K92 Mining Inc. (“
K92” or the
“
Company”) (TSX
: KNT;
OTCQX
: KNTNF) is pleased to announce that the
Board of Directors has authorized the Company’s award of the
engineering, procurement, construction and commissioning
(“
EPC”) Lump Sum Contract for the 1.2
million-tonnes-per-annum (“
mtpa”) Stage 3
Expansion Process Plant to GR Engineering Services Limited
(“
GRES”) following a tender process.
The EPC Lump Sum Contract award amount is US$81
million and is fixed price / lump sum, significantly de-risking
potential cost increases to K92. In addition to the award of the
contract, all process plant long-lead item contracts have already
been awarded on a fixed price (excluding freight), to CITIC HIC
Australia Pty Ltd for the SAG and ball mills, Jord International
Pty Ltd for the filter press, and Metso Outotec Australia Limited
for the tank flotation cells, flash flotation cells and high-rate
thickeners.
Following the award of the EPC Lump Sum Contract
and the placement of orders for the long lead items, the forecast
cost of the 1.2 mtpa Stage 3 Process Plant is within 10% of the
capital cost outlined in the Kainantu Integrated Development Plan
(“IDP”) Definitive Feasibility and Preliminary
Economic Assessment cases (see September 12, 2022 press release –
K92 Mining Inc Announces Robust Kainantu Gold Mine Integrated
Development Plan), and importantly approximately 94% of the
forecast capital cost has been fixed. This significantly mitigates
K92’s cost inflation risk for the largest growth capital cost item
for the Stage 3 Expansion (the 1.2 mtpa Stage 3 Process Plant),
representing over half of the forecast growth capital (inclusive of
attributable EPCM costs) as outlined in the IDP. Approximately 6%
of the remaining unfixed price capital cost is for projects led by
K92, including bulk earthworks and long-lead item freight
logistics. The mitigation of the Process Plant’s inflation risk as
noted above has notably strengthened the Company’s self-funding
position for the Stage 3 Expansion.
With the award of the long-lead items and the
EPC contract, commissioning of the 1.2 mtpa Stage 3 Expansion
Process Plant is targeting the end of Q1 2025. The mobilization of
the construction contractor is forecasted for early 2024, with bulk
process plant earthworks to be completed prior. The EPC contract
with GRES is expected to be executed by the end of August. The
multi-year growth capital estimate for the Stage 3 Expansion
project is planned to be provided at the end of the 3rd
Quarter.
John Lewins, K92 Chief Executive Officer and
Director, stated, “The award of the EPC contract for the 1.2 mtpa
Stage 3 Expansion Process Plant is a major milestone and de-risking
event for the Company. Combined with the long-lead items, the
Company has awarded approximately 94% of the process plant capital
cost, our largest growth capital item for the expansion, forecasted
to represent over half of the growth capital, on a fixed price
basis, significantly mitigating potential capital cost increases.
Importantly, the forecasted cost of the process plant has tracked
well with the Integrated Development Plan and the mitigation of the
Process Plant’s capital inflation risk strengthens our position to
self-fund the Stage 3 Expansion.
We are also very pleased to be working with
GRES, a world-class engineering and contracting firm. GRES brings
not only significant expertise in the design and construction of
process plants but also extensive experience in Papua New
Guinea.”
Stage 3 Expansion Activities Update
In addition to the 1.2 mtpa Process Plant,
multiple activities are progressing considerably for the Stage 3
Expansion including, but not limited to:
- Pastefill Plant Front End
Engineering and Design (“FEED”) proceeding this
quarter, with final contract to be awarded in the Q4 2023;
- Tailings dam lift 1C well underway
(60% complete) and targeting completion by end of 2023;
- Tender process underway for various
underground and surface infrastructure packages including vertical
development, power and transportation; and
- Ongoing expansion of accommodation
facilities.
About GR Engineering Services Limited
GRES is a leading Australian engineering
consulting and contracting company, that specializes in providing
fixed price engineering design and construction services to the
global resources and mineral processing industries. GRES has a
proven track record of delivering integrated project solutions in
over 20 countries across all major commodity types, including
extensive experience in Papua New Guinea. As a group, GRES employs
more than 500 professional, technical and support staff throughout
Australia and internationally, in addition to a direct construction
workforce and subcontracted personnel.
Qualified Person
K92 Mine Geology Manager and Mine Exploration
Manager, Andrew Kohler, PGeo, a qualified person under the meaning
of Canadian National Instrument 43-101 – Standards of Disclosure
for Mineral Projects, has reviewed and is responsible for the
technical content of this news release. Data verification by Mr.
Kohler includes significant time onsite reviewing drill core, face
sampling, underground workings, and discussing work programs and
results with geology and mining personnel.
About K92
K92 Mining Inc. is engaged in the production of
gold, copper and silver at 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, is in a strong financial position. A maiden resource
estimate on the Blue Lake porphyry project was completed in August
2022. K92 is operated by a team of mining company professionals
with extensive international mine-building and operational
experience.
