2019 Third Quarter Highlights
- For the three months (brackets nine months) ended
September 30, 2019, K92 produced
18,636 (56,741) oz gold, 209,287 (735,131) lbs copper and 5,284
(17,742) oz silver for a total of 19,170 (58,610) gold equivalent
("AuEq") oz.
- AuEq production for the three months ended September 30, 2019, exceeded budget by 14% and
represents a significant increase of 93% from the same quarter last
year.
- For the three months (brackets nine months), ended
September 30, 2019, K92 reports cash
cost of US$602/oz1 (US$507/oz1) and an All-in Sustaining
Cost ("AISC") per produced ounce of US$709/oz1 (US$638/oz1).
- Based on the Kainantu Gold Mine's strong year-to-date
performance, 2019 annual guidance was upgraded on August 15, 2019 to 72,000-80,000 AuEq oz (was
68,000-75,000 AuEq oz), cash costs of US$560-600/oz Au (was $580-$620/oz Au)
and AISC of US$720-760/oz Au (was
US$780-820/oz Au) on a sales
basis.
- Revenue less Cost of Sales for the three months (brackets
nine months) ended September 30, 2019
was US$8,750,138 (US$34,206,897).
- Adjusted Net Income for the three months (brackets nine
months) ended September 30, 2019 was
US$3,522,0121 (US$18,833,3451) or US$0.021 (US$0.091) per share. The financial
results at September 30, 2019 do not
include revenue from 4,277 oz of gold held in inventory, which was
only sold in October due to a concentrate loading equipment
breakdown.
VANCOUVER, Nov. 12, 2019 /CNW/ - K92 Mining
Inc. ("K92" or the "Company")
(TSXV: KNT; OTCQB: KNTNF) is pleased to
announce results from its financial statements for the three and
nine months ended September 30,
2019.
This third quarter of 2019 saw 32,094 tonnes processed,
production of 19,170 oz AuEq from the Kora North deposit, with Cash
Costs of US$602/gold oz, and AISC per
ounce produced of US$709/gold oz.
Revenue for the third quarter was US$20,989,036 with a gross margin of US$8,750,138 which excluded 4,277 ounces of gold
that was held in inventory as at September
30, 2019 due to a breakdown of a crane that prevented the
ounces to be transported for sale until October 2019.
For complete details, please refer to the consolidated interim
financial statements and associated management's discussion and
analysis, under the Company's profile on SEDAR
(www.sedar.com). All amounts are in U.S. dollars unless
otherwise indicated.
John Lewins, K92 Chief Executive
Officer and Director, stated, "The Third Quarter saw a
substantial strengthening of the financial and commercial position
of the Company and the achievement of a number of major
milestones.
During the quarter, the Company paid out all the outstanding
gold ounces owed to Cartesian Royalty Holdings II ("CRH") and
having previously paid US$3 million
to extinguish the royalty held by CRH on Kora and Irumafimpa, now
has no outstanding liabilities or obligations to CRH. In addition,
the Company paid the sum of US$12.5
million to Barrick Gold Corporation ("Barrick") to eliminate
the contingent payment of up to US$60
million payable under the original share sale agreement
dated June 11, 2014, again leaving no
outstanding liability or obligation to Barrick. As a result, as at
September 30, 2019, the Company held
just under US$18 million in cash,
with the only material debt being a US$15
million secured facility with Trafigura Pte Ltd.
The Company celebrated 1,216 days with no Lost Time Injury
("LTI") at the end of the quarter, a very special and
industry-leading achievement. At the same time, the progress on the
Kainantu Mine Expansion Project has been very pleasing with a
number of significant capital projects completed, including the
incline bypass and debottlenecking, the first phase of the camp
expansion and the installation of the gravity circuit in the plant
which is currently being commissioned.
With production of just under 20,000 oz AuEq for the Third
Quarter and just under 60,000 oz AuEq for the year-to-date and
despite significant disruption associated with the expansion
project, we have confirmed our conviction that we will achieve the
top half of our updated AuEq production guidance, while delivering
all-in sustaining costs at the bottom of or below our
guidance."
