K92 Mining Inc Releases Strong 2020 Q2 Financial Results Including Records FOR Revenue, Cash Flow and Net Cash
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 Q2 FINANCIAL RESULTS INCLUDING
RECORDS FOR REVENUE, CASH FLOW AND NET CASH
Vancouver, British Columbia, August 13, 2020 - K92 Mining Inc . (“K92” or the “ Company”)
(TSX-V: KNT; OTCQX: KNTNF) is pleased to announce results from its financial statements for the
three months ended June 30, 2020.
Second 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
• Record quarterly production of 26,847 gold equivalent (“AuEq”) oz, comprising 25,762 oz of
gold, 531,406 lbs copper and 10,867 oz silver.
• Record tonnage of 49,311 tonnes treated, a 30% increase from Q2 2019.
• Cash costs of US$596/oz gold and all-in sustaining costs (“AISC”) of US$678/oz gold(2).
• Long hole stoping at the K1 and K2 Veins has continued to perform to design and has provided
a notable positive impact on operational flexibility.
Financials
• Sold 27,149 ounces of gold, 566,084 lbs of copper and 11,729 ounces of silver. Gold
concentrate inventories of 3,439 ounces as of June 30, 2020 , a quarterly decrease of 1,474
ounces.
• Record quarterly revenue of US$47.9 million, a 105% increase from Q2 2019.
• Record operating cash flow (before working capital adjustments) of US$ 30.3 million or
US$0.14 per share and EBITDA of US$29.7 million or US$0.14 per share.
• Net income of US$16.9 million or US$0.08 per share.
• Balance sheet significantly strengthened, with cash increasing by US$13.1 million to US$34.7
million and debt decreasing by US$4.2 million to US$9.1 million as at June 30, 2020.
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Growth
• Reported an updated mineral resource for Kora, with a Measured and Indicated Resource of 1.1
million ounces at 10.45 g/t AuEq and Inferred Resource of 3.7 million ounces at 9.01 g/t AuEq,
representing a +180% and +50% increase from the October 2018 resource, respectively ( see
May 19, 2020 Press Release – K92 Mining Inc. Reports Significant Resource Increase at High-
Grade Kora Deposit).
• Surface exploration recommenced in late Q2 following lifting of the COVID-19 State of
Emergency (“SOE”) in Papua New Guinea, targeting nine diamond drill rigs operating by the
end of Q3 2020 and ten rigs by year end.
• Resumed commissioning of the Stage 2 Expansion and development of the twin incline
following the lifting of the SOE. Stage 2 Expansion commissioning is expected to be completed
by the end of Q3 2020.
For complete details of the interim 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, stated, “The second quarter represented
another important step forward for Kainantu, achieving record gold production, mill throughput, cash
flow generation and a very significant increase to mineral resources at Kora. During the quarter, our
financial position strengthened considerably, with cash growing by $13.1 million to $34.7 million and
debt decreasing by $4.2 million to $9.1 million as at June 30th.
Importantly, this was largely achieved during the COVID-19 State of Emergency in Papua New Guinea
and was possible due to the tremendous commitment of our workforce and the quality of the Kora
deposit. Strong support from all levels of Government in Papua New Guinea, especially during this
COVID-19 pandemic has also been a major positive factor in all our achievements to date . The State
of Emergency was lifted on June 16th.
During the second half of this year, Kainantu is expected to continue to take significant steps forward.
Our Stage 3 Expansion PEA was completed last month outlining a potential Tier 1 asset with ~318,000
ounces per annum AuEq run-rate production at a life of mine average all -in sustaining cost of $ 362
per gold ounce net of by-product credits that is fully funded at $1,500/oz gold prices. Stage 2 Expansion
commissioning and twin incline development are both underway and exploration activity has increased
considerably. Currently three separate vein targets on the mining lease and one regional target is being
explored, plus two additional drill rigs are arriving on site shortly.”
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Mine Operating Activities
Three months ended Three months ended
June 30, 2020 June 30, 2019
Operating data
Head grade (Au g/t) 17.6 16.7
Gold recovery (%) 92.1% 93.2%
Gold ounces produced 25,762 18,980
Gold ounces equivalent produced (1) 26,847 19,652
Tonnes of copper produced 241 119
Silver ounces produced 10,867 6,894
Financial data (in thousands of dollars)
Gold ounces sold 27,149 18,824
Revenues from concentrate sales US$47,857 US$23,293
Mine operating expenses US$8,027 US$4,369
Other mine expenses US$6,936 US$6,339
Depreciation and depletion US$3,408 US$1,801
Statistics (in dollars)
Average realized selling price per ounce, net US$1,631 US$1,258
Cash cost per ounce US$596 US$572
All-in sustaining cost per ounce US$678 US$703
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 r eporting 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 August 13, 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.
Conference Call Information
K92 will host a conference call and webcast to present the 2020 Q2 Financial Results at 10:00 am
(EDT) on Friday, August 14, 2020.
• 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.
o The conference call will also be broadcast live (webcast) and may be accessed via the
following link: http://services.choruscall.ca/links/k92mining20200814.html
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Qualified Person
K92 Mine Geology Manager and Mine Exploration Manager, Mr. Andrew Kohler, PGeo, a Qualified
Person under the meaning of N ational Instrument 43-101 – Standards of Disclosure for Mineral
Projects has reviewed and approved the technical content of this news release.
For further information regarding the Kainantu Gold Mine, please refer to the technical report with an
effective date of April 2, 2020 , and entitled, " Independent Technical Report , Mineral Resource
Estimate Update and Preliminary Economic Assessment for Expansion of the Kainantu Mine to Treat
1 MTPA from the Kora Gold Deposit, 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
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 Project , 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, assumptions contained in the PEA,
environmental risks, title disputes, failure of plant, equipment or processes 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, mitigation
of the Covid -19 pandemic, continuation of the lifted state of emergency, 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 statem ents. 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.