is set to begin in the first half of 3Q. We will
also see the potential future of Kainantu beyond Stage 2, with a Stage 3 Expansion PEA planned
for July.
On the exploration front, the rate of activity and number of targets drilled concurrently is expected
to make a major step change, with not only surface exploration resuming but three new drill rigs
arriving on site near-term. This will provide capacity to potentially test Karempe, Kora, Blue Lake
and Kora South concurrently in the second half of 2020.”
About K92
K92 Mining Inc. is engaged in the production of gold, copper and silver from the Kora and Kora
North deposits of 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
has commenced an expansion of the mine. An updated Preliminary Economic Assessment on the
property was published in January 2019. K92 is operat ed 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 +1-604-687-7130.
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 economic analysis for the Kainantu Mine, expectations of future
cash flows, the planned plant expansion, production results, cost of sales, sales of production,
potential expansion of resources , mitigation of the Covid -19 pandemic, 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 and 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 processe s to operate as anticipated, accidents, 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, international effects of
the Covid-19 pandemic, 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 n ot 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 – Equipment arrivals during the past 10 weeks: 17t bucket Sandvik LH517i UG
LHD loader (top), 45t CAT AD45B UG Haul Truck (middle) and Terex Articulated
Surface Haul Truck (bottom image)
Figure 2 – Images highlighting some of Kainantu’s COVID-19 Systems and Procedures - Left image: COVID-19 diagnostic
testing equipment; middle image: routine temperature checks; top right image: social distancing at mess, and; bottom right
image: hand washing station with traffic management procedures in place.