Part of the Stock Digest group of websites: Visit Tech Stock Digest  

Kainantu profitable and will have long mine life, says K92 CEO

Canadian miner K92 has found new ore and is ramping up its operations at its Kainantu mine in Papua New Guinea’s Eastern Highlands Province. In this exclusive interview, Chief Executive John Lewins tells Business Advantage PNG that the company is now profitable and has an anticipated mine life of over 15 years.

New ore discoveries are at the heart of Kainantu’s current health. When the mine was bought by K92 from Barrick Gold in 2015, John Lewins says the focus was initially on restarting mining operations on the Irumafimpa ore body.

K92’s John Lewins. Source: BAI

The expectation in the previous owners’ original design was that this would yield about 20 grams of gold per tonne, but it was closer to 8.5 grams.

‘It was still pretty good but, when you are expecting 20, it is not so good,’ he tells Business Advantage PNG.

‘It was recognised that this ore body was also relatively difficult mining, in terms of narrow veins, clay and other technical issues.

‘It was therefore the intent of K92 to bring the previously unmined Kora ore body into production.’

Kora and Kora North

In mid-2017, K92 drilled the first diamond drill hole from underground, looking for an extension. Attention then turned to the Kora ore body, closer to the existing underground workings, which proved to be more prospective—and ultimately profitable.

Lewins says the initial discovery hole had yields of 11.7 grams of gold per tonne, 25 grams per tonne of silver and 1.2 per cent copper.

‘We developed out to this extension area, designated “Kora North” and mined a bulk sample which was treated through the existing process plant in October 2018, achieving recoveries of 92 per cent copper and gold from that sample.

‘So, we switched our mining to basically focus on Kora and in January of this year we were 100 per cent Kora.

‘At the end of January, we declared commercial production and made a profit. The first quarter for us was profitable, the second quarter was profitable, and the third quarter is not out yet but it is definitely positive cash flow.

‘So, for the year we will make money.’

Costs

Lewins says K92’s cash costs are ‘running at around’ US$560 an ounce (the current gold price is US$1213 an ounce).

‘All in sustaining costs, bearing in mind that we are developing a brand new mine effectively underground below US$800 an ounce.

‘We are giving (production) guidance this year of 42,000-46,000 oz. We will make that.‘

Click here to continue reading...

Subscribe to the RSD email list and get the latest resource stock activity directly to your inbox, for free.

MARKET SUMMARY

INDICES

Name Last Change
DOW 23675.60 0.35%
S&P 500 2546.16 0.01%
NASDAQ 6783.91 0.44%
TSX 14416.89 0.38%
TSX-V 543.19 0.00%

Resource Commodities

Name Last Change
Gold 1251.12 0.17%
Silver 14.69 0.41%
Copper 2.67 0.090
Platinum 793.99 0.08%
Oil 46.24 7.87%
Natural Gas 3.84 8.08%
Uranium 28.63 0.00%
Zinc 1.17 0.00%

@RSDigest ON TWITTER

Part of the Stock Digest family of websites
Small Cap Stock Digest