K92 Mining Inc. (TSX: KNT) (OTCQX: KNTNF) is pleased to announce financial results for the three months ended June 30, 2023.
Other highlights include:
Drilling also intersected a dilatant zone:
The Company’s interim consolidated financial statements and associated management’s discussion and analysis for the three and six months ended June 30, 2023 are available for download on the Company’s website and under the Company’s profile on SEDAR+ (www.sedarplus.ca). All amounts are in U.S. dollars unless otherwise indicated.
Figure 1: Quarterly Production and AISC Chart
Figure 2: Quarterly Total Ore Processed, Development Metres Advanced and Total Mined Material Chart
John Lewins, K92 Chief Executive Officer and Director, stated, “During the second quarter, the Company achieved a significant number of positives with production growing 43% from Q1 2023 and 18% from Q2 2022; strong cash costs of $597/oz and AISC of $975/oz, well below the annual guidance range of $620-$680/oz for cash costs and $1,180-$1,300/oz for AISC; completion of the Stage 2A Plant Expansion in May, which delivered an immediate and notable boost to metallurgical recoveries; the discovery of a new high-grade zone at the J2 Vein at Judd South; exploration expanding multiple high-grade areas at Kora-Kora South and Judd-Judd South; and the considerable strengthening of our financial position.
Financially, the cash balance grew by $6.9m, even after a near-record $22.0m was spent on property, plant and equipment plus a record $6.3 million on exploration and evaluation expenditures during the quarter. The balance sheet is strong, standing at $95.6m cash and no debt at quarter end. Subsequent to quarter end, our financial outlook also strengthened significantly upon the order of long-lead items and the award of the Lump Sum Fixed Price engineering, procurement, construction and commissioning (“EPC”) contract for the 1.2 mtpa Stage 3 Process Plant. Combined with the long-lead items, K92 has awarded approximately 94% of the process plant capital cost, our largest growth capital item for the expansion, forecasted to represent over half of the growth capital, on a fixed price basis, significantly mitigating potential capital cost increases for the expansion. Other packages for the Stage 3 Expansion are also substantially progressing (see July 24, 2023 press release).
On the process plant, I would like to acknowledge and congratulate the team on site for the completion of the Stage 2A Plant Expansion. Since the end of 2019, the plant’s quarterly throughput has more than tripled, with two expansions, Stage 2 and Stage 2A, completed largely during the pandemic environment. The plant, as noted above, has performed well – our gold and copper recoveries in Q2 were the highest since Q4 2021. In June, the first full month post-commissioning, gold recoveries already achieved the Integrated Development Plan’s recovery parameter of 93%. Optimization work on the plant is underway, and we look forward to discovering its ultimate throughput and recovery potential.
On exploration, we are progressing on multiple fronts, with a total of 11 drills operating at the Kora-Kora South, Judd-Judd South vein systems and the A1 porphyry. We expect to provide another extensive exploration update shortly.”
Mine Operating Activities
|Three months ended
June 30, 2023
|Three months ended
June 30, 2022
|Head grade (Au g/t)||8.2||7.2|
|Gold recovery (%)||92.4%||91.0%|
|Gold ounces produced||27,405||22,934|
|Gold ounces equivalent produced (1) (2)||30,794||26,085|
|Tonnes of copper produced||692||558|
|Silver ounces produced||34,001||25,224|
|Financial data (in thousands of dollars)|
|Gold ounces sold||28,141||23,674|
|Revenues from concentrate and doré sales||US$51,759||US$37,356|
|Mine operating expenses||US$9,782||US$9,310|
|Other mine expenses||US$12,268||US$9,363|
|Depreciation and depletion||US$7,148||US$4,496|
|Statistics (in dollars)|
|Average selling price per ounce, net||US$1,883||US$1,782|
|Cash cost per ounce (2)||US$597||US$617|
|All-in sustaining cost per ounce (2)||US$975||US$893|
|(1)||Gold equivalent in Q2 2023 is calculated based on: gold $1,976 per ounce; silver $24.13 per ounce; and copper $3.85 per pound. Gold equivalent in Q2 2022 is calculated based on: gold $1,870 per ounce; silver $23 per ounce; and copper $4.32 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 on pages 12 and 13 of the Company’s management’s discussion and analysis dated August 9, 2023, available on SEDAR+ or the Company’s website, for reconciliation of these measures.|
Mineral resources that are not mineral reserves do not have demonstrated economic viability.
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.
K92 Mining Inc. is engaged in the production of gold, copper and silver 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. A maiden resource estimate on the Blue Lake copper-gold porphyry project was completed in August 2022. K92 is operated by a team of mining company professionals with extensive international mine-building and operational experience.
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