K92 Production Ramps Up and Exploration Dr illing to Commence to Follow Up on Kora Extension Discovery Hole
Suite 488 – 1090 West Georgia Street
Vancouver, British Columbia
Canada V6E 3V7
Telephone: (604) 687-7130
Facsimile: (604) 608-9110
NEWS RELEASE
August 3, 2017 Vancouver, British Columbia
K92 MINING INC.
K92 Production Ramps Up and Exploration Dr illing to Commence to Follow Up on Kora
Extension Discovery Hole
Stope production achieved from the Irumafimpa deposit
450 tonnes of gold copper concentrates shipped during July with another 250 tonnes
of gold copper concentrates sent to port and available for shipment
extensive program of diamond drilling to commence early August from
underground set ups along Kora Drive, designed to follow up on Kora extension
discovery hole
Continued regional exploration at the Poma si Project adjacent to the Mining Lease
(ML150) on EL 693 and 470 with multiple hi gh grade values returned and multiple
veins identified, including an interpreted extension to the Irumafimpa vein system
K92 Mining Inc. (“K92”) continues to ramp up production at the Irumfimpa Mine, is about to
commence exploration drilling from underground set-ups to fo llow up on the recent Kora
extension discovery hole, is preparing to mine and test a 2,000 tonne bulk sample from Kora and
continues regional exploration on the Pomasi Project.
Irumafimpa
K92 has, up until recently, been mining from deve lopment areas. Now, K92 is also mining from
production stopes where higher gold and copper grades are anticipated.
Long hole stope production has commenced from the newly developed 1235mRL to 1250mRL
stope area. It is anticipated th at the commencement of this ne w stope production, combined with
ongoing production from development and remnan t stopes will allow commercial production to
be achieved in September.
Additionally, extraction of material from planned stope s 1205S, 1220S and 1235S, which were
awaiting geotechnical input from independent consultants to fina lise the design and extraction
schedules (as per K92 News Release, May 16, 2017) is scheduled to commence in the coming
quarter. Extraction in this area will apply a combination of long hole stoping and flatbacking (cut
& fill) depending on access and geotechnical considerations.
Development above the 1250 mRL is planned in th e current quarter whic h is anticipated to
provide development feed to the mill from the 1250 and 1265 mRL levels with commencement
of stoping from these levels in the Q4 2017.
Further, grade control drilling has identified additional stoping material below the previously
planned lower limit of 1205 mRL and planning is underway to commence acc essing this area in
the Q4 2017. Further grade control drilling is also planned in this area as the limits to the down
dip extension of the mineralization has yet to be determined.
To date, approximately 7,000 metres of grade control drilling has now been completed at
Irumafimpa, which means the company has grade control drilling for the next 3 months of
production. Continuing with grade control drilling and staying ahead of production is key within
K92’s strategy of efficiently mining Irumafimpa.
Kora
Based on the recent high grade discovery of the Kora Deposit extension, the design of the Kora
Exploration Drive has been enhanced to inco rporate the development of a footwall drive
approximately 50 metres from the projected strike of the Kora Vein System as shown in Figure
1. This modification allows the development of dr ill cuddies approximately 100 metres closer to
the interpreted position of the Kora Vein System than previously planned, based on the results
from diamond drill hole KMDD000 9 which recorded an inters ection of 5.4 metres @ 11.68 g/t
Au, 25.5 g/t Ag and 1.33 % Cu from 154 metres downhol e, interpreted to be the discovery of an
extension of the Kora deposit (see K92 News Release May 24, 2017 for drill result details).
In addition to providing set ups for explorat ion drilling, this development will allow a bulk
sample (~2,000 tonnes) of the Kora deposit to be mined as early as September 2017 for testing
and evaluation purposes.
A total of approximately 120 metres of development of the Kora E xploration Drive, access drive
and footwall drive was completed during July. The first drill cuddy in the footwall drive will be
completed in early August and drilling is pl anned to commence from this cuddy immediately
following its completion. The company has also arranged the mobilization of a third more
powerful underground diamond drilling rig from its contractor which is expected on site in
September. This rig will allow holes of up to 900 metres to be drill ed from underground,
targeting rapid execution of the company’s planned exploration and expansion work.
Additional to the work underground, K92 is also in the process of re-logging core from drilling
at Kora conducted by previous operators. Of no te, in the re-logging to-date, are high grade
intercepts previously unreported by K92 such as diamond drill hole 080BD04 with 0.3 metres @
15,350 g/t Au (1.5%) from 50.7 metres (no top cut) and BKDD0015 with 0.3 metres @ 6,380 g/t
Au and from 62.4 metres (no top cut). Re-logging of the Kora core will assist and guide K92 as it
embarks on more aggressive Kora exploration a nd expansion drilling in the coming weeks and
months.
K92 has filed and made available for downloa d on the Company’s SEDAR profile, a technical
report titled “Independent Tech nical Report, Mineral Resource Update and Preliminary
Economic Assessment (“PEA”) of Irumafimpa and Kora Gold Deposits, Kainantu Project, Papua
New Guinea” with an effective date of March 2, 2017 (the “Technical Report”).
