K92 Mining (KNT.V) has released the results of an initial 800 tonne sample from the Kora vein which was been treated at the Kainantu processing plant. According to the company, the average grade of the rock was 7.7 g/t gold and 0.91% copper, whilst the recovery rates were 92.4% for the gold and 95.6% for the copper. This resulted in the production of approximately 34 tonnes of concentrate with an average grade of 163 g/t gold and 20% copper containing 177 ounces gold and almost 7 tonnes of copper (approximately 15,000 pounds).
These first 800 tonnes are part of a larger 2,000 tonne bulk sample mined from a 4 by 4 meter horizontal development stope which is the approximate mining width used in the preliminary economic assessment. More importantly, K92 confirms the average grade of the treated material is very consistent with the expected average grade.
K92 has encountered its fair share of bad luck in the past few months with disappointing production results, a local riot which resulted in damage to the underground equipment used at the Irumafimpa vein and a management shuffle as CEO Ian Stalker left the company. The results of this bulk sample is the first positive news in quite a while, and it confirms the potential of the Kora zone (Irumafimpa has always been considered the ‘warm up’ zone.
As a reminder, the company’s official PEA expected the company to mine 3.2 million tonnes over a 9 year mine life resulting in an average production of 108,000 gold-equivalent ounces and an after-tax NPV5% of $329M using $1300 gold and a copper price of $2.18 per pound. As the copper price is now trading higher, the NPV of the project will very likely increase as well (although we would prefer to use a higher discount rate than 5%).
Go to K92’s website
The author has a long position in K92 Mining. Please read the disclaimer
