Photo credit: K92 Mining Inc
K92 Mining Inc is pleased to provide its operational outlook for 2023. The Company expects gold equivalent production of 120,000-140,000 ounces, while also delivering low-cost production with an estimated cash cost of $620-$680 per ounce gold and AISC of $1,180-$1,300 per ounce gold. Cash cost and AISC per ounce have increased from 2022, driven predominantly by accelerating sustaining capital and development expenditures related to the Stage 3 and Stage 4 Expansions approved on December 6, 2022 (see December 6, 2022 press release: K92 Mining Announces Extension to Mining Lease 150 and Approval of the Kainantu Gold Mine Stage 3 and Stage 4 Expansions ), in addition to sustaining capital items that were planned to arrive in 2022 and are now arriving on-site in 2023 due to supply chain related delays. The Stage 3 and 4 Expansions are expected to transform the Kainantu Gold Mine into a Tier 1 mine, through significantly increased production and economies of scale. The Stage 4 PEA Case outlines peak annual production of 500,192 ounces AuEq in 2027, life of mine average AISC of $687/oz (co-product) or $444/oz net of by-product credits, and self-funding from mine cash flow at $1,600/oz Au.
For exploration, 2023 is forecasted to have a significant increase in both near-mine and regional activities with forecasted expenditures of $13-16 million. Since 2020, the drill fleet has more than doubled to 11 drill rigs currently operating, with the number of drills planned to increase to 13 in 2023. Importantly, surface and underground exploration activities will continue to focus on resource growth at Kora, Judd, Kora South, Judd South, Kora Deeps, Judd Deeps and Northern Deeps vein systems, and the A1 copper-gold porphyry targets.
In terms of growth capital, the tender process commenced in late-2022 for the Stage 3 and 4 Expansions. Upon completion of the tender process, timing of growth capital items that will be incurred this year will be established to provide 2023 guidance.
John Lewins, K92 Chief Executive Officer and Director, stated, “In 2022, Kainantu once again took a major step forward, achieving its sixth consecutive year of production growth, including multiple records such as ore tonnes processed, ore tonnes mined, total tonnes mined and underground development. Importantly, Kainantu finished 2022 strong, achieving multiple quarterly records in the fourth quarter. In 2023, we look to continue to build on this positive operational momentum while also focusing on investing in the long-term future of Kainantu via the Stage 3 and 4 Expansions, which was approved in December 2022 following the renewal of the Mining License for a further 10 years through until the end of 2034. This will transform the Kainantu Gold Mine into a Tier 1 mine.
As part of our guidance, we have incorporated contingency for supply chain related impacts as the global economy recovers from lingering effects of the COVID-19 pandemic environment, particularly in relation to suppliers in Asia. Based on our expectations of supply chain impact timing and stope sequencing, we expect the second half of 2023 to be our strongest in terms of production.
We are also very excited about exploration in 2023, and are pleased to be expanding our activities, through increasing the number of drill rigs from 11 currently operating to 13. The number of highly prospective drill targets at Kainantu is very large and has grown considerably over the past 18 months through surface exploration work. Our surface drilling plans to target Kora South, Judd South, Judd and the A1 Copper-Gold Porphyry Target, with underground drilling targeting, Kora, Judd, Kora South, Judd South, Kora Deeps, Judd Deeps and Northern Deeps. Other targets identified may be drilled in 2023 and we look to provide exploration updates in due course.”
Article courtesy of K92 Mining
