• Production in 2023 is expected to be 120,000 to 140,000 ounces gold equivalent a range that incorporates a contingency for supply chain related delays.
• High margin production forecasted in 2023, with cash costs between $620-$680 per ounce gold and all-in sustaining costs of $1,180-$1,300 per ounce gold. The increase from 2022 is driven predominantly by accelerating sustaining capital and development expenditures related to the Stage 3 and 4 Expansions, in addition to sustaining capital items originally scheduled for 2022 arriving in 2023 due to supply chain delays.
• The Stage 3 and 4 Expansions, approved on December 6, 2022, are expected to significantly increase production and drive economies of scale at the Kainantu Gold Mine, transforming Kainantu into a Tier 1 mine. The Integrated Development Plan’s Stage 4 Preliminary Economic Assessment Case (the “Stage 4 PEA Case”)*, outlines peak annual production of 500,192 ounces AuEq in 2027, life of mine average AISC of $687/oz (co-product) or $444/oz net of by-product credits, and self-funding from mine cash flow at $1,600/oz Au.
• Exploration to increase, with $13-$16 million expenditures projected for 2023, including the total number of operating drill rigs increasing from the current 11 to 13 rigs. Exploration will predominantly focus on resource growth with surface drilling to focus on Kora South, Judd South, Judd, and the A1 copper-gold porphyry targets, with underground drilling focusing on Kora, Kora South, Kora Deeps, Judd, Judd South, Judd Deeps and Northern Deeps targets.
• Tender process underway for growth capital items for the Stage 3 and 4 Expansions. Upon completion of the tender process, timing of the growth capital items will be established to provide its 2023 forecast.

Note: All amounts in United States Dollars unless otherwise indicated.

* 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. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Mineral reserves are defined by the definitive feasibility study and are not predicated on the preliminary economic assessment in any way.

K92 Mining Inc. (TSX: KNT) (OTCQX: KNTNF) is pleased to provide its operational outlook for 2023. The Company expects gold equivalent production of 120,000-140,000 ounces, while also delivering low-cost production with an estimated cash cost of $620-$680 per ounce gold and AISC of $1,180-$1,300 per ounce gold. Cash cost and AISC per ounce have increased from 2022, driven predominantly by accelerating sustaining capital and development expenditures related to the Stage 3 and Stage 4 Expansions approved on December 6, 2022 (see December 6, 2022 press release: K92 Mining Announces Extension to Mining Lease 150 and Approval of the Kainantu Gold Mine Stage 3 and Stage 4 Expansions), in addition to sustaining capital items that were planned to arrive in 2022 and are now arriving on-site in 2023 due to supply chain related delays. The Stage 3 and 4 Expansions are expected to transform the Kainantu Gold Mine into a Tier 1 mine, through significantly increased production and economies of scale. The Stage 4 PEA Case outlines peak annual production of 500,192 ounces AuEq in 2027, life of mine average AISC of $687/oz (co-product) or $444/oz net of by-product credits, and self-funding from mine cash flow at $1,600/oz Au.

For exploration, 2023 is forecasted to have a significant increase in both near-mine and regional activities with forecasted expenditures of $13-16 million. Since 2020, the drill fleet has more than doubled to 11 drill rigs currently operating, with the number of drills planned to increase to 13 in 2023. Importantly, surface and underground exploration activities will continue to focus on resource growth at Kora, Judd, Kora South, Judd South, Kora Deeps, Judd Deeps and Northern Deeps vein systems, and the A1 copper-gold porphyry targets.

In terms of growth capital, the tender process commenced in late-2022 for the Stage 3 and 4 Expansions. Upon completion of the tender process, timing of growth capital items that will be incurred this year will be established to provide 2023 guidance.

Table 1 – 2023 Operational Outlook Summary

(1) – Gold Equivalent Production based on the following commodity prices: Gold $1,750/oz; Copper $3.75/lb, and; Silver $21.50/oz.
(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 performance measures on pages 13-15 of the Company’s management’s discussion and analysis dated November 10, 2022, available on SEDAR, for reconciliation of these measures.

John Lewins, K92 Chief Executive Officer and Director, stated, “In 2022, Kainantu once again took a major step forward, achieving its sixth consecutive year of production growth, including multiple records such as ore tonnes processed, ore tonnes mined, total tonnes mined and underground development. Importantly, Kainantu finished 2022 strong, achieving multiple quarterly records in the fourth quarter. In 2023, we look to continue to build on this positive operational momentum while also focusing on investing in the long-term future of Kainantu via the Stage 3 and 4 Expansions, which was approved in December 2022 following the renewal of the Mining License for a further 10 years through until the end of 2034. This will transform the Kainantu Gold Mine into a Tier 1 mine.

As part of our guidance, we have incorporated contingency for supply chain related impacts as the global economy recovers from lingering effects of the COVID-19 pandemic environment, particularly in relation to suppliers in Asia. Based on our expectations of supply chain impact timing and stope sequencing, we expect the second half of 2023 to be our strongest in terms of production.

We are also very excited about exploration in 2023, and are pleased to be expanding our activities, through increasing the number of drill rigs from 11 currently operating to 13. The number of highly prospective drill targets at Kainantu is very large and has grown considerably over the past 18 months through surface exploration work. Our surface drilling plans to target Kora South, Judd South, Judd and the A1 Copper-Gold Porphyry Target, with underground drilling targeting, Kora, Judd, Kora South, Judd South, Kora Deeps, Judd Deeps and Northern Deeps. Other targets identified may be drilled in 2023 and we look to provide exploration updates in due course.”

Qualified Person

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.

Technical Report

Further details about the Integrated Development Plan’s Stage 4 Preliminary Economic Assessment Case can be found in the technical report dated October 26, 2022 and titled, “Independent Technical Report, Kainantu Gold Mine Integrated Development Plan, Kainantu Project, Papua New Guinea Definitive Feasibility Study”, filed on the Company’s website at www.k92mining.com and the SEDAR website at www.sedar.com.

About K92

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, is in a strong financial position. A maiden resource estimate on the Blue Lake 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.