Mr. John Lewins reports

K92 MINING ANNOUNCES STRONG 2023 Q4 AND ANNUAL FINANCIAL RESULTS - RECORD QUARTERLY REVENUE, NET INCOME, OPERATING CASH FLOW, EBITDA, PRODUCTION, ORE MINED, ORE PROCESSED AND DEVELOPMENT; ANNUAL PRODUCTION, CASH COST AND AISC BETTER THAN GUIDANCE

K92 Mining Inc. has released its financial results for the three and 12 months ended Dec. 31, 2023. All amounts are in U.S. dollars unless otherwise indicated.

Production

Fourth quarter of 2023:

• Record quarterly production of 39,101 ounces (oz) gold equivalent (AuEq), or 33,309 oz gold, 2,728,623 pounds (lb) copper and 56,502 oz silver;
• Cash costs of $430 (U.S.) per oz gold, second lowest to date, and all-in sustaining costs (AISC) of $1,062 (U.S.) per oz gold;
• Record quarterly ore processed of 151,908 tonnes or 1,651 tonnes per day (tpd), 21 per cent greater than the stage 2A expansion run rate and a 25-per-cent increase from Q4 2022;
• Record daily throughput achieved on Nov. 19 of 2,320 tonnes, and a seven-day throughput record achieved in November averaging 2,136 tpd, 69 per cent and 56 per cent greater than the stage 2A expansion plant design rates, respectively. The records demonstrate not only a significant immediate opportunity with the stage 2A plant having considerably greater capacity than expected, but also the potential for the stage 3 expansion process plant, which is based on the same design throughput parameters, for significantly greater capacity than its 1.2 million tpa (tonnes per annum) design;
• Record amount of ore mined of 155,062 tonnes and record total mined material (ore plus waste) of 347,529 tonnes, a 39-per-cent increase and a 21-per-cent increase from Q4 2022, respectively.

Full year 2023:

• Strong annual production of 117,607 ounces AuEq, or 100,533 oz gold, 7,690,477 lb copper and 160,628 oz silver, beating updated guidance range of 111,000 to 116,000 oz AuEq;
• Cash costs of $585 (U.S.) per oz gold and AISC of $1,162 (U.S.) per oz gold, beating original guidance ranges for cash cost of $620 to $680 per oz gold and AISC of $1,180 to $1,300 per oz gold;
• Record annual ore processed of 503,484 tonnes, a 12-per-cent increase from 2022;
• Record annual ore mined of 506,318 tonnes, a 13-per-cent increase from 2022;
• Strong recoveries achieved during the year of 91.5 per cent for gold and 92.8 per cent for copper.

Financials

Fourth quarter of 2023:

• Record quarterly revenue of $75.3-million (U.S.), an increase of 22 per cent from Q4 2022;
• Record net income of $20.0-million (U.S.) or nine cents per share, a 51-per-cent increase from Q4 2022;
• Strong cash and treasury bill position of $79.1-million (U.S.) as of Dec. 31, 2023, while remaining debt free;
• Sales of 33,273 oz gold, 3,061,956 lb copper and 63,301 oz of silver. Gold concentrate and dore inventory of 5,285 oz as of Dec. 31, 2023, a decrease of 781 oz over the prior quarter;
• Record operating cash flow (before working capital adjustments) for the three months ended Dec. 31, 2023, of $38.6-million (U.S.) or 16 U.S. cents per share, and record earnings before interest, taxes, depreciation and amortization (EBITDA) of $40.7-million (U.S.) or 17 U.S. cents per share.

Full year 2023:

• Record annual revenue of $200.3-million (U.S.), an increase of 6 per cent from 2022;
• Annual net income of $33.2-million (U.S.) or 14 cents per share;
• Annual sales of 97,355 oz gold, 7,512,951 lb copper and 159,202 oz of silver;
• Record operating cash flow (before working capital adjustments) for the 12 months ended Dec. 31, 2023, of $82.1-million (U.S.) or 35 U.S. cents per share, and record earnings before interest, taxes, depreciation and amortization of $84.1-million (U.S.) or 36 U.S. cents per share.

