K92 Mining Inc. has provided its second quarter financial results and has confirmed 2018 production guidance.
For complete details of the unaudited condensed consolidated interim financial statements and associated management’s discussion and analysis, please refer to the company’s filings on SEDAR. All amounts are in U.S. dollars unless otherwise indicated.
Other highlights
- An updated resource for Kora North, comprising a measured resource of 242,900 tonnes at 13.9 grams per tonne gold, 19 g/t silver and 1.0 per cent copper; an indicated resource of 442,800 tonnes at 11.8 g/t Au, 21 g/t Ag and 1.2 per cent Cu, and an inferred resource of 1,084,400 tonnes at 13.6 g/t Au, 15 g/t Ag and 1.0 per cent Cu announced;
- Exploration drilling commenced on Yanobo/Yompassa porphyry target;
- No lost-time injuries recorded in the three months ended June 30, 2018.
John Lewins, K92 chief executive officer and director, states: “The second quarter of 2018 saw a continuation of the buildup in production from the Kora deposit, with 10,800 ounces of gold equivalent oz produced — an increase of over 10 per cent on the first quarter. The quarter also saw the company report a net income in excess of $4-million (U.S.) with a cash cost of $576 (U.S.)/oz and AISC of $784 (U.S.)/oz. The slight increase in the AISC reflecting the increased expenditure on development and equipment necessary to establish the access and infrastructure for the longer-term sustainable mining of the Kora deposit.
“At the end of the quarter a fall of ground (FOG) near muck bay 4 in the incline necessitated the acceleration of the remediation and replacement of ground support in this area. This work had been scheduled to be undertaken over an extended period to spread the resultant disruption to operations over the balance of the year. However, as a result of the FOG, this work has been completed in a single period of approximately three weeks. This work has not changed the production guidance for 2018.”
MINE OPERATING ACTIVITIES
Three months ended Six months ended
June 30, 2018 June 30, 2018
Operating data:
Head grade (Au g/t) 20.40 18.78
Gold recovery (%) 93.50% 92.60%
Gold ounces produced 10,485 19,809
Gold ounces equivalent produced 10,800 20,529
Pounds of copper produced 128,634 294,610
Silver ounces produced 1,671 4,423
Financial data (in thousands of dollars)
Revenues -- gold sales $13,734 $22,260
Mine operating expenses ($6,665) ($9,903)
Depreciation and depletion ($619) ($1,145)
Statistics (in dollars)
Average realized selling price (per ounce) $1,301 $1,311
Cash cost (per ounce) $576 $566
All-in sustaining cost (per ounce) $784 $768
Review of financial results
Net income
The company’s net income for the three-month period ended June 30, 2018, totalled $4,071,596 or income per share of two cents compared with net loss of $1,035,441 or a loss per share of one cent for the three-month period ended June 30, 2017.
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.
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 on site 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 March 2, 2017, and entitled “Independent Technical Report, Mineral Resource Update and Preliminary Economic Assessment of Irumafimpa and Kora Gold Deposits, Kainantu Project, Papua New Guinea,” available on SEDAR.
