CANADA’S K92 Mining Inc. has commenced mining an initial 2,000 tonne bulk sample from the interpreted Kora vein, near Kainantu, mining along strike in a northerly and southerly direction from the crosscut.

The company reported that approximately 1,000 tonnes have been mined to date from this area and the company is targeting a total of 2,000 tonnes mined by the end of this week. The bulk sample is being mined from a four-metre-by-four-metre horizontal development designed to reflect the production stoping width envisaged in the preliminary economic assessment referred below. It is anticipated that this material will be treated through the process plant next week generating important information on metallurgical performance and providing a bulk concentrate for evaluation by potential offtakers.

K92 previously announced that it has intersected what it interprets as the Kora vein system in a crosscut from the modified Kora exploration drive. The intersection was predicted at this location and comprises a strongly sulphide mineralised quartz vein approximately 2.7 metres wide.

Channel sampling of the north and south faces of the vein system exposed in the crosscut returned an average of 9.89 grams per tonne gold, 46 g/t silver and 2.44 per cent copper over a true width of 2.7 metres. The vein is typical of that seen in Kora drill intercepts and outcrop in displaying multiphase brecciation and layered, bladed quartz as a matrix to clasts.

The cross cut intersection is approximately 10 to 15 metres along strike and to the north of the K92 Kora hole KMDD0009 (see K92 news release dated May 24, 2017, for details including true thicknesses). This hole recorded an intersection of 5.4 metres at 11.68 g/t gold, 25.5 g/t silver and 1.33 per cent copper from 154 metres downhole, interpreted to be the discovery of an extension of the Kora deposit.

The KMDD0009 intersection is approximately 500 metres along strike and 150 metres downdip from the closest point of the currently defined Kora deposit inferred resource and is typical of the Kora/Eutompi mineralization.

The current Kora/Eutompi inferred resource, as defined by previous drilling to date, is 4.36 million tonnes at a grade of 7.3 g/t Au, 35 g/t Ag and 2.23 per cent Cu, or 11.2 g/t gold equivalent (see attached table) and is open for expansion at depth and in both directions along strike.

The PEA estimates for Kora, based on the current resource estimates (4.36 million tonnes of 7.3 g/t Au, 35 g/t Ag and 2.23 per cent Cu):

  • Over a nine-year operating life, the plant would treat 3.2 million tonnes averaging 7.1 g/t Au, 25 g/t Ag and 1.7 per cent Cu (9.3 g/t AuEq (1));
  • This would generate an estimated positive cash flow of $537-million (U.S.) using current metal prices if 15-metre levels are used in mining; if 25-metre levels are used, then net cash flows are estimated as $558-million (U.S.); this cash flow includes conceptual allowances for capital;
  • Production of an estimated average of 108,000 AuEq (1) ounces per annum over an eight-year period from year 2 through to year 9;
  • An estimated pretax net present value (NPV) of $415-million (U.S.) for 25-metre levels, or $397-million (U.S.) for 15-metre levels, using current metal prices, exchange rates and a 5-per-cent discount;
  • An estimated after-tax NPV of $329-million (U.S.) for 25-metre levels, or $316-million (U.S.) for 15-metre levels, using current metal prices, exchange rates and a 5-per-cent discount;
  • Initial capital cost is estimated to be $13.8-million (U.S.), including the $3.3-million (U.S.) for the plant upgrade identified in the Mincore scoping study, but excluding the proposed Kora exploration inclines and diamond drilling; sustaining capital cost is estimated to a further $64-million (U.S.) spent over the life of the Kora mining for 25-metre levels, or $83-million (U.S.) for 15-metre levels;
  • Operating cost per tonne is estimated to be $125 (U.S.) per tonne for 25-metre levels, or $126 (U.S.) per tonne for 15-metre mining levels;
  • Excluding initial capital expenditure of $14-million (U.S.), cash cost is estimated to be $547 (U.S.) per ounce AuEq (inclusive of a 2.5-per-cent net smelter return (NSR) royalty) and all-in sustaining cost (AISC) of $619 (U.S.) per ounce AuEq for 25-metre mining levels, or $549 (U.S.) per ounce (inclusive of a 2.5-per-cent NSR royalty) and AISC of $644 (U.S.) per ounce AuEq for 15-metre mining levels.

Metal prices used were $1,300 per ounce for gold, $18 (U.S.) per ounce for silver and $4,800 per tonne for copper.

Kora remains open for expansion in every direction and strongly mineralised at the extent of all drilling.