K92 Mining (TSX: KNT) (OTCQX: KNTNF) announced production results for Q1, 2023 at its Kainantu Gold Mine in Papua New Guinea on Thursday, showing record setting production despite numerous machine malfunctions.
The processing plant processed ore at a rate of 117,903 tonnes or 1,310 tonnes per day (tpd), which is the company’s third highest quarter on record despite being down for eight days due to unplanned maintenance. The maintenance happened in February. A mill trunnion bearing failed causing two days downtime, and an electrical fire broke out in a cable tray, which damaged cables feeding the wet section of the process plant. This caused six days downtime.
When the plant was operational it ran strongly, setting a new monthly processing record of 1,490 tpd in March, which is 9 per cent greater than stage 2A expansion design throughput of 1,370 tpd. Also, K92 set multiple new daily throughput records during the quarter, including 1,726 tonnes on Feb. 26. Also, 1,772 tonnes on Feb. 28, 1,802 tonnes on March 3 and 1,815 tonnes on March 11.
Overall Q1 production results showed 21,488 ounces gold equivalent (AuEq) or 17,593 ounces gold, 1,651,297 lbs copper and 29,859 ounces silver. Sales during the first quarter were 17,602 ounces gold, 1,538,590 lbs copper and 29,164 ounces silver.
Gold equivalent for Q1 2023 is calculated using gold at the price of $1,890 per ounce, silver at $22.55 per ounce and copper at $4.05 per pound.
These records were broken before the flotation expansion upgrade to the stage 2A expansion plant to be commissioned in Q2. The upgrade is expected to give a boost to metallurgical recoveries and flexibility to increase throughput even further.
In the first quarter, mine performance saw a 18 per cent increase in ore mined to 117,865 tonnes and a 33 per cent increase in total material mined to 277,534 tonnes compared to Q1, 2022. Operations concentrated on Kora’s K1 and K2 veins, as well as Judd’s J1 Vein, resulting in eight levels mined. Kora mining occurred on levels 1130, 1150, 1170, 1205, 1265, and 1285, while Judd mining took place on levels 1285 and 1305.
In Q1, the operation achieved head grades of 5.21 g/t gold, 0.70 per cent copper, and 10.14 g/t silver (6.35 g/t AuEq). Average metallurgical recoveries were 89.1 per cent for gold and 91.3 per cent for copper, with improvements anticipated after the flotation expansion commissioning in Q2 2023. The head grade was significantly impacted in the latter half of the quarter due to challenging ground conditions near the convergence of K1 and K2 veins, affecting production stoping rates and access to higher-grade ore.
K92 Mining Announces Q1 Production Results, Achieving Record Development and Monthly & Daily Mill Tonnes Processed
Click here for the full release: https://t.co/Fr0XaXqRRg$KNT $KNT.TO $KNTNF #MiningNews #Gold #Mining pic.twitter.com/nflE0UKapq
— K92 Mining Inc. (KNT:TSX, KNTNF:OTCQX) (@K92Mining) April 6, 2023
Read more: Calibre Mining reports record gold production in Q1 2023
K92 Q2 production expected to be under budget
Under normal circumstances, mill feed would be supplemented by additional mining fronts during slower mining through impacted areas. However, development rates fell short during several COVID-19 pandemic quarters, leaving alternative mining areas undeveloped. As a result, supplementation from the low-grade stockpile was necessary.
K92 anticipates its Q2 production to be under budget with the second half of 2023 being its strongest for production, and 2023 production in the bottom half of the guidance range. The strength of the second half of 2023 is due to an anticipated increase to the K92’s operational flexibility and stop sequencing.
Additionally, the company experienced a considerable increase in development over the past two quarters.
The company set new quarterly records in Q1 2023 and Q4 2022, with 2,278 m and 2,221 m, respectively. This represents a significant increase compared to previous quarters, with Q1 2023 development up by 48 per cent compared to Q1 2022.
High development rates serve as a positive leading indicator for operational flexibility. It is worth noting that two new sublevels are currently being established, further enhancing the mine’s potential.
Machine operator down a mineshaft. Image via K92 Mining
Recent equipment arrivals include a new loader in Q4 2022, and in Q1 2023, a new jumbo, loader, two integrated tool carriers, Normet explosive charging machine, cement agitator truck, and a new long hole drill rig. The long hole rig is particularly significant as it doubles our long hole drill fleet, potentially increasing drilled stocks, including more stopes as “backups” for mill feed supplementation. Most of this equipment was initially scheduled for delivery in 2022, but experienced considerable delays due to global supply chain issues.
The new equipment serves to both replace existing machinery and expand the fleet. For the remainder of the first half of 2023, two underground trucks and one jumbo are scheduled for delivery. This ongoing equipment expansion and replacement will help improve the overall efficiency and capabilities of the mining operation.
In the second half of the year, K92 plans to access the ore body at depth via the twin incline, introducing a new mining front serviced by our efficient and high-capacity twin incline infrastructure. As of March 31, 2023, the second incline (6 meters x 6.5 meters) reached 2,172 meters and the third incline (5 meters x 5.5 meters) extended to 2,230 meters.
During Q1 2023, development advance was 22 per cent ahead of budget, demonstrating strong progress in the expansion of our mining capabilities. This increased development rate will facilitate continued growth and improved access to the ore body.
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