K92 Mining Releases Strong 2022 Q1 Financial Results – Record Cash Balance and Record Monthly Throughput
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 RELEASES STRONG 2022 Q1 FINANCIAL RESULTS – RECORD CASH
BALANCE AND RECORD MONTHLY THROUGHPUT
Vancouver, British Columbia, May 16, 2022 - K92 Mining Inc. (“K92” or the “Company”) (TSX:
KNT; OTCQX: KNTNF) is pleased to announce financial results for the three months ended March
31, 2022.
Safety
• Strong focus on safety with one of the best safety records in the Australasia region since
commencement of operations.
• Proactive and focused management of COVID-19. K92 has continuously operated throughout
the COVID-19 pandemic, has strong preventative and response plans, with pandemic resiliency
strengthening through ongoing vaccination programs.
Production
• Strong quarterly gold equivalent (“ AuEq”) production of 28,188 oz or 24,152 oz gold,
1,524,827 lbs copper and 28,142 oz silver, representing a 49 % increase from Q1 2021 (1).
• Cash costs of US$536/oz gold and all-in sustaining costs (“AISC”) of US$788/oz gold (2).
• Quarterly tonnage of 99,611 tonnes treated, a 36% increase from Q1 2021.
• Record throughput was achieved in March averaging 1,219 tonnes per day (“tpd”), 11% above
the Stage 2 Expansion target of 1,100 tpd, and 45% of days (14 days) exceeded 1,300 tpd.
• Gravity circuit produced 1,161 gold doré ounces, and, subsequent to March 31, 2022, the Bank
of Papua New Guinea granted K92 a Gold Dor é Export Mining License, enabling the sale of
gold doré ounces. Production from gravity will now be ramped up.
Financials
• Quarterly revenue of US$52.4 million, an increase of 78% from Q1 2021.
• Balance sheet significantly strengthened during Q 1, with a record cash position of US$79.9
million as of March 31, 2022.
• Sales of 26,471 oz of gold, 1,247,967 lbs of copper and 24,899 oz of silver. Gold concentrate
and doré inventory of 4,848 oz as of March 31, 2022, a quarterly decrease of 2,299 oz.
• Operating cash flow (before working capital adjustments) for the three months ended March
31, 2022 of US$22.7 million or US$0. 10 per share , and earnings before interest, taxes,
depreciation and amortization (“EBITDA”) of US$27.2 million or US$0.12 per share.
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• Net income for the first quarter of US$14.1 million or US$0.06 per share.
Growth
• The Stage 2A Expansion to 500,000 tonnes per annum (“tpa”) continued to progress during the
quarter with works underway and the new filter press operational; the additional TC -1000
secondary crusher arrived on site in late Q1 and is planned to be installed in Q2, while the new
flotation tanks are scheduled to arrive in the second half of 2022. Additional mining equipment
arrived on site, including a new jumbo in late Q1 and new truck and loader in early Q2. The
performance of the process plant to date, with 45% of days in March exceeding 1,300 tpd,
continues to demonstrate the potential to approach Stage 2A Expansion run-rate ahead of the
new flotation tanks being installed.
• Reported the updated Kora resource estimate and maiden Judd resource estimate. The updated
Kora resource estimate reported a Measured and Indicated Resource of 2.1 million ounces at
9.20 g/t AuEq and Inferred Resource of 2.5 million ounces at 9. 48 g/t AuEq . The maiden
resource estimate for the Judd deposit reported a Measured and Indicated Resource of 0.13
million ounces at 11.00 g/t AuEq and Inferred Resource of 0.18 million ounces at 5.66 g/t AuEq.
The resource estimates will form the basis for the upcoming economic studies (see February
23, 2022 press release).
• K92 announced high-grade and record thicknesses from maiden surface step-out drilling results
at both Kora South and Judd South. The results include the discovery of a previously unknown
vein, and the discovery of significant mineralized dilatant zones at bot h Kora South and Judd
South. An airborne geophysics survey was also completed, defining extensive new targets (see
February 16, 2022 press release). Exploration at Kora South and Judd South has increased to
two drill rigs operating during Q1, and subsequent to quarter-end, a third drill rig commenced
drilling. In 2022, up to 11 drill rigs are planned to be operating.
• Significant advance of the twin incline in Q1, 15% above budget, with incline #2 (6m x 6m)
advanced to 1,010 metres and #3 (5m x 5m) advanced to 1,063 metres as of March 31, 2022.
In the past three quarters, development exceeded budget by 10%.
The Company’s interim consolidated financial statements and associated management’s discussion and
analysis for the quarter ended March 31, 2022 are available for download on the Company’s website
and under 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, stated, “We are very pleased with the financial
results during the first quarter. Financially, the Company has never been stronger, with a record cash
balance of $79.9 million, increasing by $ 8.6 million during the quarter. All -in sustaining costs and
cash costs were also very strong, at $ 788/oz and $536/oz, respectively, and we are pleased to see the
continued compression of unit operating costs driven by economies of scale and overall increased
efficiencies as COVID-19 restrictions are progressively eased.
