Mr. John Lewins reports

K92 MINING ANNOUNCES SIGNIFICANT DE-RISKING MILESTONE - AWARDING LUMP SUM FIXED PRICE CONTRACT FOR THE DESIGN AND CONSTRUCTION OF THE 1.2 MTPA STAGE 3 PROCESS PLANT

K92 Mining Inc.'s board of directors has authorized the company's award of the engineering, procurement, construction and commissioning (EPC) lump sum contract for the 1.2-million-tonne-per-annum (mtpa) stage 3 expansion process plant to GR Engineering Services Ltd. (GRES) following a tender process.

The EPC lump sum contract award amount is $81-million (U.S.) and is fixed price/lump sum, significantly derisking potential cost increases to K92. In addition to the award of the contract, all process plant long-lead item contracts have already been awarded on a fixed price (excluding freight) to CITIC HIC Australia Pty. Ltd. for the SAG (semi-autogenous grind) and ball mills, Jord International Pty. Ltd. for the filter press, and Metso Outotec Australia Ltd. for the tank flotation cells, flash flotation cells and high-rate thickeners.

Following the award of the EPC lump sum contract and the placement of orders for the long-lead items, the forecast cost of the 1.2 mtpa stage 3 process plant is within 10 per cent of the capital cost outlined in the Kainantu integrated development plan (IDP) definitive feasibility and preliminary economic assessment cases (see Sept. 12, 2022, press release), and importantly approximately 94 per cent of the forecast capital cost has been fixed. This significantly mitigates K92's cost inflation risk for the largest growth capital cost item for the stage 3 expansion (the 1.2 mtpa stage 3 process plant), representing over half of the forecast growth capital (inclusive of attributable EPCM costs) as outlined in the IDP. Approximately 6 per cent of the remaining unfixed price capital cost is for projects led by K92, including bulk earthworks and long-lead item freight logistics. The mitigation of the process plant's inflation risk as noted above has notably strengthened the company's self-financing position for the stage 3 expansion.

With the award of the long-lead items and the EPC contract, commissioning of the 1.2 mtpa stage 3 expansion process plant is targeting the end of Q1 2025. The mobilization of the construction contractor is forecasted for early 2024, with bulk process plant earthworks to be completed prior. The EPC contract with GRES is expected to be executed by the end of August. The multiyear growth capital estimate for the stage 3 expansion project is planned to be provided at the end of the third quarter.

John Lewins, K92 chief executive officer and director, stated: "The award of the EPC contract for the 1.2 mtpa stage 3 expansion process plant is a major milestone and derisking event for the company. Combined with the long-lead items, the company has awarded approximately 94 per cent 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. Importantly, the forecasted cost of the process plant has tracked well with the integrated development plan and the mitigation of the process plant's capital inflation risk strengthens our position to self-fund the stage 3 expansion.

"We are also very pleased to be working with GRES, a world-class engineering and contracting firm. GRES brings not only significant expertise in the design and construction of process plants but also extensive experience in Papua New Guinea."

Stage 3 expansion activities update

In addition to the 1.2 mtpa process plant, multiple activities are progressing considerably for the stage 3 expansion including, but not limited to:

• Pastefill plant front-end engineering and design (FEED) proceeding this quarter, with final contract to be awarded in the Q4 2023;
• Tailings dam lift 1C well under way (60 per cent complete) and targeting completion by end of 2023;
• Tender process under way for various underground and surface infrastructure packages including vertical development, power and transportation;
• Continuing expansion of accommodation facilities.

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 on site reviewing drill core, face sampling, underground workings, and discussing work programs and results with geology and mining personnel.

About K92 Mining Inc.

K92 Mining 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 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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