Growth:

• During the quarter, K92 announced its updated Kora and Judd resource estimates. The updated Kora resource estimate reported a measured and indicated resource of 2.3 million ounces at 10.24 grams per tonne (g/t) AuEq and an inferred resource of 3.9 million ounces at 8.60 g/t AuEq, representing increases of 8 per cent and 58 per cent from the previous resource estimate, respectively. The updated Judd resource estimate reported a measured and indicated resource of 350,000 ounces at 8.68 g/t AuEq and inferred resource of 560,000 ounces at 7.72 g/t AuEq, representing increases of 167 per cent and 211 per cent, respectively;
• Subsequent to the year-end, results from the first two holes from K92's maiden drill program at the Arakompa project recorded significant near-surface mineralization, with four high-grade lodes intersected in hole KARDD0002. Between the high-grade lodes, the tonalite to dioritic host rock is overprinted with porphyry-style mineralization increasing the potential for bulk mining. The target size of Arakompa is very large, with mineralization demonstrated from drill holes, rock samples and surface workings for at least 1.7 kilometres (km) of strike, hosted within an approximately 150-metre-to-225-m-wide mineralized intense phyllic altered package, and exhibits a vertical extent of plus 500 metres (m). Arakompa is sparsely drilled, with K92's maiden drill results representing the first drilling on the project completed in 32 years. A total of 18 holes were drilled historically, with the vast majority shallow. Highlights from the maiden drill program include:
  • KARDD0002 recording 7.20 m at 24.76 g/t AuEq, 5.70 m at 9.94 g/t AuEq, 5.30 m at 6.06 g/t AuEq and 3.60 m at 3.38 g/t AuEq;
  • KARDD0002 recording a bulk intersection of 219.8 m at 1.59 g/t AuEq with a higher grade core of 149.4 m at 2.12 g/t AuEq, starting at 5.2 m from surface;
  • Other historic highlights reported include:
    • 004DA92 recording 4.00 m at 32.03 g/t AuEq;
    • 013AD92 recording 4.00 m at 20.21 g/t AuEq;
    • 016AD92 recording 6.30 m at 14.96 g/t AuEq;
    • 010AD92 recording 9.20 m at 10.67 g/t AuEq;
• The twin incline is now effectively complete, with incline No. 2 (six m by 6.5 m) advanced to 2,863 metres and No. 3 (five m by 5.5 m) advanced to 2,838 metres as at Dec. 31, 2023. Overall mine development during the fourth quarter was 2,649 metres, an increase of 19 per cent from Q4 2022 and a quarterly record.

The company's annual consolidated financial statements and associated management's discussion and analysis for the year ended Dec. 31, 2023, are available for download on the company's website and under the company's profile on SEDAR+.

Process plant throughput performance, daily records and near records

John Lewins, K92 chief executive officer and director, stated: "In 2023, K92 once again took a major step forward in numerous areas, delivering a strong finish to the year with multiple records achieved both financially and operationally, including, but not limited to, record production, development, material movements, earnings per share, cash flow per share and revenue. With the strong fourth quarter, K92 exceeded the top end of its updated production guidance range and delivered better cash costs and all-in sustaining costs than the original guidance range. Two thousand twenty-three also delivered a significantly expanded resource base, with the combined measured and indicated resource at Kora and Judd increasing by plus 13 per cent to 2.6 million oz AuEq at 10.0 g/t AuEq and the inferred resource increasing by plus 70 per cent to 4.5 million oz AuEq at 8.5 g/t AuEq, firmly placing Kainantu in an elite category of large high-grade gold systems globally.

"Looking ahead, we are very excited for 2024 as we continue to advance the transformation of Kainantu and K92 into a Tier 1, mid-tier producer in 2025. Concurrent with our transformative expansion works, we also remain focused on exploration, both near mine and regionally, with very encouraging results to date, particularly from Arakompa in late February reporting high-grade drill results, including 7.20 m at 24.76 g/t AuEq, 5.70 m at 9.94 g/t AuEq, 5.30 m at 6.06 g/t AuEq and 3.60 m at 3.38 g/t AuEq, and a bulk intersection of 219.8 m at 1.59 g/t AuEq, with a higher-grade core of 149.4 m at 2.12 g/t AuEq, starting at 5.2 m from surface. Importantly, this is the first time that any drilling has been completed on Arakompa in 32 years with only very limited and shallow drilling completed historically. The second drill rig has already commenced drilling at Arakompa and we look forward to providing exploration updates on our various targets in due course."

Conference call and webcast to present results

K92 will host a conference call and webcast to present the 2023 fourth quarter and annual financial results at 8:30 a.m. EDT on Tuesday, April 2, 2024.

Listeners may access the conference call by dialling toll-free to 1-800-319-4610 within North America or 1-604-638-5340 from international locations.

The conference call will also be broadcast live (webcast) and may be accessed on-line.

Qualified person

K92's 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.

Technical report

The integrated development plan (IDP) for the Kainantu gold mine project in Papua New Guinea is included in a technical report, titled, "Independent Technical Report, Kainantu Gold Mine Integrated Development Plan, Kainantu Project, Papua New Guinea," dated Oct. 26, 2022, with an effective date of Jan. 1, 2022.

About K92 Mining Inc.

K92 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.

We seek Safe Harbor.