CANADIAN miner K92 Mining Inc. has received positive results of the Preliminary Economic Assessment (PEA) update for a proposed US$13.6 million expansion of the Kanaintu gold mine in PNG.
The PEA found that mining production and plant processing capacity could be increased to 400,000 tonnes per annum over a period of approximately 12 months;
The expanded plant would treat 4.9 million tonnes averaging 9.0 g/t Au. 20 g/t Ag and 1.3% Cu, with average production of over 120,000 oz AuEq per annum with cash costs of US$429/oz AuEq and all-in sustaining costs (AISC) of US$615/oz AuEq.
The study also found that during the first five years, average production would be of over 145,000 oz AuEq per annum.K92 CEO John Lewins, said the results of the PEA show a robust project capable of producing almost 650,000 ozs Au and 10,000 tonnes of copper over the next five years and over 1.3 Mozs and 60,000 tonnes of copper over a 13-year life,” Mr Lewins said.
“With cash costs of only US$429/oz AuEq and AISC of US$615/oz AuEq, the PEA indicates a project pre-tax NPV5 of almost US$400 million in the first five years and over US$700 million over the life of the project.
“Importantly, the PEA is not for the proposed development of a new project, but for an expansion of our producing Kainantu operation which produced over 45,000 ozs AuEq in 2018 at a cash cost of below US$600/oz AuEq. The operation is expected to produce in excess of 60,000 ozs AuEq in 2019 assuming no expansion, or over 80,000 ozs AuEq with the expansion envisaged in the PEA.
“The initial capital cost for the expansion is estimated at less than US$14 million and can be met entirely from cash flow from existing production. The Company has already commenced some preparatory work for this expansion, including significant capital expenditure on a gravity circuit for the process plant, a camp expansion and the ordering of additional mobile and fixed plant for the underground mine.
“In addition, K92 has established a strong operations team of mining professionals on the ground in PNG which has seen the Kainantu Mine declare Commercial Production on Kora North on February 1, 2018, just four months after treating the first bulk sample from the deposit. The Company has been enhancing this team to ensure that the necessary personnel are available to take the next step in the development of the Kainantu Mine,” Mr Lewins said