K92 Mining Inc. Releases Strong 2020 Q1 Financial Results
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. RELEASES STRONG 2020 Q1 FINANCIAL RESULTS
Vancouver, British Columbia, May 14, 2020 - K92 Mining Inc. (“K92” or the “ Company”)
(TSXV: KNT; OTCQB: KNTNF) is pleased to announce results from its financial statements for
the three months ended March 31, 2020.
First Quarter 2020 Highlights:
Safety
• Strong safety record continues, with no lost time injuries and one of the best safety records
in the Australasia region since start of operations.
• Proactive and focused management of COVID-19, with no confirmed cases amongst
employees. K92 continues to operate and has strong preventative and response plans.
Production
• Q1 production of 19,240 oz of gold, 339,993 lbs copper and 6,937 oz silver for a total of
19,934 gold equivalent (“AuEq”) oz, representing the second highest quarter on record.
• Record material movements of 125,500 tonnes and record underground development of
1,560 metres, increasing from Q1 2019 by 110% and 215%, respectively.
• Commenced long hole stoping at Kainantu with the first stope from the K1 vein.
• Record tonnage of 47,313 tonnes treated, a 76% increase from Q1 2019.
• Cash costs of US$708/oz gold and all-in sustaining costs of US$886/oz gold.
Financials
• Sold 18,747 ounces of gold, 306,993 lbs of copper and 7,165 ounces of silver for revenues
of US$27,633. Gold equivalent concentrate inventories increased by 746 ounces during the
quarter, to 4,913 ounces.
• EBITDA of US$9.8 million or US$0.05 per share and operating cash flow (before working
capital adjustments) of US$12.5 million or US$0.06 per share.
Growth
• High-grade drill results continue to be reported at Kora North, which will contribute to our
upcoming resource expected in May 2020 and Stage 3 Expansion PEA.
• Record stockpile of 17,982 tonnes built ahead of the plant expansion commissioning.
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For complete details of the annual audited consolidated financial statements and associated
management’s discussion and analysis, please refer to the Company’s website or profile on
SEDAR (www.sedar.com). All amounts are in U.S. dollars unless otherwise indicated.
John Lewins, K92 Chief Executive Officer and Director, state d, “The first quarter demonstrated
the tremendous growth potential of the Kainantu Mine, both operationally and through
exploration. Operationally, the completion of infrastructure projects and fleet expansions in prior
quarters delivered record material movements and development rates. The development rates,
importantly, are consistent with the ad vance rates required long -term and material movements
have built stockpiles for over one month of process plant production. Production from o ur first
long hole stop e on the K1 vein also commenced during the quarte r and represents a major
milestone. Long ho le stoping to date has performed well, and we are very encouraged by the
enhanced operational flexibility that comes with this mining method.
On exploration, we continued to deliver high-grade step-out and infill results from both
underground and surface drilling at Kora North. Since the latest resource estimate in Q4 2018,
step-out drilling has consistently intersected the structure along strike to the South, to depth and
up-dip. Mining has also steadily delivered positive grade and tonnage reconciliations. We look
forward to providing our updated resource estimate in the near-term and a Preliminary Economic
Assessment (“PEA”) on the Stage 3 Expansion shortly thereafter.
Most importantly, I would like to acknowledge the outstanding commitment of our workforce and
the strong support from Government during the COVID-19 pandemic environment.”
Mine Operating Activities
Three months ended
March 31, 2020
Three months ended
March 31, 2020
Operating data
Head grade (Au g/t) 13.6 23.6
Gold recovery (%) 93.0% 93.7%
Gold ounces produced 19,240 19,125
Gold ounces equivalent produced (1) 19,934 19,788
Tonnes of copper produced 154 120
Silver ounces produced 6,937 5,564
Financial data (in thousands of dollars)
Gold ounces sold 18,747 18,416
Revenues from concentrate sales US$27,633 US$23,994
Mine operating expenses US$7,716 US$4,369
Other mine expenses US$5,951 US$3,435
Depreciation and depletion US$1,556 US$1,517
Statistics (in dollars)
Average realized selling price per ounce, net US$1,502 US$1,247
Cash cost per ounce US$708 US$391
All-in sustaining cost per ounce US$886 US$567
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Notes:
(1) Gold equivalent for 2020 based on the following prices: gold $1,500 per ounce; silver
$17.75 per ounce; and copper $2.70 per pound. Gold equivalent for 2019 based on the
following metal prices: gold $1,300 per ounce; silver $16.50 per ounce; and copper $2.90
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 May 14, 2020, available on
SEDAR, for reconciliation of these measures.
K92 has not based its production decisions on mineral reserve estimates or feasibility studies, and
historically such projects have increased uncertainty and risk of failure. Mineral resources that are
not mineral reserves do not have demonstrated economic viability.
Updated Guidance
The Company is withdrawing its full -year 2020 production guidance as a result of timing
uncertainty related to international travel for commissioning of our Stage 2 Plant Expansion due
to the COVID-19 National State of Emergency declared in Papua New Guinea on March 20, 2020.
Once clarity on timing is reached, we will provide updated guidance. The Kainantu Mine continues
to operate at the Stage 1 plant throughput with modifications made to mine sequencing already
implemented to increase cash flow. There are no confirmed cases of COVID -19 within our
workforce and we are encouraged by the progressive relaxing of restrictions in PNG.
Conference Call Information
A conference call to discuss these results will be held on Friday, May 15, 2020 at 10:00 am Eastern
time. Listeners may access the conference call by dialing toll -free 1-800-319-4610 within North
America or +1-604-638-5340 from international locations.
Listeners may also access the conference call live and for replay via webcast at the following URL:
http://services.choruscall.ca/links/k92mining20200515.html
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 conten t 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.
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For further information regard ing the Kainantu Gold Mine, please refer to the technical report
dated January 8, 2019, and entitled, "Independent Technical Report, Mineral Resource Estimate
Update and Preliminary Economic Assessment of Kora North and Kora Gold Deposits, Kainantu
Project, Papua New Guinea," available on SEDAR.
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.
NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT
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RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news
release includes cert ain “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 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
processes to operate as anticipated, accidents, labour disputes, claims and li mitations on
insurance coverage and other risks of the mining industry, changes in national and local
government regulation of mining operations in PNG, and regulations and other matters.. There
can be no assurance that such statements will prove to be acc urate, 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. For information on risks, please
refer to the Company’s Manage ment Discussion and Analysis for the year ended December 31,
2019. 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.