K92 MINING INC. REPORTS STRONG FOURTH QUARTER AND FULL-YEAR 2019 RESULTS AND RECORD ANNUAL PRODUCTION AND COSTS
March 27 2020 - 9:15AM
K92 Mining Inc. (“
K92” or
the “
Company”) (TSXV:
KNT;
OTCQB:
KNTNF) is pleased to announce results
from its financial statements for the three and twelve months ended
December 31, 2019.
Fourth Quarter 2019
Highlights
- Record quarterly cash costs of
US$461 per gold ounce and all-in sustaining costs (AISC) of US$658
per gold ounce.
- Record quarterly gold equivalent
(AuEq) production of 23,646 AuEq ounces, exceeding budget by 30%
and increasing 23% from the third quarter.
- Record quarterly revenue totaling
US$33.4 million, increasing 59% from the third quarter. The
financial results do not include 4,167 oz of gold ounces held in
inventory, which was sold in January due to longer concentrate
drying times.
- Record net income for the three
months ended December 31, 2019 of US$22.5 million or US$0.10 per
share.
- Record operating cash flow (before
working capital adjustments) for the three months ended December
31, 2019 of US$18,061,639 or US$0.09 per share.
- Record quarterly gross margin of
58%.
Full Year 2019 Highlights:
- Record annual cash costs of US$494
per gold ounce and AISC of US$680 per gold ounce. This was
significantly below the upgraded guidance of US$560-$600/oz Au
(originally $580-620/oz Au) and AISC of US$720-760/oz Au
(originally US$780-820/oz Au).
- Record AuEq production of 82,256
AuEq ounces, increasing 91% from 2018. This exceeded the top end of
the upgraded production guidance range of 72,000 to 80,000 AuEq
oz.
- Record annual revenue of US$101.7
million, increasing 91% from 2018.
- Record net income for the twelve
months ended December 31, 2019 of US$32.5 million or US$0.16 per
share.
- Record operating cash flow (before
working capital adjustments) for the twelve months ended December
31, 2019 of US$49,713,822 or US$0.24 per share.
- Record annual gross margin of
53%.
For complete details of the annual audited
consolidated financial statements and associated management's
discussion and analysis, please refer to 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 Fourth Quarter saw K92 achieve multiple
records including production, costs and revenue. This strong
performance resulted in exceeding our upgraded annual guidance by
2,256 oz gold equivalent production and significantly beating
all-in sustaining costs with costs of US$680 per ounce gold versus
the upgraded guidance of US$720-US$760 per ounce gold.
The strong performance through 2019 has also
resulted in a significant strengthening of K92’s financial
position. As at December 31, 2019, the Company held just under
US$22 million in cash, with the only material debt being a US$13.3
million secured facility with Trafigura. Additionally, the vast
majority of our US$15 million Stage 2 expansion capital has already
been spent.”
MINE OPERATING ACTIVITIES
|
Three months endedDecember 31, 2019 |
Twelve months endedDecember 31, 2019 |
Operating
data |
|
|
Head
grade (Au g/t) |
25.2 |
20.8 |
Gold
Recovery (%) |
93.9% |
93.7% |
Gold
ounces produced |
23,096 |
79,838 |
Gold
ounces equivalent produced (1) |
23,646 |
82,256 |
Tonnes of
copper produced |
98 |
432 |
Silver
ounces produced |
5,243 |
22,984 |
|
|
|
Financial
data (in thousands of dollars) |
|
|
Gold
ounces sold |
22,754 |
75,647 |
Revenues
from concentrate sales |
US$33,416 |
US$101,693 |
Mine
operating expenses |
US$10,969 |
US$39,153 |
Depreciation and depletion |
US$2,976 |
US$8,862 |
|
|
|
Statistics (in dollars) |
|
|
Average
realized selling price per ounce, net |
US$1,469 |
US$1,344 |
Cash cost
per ounce |
US$461 |
US$494 |
All-in
sustaining cost per ounce |
US$658 |
US$680 |
Notes:
- Gold equivalent for 2018 and 2019
based on the following metal prices: gold $1,300 per ounce; silver
$16.50 per ounce; and copper $2.90 per pound.
- 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 March 26, 2020, 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.
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.
On Behalf of the Company,
John Lewins, Chief Executive Officer and
Director
For further information, please contact David
Medilek, P.Eng., CFA at +1-604-687-7130.
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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