K92 Mining Releases Strong 2022 Q2 Financial Results – Record Cash Balance, MINE and Mill 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 Q2 FINANCIAL RESULTS – RECORD CASH
BALANCE, MINE AND MILL THROUGHPUT
Vancouver, British Columbia, August 15, 2022 - K92 Mining Inc . (“K92” or the “ Company”)
(TSX: KNT; OTCQX: KNTNF) is pleased to announce second quarter financial results for the three
and six months ended June 30, 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, and has strong preventative and response plans, with pandemic
resiliency strengthening through ongoing vaccination programs.
Production
• Record plant throughput of 108,853 tonnes processed during the quarter , or 1,196 tonnes per
day (“tpd”), significantly exceeding the Stage 2 Expansion run -rate and a 44% increase from
Q2 2021.
• Record mine throughput with 114,471 tonnes mill feed mined during the quarter or 1,258 tpd,
an increase of 59% from Q2 2021.
• Strong quarterly gold equivalent (“ AuEq”) production of 26,085 oz or 22,934 oz gold,
1,229,961 lbs copper and 25,224 oz silver (1).
• Cash costs of US$617/oz gold and all-in sustaining costs (“AISC”) of US$893/oz gold (2).
• Strong metallurgical recoveries of 91.0% for gold and 90.9% for copper, ahead of the
installation of the additional flotation cells planned for Q4 2022, which will double rougher
tank capacity.
• Record monthly throughput achieved in June, averaging 1,251 tpd, 1 4% above the Stage 2
Expansion run-rate of 1,100 tpd. During May and June, 48% of days (29 days) exceeded 1,300
tpd.
• Subsequent to quarter end, multiple process plant daily throughput records were realized that
significantly exceeded the Stage 2A Expansion run -rate of 1,370 tpd, with 1,638 tonnes and
1,642 tonnes processed on July 6 and 14, respectively, in addition to 1,609 tonnes processed on
July 12.
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Financials
• Record cash position of US$81.7 million as of June 30, 2022. Subsequent to quarter end, K92
closed a C$50 million bought deal financing to further strengthen the balance sheet while
remaining debt-free.
• Sales of 23,674 oz of gold, 1,349,816 lbs of copper and 27,033 oz of silver. Gold concentrate
and doré inventory of 3,012 oz as of June 30, 2022, a quarterly decrease of 1,836 oz.
• Operating cash flow (before working capital adjustments) for the three months ended June 30,
2022, of US$10.5 million or US$0.05 per share, and earnings before interest, taxes, depreciation
and amortization (“EBITDA”) of US$13.3 million or US$0.06 per share.
• Net income of US$5.1 million or $0.02 per share, a 17% increase from Q2 2021.
• Quarterly revenue of US$37.4 million, a 5% increase from Q2 2021.
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
crusher was installed in late Q2 and was commissioned in July, while new flotation tanks are
scheduled to arrive in Q4 2022. Additional m ining equipment ar rived on site in early Q2 ,
including a new truck and loader; while a loader and jumbo are scheduled to arrive in Q3. The
performance of the process plant to date continues to demonstrate the potential to approach
Stage 2A Expansion run-rate ahead of the new flotation tanks being installed.
• Results for 116 diamond drill holes reported for the Kora and Judd deposits with 25
intersections exceeding 10 g/t AuEq at Kora and 19 intersections exceeding 10 g/t AuEq at
Judd. Highlights include multiple intersections at JDD0051 including 8.80 m at 61.17 g/t AuEq
from the J1 Vein and multiple intersections at KMDD0402 including 4.20 m at 37.38 g/t AuEq
from the K2 Vein and 8.50 m at 26.34 g/t AuEq from the K1 Vein (see June 9, 2022 press
release).
• Significant advance of the twin incline in Q 2, with incline #2 (6m x 6 .5m) advanced to 1,276
metres and #3 (5m x 5 .5m) advanced to 1,317 metres as of June 30, 2022. Year-to-date, twin
incline development has exceeded budget by 38%. Overall mine development was 1,826m, an
increase of 75% and 19% from Q2 2021 and Q1 2022, respectively.
