Kainantu Mine: High-Grade Gold Production

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PAPUA
NEW GUINEA

K92 Mining is focused on operating and expanding the Kainantu Gold Mine, located in Eastern Highlands province, Papua New Guinea. Since acquiring the project from Barrick Gold in 2014 and restarting in late-2016, K92 has transformed Kainantu into a rapidly expanding both producer and mineral resources. Production has also been low cost, which is a testament to the high grade, continuity, solid thickness, geotechnical and metallurgical characteristics of the deposit. The transformation was driven by a series of near-mine infrastructure exploration discoveries.

In May 2017, a near-mine infrastructure discovery of Kora North was made. This discovery ultimately combined the Kora, Eutompi and Kora North deposits into what is now known as the Kora deposit. In February 2022, following extensive underground drilling focused on upgrading Inferred resources to Measured & Indicated, K92 announced its updated Kora Resource of 2.1 moz at 9.2 g/t AuEq Measured and Indicated and 2.5 moz at 9.5 g/t AuEq Inferred. In addition, a maiden Judd Resource was announced just over a year after the discovery of high-grade underground mineralization in Q4 of 2020. The Judd main resource currently stands at 0.13 moz at 11.0 g/t AuEq Measured and Indicated and 0.18 moz at 5.7 g/t AuEq Inferred. In December 2023 K92 Mining announced yet another resource update for the Kora and Judd deposits which was achieved over a period of less than two years and at a discovery cost of less than US$7.5 per ounce gold equivalent. The combined Kora and Judd Measured and Indicated resource increased +13%, net of depletion, to 8.1 million tonnes at 10.00 g/t AuEq for 2.6 million ounces AuEq, and the Inferred resource increased +70%, net of depletion, to 16.5 million tonnes at 8.48 g/t AuEq for 4.5 million ounces AuEq.

Operations are undertaking multiple stages of expansion, with Stage 2 Expansion run-rate achieved in late-2021, Stage 2A Expansion completed in May 2023 to increase throughput by +50% to +600,000 tpa (upgraded from 500,000 tpa), Stage 3 Expansion construction underway with commissioning targeting late-Q2 2025 that is expected to increase throughput to 1.2 mtpa, and a Stage 4 Expansion scheduled for commissioning in the second half of 2027 bringing throughput to 1.8 mtpa. As outlined in the October 2024 updated Stage 3 Expansion DFS study, Stage 3 is expected to achieve Tier 1 production (303 koz gold equivalent per annum run-rate, $665/oz (net of by-products) or $920/oz (co-product) life of mine average all-in sustaining costs with significant upside potential). The Stage 4 Expansion PEA study outlines a 414 koz gold equivalent per annum run-rate, $432/oz (net of by-products) or $822/oz (coproduct) life of mine average all-in sustaining costs⁽¹⁾.

Exploration is self-funded and is a major focus, with up to 11 drill rigs operating on both vein and porphyry targets. In August 2022, K92 announced a 10.8 moz AuEq Inferred resource or 4.7 blbs CuEq at its Blue Lake Porphyry. Blue Lake is a discovery by K92, with nearly every hole intersecting mineralization and at a discovery cost of <$1/oz. Additionally, exploration is advancing at the A1 Porphyry Target and the Arakompa high-grade vein system, our highest priority porphyry and vein targets. With four rigs currently drilling the +1.7km mineralized corridor at Arakompa, we plan to release a maiden resource by Q1 2025.

Kainantu has a large ~830km² land package in the land of large Tier 1 Gold Assets. The property hosts many highly prospective vein field and porphyry targets. Multiple targets are being drill tested concurrently.

Note (1): Refer to the Updated Integrated Development Plan (IDP) DFS Case and PEA Case. IDP effective date is January 1, 2024.

Kainantu Achievements and Milestones

Oct 2024

Updated Kainantu Integrated Development Plan (Stage 3 DFS and Stage 4 PEA)

Feb 2024

Significant Maiden Drilling Results From Arakompa

Dec 2023

Kora and Judd Resource Update – 2.6 Moz AuEq M&I, 4.5 Moz AuEq Inferred

May 2023

500ktpa, Stage 2A Expansion Achieved

Dec 2022

Extension to Mining Lease 150 to June 2034

Sept 2022

Kainantu Integrated Development Plan (Stage 3 DFS and Stage 4 PEA)

