K92 Mining Releases Strong 2022 Q3 Financial Results – Record Cash Balance, ORE Mined and ORE Processed
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 Q3 FINANCIAL RESULTS – RECORD CASH
BALANCE, ORE MINED AND ORE PROCESSED
Vancouver, British Columbia, November 14, 2022 - K92 Mining Inc. (“K92” or the “Company”)
(TSX: KNT; OTCQX: KNTNF) is pleased to announce third quarter financial results for the three and
nine months ended September 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 that remain in place.
Production
• Record ore processed during the quarter of 117,938 tonnes, or 1,282 tonnes per day (“ tpd”),
significantly exceeding the Stage 2 Expansion run-rate and a 35% increase from Q3 2021.
• Record monthly ore processed achieved in August, averaging 1,373 tpd, 25% above the Stage
2 Expansion run-rate of 1,100 tpd. Record daily mill tonnes processed achieved on July 14, of
1,642 tonnes. Importantly, the records were achieved prior to commissioning of a major Stage
2A Expansion plant upgrade, the flotation expansion, with commissioning planned for late-Q4
2022/early-Q1 2023.
• Record ore mined with 122,035 tonnes mined during the quarter , or 1,326 tpd, an increase of
37% from Q3 2021.
• Strong quarterly production of 32,995 oz gold equivalent (“ AuEq”), or 29,256 oz gold,
1,666,076 lbs copper and 32,161 oz silver (1).
• Cash costs of US$503/oz gold and all-in sustaining costs (“AISC”) of US$909/oz gold (2).
Financials
• Record cash position of US$106.7 million as of September 30, 2022. During the quarter, K92
closed a C$50 million bought deal financing to further strengthen the balance sheet while
remaining debt-free.
• Sales of 25,297 oz of gold, 1,551,981 lbs of copper and 28,396 oz of silver. Gold concentrate
and doré inventory of 6,795 oz as of September 30, 2022, an increase over the prior quarter of
3,783 oz.
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• Operating cash flow (before working capital adjustments) for the three months ended
September 30, 2022, of US$12.8 million or US$0.06 per share, and earnings before interest,
taxes, depreciation and amortization (“EBITDA”) of US$11.2 million or US$0.05 per share.
• Net income of US$3.1 million or $0.01 per share.
• Quarterly revenue of US$36.4 million, an increase of 3% from Q3 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 commissioned in July, while new flotation tanks are to be commissioned in late-
Q4 2022/early-Q1 2023. Additional mining equipment arrived on site during Q3, including a
new loader and jumbo. The performance of the process plant to date continues to demonstrate
the potential to ultimately exceed the Stage 2A Expansion run-rate.
• K92 announced its maiden resource estimate at the Blue Lake porphyry project . The 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
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 (see August 9, 2022 press release). Soil sampling at A1 has commenced
and plans to be followed by drilling(3).
• Results of the Integrated Development Plan (“IDP”) were reported. The IDP comprises two
scenarios: Kainantu Stage 3 Expansion Definitive Feasibility Study Case (“ DFS Case”), and
an alternate Kainantu Stage 4 Expansion Preliminary Economic Assessment Case (“ PEA
Case”). The DFS Case evaluates the Stage 3 Exp ansion to 1.2 million tpa, with an a fter-tax
NPV5% of US$586 million at US$1,600/oz gold, a peak annual production of 308,793 oz AuEq
in 2026, and life of mine average cash costs of US$366/oz gold and AISC of US$545/oz gold.
The alternate PEA Case evaluates the Stage 4 Expansion to 1.7 million tpa, with an after -tax
NPV5% of US$1.3 billion at US$1,600/oz gold, a peak annual production of 500,192 oz AuEq
in 2027, and life of mine average cash costs of US$275 /oz gold and AISC of US$444/oz gold
(see September 12, 2022 press release)(4).
• Subsequent to quarter end, results from 93 diamond drill holes were reported from underground
and surface at Kora, Kora South, Judd, Judd South and Northern Deeps. The results
considerably extended the known drilled deposit strike length of both the Kora-Kora South and
Judd-Judd South veins systems by ~600 metres to the South, in addition to the second hole
drilled at the Northern Deeps target intersecting 3.08 metres (2.15 m true width) at 7.18 g/t
AuEq ~700 m north of the Kora Resource. The drilled deposit strike length of the Kora -Kora
South Vein system has now been established to be over 2.65 km. Additionally, drilling at Kora
South and Judd South both intersected potential dilatant zone mineralization, including Kora
South underground drill hole KMDD0495 recording multiple intersections including 30.55 m
(11.80 m true width) at 12.82 g/t AuEq or 4.15 g/t Au, 78 g/t Ag and 4.79% Cu from the K2
Vein. The hole ended in mineralization as it was terminated early due to ground conditions and
is situated +400 metres down -dip from the previously reported hole KUDD0002, which
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intersected a dilatant zone, recording 35.90 m (23.34 m true width) at 5.98 g/t AuEq (see
October 18, 2022 press release).
• Significant advance of the twin incline in Q 3, with incline #2 (6m x 6 .5m) advanced to 1,543
metres and #3 (5m x 5.5m) advanced to 1,581 metres as of September 30, 2022. Overall mine
development was 1,887 metres, an increase of 19% from Q3 2021.
