K92 Mining Inc. Achieves Record Gold Equivalent Production of 26,847 Oz From Kainantu Gold Mine in Second Quarter
- Q2 production achieved a record of 25,762 oz of gold, 531,406 lbs copper and 10,867 oz silver for a total of 26,847 gold equivalent (“AuEq”) oz, a 37% increase from Q2 2019.
- Record tonnage of 49,311 tonnes treated in Q2 2020, a 30% increase from Q2 2019. Positive grade reconciliation versus resource model, with gold head grade of 17.64 g/t gold and copper at 0.54%.
- Surface exploration recommenced by end of Q2 following lifting of State of Emergency, with three surface diamond drill rigs again operating on two targets in addition to the three underground diamond drill rigs.
- Financial position remains strong, balance sheet has strengthened during the COVID-19 pandemic and on June 16, Papua New Guinea lifted the COVID-19 State of Emergency (“SOE”) resulting in a further easing of some restrictions.
VANCOUVER, British Columbia, July 06, 2020 (GLOBE NEWSWIRE) -- K92 Mining Inc. (“K92” or the “Company”) (TSX-V: KNT; OTCQX: KNTNF) is pleased to announce production in the second quarter (“Q2”) of 26,847 oz AuEq at its Kainantu Gold Mine in Papua New Guinea.
During Q2, K92 produced 25,762 ounces of gold, 531,406 pounds of copper and 10,867 ounces of silver, or 26,847 AuEq oz (based on a gold price of US$1,500/oz; silver price of US$17.75/oz; copper price of US$2.70/lb). The quarter also achieved record mill throughput of 49,311 tonnes, despite lower running time associated with the COVID-19 State of Emergency and other production impacts, with multiple daily mill throughput records exceeding 700 tonnes.
Mining operations in Q2 focused on Kora’s K1 and K2 veins and comprised of development tonnes on the K1 vein on five levels, K1 vein long hole stoping (modified AVOCA method) on the 1205 mRL level, K2 vein development tonnes from the 1170 mRL level and K2 vein long hole stoping (modified AVOCA method) on the 1185 mRL level. Importantly, Q2 marked the first full quarter of long hole stoping, which commenced in March 2020 on the K1 vein. To date, long hole stoping has performed to design and has provided a notable positive impact on operational flexibility. Long hole stoping is planned to increase through 2020.
The blend of K1 and K2 material provided an average head grade to the process plant for Q2 of 17.64 g/t Au and 0.54% Cu. Gold head grades were above budget and continued to deliver a positive grade reconciliation, while copper grades were also significantly above budget.
The Kainantu mine continues to operate during the COVID-19 pandemic, with a significant focus on health and safety and risk-mitigation. On March 20, 2020 the Government of Papua New Guinea declared a COVID-19 State of Emergency (see March 23, 2020 press release - K92 Announces COVID-19 Operational Update and Response Plan) and on June 16, 2020 the Government of Papua New Guinea lifted the SOE (see June 16, 2020 press release - K92 Mining Inc. Provides Operations and Stage 2 Expansion Update After Lifting of PNG COVID-19 State of Emergency), resulting in a further easing of restrictions. After the lifting of the SOE, Kainantu has experienced a significant improvement in the movement of personnel, and our twin incline and surface exploration activities have resumed with multiple targets now being drilled concurrently. The Stage 2 plant commissioning to double throughput from 200,000 tpa to 400,000 tpa is now targeting completion by the end of Q3 2020. To date, there are no known cases of COVID-19 amongst our employees or members of the local community.
Table 1 – Q2 & H1 2020 and Q2 & 2019 Annual Production Data
|Q2 2019||2019 Total||Q1 2020||Q2 2020||H1 2020|
|Feed Grade Au||g/t||16.7||20.8||13.6||17.64||15.7|
|Feed Grade Cu||%||0.34%||0.37%||0.36%||0.54%||0.45%|
|Recovery (%) Au||%||93.2%||93.7%||92.9%||92.1%||92.4%|
|Recovery (%) Cu||%||92.5%||92.8%||91.6%||91.1%||91.3%|
|Metal in Conc Prod Au||Oz||18,980||79,838||19,240||25,762||45,002|
|Metal in Conc Prod Cu||T||119||432||154||241||393|
|Metal in Conc Prod Ag||Oz||6,894||22,984||7,679||10,867||18,546|
|Gold Equivalent Production||Oz||19,652||82,256||19,943||26,847||46,790|
Note - Gold equivalent for 2019 based on the following metal prices: gold $1,300 per ounce; silver $16.50 per ounce; and copper $2.90 per pound. Gold equivalent for 2020 based on the following prices: gold $1,500 per ounce; silver $17.75 per ounce; and copper $2.70 per pound.
John Lewins, K92 Chief Executive Officer and Director, stated, “It is a testament to the extraordinary commitment of our workforce and the quality of the Kora deposit that in Q2 Kainantu was able to achieve record gold production and mill throughput despite the COVID-19 State of Emergency in Papua New Guinea. The State of Emergency was lifted on June 16th and has resulted in further easing of restrictions that has benefited our operation.
We are especially excited about the second half of this year for Kainantu. On production, the Stage 2 plant expansion commissioning to double mill capacity is expected to be completed by the end of Q3. Looking to the future, the Stage 3 Expansion PEA based on the recently released updated resource is expected to be completed later this month. On exploration, activities have significantly ramped up with the lifting of the State of Emergency. There are now six diamond drill rigs operating; three underground and three on the surface, and we are targeting nine rigs by the end of Q3 and ten rigs by year end. The drill rigs are planned to drill multiple targets concurrently, including Kora, Kora South, Blue Lake and Karempe.
Finally, it is important to recognize the support of all levels of Government in Papua New Guinea, especially during this COVID-19 pandemic, which has been a major positive factor in all our achievements to date.”
K92 mine geology manager and mine exploration manager, 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. Data verification by Mr. Kohler includes significant time onsite reviewing drill core, face sampling, underground workings, and discussing work programs and results with geology and mining personnel.
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.
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.
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, 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 certain 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, 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.