K92 Mining Secures US $15 Million Loan and Offtake Agreement with Trafigura
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 SECURES US $15 MILLION LOAN
AND OFFTAKE AGREEMENT WITH TRAFIGURA
• Executed Loan Agreement with Trafigura for US $15 million for expansion of the
Kainantu Gold Mine.
• Offtake Agreement covering 100% production of copper/gold concentrates at
competitive industry terms with no minimum quantity requirements.
• Continuing relationship with Trafigura, our o fftake partner since the start of
operations at Kainantu.
Vancouver, British Columbia, July 2, 2019 - K92 Mining Inc. (“K92” or the “ Company”)
(TSXV: KNT; OTCQB: KNTNF) is pleased to announce that K92 and Trafigura Pte Ltd.
(“Trafigura”), a market leader in the global commodities industry, have enter ed into a loan
agreement pursuant to which Trafigura will provide a US $15 million loan (the “Loan”) to K92
and an offtake agreement for the purchase by Trafigura of 100% of K92’s copper/gold concentrate
produced at the Kainantu gold mine located in Papua New Guinea.
KEY TERMS
US $15 Million Loan
• Two-year term Loan with three-month repayment grace period followed by twenty-one
repayment installments.
• Competitive interest rates.
• No hedging conditions.
• Proceeds to be used primarily for expansion of K92’s Kainantu Gold Mine located in Papua
New Guinea.
• Loan is initially unsecured;
• The Loan includes conditions subsequent in relation to the provision of security over assets
of K92 and its subsidiary, K92 Mining Limited ; once these obligations are satisfied, the
Conversion Right referred to below expires.
• During the initial period prior to the provision of security, the agreement provides that in
certain circumstances of default, Trafigura may accelerate repayment of the Loan. Subject
to a grace period, if the Loan is not then repaid, Trafigura may convert all or any portion
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of the Loan into common shares of K92 at a conversion price equal to US$1.3794 per share
(the “Conversion Right”).
• Drawdown under the Loan is subject to a number of customary conditions precedent for
transactions of this nature, including receipt of TSX Venture Exchange acceptance.
Offtake Agreement
• Nine-year term ending February 11, 2028 or until a minimum of 165,000 dry metric tonnes
(“Minimum DMT”) of concentrate has been delivered, whichever is later. If Minimum
DMT has been delivered during the nine-year period, K92 is then only required to sell 50%
of K92’s annual production until the end of the term of agreement.
• Competitive industry terms in rela tion to all metrics at London Metals Exchange spot
prices.
• Attractive payment arrangements which provide for upfront payment on delivery of
concentrates to port of dispatch and provision of certain shipping documents.
• Competitive transport charges.
John Lewins, K92 Chief Executive Officer and Director, state d, “We are extremely happy to
announce a major strategic funding and offtake agreement which continues our partnership with
Trafigura, our offtake partner since the start of operations at Kainantu mine. These agreements
reinforce our strong relationship with Trafigura and reflect its confidence in the project and in the
ability of the K92 team to meet its goals and obligations in terms of production and the current
expansion.
The loan provided by Trafigura allows K92 to continue with the timely expansion of the Kainantu
mine to double current capacity to 400,000 tonnes per annum, increasing annual production to an
average of 120,000 ounces of gold equivalent. The offtake agreement secures a long-term offtake
at competitive industry terms and provides security and confidence in relation to income from sale
of our products.”
On Behalf of the Company,
John Lewins, Chief Executive Officer and Director
For further information, please contact the Company 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 necessari ly 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 o r implied by such forward -looking statements. All statements
that address future plans, activities, events, or developments that the Company believes, expects
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or anticipates will or may occur are forward-looking information, including statements regarding
the anticipated benefits from the Loan and the Offtake Agreement, the anticipated use of proceeds,
expectations of future cash flows, the proposed plant expansion, potential expansion of resources
and the generation of further drilling results which may o r may not occur. Forward -looking
statements and information contained herein 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, t iming and amount of future exploration and
development, capital and operating 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, and regulations and other matters. There can be no assurance that s uch 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 i ntention 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.
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.