K92 Mining Inc. (TSX-V:KNT) (OTCQB:KNTNF) is pleased to announce the first concentrate from Kora production has been shipped to the Port of Lae, pursuant to a new offtake agreement, with the provisional payment (90% of total value of shipment) received by K92.
The new offtake agreement includes a provision for funding of USD $15 million in non-dilutive financing from one of the world’s largest commodity trading groups, to secure the long term offtake for production from the Kora Deposit.
The $15 million in financing is subject to a number of closing conditions, which the two parties have commenced pursuing. Prior to the removing of these conditions, K92 will ship Kora concentrate under an agreement with interim provisions facilitating the same. K92 anticipates utilizing the $15 million to target an expansion of the mining and processing rate to a level envisioned in the Preliminary Economic Assessment referred to below.
K92 Chief Executive Officer, John Lewins, states, “This offtake agreement announced today allows for immediate shipping of concentrate that K92 is producing from Kora. At the same time, it provides a potential path for a non-dilutive financing to target significant production expansion. The offtaker is one of the world’s largest commodity traders, is very active in Papua New Guinea and familiar with K92 and our operations. The discovery of the Kora extension area adjacent to our current mining area has been game-changing for the company and we are continuing to drill and mine in this area.”
The current Kora/Eutompi inferred resource, as defined by previous drilling to date, is 4.36 million tonnes at a grade of 7.3 g/t Au, 35 g/t Ag and 2.23 per cent Cu, or 11.2 g/t gold equivalent (see Table 1.0) and is open for expansion at depth and in both directions along strike.
K92 has previously announced and has been following up on the discovery of an extension of Kora, made in K92 drillhole KMDD0009, which recorded an intersection of 5.4 metres at 11.68 g/t gold, 25.5 g/t silver and 1.33 per cent copper 500 metres to the north from the closest point of the currently defined Kora deposit inferred resource (see K92 news release dated May 24, 2017, for details including true thicknesses). All ten follow-up holes drilled since, in this discovery area, have intersected gold, silver and copper mineralization.
K92 has filed and made available for download on the company’s SEDAR profile a technical report titled “Independent Technical Report, Mineral Resource Update and Preliminary Economic Assessment of Irumafimpa and Kora Gold Deposits, Kainantu Project, Papua New Guinea,” with an effective date of March 2, 2017, that provides additional information on the geology of the deposits, drilling and sampling procedures, lab analysis, and quality assurance/quality control for the project, and additional details on the resource estimates.
The PEA estimates for Kora, based on the current resource estimates (4.36 million tonnes of 7.3 g/t Au, 35 g/t Ag and 2.23 per cent Cu):
Metal prices used were $1,300 per ounce for gold, $18 (U.S.) per ounce for silver and $4,800 per tonne for copper. Gold equivalent 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 considerations 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 contains a full description of all underlying assumptions relating to the PEA. Mineral resources that are not mineral reserves and do not have demonstrated economic viability.
TABLE 1.0 IRUMAFIMPA AND KORA/EUTOMPI RESOURCES
|Resource by Deposit and Category|
M in Table is millions. 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. Gold equivalents are calculated as AuEq = Au g/t + Cu%*1.52+ Ag g/t x 0.0141.
K92 Vice President Chris Muller, PGeo, a qualified person under the meaning of Canadian National Instrument 43-101, has reviewed and is responsible for the technical content of this news release. Data verification by Mr. Muller includes significant time onsite reviewing drill core, surface exposures, underground workings and discussing work programs and results with exploration personnel.
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