VANCOUVER-headquartered K92 Mining Inc. (TSX-V: KNT; OTCQX: KNTNF) is says it expects another significant, year over year, increase in gold equivalent production of 34-46% while also delivering low-cost production at its Kainantu Mine in Papua New Guinea.
The company said the strongest production and lowest costs are expected in the second half of 2020 as the Stage 2 Expansion ramp-up to run-rate throughput is forecasted to be achieved by the end of 2020.
Chief Executive Officer and Director, John Lewins, said exploration activities are also forecasted to increase, with two new surface drill rigs and one new underground drill rig targeting delivery in Q2 2020.
He said the drill rigs are planned for both near-mine and regional exploration, including expanding exploration activities to drill new targets. Between C$8 million and C$10 million has been budgeted for exploration, which is included as part of the operating costs, sustaining capital and growth expenditures.
Growth capital is forecasted to be between C$20 million and C25 million, which includes completing the Stage 2 Expansion and twin incline development. The twin incline is designed for a throughput capacity of up to 2 million tonnes per annum. K92 has recently commenced early earthworks on the twin incline.
“2019 was a transformational year for Kainantu, exceeding our upgraded guidance while making significant progress towards our Stage 2 Expansion,” Mr Lewins said.
“In 2020, we expect to consolidate these gains, with production taking a significant step forward to over 110,000 ounces gold equivalent and achieving run-rate Stage 2 Expansion throughput by year end.
“We are also very excited about our exploration programmes in 2020. Three new drill rigs are set to arrive in Q2 2020, providing an increase to our rate of exploration and importantly an increase to our capacity to test new, high potential, targets.”
K92 Mining Inc. is engaged in the production of gold, copper and silver from the Kora and Kora North deposits of 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 has commenced an expansion of the mine. An updated Preliminary Economic Assessment on the property was published in January 2019.