Aug 2022

Blue Lake Maiden Resource – 10.8 Moz AuEq or 4.7 Blb CuEq Inferred

Feb 2022

Kora Resource Update and Maiden Judd Resource - 2.3 Moz AuEq M&I, 2.6 Moz AuEq Inferred

Oct 2021

500ktpa, Stage 2A Expansion Announced

Sep 2021

400ktpa, Stage 2 Expansion Achieved

Sep 2020

Stage 2 Expansion Commissioned

July 2020

1mtpa, Stage 3 Expansion PEA

May 2020

Resource Update - 1.3 Moz AuEq Measured & Indicated, 3.9 Moz AuEq Inferred

Mar 2019

400ktpa, Stage 2 Expansion Announced

Jan 2018

Commercial Production Declared

May 2017

Kora North Discovery

Oct 2016

Stage 1 Production Restart - 200ktpa

MINE LIFE & MATERIAL MOVEMENTS	Stage 3 DFS	Stage 4 PEA
Mine Life	7 Years	14 Years
Throughput	1.2 mtpa	1.8 mtpa
Total Ore Mined	6.2 mt	20.4 mt
LOM AVERAGE GRADES
Gold Grade	6.7 g/t	6.0 g/t
Copper Grade	1.0%	1.2%
Silver Grade	19 g/t	23 g/t
AuEq Grade	8.5 g/t	8.2 g/t
AVERAGE RECOVERIES
Gold Recovery	93%	93%
Copper Recovery	94%	94%
ANNUAL PRODUCTION (AuEq)
Stage 3 Run-Rate	303 koz	414 koz
LOM Avg	223 koz	356 koz
Peak	319 koz	485 koz
COSTINGS
Expansion Capex	$194M	$201M
Sustaining Capex	$337M	$900M
Avg Unit Costs	$145/t	$126/t
LOM Avg Cash Cost (co-product)	$694/oz	$633/oz
LOM Avg Cash Cost (net of by-product)	$380/oz	$174/oz
LOM Avg AISC (co-product)	$920/oz	$822/oz
LOM Avg AISC (net of by-product)	$665/oz	$432/oz

Note (1): Refer to Updated Integrated Development Plan (IDP) DFS Case and PEA Case. IDP effective date is January 1, 2024.

AuEQ Production & Outlook

Rapid Production Growth

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Regional Geology

The Kainantu property is located within the New Guinea Thrust Belt, close to its northern contact with the Finisterre Terrane. The contact is marked by the northwest trending Ramu-Markham Fault, a major suture zone that marks the northern margin of the Australian Craton. The New Guinea Thrust Belt records an early Miocene or older ductile, tight folding event that was followed by middle Miocene intrusions. Late Miocene regional scale low-angle thrust faulting followed, associated with the collision of the Finisterre Terrane. The belt is characterised by a number of north-northeast trending fault zones that commonly host major ore deposits.

Kainantu Geology

The Kainantu area is underlain by greenschist to amphibolite facies metamorphic rocks of the Early Miocene Bena Bena Formation, which are unconformably overlain by the Miocene age Omaura Formation consisting of volcano-sedimentary units and limestone lenses. The overlying Yaveufa Formation comprises basaltic and andesitic flows, agglomerates, volcanoclastic sandstone and limestone. The mid-Miocene Akuna Intrusive Complex consists of multiple phases ranging from olivine gabbros, dolerites, hornblende gabbros and biotite diorites to granodiorites. Late Miocene age Elandora Porphyry intrusions and breccias are associated with mineralization and occur within proximity to a major north-northeast trending transfer structure. Mineralization on the property includes Au, Ag and Cu occurring in low sulphidation epithermal Au-telluride veins, Au-Cu-Ag sulphide veins of Intrusion Related Gold Copper (“IRGC”) affinity, less explored porphyry Cu-Au systems and alluvial gold.

Kainantu Vein Field

Within and surrounding Mining Lease 150 (“ML 150”) is an epithermal vein field consisting of multiple known and highly prospective vein systems: Kora, Irumafimpa, Karempe, Judd, Kora South, Judd South, Mati, Maniape and Arakompa. Mining is focused on the Kora vein system, consisting of two dominant veins and the Judd vein system consisting of four known veins with one vein being mined. There are multiple near-mine infrastructure targets, within the Kora-Kora South, Judd-Judd South and Karempe vein systems.

