K92 Mining 2022 Operational Guidance Forecasts Significant Production Increase
- Production in 2022 is expected to increase up to 34% year-over-year, with gold equivalent (“AuEq”) production of 115,000 to 140,000 ounces, a range that incorporates a contingency related to COVID- 19.
- High-margin production expected in 2022, with cash costs between $560 and $640 per ounce gold and all-in sustaining costs (“AISC”) between $890 and $970 per ounce gold.
- Exploration is expected to increase with expenditures of $12-15 million planned for 2022. With the infill drilling program at Kora for the updated resource estimate completed, the focus is now on growth drilling of the resources primarily at Kora, Judd, Kora South, Judd South and Blue Lake Porphyry.
- Growth capital costs are expected to be $41-47 million, which includes Stage 2A expansion to increase throughput by 25% to 500,000 tons per year (1,370 tons per day), upgrades major upgrades to our underground and surface infrastructure and the dual slope development to also support the Stage 3 extension.
Note: All amounts are in US dollars unless otherwise specified.
VANCOUVER, British Columbia, Jan. 24, 2022 (GLOBE NEWSWIRE) — K92 Mining Inc. (“K92“or the”Society”) (TSX: KNT; OTCQX: KNTNF) is pleased to provide its operating outlook for 2022. The Company expects a significant year-over-year increase in gold equivalent production of up to 34% to 115,000 to 140,000 ounces, while offering low-cost production with an estimated cash cost of $560. -$640 per ounce of gold and an all-in sustaining cost (“AISC”) of $890 to $970 per ounce of gold. In addition, the Company plans to accelerate exploration activities and invest in future production growth.
On the exploration side, 2022 is expected to see a significant increase in near-mine and regional activity with planned spending of $12-15 million. Since 2020, the drill fleet has more than doubled to up to eleven drill rigs. Importantly, exploration has recently made a major pivot to focus on resource growth previously primarily from infill drilling at Kora, with plans to drill the Judd, Kora, Judd South and Kora South vein systems. , and the Blue Lake porphyry. Significant generative surface exploration activity from 2021 is expected to continue through 2022.
Growth capital is expected to be between $41 million and $47 million, which includes the ongoing Stage 2A expansion to 500,000 tonnes per annum (1,370 tonnes per day), substantial upgrades to our underground infrastructure and of surface and dual slope development to also support the Stage 3 expansion. The dual inclined plane is designed for a throughput capacity of up to 2 million tonnes per year (“tpa”) or 3 million tonnes per year with conveyors. As of December 31, 2021, the farthest dual slope had advanced 893 meters.
Table 1 – Summary of 2022 operational outlook
|Gold equivalent production(1)||ounces||115,000 to 140,000|
|Cash costs(2)||$/Oz||$560 to $640 per ounce of gold|
|All inclusive sustaining costs(2)||$/Oz||$890 to $970 per ounce of gold|
|Growth capital||US DOLLARS$||$41–47 million|
|Exploration||US DOLLARS$||$12-15 million|
(1) – Gold equivalent production based on the following commodity prices: gold $1,750/oz; Copper $3.75/lb, and; Silver $25/oz.
(2) – The Company provides certain non-international standard measures of financial reporting as supplemental information that management believes is useful to investors in explaining the Company’s financial results. Please refer to the non-IFRS financial performance measures in the Company’s MD&A dated November 10, 2021, available on SEDAR, for a reconciliation of these measures.
John Lewins, Chairman and CEO and Director of K92, said: “2021 has been a record year and we expect to deliver another record year in 2022. mine throughput and some of the highest metallurgical recoveries in the past last two years for gold and copper, has certainly prepared the operation well for 2022. We have also achieved our early 2021 target of achieving throughput of the mine and expansion stage of the 2 by year-end, and we plan to continue to grow in 2022 through the Stage 2A expansion designed to increase throughput by +25% to 500,000 tpa with commissioning scheduled for the 3rd quarter of 2022.