The PEA estimates for Kora, based on the current Inferred resource , estimates (4.36 million
tonnes of 7.3 g/t Au, 35 g/t Ag and 2.23% Cu);
Over a 9 year operating life the plant would treat 3.2 million Inferred tonnes averaging 7.1
g/t Au, 25 g/t Ag and 1.7% Cu (9.3 g/t AuEq*)
this would generate an estimated positive cash flow of US $537 million using current metal
prices if 15m levels are used in mining. If 25m levels are used then net cashflows are
estimated as US $558 million. This cashflow includes conceptual allowances for capital
production of an estimated average of 108,000 AuEq* ozs per annum over an 8 year period
from Year 2 through to Year 9
An estimated pre-tax NPV of US $415 million for 25m levels; or US $397 million for 15m
levels; using current metal prices, exchange rates and a 5% discount
an estimated after-tax NPV of US $329 milli on for 25m levels; or US $316 million for
15m levels; using current metal prices, exchange rates and a 5% discount
initial capital cost is esti mated to be US $13.8 million, including the US $3.3 million for
the plant upgrade identified in the Mincore Scoping Study but excluding the proposed Kora
exploration inclines and diamond drilling. Sustai ning Capital Cost is estimated to a further
US $64 million spent over the life of the Kora mining for 25m levels or US $83 million for
15m levels
operating cost per tonne is estimated to be US $125/tonne for 25m levels or US $126 /
tonne for 15m mining levels
excluding initial capital expenditure of US $14 million, cash cost is estimated to be US
$547 / oz AuEq (inclusive of a 2.5% NSR) and AISC of US $619/oz AuEq for 25m mining
levels; or US $549/oz (inclusive of a 2.5% NSR) and AISC of US $644/oz AuEq for 15m
mining levels
Metal prices used were Au – $1300/oz; Ag – US $18/oz; Cu – US $4800/tonne
*AuEq calculated on above metal prices
Kora remains open for expansion in every direction and strongly mineralized at the extent of all
drilling.
The PEA is preliminary in nature and includes inferred mineral resources that are considered too
speculative geologically to have the economic consid erations applied to them that would enable
them to be categorized as mineral reserves, and there is no certainty that the PEA will be
realized. The Technical Report cont ains a full description of all underlying assumptions relating
to the PEA. Mineral Resources that are not Mineral Reserv es do not have demonstrated
economic viability.
Regional Exploration
Exploration outside of ML 150 is currently focu sed on the Pomasi Project area adjacent to the
Mining Lease (ML150) on EL 693 and EL 470 w ith work moving from Pomasi Area 1 to
Pomasi Area 2, see Figure 2 below. The work has included:
o Prospecting, sampling, mapping and assessment of the mineralised veins;
o Mapping of the geology within the drainage systems and surface exposures, and linking
them with the prospected veins;
o Conducting a ridge and spur soil sample survey for indications of anomalous
geochemical dispersion from the auriferous veins across a select number of ridges and
spurs;
o Trenching along the length of identified veins to establish widths, grades and strike extent
To date results have included multiple high grade values (previously reported) and the
identification of multiple high grade veins including an interpreted extension to the Irumafimpa
vein system. These results have also identified a number of gol d and copper targets from soil
sampling analysis, which will be followed up in the next phase of work.
The Company plans to fly a detailed aerial ge ophysics program over its Mining and Exploration
Leases. While limited aerial geophysics has prev iously been undertaken in 1982 and again in
2008, K92 and its consultants have evaluated the data and found it to be of generally poor quality
with very limited ground penetration. This survey is considered as an essential tool for the
identification of extensions to existing deposit s as well as better defining existing vein and
porphyry targets and identifying potential new targets.
Ian Stalker, K92 Chief Executive Officer and Director, states, “Moving from mining
development material into stope material is a major positive for our Irumafimpa mining
operation. With mining and processing going well and with the production ramp up progressing,
shareholders can also look forward to the commencement of explor ation drilling to follow up on
the recent Kora extension discovery hole. The combination of production alongside of
exploration targeting high impact expansion and disc overy will provide significant news flow in
the coming weeks and months.”
On behalf of the company,
Ian Stalker
Chief Executive Officer and Director
K92 Exploration Manager, Chris Muller, P Geo, a qualified person under the meaning of
Canadian National Instrument 43- 101, has reviewed and is respons ible for the te chnical content
of this news release. Mr. Mull er has spent significant time onsite reviewing drill core, surface
exposures, underground workings a nd discussing work programs and results with exploration
personnel.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined
in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
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 assu mptions that, while co nsidered 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, activities, events or developments that the Compan y believes, expects or anticipates will
or may occur are forward-looking information, including statements regarding the realization of the preliminary
economic analysis for the Project, expectations of futu re cash flows, the proposed plant expansion, 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 certain factors and assumptions regarding, among other
things, the market price of the Company’s securities, meta l 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, enviro nmental 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 such statem ents will prove to be accurate, as actual results and
future events could differ materially from those anticipat ed 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.
Figure 1
Kora Exp
Kora Develo
ploration Drive
opment
Footwa
all Drive
Kora V
Vein System
800 Incline
Puma Inc
cline
Figure 2
deposits/
Contoured
/prospects. S
points - A u
Sample point
u. Pomasi A
ts are contou
Areas 1 an d
ured by Au p
d 2, with re s
ppb values.
spect to M L
L150 and k n
nown