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K92 Mining Inc
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Close 2019-01-22 C$ 1.10
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K92 Mining produces 16,844 AuEq oz in Q4

2019-01-22 08:27 ET - News Release

Mr. John Lewins reports


K92 Mining Inc. has provided an update on operations for fourth quarter of 2018 at its Kainantu gold mine in Papua New Guinea.

During Q4, K92 produced 16,451 ounces of gold, 170,800 pounds of copper and 3,095 oz of silver or 16,844 AuEq oz (based on a gold price of $1,300 (U.S.)/oz; silver $16.50 (U.S.)/oz; copper $2.90 (U.S.)/lb). Q4 production represents a new record for the Kainantu gold mine, being over 50 per cent higher than any previous record quarter.

The annual production of 45,810 ounces of gold, 611,000 pounds of copper and 10,069 oz of silver or 47,237 AuEq oz (based on a gold price of $1,300 (U.S.)/oz; silver $16.50 (U.S.)/oz; copper $2.90 (U.S.)/lb) exceeds the guidance of 44,000 to 46,000 oz AuEq.

Mining operations in Q4 continued to focus on Kora North and comprised cut and fill stope mining from the K2 vein over a 200-metre strike length, cut and fill stope mining on the K1 vein over a 250-metre strike length from the 1,185 mRL level as well as development tonnes from K1 and K2 on the newly established 1,170 mRL level.

The blend of primarily K1 material with some and K2 material provided an average head grade to the process plant for Q4 of 21.8 g/t Au and 0.33 per cent Cu. This blend had been maintained for much of 2018 and provided an average grade to the process plant of 19.13 g/t gold and 0.38 per cent copper for the year.

Recoveries for Q4 averaged 94.8 per cent for gold and 93.6 per cent copper while for 2018 gold recovery averaged 93.7 per cent and copper recovery averaged 93 per cent.

Grade control drilling from the third drill cuddy, diamond drill cuddy 3 (DDC3), continued during the quarter, while exploration drilling continued from DDC4. An updated resource estimate for the Kora North deposit was also completed during Q4 by Simon Tear (PGeo), consultant to the company and a director of independent consultancy H & S Consultants Pty. Ltd., Sydney, Australia.

The updated resource estimate comprises a measured resource of 154,000 tonnes at 18.7 g/t Au, 8.9 g/t Ag and 0.5 per cent Cu; an indicated resource of 690,000 tonnes at 11.6 g/t Au, 14.1 g/t Ag and 0.8 per cent Cu, and an inferred resource of 1.92 million tonnes at 10.7 g/t Au, 13.3 g/t Ag and 0.7 per cent Cu. This represents an increase of over 20 per cent in the contained gold equivalent oz for the measured and indicated resource and almost 30 per cent for the inferred resource.

Exploration drilling commenced in Q4 at the Kokomo project targeting high-grade veins extending northwest from Irumafimpa/Kora.

                                  2018 PRODUCTION DATA
                                  Quarter 1   Quarter 2   Quarter 3   Quarter 4     Total
Waste tonnes                  t      17,585      29,984      24,783      40,331   112,684
Tonnes processed              t      18,668      17,105      18,907      24,806    79,487 
Feed grade Au               g/t       16.95       20.39       16.70       21.77     19.13  
Feed grade Cu                 %        0.44%       0.36%       0.37%       0.33%     0.38% 
Recovery (%) Au               %       91.66%      93.50%      94.07%      94.76%    93.68%
Recovery (%) Cu               %       91.28%      93.62%      93.71%      93.57%    92.98%
Metal in conc prod Au        oz       9,323      10,486       9,549      16,451    45,810 
Metal in conc prod Cu         t      75.173      58.266      66.367      77.460    277.27 
Metal in conc prod Ag        oz       2,752       1,671       2,551       3,095    10,069 
Gold equivalent oz produced  oz       9,719      10,791       9,883      16,844    47,237 

John Lewins, K92 chief executive officer and director, states: "The production results for the fourth quarter exceeded all expectations with a 60-per-cent increase in gold production in comparison to the best previous quarter and an extremely pleasing 60-per-cent increase in total tonnage mined and 30-per-cent increase in tonnes treated. The production figures reflect a steady increase over the year and the impact of the additional mobile and fixed plant purchased during the year.

