K92 Mining Inc. (TSX: KNT) (OTCQX: KNTNF) has hired an engineering firm to design and build a new processing plant in Papua New Guinea for $81 million.
The gold, copper and silver mining company announced the contract with GR Engineering Services Limited (GRES) to build a plant that will be able to process 1.2 million tonnes of material every year.
K92 has also given contracts to other companies to supply important equipment for the plant. The company has set a target to start using the new plant by the end of March 2025 while construction is expected to start work early in 2024.
The company plans to share more details about the cost of this big project at the end of the third quarter of the year.
K92 CEO John Lewins said the award of the engineering, procurement, construction and commissioning (EPC) contract for the 1.2 million-tonnes-per-annum Stage 3 Expansion Process Plant is a major milestone and de-risking event for the company.
“Combined with the long-lead items, the company has awarded approximately 94 per cent of the process plant capital cost, our largest growth capital item for the expansion, forecasted to represent over half of the growth capital, on a fixed price basis, significantly mitigating potential capital cost increases,” he said.
GRES specializes in fixed-price engineering design and construction services to the global resources and mineral processing industries.
The company also has fixed contracts with CITIC HIC Australia Pty Ltd for the SAG and ball mills; Jord International Pty Ltd for the filter press; and Metso Outotec Australia Limited for the tank flotation cells, flash flotation cells and high-rate thickeners.
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In addition to the construction of the 1.2 million-tonnes-per-annum (mtpa) processing plant there are several other activities related to the operations expansion that are making significant progress.
For instance, the front-end engineering and design (FEED) for the pastefill plant is currently underway, with the final contract expected to be awarded in the fourth quarter of 2023.
Work on the tailings dam also progressing well, with 60 per cent of the project already completed and the target for completion set for the end of 2023.
The expansion of accommodation facilities is also in progress, ensuring that there will be sufficient living space for the workforce as the expansion continues.
K92 Mining stock went up by 0.16 per cent on Monday to $6.19 on the Toronto Stock Exchange.
Other companies operating in Papua New Guinea include the giant Barrick Gold Corp. (TSX: ABX) (NYSE: GOLD) which operates the Porgera gold mine in the Enga Province and Newcrest Mining (ASX: NCM) which operates the Lihir gold mine in the New Irland province and the Wafi-Golpu project in Morobe.
