K92 Mining Releases Strong Q2 Financial Results and Record Mill Throughput
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 RELEASES STRONG Q2 FINANCIAL RESULTS AND RECORD MILL
THROUGHPUT
Vancouver, British Columbia, August 16, 2021 - K92 Mining Inc . (“K92” or the “ Company”)
(TSX: KNT; OTCQX: KNTNF) is pleased to announce results from its financial statements for the
three and six months ended June 30, 2021.
Safety
• Strong focus on safety with one of the best safety records in the Australasia region since start
of operations.
• Proactive and focused management of COVID -19. K92 continues to operate and has strong
preventative and response plans, with pandemic resiliency rapidly increasing through ongoing
vaccination programs.
Production
• Record quarterly tonnage of 75,667 tonnes treated, a 53% increase from Q2 2020.
• Quarterly gold equivalent (“AuEq”) production of 25,015 oz, or 22,153 oz gold, 1,098,730 lbs
copper and 14,914 oz silver.
• Cash costs of US$736/oz gold and all -in sustaining costs (“ AISC”) of US$1,0 57/oz gold
ounce(2).
• Production during the quarter was materially impacted by a surge in COVID-19 cases in Papua
New Guinea and the suspension of expatriate travel between Australia and Papua New Guinea
from mid-March to mid-May.
• K92’s operational resiliency and efficiencies in addressing COVID -19 challenges were
reflected in operational performance in the second half of the quarter, with production totaling
16,284 oz AuEq. K92 expects the second half of the year to be notably stronger than the first ,
and the fourth quarter to be the strongest, bolstered by production stoping commencing on the
Judd Vein System.
Financials
• Balance sheet remained strong during Q2. K92 fully repaid its debt during the first quarter and
maintains a strong cash balance, ending the quarter with US$56 million as at June 30, 2021. As
production in the second half of the quarter was the strongest, a notable number of sales were
realized in the third quarter.
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• Sold 18,939 oz of gold, 862,407 lbs of copper and 12,472 oz of silver in the quarter . Gold
concentrate inventories of 5,456 oz as of June 30, 2021, a quarterly increase of 3,077 oz.
• Quarterly revenue of US$35.5 millio n and net income for Q2 of US$4.4 million or US$0.02
per share.
• Operating cash flow (before working capital adjustments) for the quarter of US$15.2 million or
US$0.07 per share and e arnings before interest, taxes, depreciation and amortization
(“EBITDA”) of US$11.8 million or US$0.05 per share.
Growth
• Following the positive drilling, underground development, and metallurgical results to date at
the Judd Vein System, first production stoping is now planned for Q4. Development on the J1
Vein is underway on its second sublevel, the 1265 Level , and Judd has been prioritized to
eliminate its core logging and assaying backlog.
• Results for 43 diamond drill holes reported for the Kora deposit, with 20 intersections exceeding
10 g/t AuEq, including KMDD0286 recording multiple intersections including 3.0 m at 71.22
g/t Au, 14 g/t Ag and 0.17% Cu ( 71.64 g/t AuEq, 1.38 m true width) on the K1 Vein and
KMDD0339 recording multiple intersections including 6.30 m at 24.86 g/t Au, 74 g/t Ag and
4.44% Cu (32.11 g/t Au Eq, 5.33 m true width) from the K2 Vein (see July 22, 2021 press
release: K92 Mining Announces Latest High -Grade Drill Results at Kora, Including 3.0 m at
71.64 g/t AuEq & 5.35 m at 37.98 g/t AuEq).
• Phase 2 drilling at Blue Lake has commenced deeper targeted drilling with two drill rigs
operating. Subsequent to quarter end, hole KTDD0020 drilled to a record depth of 1400.6m.
• The new twin incline development has made considerable progress with the #2 (6m x 6m)
incline now advanced 496 metres and the #3 (5m x 5m) incline advanced 530 metres as at July
31, 2021. Development of t he incline resumed on May 21, 2021 after the COVID-19 Papua
New Guinea and Australia travel restrictions were lifted and the COVID-19 situation in Papua
New Guinea improved.
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, “As we enter the second half of the
year, after a n unexpectedly challenging first half due to COVID-19 related challenges, there is
optimism and an improving resiliency to the pandemic. Operationally, the second half of 2Q delivered
strong results with 16,284 oz AuEq produced and we expect the second half of the year to be stronger
than the first half, and the fourth quarter to be the strongest for the year. The introduction of Judd into
our mine plan in Q4, will provide a notabl e boost to operational flexibility by adding another mining
front and high grade which are expected to benefit the operation in not just 2021 but going forward.
On exploration, we are actively reducing our backlog of holes to assay and core log, while also adding
more holes from our drill rig fleet with up to 11 rigs operating. This is expected to result in an increase
in news flow in the second half of the year . The immediate focus is reducing the backlog at Judd and
we expect to report results near term. Porphyry exploration has progressed from relatively shallow
vector drilling to now deeper drilling targeting the potassic core. The performance and capabilities of
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the drill rigs has been solid, very recently drilling KTDD0020 to a depth of 1400.6m – this is a record
for Kainantu but also one of the deepest holes drilled in PNG in the last few years. In terms of COVID-
19 resiliency, we continue to make considerable progress with onsite vaccinations for our workforce
underway and recently reduced restrictions for those that are fully vaccinated, decreasing site
quarantine load and providing a boost to staffing levels.
Lastly, I would like to once again, thank the workforce at the Kainantu Gold Mine. Our staff turnover
rate is well below industry average, at approximately 10% over the last twelve months , which we
believe is indicative of the extraordinary commitment of o ur workforce but also the belief in a strong
future. The support of the Government of Papua New Guinea and also the Government of Australia
continues to be a major factor in our success.”
Mine Operating Activities
Three months ended Three months ended
June 30, 2021 June 30, 2020
Operating data
Head grade (Au g/t) 10.3 17.6
Gold recovery (%) 88.3% 92.1%
Gold ounces produced 22,153 25,762
Gold ounces equivalent produced (1) 25,015 26,847
Tonnes of copper produced 498 241
Silver ounces produced 14,914 10,867
Financial data (in thousands of dollars)
Gold ounces sold 18,939 27,149
Revenues from concentrate sales US$35,518 US$47,857
Mine operating expenses US$8,789 US$8,027
Other mine expenses US$9,005 US$6,936
Depreciation and depletion US$3,154 US$3,408
Statistics (in dollars)
Average realized selling price per ounce, net US$1,754 US$1,631
Cash cost per ounce US$736 US$560
All-in sustaining cost per ounce US$1,057 US$642
Notes:
(1) 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. Gold equivalent for 2020 is based on the following
prices: gold $1,500 per ounce; silver $17.75 per ounce; and copper $2.70 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 August 12, 2021, available on SEDAR
or the Company’s website, for reconciliation of these measures.
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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 2021 Q2 Financial Results at 8:30 am (EDT)
on Tuesday, August 17, 2021.
• 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: http://services.choruscall.ca/links/k92mining20210817.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 from the Kora deposit 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 +1-604-687-7130.
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,
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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 ce rtain 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 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.