In terms of production growth, the process plant continues to exceed our expectations. In March 2022,
the plant delivered a record average daily throughput for the month of 1,219 tpd and 45% of the days
exceeded 1,300 tpd . This is well above the 1,100 tpd Stage 2 Expansion run -rate and shows the
potential to approach the Stage 2A Expansion run-rate of 500,000 tpa or 1,370 tpd , ahead of the
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installation of the flotation cells . Work on the next phases of growth is also proceeding with an
economic study underway for the Stage 3 Expansion and Stage 3A Expansion.
Exploration also continues to deliver strong results on multiple fronts. I am pleased to report that the
third drill rig is now operating at Kora South and Judd South , rapidly increasing the number of rigs
from one rig earlier this year. Drilling at Judd South followed by Kora South with long underground
holes is also planned to commence shortly.
Lastly, I would like to highlight that the achievements in Q1 occurred during the COVID-19 Omicron
wave in Papua New Guinea. Our control measures on site held up very well. I am extremely proud of
our workforce and what they have achieved during the pandemic environment and I am pleased to
report a significant relaxing of restrictions on site, including the removal of quarantin ing. This is
already having a noticeable positive impact on operational efficiencies and costs. The support of the
Governments of both Papua New Guinea and Australia throughout the pandemic has also been a major
factor in our success.”
Mine Operating Activities
Three months ended Three months ended
March 31, 2022 March 31, 2021
Operating data
Head grade (Au g/t) 8.3 8.5
Gold recovery (%) 90.9% 88.9%
Gold ounces produced 24,152 17,774
Gold ounces equivalent produced (1) 28,188 18,914
Tonnes of copper produced 692 193
Silver ounces produced 28,142 7,925
Financial data (in thousands of dollars)
Gold ounces sold 26,471 21,879
Revenues from concentrate sales US$52,412 US$29,513
Mine operating expenses US$8,738 US$7,630
Other mine expenses US$9,400 US$10,420
Depreciation and depletion US$4,397 US$2,857
Statistics (in dollars)
Average realized selling price per ounce, net US$1,769 US$1,735
Cash cost per ounce US$536 US$745
All-in sustaining cost per ounce US$788 US$1,038
Notes:
(1) Gold equivalent for 202 2 is based on the London Metal Exchange quarterly spot average price : gold $1,879 per
ounce; silver $2 4 per ounce; and copper $4. 53 per pound. Gold equivalent for 2021 is based on t he following
prices: gold $1,800 per ounce; silver $25 per ounce; and copper $4.35 per pound .
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(2) The Company provides some non -international financial report ing 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 13, 2022, available on SEDAR or the Company’s website, 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 and Webcast to Present Results
K92 will host a conference call and webcast to present the 2022 first quarter financial results at 8:30
am (EDT) on Monday, May 16, 2022.
• 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.
• The conference call will also be broadcast live (webcast) and may be accessed via the following
link: https://services.choruscall.ca/links/k92mining20220516.html
Qualified Person
K92 Mine Geology Manager and Mine Exploration Manager, Mr. 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 content of this news release.
Resource estimates are in included in a technical report titled, “Independent Technical Report, Mineral
Resources Estimate Update Kora and Judd Gold Deposits, Kainantu Project, Papua New Guinea” dated
January 1, 2022.
About K92
K92 Mining Inc. is engaged in the production of gold, copper and silver from the Kora and Judd
deposits 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.
The Company commenced an expansion of the mine based on a n updated Preliminary Economic
Assessment on the pro perty which was published in January 2019 and updated in July 2020 . 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 at +1-604-416-4445
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CAUTIONARY STATEMENT REGARDING FORWARD -LOOKING INFORMATION: This news release
includes certain “forward-looking statements” under applicable Canadian securities legislation. All statements
in this news release that address events or developments that we e xpect 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, identified 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”, “would”, “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
assumptions 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 Pandemic; 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 weather and climate in remote areas in which certain of the Company’s operations are located; failure to
achieve production, cost and other estimates; risks and uncertainties associated with exploration and
development; the fact that a feasibility studying of mineral reserves demonstrating economic and technical
viability has not been prepared for the Kainantu Mine; 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; 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 price and market for outputs, including gold, silver and copper; inability of the Company to identify
appropriate acquisition targets or complete desirable acquisitions; 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 conflict in Ukraine; 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 politic al
conditions, including relationship with the communities in 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”. Estimates of mineral resources
are also forward -looking statements because they constitute projections, based on certain estimates and
assumptions, regarding the amount of minerals that may be encountered in the future and/or the anticipated
economics of production, should mining occur. 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 a nticipated, estimated, or intended. 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 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.