VANCOUVER, British Columbia, May 16, 2022 (GLOBE NEWSWIRE) -- K92 Mining Inc. (“ K92 ” or the “ Company ”) (TSX: KNT ; OTCQX: KNTNF ) is pleased to announce financial results for the three months ended March 31, 2022.
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, has strong preventative and response plans, with pandemic resiliency strengthening through ongoing vaccination programs.
Strong quarterly gold equivalent (“ AuEq ”) production of 28,188 oz or 24,152 oz gold, 1,524,827 lbs copper and 28,142 oz silver, representing a 49 % increase from Q1 2021 ( 1 ) .
Cash costs of US$536/oz gold and all-in sustaining costs (“ AISC ”) of US$788/oz gold (2) .
Quarterly tonnage of 99,611 tonnes treated, a 36% increase from Q1 2021.
Record throughput was achieved in March averaging 1,219 tonnes per day (“ tpd ”), 11% above the Stage 2 Expansion target of 1,100 tpd, and 45% of days (14 days) exceeded 1,300 tpd.
Gravity circuit produced 1,161 gold doré ounces, and, subsequent to March 31, 2022, the Bank of Papua New Guinea granted K92 a Gold Doré Export Mining License, enabling the sale of gold doré ounces. Production from gravity will now be ramped up.
Quarterly revenue of US$52.4 million, an increase of 78% from Q1 2021.
Balance sheet significantly strengthened during Q1, with a record cash position of US$79.9 million as of March 31, 2022.
Sales of 26,471 oz of gold, 1,247,967 lbs of copper and 24,899 oz of silver. Gold concentrate and doré inventory of 4,848 oz as of March 31, 2022, a quarterly decrease of 2,299 oz.
Operating cash flow (before working capital adjustments) for the three months ended March 31, 2022 of US$22.7 million or US$0.10 per share, and earnings before interest, taxes, depreciation and amortization (“ EBITDA ”) of US$27.2 million or US$0.12 per share.
Net income for the first quarter of US$14.1 million or US$0.06 per share.
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 secondary crusher arrived on site in late Q1 and is planned to be installed in Q2, while the new flotation tanks are scheduled to arrive in the second half of 2022. Additional mining equipment arrived on site, including a new jumbo in late Q1 and new truck and loader in early Q2. The performance of the process plant to date, with 45% of days in March exceeding 1,300 tpd, continues to demonstrate the potential to approach Stage 2A Expansion run-rate ahead of the new flotation tanks being installed.
Reported the updated Kora resource estimate and maiden Judd resource estimate. The updated Kora resource estimate reported a Measured and Indicated Resource of 2.1 million ounces at 9.20 g/t AuEq and Inferred Resource of 2.5 million ounces at 9.48 g/t AuEq. The maiden resource estimate for the Judd deposit reported a Measured and Indicated Resource of 0.13 million ounces at 11.00 g/t AuEq and Inferred Resource of 0.18 million ounces at 5.66 g/t AuEq. The resource estimates will form the basis for the upcoming economic studies (see February 23, 2022 press release).
K92 announced high-grade and record thicknesses from maiden surface step-out drilling results at both Kora South and Judd South. The results include the discovery of a previously unknown vein, and the discovery of significant mineralized dilatant zones at both Kora South and Judd South. An airborne geophysics survey was also completed, defining extensive new targets (see February 16, 2022 press release). Exploration at Kora South and Judd South has increased to two drill rigs operating during Q1, and subsequent to quarter-end, a third drill rig commenced drilling. In 2022, up to 11 drill rigs are planned to be operating.
Significant advance of the twin incline in Q1, 15% above budget, with incline #2 (6m x 6m) advanced to 1,010 metres and #3 (5m x 5m) advanced to 1,063 metres as of March 31, 2022. In the past three quarters, development exceeded budget by 10%.
The Company’s interim consolidated financial statements and associated management’s discussion and analysis for the quarter ended March 31, 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, “ We are very pleased with the financial results during the first quarter. Financially, the Company has never been stronger, with a record cash balance of $79.9 million, increasing by $8.6 million during the quarter. All-in sustaining costs and cash costs were also very strong, at $788/oz and $536/oz, respectively, and we are pleased to see the continued compression of unit operating costs driven by economies of scale and overall increased efficiencies as COVID-19 restrictions are progressively eased.
In terms of production growth, the process plant continues to exceed our expectations. In March 2022, the plant delivered a record average daily throughput for the month of 1,219 tpd and 45% of the days exceeded 1,300 tpd. This is well above the 1,100 tpd Stage 2 Expansion run-rate and shows the potential to approach the Stage 2A Expansion run-rate of 500,000 tpa or 1,370 tpd, ahead of the installation of the flotation cells. Work on the next phases of growth is also proceeding with an economic study underway for the Stage 3 Expansion and Stage 3A Expansion.
Exploration also continues to deliver strong results on multiple fronts. I am pleased to report that the third drill rig is now operating at Kora South and Judd South, rapidly increasing the number of rigs from one rig earlier this year. Drilling at Judd South followed by Kora South with long underground holes is also planned to commence shortly.
Lastly, I would like to highlight that the achievements in Q1 occurred during the COVID-19 Omicron wave in Papua New Guinea. Our control measures on site held up very well. I am extremely proud of our workforce and what they have achieved during the pandemic environment and I am pleased to report a significant relaxing of restrictions on site, including the removal of quarantining. This is already having a noticeable positive impact on operational efficiencies and costs. The support of the Governments of both Papua New Guinea and Australia throughout the pandemic has also been a major factor in our success. ”
Mine Operating Activities
Three months ended Three months ended
March 31, 2022 March 31, 2021
Head grade (Au g/t) 8.3 8.5
Gold recovery (%) 90.9% 88.9%
Gold ounces produced 24,152 17,774
Gold ounces equivalent produced (1) 28,188 18,914
Tonnes of copper produced 692 193
Silver ounces produced 28,142 7,925
Financial data (in thousands of dollars)
Gold ounces sold 26,471 21,879
Revenues from concentrate sales US$52,412 US$29,513
Mine operating expenses US$8,738 US$7,630
Other mine expenses US$9,400 US$10,420
Depreciation and depletion US$4,397 US$2,857
Statistics (in dollars)
Average realized selling price per ounce, net US$1,769 US$1,735
Cash cost per ounce US$536 US$745
All-in sustaining cost per ounce US$788 US$1,038
(1) Gold equivalent for 2022 is based on the London Metal Exchange quarterly spot average price: gold $1,879 per ounce; silver $24 per ounce; and copper $4.53 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 May 13, 2022, 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 first quarter financial results at 8:30 am (EDT) on Monday, May 16, 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/k92mining20220516.html
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.
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.
K92 Mining Inc. is engaged in the production of gold, copper and silver from the Kora and Judd deposits 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 an 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