K92 reports 10.8M oz gold-equivalent resource for Blue Lake porphyry, near its Kainantu mine 

K92 Mining (TSX: KNT) has released a first resource for its Blue Lake gold porphyry project, only 4 km southwest of its Kainantu mine in Papua New Guinea. 
 
Inferred resources total 10.8 million oz. of gold equivalent at 0.61 gram gold equivalent per tonne, based on 549 million tonnes averaging 0.21 gram gold per tonne, 0.23% copper and 2.42 grams silver. The estimate used a 0.4 gram gold equivalent cut-off grade for 4.7 billion lb. copper at 0.38% copper equivalent.

The resource is based on 26 diamond-drill holes totalling 16,474.8 metres. 

Blue Lake is located in PNG’s Eastern Highlands province close to K92’s producing, high-grade gold-copper Kainantu mine, which is about 212 km northwest by road from the port city of Lae and 380 km north of the capital Port Moresby. The Kainantu region is known for Tier 1 deposits. 

Chris Muller, vice-president exploration said the company will continue exploration at Blue Lake, which was discovered by K92 in 2017. 
 
“[Gold and copper deposits] manifested as quartz stockwork veins and bornite mineralization will be the focus of ongoing drill targeting at Blue Lake. A very expansive silica-clay lithocap connecting Blue Lake with the A1 Prospect is virtually untested by drilling and has the potential to host multiple gold-copper mineralized porphyries,” he said. 
 
John Lewins, K92 CEO and director, added that the company believes Blue Lake is “only the tip of the porphyry iceberg at Kainantu,” with five others near the site and the A1 porphyry as the top priority. 
 
“Soil sampling at A1 is expected to commence imminently, with diamond drilling planned afterwards. Between our intrusion-related gold/copper exploration at Kora, Judd, Kora South and Judd South and our porphyry exploration, we are very excited about the potential at Kainantu,” he said. 
 
In a research note on Wednesday, Andrew Mikitchook of BMO Capital Markets said the resource is large but low-grade and investors will be looking forward to the next phase of exploration when K92 might define high-grade areas inside the resource which could offer visibility into an initial mining target. 
 
“The Blue Lake resource has room to expand along strike and down-plunge, and regional exploration potential remains high,” Mikitchook said. “The deposit is near five other porphyry targets, the highest priority being the A1 target where exploration will commence soon. The company also flagged the area between Blue Lake and A1 as a prospective area that is essentially un-explored.” 
 
K92 bought the 860-sq.-km Kainantu mine from Barrick Gold (TSX: ABX; NYSE: GOLD) in 2014. 
 
K92 shares were trading at $8.74 in Toronto as of mid-morning Wednesday, after opening the day at $8.39. Its shares have traded in a 52-week range of $5.75 and $10.52. It has a market cap of $1.9 billion.