Location & Infrastructure

The Kainantu Gold Mine is located in the Eastern Highlands Province of Papua New Guinea, approximately 180 km west-northwest of Lae. The mine is serviced by a sealed road from Lae to within 8 km of the site, nearby Gusap Airstrip in the Ramu Valley, and also has grid power from the nearby Yonki Dam hydro-electric scheme, with full on-site power generation on standby. The underground mine is located on Mining Lease 150 (“ML 150”); while the Process Plant, Offices, Workshops, Stores, Camp and Tailing Storage Facility are located on a Lease for Mining Purposes 78 (“LMP 78”).

Mining

The underground workings are accessed via a 2,500 metre, 5 metre x 5 metre incline from a portal located at 840 mRL level. Current mining operations are focused on the Kora deposit with some production from the Judd vein system. Production from Kora is from the subparallel K1 and K2 veins, and consists of mostly long hole stoping with limited cut and fill stoping. Long hole stoping began in late Q1 2020. Mining is mechanized using twin and single boom Jumbos; 517i, 1700 and 1300 LHDs, and; 20, 30, 40 & 45 tonnes trucks. Material is trucked ~6 km from the portal to the Process Plant by 20 tonne road trucks. The mining fleet is modern, and utilizes some of the latest technology.

Processing

The Process Plant is a relatively simple design with a two-stage crush, ball mill, flotation circuit producing a combined gold-copper flotation concentrate which is shipped in 20 tonne containers from Lae to smelters in various parts of the world. The gravity circuit, which is being optimized, produces a dore product. The tailings storage facility (TSF) is a downstream design and located downstream of the process plant. At the end of 3Q20, K92 commissioned its Stage 2 Expansion doubling throughput to 400ktpa, followed by the Stage 2A Expansion commissioned in 2Q23 increasing throughput +25% to 500ktpa (+120koz/year).

		Tonnes	Gold		Silver		Copper		Gold EQ.
		mt	g/t	moz	g/t	moz	%	kt	g/t	moz
KORA (January/2024)	Proven	2.95	7.4	0.70	19	1.9	1.1	31	9.4	0.89
	Probable	2.52	5.7	0.46	19	1.6	1.0	26	7.6	0.61
JUDD (January/2024)	Proven	0.24	8.3	0.06	17	0.1	0.6	1	9.4	0.07
	Probable	0.47	6.5	0.10	13	0.2	0.5	2	7.5	0.11
Consolidated	Total Proven	3.19	7.5	0.77	19	2.0	1.0	33	9.4	0.96
	Total Probable	2.99	5.8	0.56	18	1.8	1.0	28	7.6	0.73
	Total Proven & Probable	6.18	6.7	1.32	19	3.7	1.0	61	8.5	1.69

		Tonnes	Gold		Silver		Copper		Gold EQ.
		mt	g/t	moz	g/t	moz	%	kt	g/t	moz
KORA (September/2023)	Measured & Indicated	6.9	7.9	1.8	21	4.7	1.3	86	10.2	2.3
	Inferred	14.3	5.6	2.6	29	13.2	1.6	231	8.6	3.9
JUDD (September/2023)	Measured & Indicated	1.2	7.2	0.29	17	0.7	0.8	9	8.7	0.35
	Inferred	2.3	6.3	0.45	16	1.1	0.8	17	7.7	0.56
IRUMAFIMPA (March/2017)	Indicated	0.56	12.8	0.23	9	0.2	0.28	17	13.4	0.24
	Inferred	0.53	10.7	0.19	9	0.2	0.27	34	11.5	0.20
Consolidated	Total Measured & Indicated	8.7	8.1	2.3	20	5.5	1.1	112	10.2	2.9
	Total Inferred	17.1	5.8	3.2	26	14.5	1.5	282	8.6	4.7

		Tonnes	Gold		Silver		Copper		Gold EQ.		Copper EQ.
		mt	g/t	Moz	g/t	Moz	%	Blb	g/t	Moz	%	Blb
Blue Lake (August/2022)	Inferred	549	0.21	3.7	2.42	43.0	0.23	2.9	0.61	10.8	0.38	4.7