MINE OPERATING ACTIVITIES
|
Three months
ended
September 30, 2019
|
Nine months ended
September 30, 2019
|
Operating
data
|
|
|
Head grade (Au
g/t)
|
19.20
|
19.44
|
Gold Recovery
(%)
|
94.1%
|
93.7%
|
Gold ounces
produced
|
18,636
|
56,741
|
Gold ounces
equivalent produced (1)
|
19,170
|
58,610
|
Pounds of copper
produced
|
209,287
|
735,131
|
Silver ounces
produced
|
5,284
|
17,742
|
|
|
|
|
|
|
Financial data (in
thousands of dollars)
|
|
|
Gold ounces
sold
|
15,652
|
52,893
|
Gold ounces
produced
|
18,636
|
56,741
|
Revenues from gold
sales
|
US$20,989
|
US$68,277
|
Mine operating
expenses
|
US$9,670
|
US$28,184
|
Depreciation and
depletion
|
US$2,569
|
US$5,886
|
|
|
|
Statistics (in
dollars)
|
|
|
Average realized
selling price per ounce, net
|
US$1,341
|
US$1,291
|
Cash cost per ounce
(1) sold
|
US$602
|
US$507
|
All-in sustaining
cost per ounce (1) sold
|
US$740
|
US$650
|
All-in sustaining
cost per ounce (1) produced
|
US$709
|
US$638
|
|
Notes:
|
|
|
(1)
|
The Company provides
some non-international financial reporting standard measures
as supplementary information that management believes may be useful
to investors to
explain the Company's financial results. Please refer to
non-IFRS financial
performance measures of the Company's management's discussion and
analysis dated
November 12, 2019, available on SEDAR, for reconciliation of these
measures.
|
K92 has not based its production decisions on mineral reserve
estimates or feasibility studies, and historically such projects
have increased uncertainty and risk of failure. Mineral
resources that are not mineral reserves do not have demonstrated
economic viability.
Review of financial results
Net income
The Company's net loss for the three months ended September 30, 2019, totalled US$389,139, or loss per share of US$0.002 compared with US$1,831,372 or US$0.01 per share for the three months ended
September 30, 2018.
The loss was attributable to the full repayment of gold
deliverable to CRH Funding II Pte Ltd during the quarter. K92
recorded its final amortization of deferred loss (see Note 10 to
the financial statements) of $3,279,469 and its final fair value loss on the
gold purchase agreement of $802,386.
In addition, 4,277 ounces of gold was held in inventory as at
September 30, 2019 due to a breakdown
of a crane that prevented the ounces being transported for sale
until October 2019.
Operating Cash Flow
The Company's operating cash flow for the nine months ended
September 30, 2019 totalled
US$12,910,698 or US$0.06 per share compared with US$11,871,213 or US$0.07 per share for the nine months ended
September 30, 2018. Operating
cash flow before working capital adjustments for the nine months
ended September 30, 2019 totalled
US$31,652,183 or US$0.15 per share compared with US$11,352,456 or US$0.07 per share for the nine months ended
September 30, 2018.
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.
For further information regarding the Kainantu gold mine, please
refer to the technical report dated January
8, 2019, and entitled, "Independent Technical Report,
Mineral Resource Estimate Update and Preliminary Economic
Assessment of Kora North and Kora Gold Deposits, Kainantu Project,
Papua New Guinea," available on
SEDAR.
About K92
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. 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
NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES
PROVIDER (AS THAT TERM IS DEFINED IN POLICIES OF THE TSX VENTURE
EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF
THIS RELEASE.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION:
This news release includes certain "forward-looking statements"
under applicable Canadian securities legislation. Forward-looking
statements are necessarily based upon a number of estimates and
assumptions that, while considered reasonable, are subject to known
and unknown risks, uncertainties, and other factors which may cause
the actual results and future events to differ materially from
those expressed or implied by such forward-looking statements. All
statements that address future plans, activities, events, or
developments that the Company believes, expects or anticipates will
or may occur are forward-looking information, including statements
regarding the realization of the preliminary economic analysis for
the Kainantu Gold Mine, expectations of future cash flows, the
planned plant expansion, production results, cost of sales, sales
of production, potential expansion of resources and the generation
of further drilling results which may or may not occur.
Forward-looking statements and information contained herein are
based on certain factors and assumptions regarding, among other
things, the market price of the Company's securities, metal prices,
exchange rates, taxation, the estimation, timing and amount of
future exploration and development, capital and operating costs,
the availability of financing, the receipt of regulatory approvals,
environmental risks, title disputes, failure of plant, equipment or
processes to operate as anticipated, accidents, labour disputes,
claims and limitations on insurance coverage and other risks of the
mining industry, changes in national and local government
regulation of mining operations in PNG, and regulations and other
matters.. 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.
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SOURCE K92 Mining Inc