Infrastructure Upgrades Expected To Transform Kainantu Into Mid-Tier One Gold Producer

VANCOUVER - K92 Mining Inc. Chief Executive Officer and Director, John Lewins, said, “During the third quarter, the Company saw a significant strengthening to its financial position, with a strong cash balance of $79.9 million, a quarter end inventory of 6,066 ounces gold equivalent subsequently sold in October and on September 26, 2023 a senior secured loan with Trafigura was announced for $100 million, financially well positioning the Company to deliver its Stage 3 and 4 Expansions while also enabling an expansion to exploration activities. Importantly, during the first nine months of the year, the Company also invested $69.4 million on property, plant and equipment and $15.3 million on exploration.

Year to date, a notable amount of progress has been made on the Stage 3 and 4 Expansions. On July 24, 2023, a major de-risking milestone was achieved, with the award of the Lump Sum Fixed Price contract for the design and construction of the 1.2 mtpa Stage 3 Process Plant to GR Engineering Services Limited. Combined with the award of various long-lead time items, approximately 94% of the forecast capital cost for the Process Plant, which represents over half of the total growth capital as outlined in the Integrated Development Plan, has been significantly de-risked on a fixed price basis. Clearing and completion of the contractor staging area is nearly complete for the process plant, contractor mobilization is scheduled for January and plant commissioning remains unchanged for the end of Q1 2025.

Various other works for Stage 3 have also made significant progress. The Front End Engineering and Design (FEED) for the Paste Fill Plant is well advanced, with the ordering of long-lead time items expected in January. The tailings storage facility lift 1C is now over 78% complete, while construction of the camp expansion to meet the workforce requirements for Stage 4 and the interim power station are also well advanced.

The underground mine is also progressing multiple infrastructure projects, including but not limited to: i) the twin incline, now over 93% complete, ii) interim ventilation fan upgrade targeting completion by year end, iii) Puma vent incline targeting completion mid-2024, iv) ore pass system for highly efficient material movements targeting completion Q3 2024, v) Pastefill system targeting soon after commissioning of the Stage 3 process plant, and, vi) underground development tripling the number of mining fronts through 2024 (see Figure 4 to 6).

These infrastructure upgrades, both underground and on surface, are expected to transform Kainantu and the business into a Mid-Tier, Tier 1 gold producer.

On operations, we continue to see the fourth quarter as the strongest for the year and re-iterate our updated guidance. The performance of the process plant has been exceptional, delivering a flurry of daily throughput records in early October including 2,027 tonnes processed (3) on October 10, well above the Stage 2A Plant design of 1,370 tonnes per day (see Figure 3). Development has also seen a significant step up in October, achieving a monthly record of 903 metres. Multiple initiatives are underway to increase development considerably over the next few months.

Lastly, on exploration, as previously announced, we are very pleased to have increased our exploration budget for 2023 with plans to expand the program to drill multiple new high priority targets in addition to our existing primary targets.”