Kainantu Resource and Reserve Disclosures
Kora and Judd Reserve Disclosure
- The long-term metal prices used for calculating the financial analysis is US$1,900/oz gold, US$4.50/lb copper, US$25/oz silver.
- Gold Equivalents are calculated as AuEq = Au g/t + Cu % *1.62406 + Ag g/t*0.01316. Metal payabilities and recoveries are not incorporated into this formula.
- A minimum mining width of 3.0 m has been applied for stoping, inclusive of a 1.0 m dilution skin.
- In addition to the 1.0 m dilution skin, additional dilution of 5% has been added for Avoca mined stopes and 2.5% for long hole stoping with pastefill. Where a stope is within 5.0m proximity of the HW or FW of the fault gouge, an additional 1.0m of dilution was added at a grade averaging 1.42g/t AuEq. This results in a total average dilution of 27.8%.
- Mining recoveries of 90% have been applied to Avoca mined stopes, and 95% for long hole stoping with pastefill.
- A cut-off grade of 3.5 g/t AuEq was used to define stoping blocks. Stope shapes with uneconomic development were excluded. The cut-off grade takes into account site operating costs, G&A costs, sustaining capital costs and relevant processing and revenue inputs.
- Measured Mineral Resources were used to report Proven Mineral Reserves.
- Indicated Mineral Resources were used to report Probable Mineral Reserves.
- Tonnage and grade estimates include dilution and recovery allowance.
- The Mineral Reserves reported are not added to Mineral Resources.
Kora and Judd Resource Disclosure
- The Independent and Qualified Person responsible for the Mineral Resource estimate is Simon Tear, P.Geo. of H & S Consultants Pty. Ltd., Sydney, Australia, and the effective date of the estimate is September 12, 2023.
- Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
- Geological interpretation has generated a series of narrow, sub-vertical vein structures based on delineated wireframes on 10m, 20m and 25m spaced cross sections. The design of the lode wireframes is based on a combination of logged geology, Au, Cu & Ag assay grades and locally on a nominal minimum mining width of 5.2m, all coupled with geological sense.
- Resources were compiled at 3 g/t gold equivalent cut-off grades for Kora and Judd.
- Density (t/m 3 ) was modelled using Ordinary Kriging on 2,778 sample measurements. Areas within the mineral wireframes where no density grades were interpolated had average default values inserted at appropriate levels.
- Reported tonnage and grade figures are rounded from raw estimates to reflect the order of accuracy of the estimate.
- Minor variations may occur during the addition of rounded numbers.
- Estimations used metric units (metres, tonnes and g/t).
- Gold equivalents are calculated as AuEq = Au g/t + Cu%*1.6481+ Ag g/t*0.0114. Gold price US$1,700/oz; Silver US$22.5/oz; Copper US$4.00/lb. Metal payabilities and recoveries are incorporated into the AuEq formula. Recoveries of 95% for copper and 80% for silver were used.
Irumafimpa Resources Disclosure
- Irumafimpa Resource refers to Technical Report titled, "Independent Technical Report, Mineral Resource Estimate Update and Preliminary Economic Assessment of Irumafimpa and Kora Gold Deposits, Kainantu Project, Papua New Guinea", March 2017 – Qualified Person, Anthony Woodward MAIG, Nolidan Mineral Consultants.
- Gold Equivalents are calculated as Gold equivalents are calculated as AuEq = Au g/t + Cu%*1.7308 + Ag g/t*0.0185. Metal prices Au: US$1,200/oz, Ag: US$22.26/oz, Cu US$3.03/lb.
Blue Lake Resources Disclosure
- Estimates are based on Technical Report titled, “Independent Technical Report, Mineral Resource Estimate Blue Lake Porphyry, Kainantu Project, Papua New Guinea”.
- The Independent and Qualified Person responsible for the mineral resource estimate is Simon Tear, P.Geo. of H & S Consultants Pty. Ltd., Sydney, Australia, and the effective date of the Mineral Resource is 1st August, 2022.
- Mineral resources are not mineral reserves and do not have demonstrated economic viability.
- Resources were compiled at 0.1, 0.2, 0.3, 0.4, 0.5, 0.6 g/t AuEq cut-off grades.
- Density was based on 2,473 measured density data recordings (weighed core trays and measured core) which were composited and subsequently modelled unconstrained using Ordinary Kriging. Reported tonnage and grade figures are rounded from raw estimates to reflect the order of accuracy of the estimate.
- Minor variations may occur during the addition of rounded numbers.
- Estimations used metric units (metres, tonnes and g/t)
- Gold equivalents are calculated as AuEq = Au g/t + Cu%*1.607 + Ag g/t*0.0125. Copper equivalents are calculated as CuEq = Cu% + Au g/t*0.006222 + Ag g/t* 0.00007778. Gold price US$1,600/oz; Silver US$20/oz; Copper US$3.75/lb.