The Company’s interim consolidated financial statements and associated management’s discussion and
analysis for the quarter ended September 30, 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, “The third quarter represented yet
another major step forward for the Company. Operationally, Kainantu delivered one of our most
complete quarters to date, with near -record production, development, record ore processed , and
record ore mined . Importantly, in August, Kainantu realized Stage 2A Expansion processing
throughput, ahead of the completion of the flotation cells, the last major plant upgrade, highlighting
the potential for the process plant’s ultimate throughput to exceed design.
The quarter also del ivered a major growth milestone, with the completion of the Integrated
Development Plan outlinin g a Stage 3 Definitive Feasibility Study and an alternative Stage 4
Preliminary Economic Assessment case. Both cases demonstrated Tier 1 production and costs, and
strong economics. Importantly, both cases are expected to be fully funded from mine cashflow and K92
ended Q3 with its largest quarter end cash balance on record plus near-record gold concentrate and
doré inventory of 6,795 oz to sell in Q4.
In late 2021, exploration activities made a major pivot from infill to resource growth, and I am pleased
to report that since the Kora and Judd resource estimates, the known drilled strike length of the Kora-
Kora South and Judd-Judd South vein systems have been extended by +60% and +130%, respectively
(Kora effective date of October 31, 2021 and Judd effective date of December 31 2021) . This strike
extension increase, does not include our initial drill results at Northern Deeps, which intersected
mineralization ~700 m north of the Kora Resource at the K1/M6 vein, representing a highly prospective
target that we plan to continue drilling as we advance the twin incline to the South . Exploration also
continues to intersect dilatant zones, in both Kora South and Judd South, including KMDD0495
recording 30.55 m at 12.82 g/t AuEq and ending in mineralization at the K2 vein . Dilatant zones
represent a potential endowment intensity multiplier and are an increasing exploration focus.
Copper-gold porphyry exploration also continues to make significant progress, with a maiden resource
of 10.8 million oz AuEq or 4.7 billion lbs CuEq at Blue Lake delivered in Q3. Blue Lake was discovered
by K92 and done so at a low -discovery cost of less than $1/oz AuEq , with significant potential for
resource growth . At A1, our top priority porphyry target, surface sampling is underway ahead of
diamond drilling.
With drilling at Kora, Kora South, Judd, Judd South and Kora/Judd Northern Deeps, plus plans for
porphyry dri lling in 2023, we are very excite d about our exploration activities and we plan to
progressively increase them next year.”
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Mine Operating Activities
Three months ended
September 30, 2022
Three months ended
September 30, 2021
Operating data
Head grade (Au g/t) 8.7 9.0
Gold recovery (%) 88.9% 86.1%
Gold ounces produced 29,256 21,908
Gold ounces equivalent produced (1) 32,995 24,122
Tonnes of copper produced 756 364
Silver ounces produced 32,161 19,736
Financial data (in thousands of dollars)
Gold ounces sold 25,297 21,675
Revenues from concentrate and doré sales US$36,438 US$35,730
Mine operating expenses US$8,516 US$6,076
Other mine expenses US$7,031 US$10,704
Depreciation and depletion US$5,237 US$3,352
Statistics (in dollars)
Average realized selling price per ounce, net US$1,663 US$1,707
Cash cost per ounce US$503 US$596
All-in sustaining cost per ounce US$909 US$752
Notes:
(1) Gold equivalent for Q 3 2022 is based on the London Metal Exchange quarterly spot average price: gold $1, 730
per ounce; silver $19 per ounce; and copper $3.51 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 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 November 10, 2022, available on SEDAR or the Company’s website , for reconciliation of these
measures.
(3) The Blue Lake maiden resource estimate is included in a technical report titled, “ Independent Technical Report,
Mineral Resource Estimate Blue Lake Porphyry, Kainantu Project, Papua New Guinea”, and dated August 1, 2022.
(4) The IDP is included in a technical report titled, “ Independent Technical Report, Kainantu Gold Mine Integrated
Development Plan, Kainantu Project, Papua New Guinea” , and dated October 26, 2022, with an effective date of
January 1, 2022.
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.
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Conference Call and Webcast to Present Results
K92 will host a conference call and w ebcast to present the 2022 third quarter financial results at 8:30
am (EST) on Monday, November 14, 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/k92mining2022q3.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.
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 is carrying out a
series of expansions on the mine and 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. Such forward-looking statements include, without limitation: (i) the results of the Kainantu Project
DFS, and the Kainantu 2022 PEA, including the Stage 3 Expansion, a new standalone 1.2 mtpa process plant
and supporting infrastructure; (ii) statements regarding the expansion of the mine and development of any of
the deposits; and (iii) the Kainantu Stage 4 Expansion, operating two standalone process plants, larger surface
infrastructure and mining throughputs.
All statements in this news release that address events or developments that we expect 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 a s “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 su bject to known and unknown risks, uncertainties and other
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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 re mote 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; 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 s ecurity 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 political conditions, including relationship with the
communities in jurisdictions it operates; othe r 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. The estimation of mineral resources and mineral reserves is
inherently uncertain and involves subjective judgments about many relevant factors. Mineral resources that are
not mineral reserves do not have demonstrated economic viability. The accuracy of any such estimates is a
function of the quantity and quality of available data, and of the assumptions made and judgments used in
engineering and geological interpretation , Forward-looking statements are not a guarantee of future
performance, and actual results and future events could materiall y 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 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.