K92 Mining Inc. Reports Strong Fourth Quarter and Full-Year 2019 Results and Record Annual Production and Costs
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
March 27, 2020 Vancouver, British Columbia
K92 MINING INC. REPORTS STRONG FOURTH QUARTER AND FULL-YEAR 2019
RESULTS AND RECORD ANNUAL PRODUCTION AND COSTS
K92 Mining Inc. (“K92” or the “ Company”) (TSXV: KNT; OTCQB: KNTNF) is pleased to
announce results from its financial statements for the three and twelve months ended December
31, 2019.
Fourth Quarter 2019 Highlights
• Record quarterly cash costs of US$461 per gold ounce and all -in sustaining costs (AISC)
of US$658 per gold ounce.
• Record quarterly gold equivalent (AuEq) production of 23,646 AuEq ounces, exceeding
budget by 30% and increasing 23% from the third quarter.
• Record quarterly revenue totaling US$33.4 million, increasing 59% from the third quarter.
The financial results do not include 4,167 oz of gold ounces held in inventory, which was
sold in January due to longer concentrate drying times.
• Record net income for the three months ended December 31, 2019 of US$22.5 million or
US$0.10 per share.
• Record o perating cash flow (before working capital adjustments) for the three months
ended December 31, 2019 of US$18,061,639 or US$0.09 per share.
• Record quarterly gross margin of 58%.
Full Year 2019 Highlights:
• Record annual cash costs of US$494 per gold ounce and AISC of US$680 per gold ounce.
This was significantly below the upgraded guidance of US$560 -$600/oz Au (originally
$580-620/oz Au) and AISC of US$720-760/oz Au (originally US$780-820/oz Au).
• Record AuEq production of 8 2,256 AuEq ounces, increasing 91% from 2018. This
exceeded the top end of the upgraded production guidance range of 72,000 to 80,000 AuEq
oz.
• Record annual revenue of US$101.7 million, increasing 91% from 2018.
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• Record net income for the twelve months ended December 31, 2019 of US$32.5 million
or US$0.16 per share.
• Record operating cash flow (before working capital adjustments) for the twelve months
ended December 31, 2019 of US$49,713,822 or US$0.24 per share.
• Record annual gross margin of 53%.
For complete details of the annual audited consolidated fina ncial statements and associated
management's discussion and analysis, please refer to the Company's 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 Fourth Quarter saw K92
achieve multiple records including production, costs and revenue. This strong performance
resulted in exceeding our upgraded annual guidance by 2,256 oz gold equivalent production and
significantly beating all-in sustaining costs with costs of US$680 per ounce gold versus the
upgraded guidance of US$720-US$760 per ounce gold.
The strong performance through 2019 has also resulted in a significant strengthening of K92’s
financial position. As at December 31, 2019, the Company held just under US$22 million in cash,
with the only material debt being a US$13.3 million secured facility with Trafigura. Additionally,
the vast majority of our US$15 million Stage 2 expansion capital has already been spent.”
MINE OPERATING ACTIVITIES
Three months ended Twelve months ended
December 31, 2019 December 31, 2019
Operating data
Head grade (Au g/t) 25.2 20.8
Gold Recovery (%) 93.9% 93.7%
Gold ounces produced 23,096 79,838
Gold ounces equivalent produced (1) 23,646 82,256
Tonnes of copper produced 98 432
Silver ounces produced 5,243 22,984
Financial data (in thousands of dollars)
Gold ounces sold 22,754 75,647
Revenues from concentrate sales US$33,416 US$101,693
Mine operating expenses US$10,969 US$39,153
Depreciation and depletion US$2,976 US$8,862
Statistics (in dollars)
Average realized selling price per ounce, net US$1,469 US$1,344
Cash cost per ounce US$461 US$494
All-in sustaining cost per ounce US$658 US$680
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Notes:
• Gold equivalent for 2018 and 2019 based on the following metal prices: gold $1,300 per
ounce; silver $16.50 per ounce; and copper $2.90 per pound.
• 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
of the Company’s management’s discussion and analysis dated March 26, 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.
For further information regarding 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
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 Gold Mine, expectations of
future cash f lows, 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 here in 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
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of future exploration and development, capital and operat ing 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 limitations 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 accurate, as actual results and fu ture
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.