On Behalf of the Company,
John Lewins, Chief Executive Officer and
Director
For further information, please contact David
Medilek, P.Eng., CFA, President at +1-604-416-4445
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
INFORMATION: This news release includes certain “forward-looking
information” within the meaning of applicable Canadian securities
legislation (“forward-looking statements”), including, but not
limited to, the impact of global supply chain and financial market
disruptions; projections of future financial and operational
performance; statements with respect to future events or future
performance; production estimates; anticipated operating and
production costs and revenue; estimates of capital expenditures;
future demand for and prices of commodities and currencies;
estimated mine life of our mine; estimated closure and reclamation
costs and statements regarding anticipated exploration,
development, construction, production, permitting and other
activities on the Company’s properties, including: expected gold,
silver and copper production and the Stage 3 Expansion and Stage 4
Expansion. Estimates of mineral reserves and mineral resources are
also forward-looking statements because they constitute
projections, based on certain estimates and assumptions, regarding
the amount of minerals that may be encountered in the future and/or
the anticipated economics of production. All statements in this
Annual Information Form that address events or developments that we
expect to occur in the future are forward-looking statements.
Forward-looking statements are statements that are not historical
facts and are generally, although not always, identified by words
such as “expect”, “plan”, “anticipate”, “project”, “target”,
“potential”, “schedule”, “forecast”, “budget”, “estimate”, “intend”
or “believe” and similar expressions or their negative
connotations, or that events or conditions “will”, “would”, “may”,
“could”, “should” or “might” occur. All such forward-looking
statements are based on the opinions and estimates of management as
of the date such statements are made.
Forward-looking statements are necessarily based
on estimates and assumptions that are inherently subject to known
and unknown risks, uncertainties and other factors, many of which
are beyond our ability to control, that may cause our actual
results, level of activity, performance or achievements to be
materially different from those expressed or implied by such
forward-looking information. Such factors include, without
limitation, Public Health Crises, including the COVID-19 Pandemic;
changes in the price of gold, silver, copper and other metals in
the world markets; fluctuations in the price and availability of
infrastructure and energy and other commodities; fluctuations in
foreign currency exchange rates; volatility in price of our common
shares; inherent risks associated with the mining industry,
including problems related to weather and climate in remote areas
in which certain of the Company’s operations are located; failure
to achieve production, cost and other estimates; risks and
uncertainties associated with exploration and development;
uncertainties relating to estimates of mineral resources including
uncertainty that mineral resources may never be converted into
mineral reserves; the Company’s ability to carry on current and
future operations, including development and exploration
activities; the timing, extent, duration and economic viability of
such operations, including any mineral resources or reserves
identified thereby; the accuracy and reliability of estimates,
projections, forecasts, studies and assessments; the Company’s
ability to meet or achieve estimates, projections and forecasts;
the availability and cost of inputs; the availability and costs of
achieving the Stage 3 Expansion or the Stage 4 Expansion; the
ability of the Company to achieve the inputs the price and market
for outputs, including gold, silver and copper; inability of the
Company to identify appropriate acquisition targets or complete
desirable acquisitions; failures of information systems or
information security threats; political, economic and other risks
associated with the Company’s foreign operations; geopolitical
events and other uncertainties, such as the conflict in Ukraine;
compliance with various laws and regulatory requirements to which
the Company is subject to, including taxation; the ability to
obtain timely financing on reasonable terms when required; the
current and future social, economic and political conditions,
including relationship with the communities in Papua New Guinea and
other jurisdictions it operates; other assumptions and factors
generally associated with the mining industry; and the risks,
uncertainties and other factors referred to in the Company’s Annual
Information Form under the heading “Risk Factors”.
Estimates of mineral resources are also
forward-looking statements because they constitute projections,
based on certain estimates and assumptions, regarding the amount of
minerals that may be encountered in the future and/or the
anticipated economics of production. The estimation of mineral
resources and mineral reserves is inherently uncertain and involves
subjective judgments about many relevant factors. Mineral resources
that are not mineral reserves do not have demonstrated economic
viability. The accuracy of any such estimates is a function of the
quantity and quality of available data, and of the assumptions made
and judgments used in engineering and geological interpretation,
Forward-looking statements are not a guarantee of future
performance, and actual results and future events could materially
differ from those anticipated in such statements. Although we have
attempted to identify important factors that could cause actual
results to differ materially from those contained in the
forward-looking statements, there may be other factors that cause
actual results to differ materially from those that are
anticipated, estimated, or intended. 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
statements, whether as a result of new information, future events
or otherwise, except as required by law.
K92 Mining (TSX:KNT)
Historical Stock Chart
Von Apr 2024 bis Mai 2024
K92 Mining (TSX:KNT)
Historical Stock Chart
Von Mai 2023 bis Mai 2024