• Subsequent to quarter end, K92 announced its maiden resource estimate at the Blue Lake
porphyry project . T he maiden Blue Lake resource estimate reported a significant inferred
resource of 10.8 million ounces AuEq at 0.61 g/t AuEq or 4.7 billion pounds copper equivalent
(“CuEq”) at 0.38% CuEq . Future exploration plans at Blue Lake include drilling to target
expanding the higher -grade core, which is open at depth, and exploring for additional
mineralized porphyries beneath an extensive composite lithocap that extends to and includes
the A1 Porphyry Target, our highest priority porphyry target based on geophysics completed in
late 2021. Plans are underway to imminently commence soil sampling at A1 followed by
drilling (see August 9, 2022 press release).
The Company’s interim consolidated financial statements and associated management’s discussion and
analysis for the quarter ended June 30, 2022 are available for download on the Company’s website and
under the Company’s profile on SEDAR (www.sedar.com). A ll amounts are in U.S. dollars unless
otherwise indicated.
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John Lewins, K92 Chief Executive Officer and Director, stated, “In the second quarter we continued
our growth trajectory with multiple records achieved: record cash balance of $82 million with no debt;
record mill throughput averaging 1,196 tpd that is significantly higher than the Stage 2 Expansion run-
rate of 1,100 tpd; record mine production averaging 1,258 tpd, and; record average monthly
throughput in June of 1,251 tpd.
Following the i nstallation of our additional TC -1000 crusher the process plant took another step
forward, achieving daily process plant records well in excess of the Stage 2A Expansion design of
1,370 tpd or 500,000 tpa. July 6 recorded 1,638 tonnes, on July 14 1,642 tonnes were processed, and
on July 12, 1,609 tonnes were processed. This strong performance is especially significant as we have
not yet installed a key upgrade for the Stage 2A Expansion, which is the additional flotation cells to
double rougher cap acity targeting Q4. Concurrent with the increasing mill throughput capabilities ,
underground mine throughput capabilities are growing as well, with a new jumbo and loader recently
arriving in-country and plans to add more equipment over the coming months. The strong performance
of the process plant and plans for higher grade stopes in the second half of this year well positions K92
to achieve its 2022 production guidance of 115,000 to 140,000 ounces AuEq. In addition to Stage 2A,
economic studies for the Stage 3 Expansion and beyond are progressing well and we plan to announce
near term.
Only a few days ago, K92 achieved a major milestone in our copper-gold porphyry exploration, with
the announcement of the maiden inferred resource estimate for the Blue Lake Porphyry of 10.8 million
oz AuEq or 4.7 million lbs CuEq. We believe Blue Lake is only the tip of the porphyry iceberg at
Kainantu. In Papua New Guinea, porphyries tend to cluster and there are five other porphyry targets
proximal to Blue Lake, with A1 being of highest priority. Soil sampling of A1 is expected to commence
imminently, followed by diamond drilling.
Also on exploration, we are pleased to report that our fourth drill rig is now opera ting at Kora South
and Judd South, and a fifth rig is now on order. Underground drilling of Kora South and Judd South
has also commenced through long targeted holes.
Between our operational growth, copper -gold porphyry exploration and high -grade vein field
exploration, there is certainly a lot to look forward to.”
Mine Operating Activities
Three months ended Three months ended
June 30, 2022 June 30, 2021
Operating data
Head grade (Au g/t) 7.2 10.3
Gold recovery (%) 91.0% 88.3%
Gold ounces produced 22,934 22,153
Gold ounces equivalent produced (1) 26,085 25,015
Tonnes of copper produced 588 498
Silver ounces produced 25,224 14,914
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Financial data (in thousands of dollars)
Gold ounces sold 23,674 18,939
Revenues from concentrate and doré sales US$37,356 US$35,518
Mine operating expenses US$9,310 US$8,789
Other mine expenses US$9,363 US$9,005
Depreciation and depletion US$4,496 US$3,154
Statistics (in dollars)
Average realized selling price per ounce, net US$1,783 US$1,754
Cash cost per ounce US$617 US$736
All-in sustaining cost per ounce US$893 US$1,057
Notes:
(1) Gold equivalent for Q2 2022 is based on the London Metal Exchange quarterly spot average price: gold $1,870
per ounce; silver $23 per ounce; and copper $4.32 per pound. Gold equivalent for 2021 is based on the following
prices: gold $1,800 per ounce; silver $25 per ounce; and copper $4.35 per pound .
(2) The Company provide s 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 August 1 2, 202 2, 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 second quarter financial results at 8:30
am (EDT) on Monday, August 15, 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/k92mining2022q2.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.
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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 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 property 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
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”, “p otential”, “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 stateme nts 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 includ e, 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
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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 con flict 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 political 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. Altho ugh 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 anticipated,
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.