Mr. John Lewins reports

K92 MINING ANNOUNCES US$100 MILLION SENIOR SECURED LOAN AND AMENDED OFFTAKE AGREEMENT WITH TRAFIGURA, BOLSTERING BALANCE SHEET AND FUTURE METALS PAYABILITIES

K92 Mining Inc. has entered into a loan agreement with Trafigura Pte. Ltd., a market leader in the global commodities industry, pursuant to which Trafigura will provide a $100-million (U.S.) senior secured loan to K92.

In addition, the Papua New Guinea subsidiary of the company, K92 Mining Ltd., and Trafigura have amended and restated the offtake agreement dated July 1, 2019, for the purchase by Trafigura of 100 per cent of K92's copper/gold concentrates produced at the Kainantu gold mine in Papua New Guinea. The loan and the amended offtake agreement will only come into effect upon satisfaction of express conditions precedent, including but not limited to: (i) the execution and registration of the security, and (ii) regulatory approvals. These conditions precedent have not as yet been satisfied. K92 expects first drawdown to occur in early to mid-Q4 2023.

The loan is at the corporate level and may be used for general corporate purposes, working capital purposes and capital expenditures. No hedging is required for the loan. The loan further strengthens K92's strong financial position, with $95.6-million (U.S.) and no debt as at June 30, 2023.

Key terms

$100-million (U.S.) senior secured loan:

• Four-year term from the date which the first advance of funds are made;
• Competitive interest rates;
• One-year interest only repayment grace period;
• No hedging conditions;
• The loan will be secured by, among other things, a charge over the assets of K92 Mining and a pledge of the shares of both K92 Mining and K92 Holdings International Ltd. (the security);
• Drawdown of the first $25-million (U.S.) under the Loan (the initial advance) is subject to conditions precedent, including but not limited to: (i) the execution and registration of the security, and (ii) regulatory approvals, which have not as yet been satisfied;
• Drawdown of the balance of the loan is subject to subsequent conditions in relation to the registration of certain items which form part of the security;
• Prior to satisfaction of the conditions subsequent, should an event of default occur under the loan, Trafigura has, among other rights, the right to accelerate repayment of the loan, and convert all or any portion of the initial advance into common shares of K92;
• Once the conditions subsequent are satisfied, the conversion right will expire and be of no further force or effect.

Amended offtake agreement:

• The term of the offtake agreement will extend and continue for an additional seven consecutive calendar years, beginning Jan. 1, 2026, or until a minimum quantity of 600,000 dry metric tonnes of concentrate have been delivered to Trafigura.
• Competitive industry terms in relation to all metrics at London Metals Exchange spot prices.
• Attractive payment arrangements which provide for upfront payment on delivery of concentrates to port of dispatch and provision of certain shipping documents.
• Amended and improved metals payabilities for deliveries of concentrates, which include amending penalties, treatment and refining charges, and transport charges, all of which are better than the assumptions outlined in the Kainantu integrated development plan (IDP) definitive feasibility and preliminary economic assessment cases (see Sept. 12, 2022, press release).

John Lewins, K92 chief executive officer and director, stated: "We are extremely pleased to be expanding our partnership with Trafigura, with a $100- million (U.S.) loan and amended offtake agreement. Trafigura has been our offtake partner since the start of operations at the Kainantu gold mine, and these agreements reinforce our strong relationship with Trafigura.

"In combination with K92's already strong cash position of $96-million at the end of Q2 2023, the $100-million (U.S.) loan effectively fully finances the growth capital outlined in the IDP for both the stage 3 DFS and stage 4 PEA cases, which transform Kainantu into a Tier 1 producer with run-rate production of 300,000 ounces gold equivalent and 470,000 oz AuEq per annum, respectively. Importantly, the loan enables K92 to more confidently invest and potentially increase exploration activities while completing the major production expansions. The offtake agreement also secures long-term competitive terms and provides security and confidence in our income from the sale of our concentrate product."

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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