We are also very excited about exploration for 2022, with most of the program focused on resource growth. Surface drilling is progressing at Judd South and Kora South, targeting large outflows from existing known deposits. Surface drilling is also progressing at Blue Lake with deeper drilling targeting potassium core. Underground drilling for the first time has the majority of the rigs at Judd and plans are also in place to take advantage of the dual slope later in the year for outings at Kora along the strike to the north and in depth.
Advancing the Stage 3 expansion is a key part of our plans this year, with significant progress planned on several fronts. The progress of the dual-slope development has performed well, exceeding budget in the second half of 2021. The resource update for Judd and Kora is expected to be announced together this quarter, along with our Stage 3 Definitive Feasibility Study and our Updated Preliminary Economic Assessment (“PEA”) are progressing well and are scheduled for release in the second quarter. Drilling work for a ventilation shaft with a diameter of 5 meters located to the south of the mining lease should also begin at the end of 2022.
Regarding COVID-19, it continues to be a factor for companies and industries around the world and therefore we have factored a contingency into our production forecast range by extending its lower bound. It is also important to highlight that our resilience to the pandemic has improved significantly over the past year, with over 65% of our workforce having received their first dose of vaccine and COVID-19 control measures on site have proven to be sustainable to date. Operations also benefited from a substantial improvement in the international travel of our expatriate workforce, consultants and suppliers.
Finally, I would like to thank our staff once again – their commitment and resilience has been extraordinary. The Government of Papua New Guinea and the Government of Australia have also played major roles in our success. This has set up a potentially very exciting 2022.
K92 Mine Geology Manager and Mine Exploration Manager, Andrew Kohler, PGeo, a qualified person within the meaning of National Instrument 43-101 – Disclosure standards for mining projects, has reviewed and is responsible for the technical content of this press release. Mr. Kohler’s data verification includes considerable on-site time to review drill core, face sampling, underground workings and discuss work programs and results with geology and mining personnel. .
K92 Mining Inc. is engaged in the production of gold, copper and silver from the Kora deposit at the Kainantu Gold Mine in the Eastern Highlands Province of Papua New Guinea, as well as the exploration and development of mineral deposits in the immediate vicinity of the mine. . The company declared commercial production of Kainantu in February 2018 and is in a strong financial position.
The company has commenced mine expansion based on an updated Preliminary Economic Assessment on the property which was released in January 2019 and updated in July 2020. K92 is operated by a team of mining professionals. mining company with extensive international experience in the construction and operation of mines.
On behalf of the company,
John Lewins, President and CEO and Director
For more information, please contact David Medilek, P.Eng., CFA at +1-604-687-7130.
CAUTION REGARDING FORWARD-LOOKING INFORMATION
This press release contains certain “forward-looking statements” under applicable Canadian securities laws. Forward-looking statements are necessarily based on a number of estimates and assumptions which, while believed to be reasonable, are subject to known and unknown risks, uncertainties and other factors which may cause actual results to differ. and future events differ materially from those expressed or implied. by such forward-looking statements. All statements that address future plans, activities, events or developments that the Company believes, expects or anticipates will occur or may occur are forward-looking information, including statements regarding the achievement of preliminary economic analysis for the Kainantu mine, future cash flow projections, planned mill expansion, production results, cost of sales, production sales, potential resource expansion and generation additional drill results that may or may not occur. The forward-looking statements and information contained herein are based on certain factors and assumptions regarding, among other things, the market price of the Company’s securities, metal prices, foreign exchange rates, taxation, estimation, timing and amount of future exploration and development, capital and operating costs, availability of financing, receipt of regulatory approvals, environmental risks, title disputes, plant failure, equipment or processes to operate as designed, accidents, labor disputes, claims and limitations of insurance coverage and other risks of the mining industry, changes in regulations national and local government of mining operations in PNG, the mitigation of the COVID-19 pandemic, the removal of travel restrictions, the continuation of the lifting of the state of emergency, the regulation mentation and other issues. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.