VANCOUVER, British Columbia, Aug. 20, 2019 (GLOBE NEWSWIRE) -- K92 Mining Inc. (“K92” or the “Company”) (TSXV: KNT; OTCQB: KNTNF) is providing an update to shareholders regarding the trading activity of its common shares (“Shares”) on the TSX Venture Exchange and OTCQX. Although we do not generally respond to market activity, we feel it is appropriate at this time to comment based on the level of trading activity in KNT and KNTNF Shares on August 19, 2019.
K92 is aware of various media reports on recent negotiations between Barrick Gold Corporation and the Government of Papua New Guinea relating to the renewal of the special mining lease for the Porgera Mine. While K92 is not a party to those negotiations and has no affiliations with the Porgera Mine, K92 believes that some of these reports may have inadvertently caused some confusion and contributed to recent volatility in the Company’s share price.
To clarify, K92’s Mining Lease (ML150) and License for Mining Purpose (LMP 78) are not subject to any renewal discussion and are not due for renewal until June 13, 2024, at which time the Company has the right to renew the mining leases subject to Papua New Guinea mining regulations. Pursuant to mining regulations, during the renewal negotiation process, the mine would continue to operate as normal. The Government of Papua New Guinea, including the Mineral Resources Authority, has not approached nor discussed amendments to our mining leases.
The Company further notes that the Government of Papua New Guinea has been and continues to be supportive of the extractive industries which are the largest contributor to the economy and largest export earner. The Government has further indicated a review of the current resources legislative framework, setting 2025 as the target date for migration to a new framework. The Company fully expects that any new legislation would involve consultation with industry as has been the case in the past.
K92 reiterates its long-term commitment to Papua New Guinea, having announced the expansion of the producing, high-grade, underground, Kainantu Mine on March 13, 2019 (See Press Release: K92 Mining to Expand Kainantu Gold Mine, PNG). Based on the outcomes of the January 8, 2019 Preliminary Economic Assessment (“PEA”) (See sedar.com and Press Release: K92 Mining PEA Results), the mine is expected to produce over 120,000 oz AuEq* over a 13-year period. At commodity prices of US$1300/oz Gold, US$16.5/oz Silver and US$2.90/lb Copper, the PEA estimates Kainantu generating:
- Royalty payments of US$50 million;
- Total taxes (including payroll and corporate tax) of US$300 million;
- Total sustaining capital over that period of US$202 million.
*Au Eq – calculated on above Current Metal Prices of Au – US$1,300/oz; Ag – US$15/oz; Cu – US$2.90/lb.
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.
K92 would also like to emphasize its focus on the prosperity and development of Papua New Guinea and the local communities, currently employing over 800 people (direct employees and contractors), of which over 95% are from Papua New Guinea, with the majority being from local communities. K92 also has many long-term social and economic development initiatives, including (but not limited to): i) joint venture agreements signed between landowner groups and service providers to provide long term supply of services, including transport, security, ancillary mobile plant, and catering and camp services; ii) scholarships to support children of landowners for studies at tertiary institutions, with 11 scholarships provided in 2018 and over 50 provided in 2019, and; iii) numerous infrastructure and service development programs.
Lastly, K92 continues to invest in exploration to extend the mine life of Kainantu and further develop the resource potential regionally. There are currently six drill rigs operating on our ~405km2 land package and our intention is to continue to increase the quantity of drill rigs.
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.
For further information regarding the Kainantu gold mine, please refer to the technical report dated January 8, 2019, and entitled, "Independent Technical Report, Mineral Resource Estimate Update and Preliminary Economic Assessment of Kora North and Kora Gold Deposits, Kainantu Project, Papua New Guinea," available on SEDAR.
On Behalf of the Company,
John Lewins, Chief Executive Officer and Director
For further information, please contact David Medilek 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, renewal of the Company’s mining leases, 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 Papua New Guinea, 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.