Commissioning Of Stage 2 Expansion Plant And Multiple Throughput Records Exceeding Design

VANCOUVER - K92 Mining Inc. reported production in the third quarter (Q3), of 22,261 oz AuEq at its Kainantu Gold Mine in Papua New Guinea. During Q3, K92 produced 21,298 ounces of gold, 488,020 pounds of copper and 7,127 ounces of silver, or 22,261 AuEq oz. The quarter also achieved record mill throughput of 64,702 tonnes following successful commissioning of the Stage 2 process plant expansion to double throughput from 200,000 tpa (~550tpd) to 400,000 tpa (~1,100 tpd), including 5 consecutive days significantly above design, averaging almost 1,200 tpd.

Mining operations in Q3 focused on Kora’s K1 and K2 veins and comprised development tonnes on the K1 vein on five levels, K1 vein long hole stoping (modified AVOCA method) on the 1205 and 1225 mRL level, K2 vein development tonnes from the 1170 mRL level and K2 vein long hole stoping (modified AVOCA method) on the 1185 mRL level. Importantly, Q3 marked the second full quarter of long hole stoping, which commenced in March 2020 on the K1 vein. To date, long hole stoping has performed to design on both the K1 and K2 veins and has provided a notable positive impact on operational flexibility, including multiple consecutive days exceeding 1,100 tpd of plant feed from underground in Q3. Long hole stoping is planned to increase through 2020 and K92 remains on track to consistently achieve throughput of 1,100 tpd of plant feed from underground by year end.

The blend of K1 and K2 material provided an average head grade to the process plant for Q3 of 11.29 g/t Au and 0.38% Cu. Plant feed grades were deliberately lowered during the commissioning period to minimize the potential for gold losses. Gold head grades continued to deliver a positive grade reconciliation. Grades are expected to increase in Q4 as higher-grade mining areas are reprioritized.

In Q3, underground infrastructure development encountered significant mineralization in the Judd #1 Vein (“J1 vein”), one of four known veins in the Judd vein system. As a result, the infrastructure drive was modified to develop along the J1 vein, providing a bulk sample to be treated during Q4. In addition, a drilling program has commenced on Judd. There are currently two drill rigs targeting Judd from underground, and the underground development drive continues to be advanced to the South. Judd is located on the mining lease and runs parallel to and approximately 200 metres to the North East of Kora. A portion of the Judd material mined has already been processed and blended with Kora material.

The twin incline project made considerable progress in Q3, including completing surface ground support, two portals and portal ground support steel sets. Development has also now advanced through weathered ground into competent fresh rock. The Kainantu mine continues to operate during the COVID-19 pandemic, with a significant focus on health and safety and risk-mitigation. On March 20, 2020 the Government of Papua New Guinea declared a COVID-19 State of Emergency (SOE).

John Lewins, Chief Executive Officer and Director, said, “We are extremely pleased to have successfully completed the commissioning of our Stage 2 Plant Expansion, which represents an important milestone for the Company and a positive step-change in our throughput capabilities, doubling from 200,000 tpa (~550 tpd) to 400,000 tpa (~1,100 tpd). The performance of the expanded plant to date has exceeded expectations on throughput, with the plant achieving 5 consecutive days significantly above design, averaging almost 1,200 tpd. Recoveries have also been solid post-commissioning and have been steadily increasing through late Q3 and into Q4 as our team fine-tunes the circuit.

Mining operations have also been tracking well, benefiting from an expanded fleet and a significant boost to operational flexibility, with long hole stoping now firmly established on the K1 and K2 veins. During Q3, multiple consecutive daily records were achieved, with underground plant feed material movements exceeding 1,100 tpd and a solid quarter-end stockpile of ~18,000 tonnes. Kainantu remains on track to meet its goal of consistently achieving 1,100 tpd of plant feed from underground by year-end.

We are especially excited about the remainder of this year for Kainantu. The fourth quarter is expected to deliver our strongest quarterly production to date, benefitting from the completion of the Stage 2 Plant Expansion in Q3. Exploration activities are also ramping up considerably, with nine drill rigs now on site, and one more rig expected to arrive by end of year. Drill rigs are currently targeting the Judd, Karempe and Kora vein systems, with exploration on Kora South planned to commence this quarter. The second drill program is also scheduled to commence at Blue Lake this quarter. We expect to provide exploration updates on our vein field exploration programs near-term.

I would like to, once again, highlight the exceptional commitment of our workforce and the quality of the Kora Deposit. Despite the challenges of the COVID-19 pandemic, we continue to take significant steps forward towards increasing production and exploration activities, while also strengthening our financial position. The support of all levels of Government in Papua New Guinea, especially during the COVID-19 pandemic, has also been a major positive factor in all of our achievements to date.”