Canadian Developer Has Big PNG Growth Plans
K92 Mining Inc. (TSX-V: KNT; OTCQX:KNTNF) has received very encouraging results from a Preliminary Economic Assessment (PEA) on its Kora gold deposit, which together with its Irumafimpa gold deposit comprise the Kainantu Gold Mine Project in Papua New Guinea.
CEO, John Lewins, said that based on the results of the study, the company is proceeding to a Definitive Feasibility Study (DFS) for the Kora Stage 3 Expansion.
Stage 3 Expansion PEA Study Highlights
- After-tax NPV5% of US$1.5 billion at US$1,500 per ounce gold, increasing to an after-tax NPV5% of US$2.0 billion at US$1,900 per ounce gold.
- Average annual expansion run-rate production of 318,000 ounces gold equivalent (“AuEq”)(1) per annum at 1.0Mtpa, commencing in late-2023, representing a 165% increase from Stage 2 Expansion Life of Mine (“LOM”) average annual production.
- LOM average cash costs of US$353 per AuEq ounce and AISC(2) of US$489 per AuEq ounce.
- Low cash costs of US$202 per gold ounce and AISC costs of US$362 per gold ounce net of by-product credits.
- Initial pre-expansion capital cost of US$125 million and life of mine sustaining capital cost of US$341 million with all capital costs fully funded by existing Stage 2 Kainantu mine cash flow.
- Mine life of 12 years, including ~3 years of Stage 2 production (2021 to late-2023).
“Over the past three years, Kainantu has delivered tremendous production and exploration growth and we are very pleased to report the results for the next major growth plan – Stage 3 Expansion,” Mr Lewins said.
“The PEA economics are robust, with run-rate production of ~318,000 oz AuEq per annum; low average all-in sustaining costs net of by-product credits of $362/oz gold which benefitted from higher copper grades and economies of scale, and; an after-tax NPV5% of US$1.5 billion at US$1,500/oz. Importantly, the Stage 3 Expansion is a low capital intensity project and within our ability to self-fund from scheduled mine cash flow.
“As a result, we are initiating a Definitive Feasibility Study (“DFS”) for Stage 3, targeting mid-2021.
“Work on the new twin incline is underway and we currently have four diamond drill rigs operational underground focused on upgrading the resource for the DFS and expanding the known resource to the south and at depth. Surface exploration is also rapidly expanding, from the current 3 diamond drill rigs to five drill rigs by year-end, adding even greater focus on resource growth near-mine and regionally.” The Kora Stage 3 Expansion PEA considers an expansion to underground mining with on-site treatment of mine material by conventional milling, gravity and flotation recovery through a standalone one-million-tonne-per annum (Mtpa) process plant.