"The production figures achieved in Q4 and the entire year are testament to the dedication, hard work and effort of the entire K92 team (including contractors) at our Kainantu gold mine. The results achieved, especially in Q4, provide K92 an excellent platform to build upon going into 2019. We fully expect that we will be setting new records in 2019 and look forward to providing production guidance for 2019 in the near future.

"While 2018 has been very much a transformational year for K92 and the Kainantu gold mine, with a recently completed positive PEA on the doubling of production capacity at Kainantu, an accelerated underground drilling program and a significantly expanded exploration program surrounding the ML150 mining lease, we expect 2019 to provide another major step up in our transformation to a significant gold and copper producer and explorer."

Further financial details regarding Q4 and annual production will be available in the upcoming annual financial statements. Based on budget, K92 anticipates operations achieved positive cash flow for the quarter.

      Global mineral resources Kora North gold-copper mine October, 2018

                 Tonnes   Gold               Silver      Copper          AuEq
Category             Mt    g/t    Moz    g/t    Moz     %   Mlb    g/t    Moz
Measured           0.15   18.7   0.09    8.9   0.04   0.5   1.6   19.6   0.09 
Indicated          0.69   11.6   0.26   14.1   0.31   0.8  11.8   12.9   0.29 
Total M & I        0.85   12.9   0.35   13.1   0.36   0.7  13.3   14.1   0.39 
Inferred total     1.92   10.7   0.66   13.3   0.82   0.7  29.5   11.9   0.74 

The resource estimate is included in a technical report titled, "Independent Technical Report, Mineral Resources Estimate Update and Preliminary Economic Assessment of Kora North and Kora Gold Deposits, Kainantu Project, Papua New Guinea" with an effective date of Sept. 30, 2018, prepared by Anthony Woodward BSc (honours), MSc, MAIG; Simon Tear, BSc (honours), EurGeol, PGeo, IGI, EurGeol; Christopher Desoe, BE (min) (honours), FAusIMM, RPEQ, MMICA; Lisa J. Park, BEng (chemistry), GAICD, FAusIMM.

Key assumptions and parameters used in the resource estimate

Mineralization comprises two parallel, steeply west dipping, north-south-striking quartz-sulphide vein systems, K1 and K2, within an encompassing dilatant structural zone hosted by phyllite. An additional structure, the Kora link, has also been defined and provides a possible link between the two main vein systems.

Underground drilling consists of diamond core for a range of core sizes depending on length of hole and expected ground conditions. Sampling is sawn half core under geological control and generally ranges between 0.5 m and one m. Underground face sampling is completed for every fired round and is to industry standard.

Quality assurance/quality control data indicated no significant issues with the accuracy of the on-site analysis.

Core recovery of the mineral zone was initially 90 per cent, this has improved to over 95 per cent. There is no relationship between core recovery and gold grade.

Geological logging is consistent and is based on a full set of logging codes covering lithology, alteration and mineralization. The geological interpretation of the vein systems is represented as 3-D wireframe solids snapped to a combination of diamond drill hole data and underground face sampling. Definition of the wire frames is based on identified gold mineralization in drill core nominally at a 0.2 g/t Au cut-off in conjunction with geological control/sense and current mining widths.

Gold equivalent (AuEq) g/t was calculated using the formula Au g/t plus (Cu per cent multiplied by 1.53) plus Ag g/t multiplied by 0.0127. (No account of metal recoveries through the plant have been used in calculating the metal equivalent grade. However, production is currently achieving 93-per-cent metal recovery for both gold and copper and gold is currently providing 95 per cent and copper 5 per cent of the total revenue of the mine).

The gold price is $1,300 (U.S.)/oz; silver is $16.50 (U.S.)/oz; and copper is $2.90 (U.S.)/lb.

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.

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