K92 Mining (TSXV: KNT; US-OTC: KNTNF) intersected 175 metres of 0.28 gram gold per tonne and 0.22% copper from 259 metres downhole at its Blue Lake porphyry prospect, 4 km southwest of its Kora deposit, at the Kainantu gold mine in Papua New Guinea.
The hole ended in mineralization.
The company discovered the prospect in 2017, after a surface mapping and sampling program. It completed a soil grid at 50-metre spacing over a 2-sq.-km area, and collected more than 1,000 samples, revealing a large coincident gold and copper anomaly.
Silicified breccias in outcrop were initially encountered in September 2017, with samples assaying up to 20 grams gold per tonne and 15% copper.
K92 plans to complete a 2,400-metre diamond drill program at the porphyry prospect this year. The program will consist of six 400-metre holes.
In March 2019, the company announced its decision to double capacity at its Kainantu gold mine to 400,000 tonnes a year by the end of the fourth quarter, increasing production to an average of 120,000 gold equivalent oz. annually over the next 13 years.
The company expects the mine will produce 68,000 to 75,000 gold equivalent oz. in 2019, and 115,000-125,000 gold equivalent oz. in 2020.
Capital costs for expansion are estimated at US$15 million over a 12-month period.
A preliminary economic assessment (PEA) of the expansion plan of the operation, completed in January, would produce almost 650,000 oz. gold and 10,000 tonnes of copper over the next five years, and over 1.3 million oz. and 60,000 tonnes of copper over a mine life of 13 years. The study estimated cash costs of US$429 per gold equivalent oz., and all-in sustaining costs (AISCs) of US$615 per gold equivalent ounce.
The Kainantu mine is in the Eastern Highlands province of Papua New Guinea. The property was previously mined by Highlands Pacific and Barrick Gold (TSX: ABX; NYSE: GOLD) in the early 2000s. After being commissioned in 2006, the processing facilities operated for a year before Barrick put them on care and maintenance in December 2008.
The 410-sq.-km property is 180 km west-northwest of Lae.
K92 Mining shares are trading at $1.42 in a 52-week range of 57¢ and $1.57. The company has a $274-million market capitalization.
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