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K92 Mining Has a K50M Budget for Exploration in 2021
by PNG Business News - March 11, 2021
In 2021, K92 Mining will invest K50 million in exploration.
Exploration dollars are critical, according to John Lewins, chief executive officer and director of K92 Mine, because they extend the project if good prospects are discovered.
The mine was re-commissioned in 2017 and announced commercial production at the start of 2018, according to Lewins.
So, it's been running as a commercial profitable mine for three years and has turned a profit.
“What’s important for Papua New Guinea is that the recognition of the potential that we got here in PNG,” he said. “And that, I think it’s been forgotten to a certain extent over the last few years and we have seen exploration expenditure dropping over several years.”
Lewins also said that they would like to see that start up again because there will be no more mines unless there are more explorations .“So exploration dollars are important,” he said. “This year, 25 per cent of all exploration dollars come from our company. I believe, we are the single largest company in terms of our expenditure in exploration and that’s our commitment.”
When the company's explorations linked the kora North deposit to its main ore body, it reached pay dirt and turned around its fortunes.
He said, “Its only Kora North but we are busy looking for a number of other deposits and we are not focusing just on Kora and the mine. But we got over 700 square kilometres of ground to run and our budget is K50m on explorations. We are spending a lot of money on exploration and that’s the profit that we made or money that we made is put back to look into it or production in Papua New Guinea”.
PNG Business News - March 23, 2021
Lewins: Weakening gold price to Impact K92 Operations
According to K92 Mine Inc, the falling worldwide gold price means that mining companies in the country will reduce non-essential spending, which would have an effect on suppliers. John Lewins, the company's CEO, was responding to questions about existing gold prices. He added that the gold price began the year at around US$1,950 per ounce (K6,694.49/oz) and has since declined to around US$1,730 per ounce (K5,939.21/oz). According to him, mines may postpone capital and expansion projects, reducing jobs and production growth. “Any movement in the gold price affects the gold mines in PNG,” Lewins said. “The average ‘all-in sustaining cost’ of production for PNG mines is around US$1,000/oz (K3,433.07/oz) to US$1,100/oz (K3,776.38/oz), so at current prices, all the mines in PNG are still operating with good margins. Lower margins, mean lower profits, less tax to Government, less money spent on exploration and capital and lower royalty payments to communities and Government. The other point to note is that the Australian dollar has strengthened against the US dollar, so the gold price in Australian dollars has dropped even more, from AU$2,700 (K7,177.11) late last year to currently AU$2,100 (K5,582.20). Given that a lot of the costs incurred by PNG gold mines are in Australian dollars, this is probably more important than the US dollar price movement.” According to Lewins, the gold price will remain under pressure for the first half of this year, but will possibly recover in the second half. “Much depends on the performance of the US economy and others, following the shutdown caused by the Covid-19 pandemic,” he said. The price of gold is expected to fall in 2021 for a variety of reasons: Central banks' physical demand for gold has declined; Jewellery sales have been underwhelming as the covid-19 pandemic has stifled customer activity; Investors' "lack of interest" in buying gold has also been a source of market stress; Gold has been sold by a number of hedge funds; and The US dollar has strengthened, implying a drop in gold prices; and, growing interest in alternative investments such as Bitcoin. “It should be remembered that the gold price is still at a very high price relative to the average price over the last five years,” Lewins said.
PNG Business News - March 31, 2021
K92 Mining Records 56% Increase in Revenue at Kainantu, Thanks to Record Production
K92 Mining recently revealed that its Kainantu gold mine in Papua New Guinea's Eastern Highlands province produced a record annual gold-equivalent output of 98,872 oz. The gold equivalent volume is 95,109 oz of gold, 1,853,078 lbs of copper, and 36,067 oz of silver, reflecting a 20 per cent growth in AuEq from the previous year. Cash costs of US$651/oz gold and AISC of US$782/oz gold were obtained by the company. The firm reported that its annual revenue of US$159.1 million were up 56 per cent from the previous year. EBITDA was US$79.6 million, or US$0.37 per share, and operating cash flow was US$76.5 million, or US$0.35 per share. The company's net income was $42.0 million, or $0.19 per share. In addition, following the lifting of the State of Emergency in June 2020, K92 successfully commissioned Stage 2 Plant Extension, doubling throughput capacity to 400,000 tonnes per year and ongoing construction of the twin incline. K92 Mining is involved in the extraction of gold, copper, and silver from the Kora deposit at the Kainantu gold mine in Papua New Guinea's Eastern Highlands province, as well as the discovery and construction of mineral resources near the mine. In February 2018, the company announced commercial production from Kainantu and is in a good financial position. John Lewins, K92 Chief Executive Officer and Director stated, “2020 represented another transformational year for K92. In terms of operations, Kainantu delivered record throughput, production and development, and finished the year particularly strong, with multiple quarterly records achieved in the fourth quarter. In the third quarter, K92 achieved two major growth milestones: the completion of the Stage 2 Plant Expansion commissioning, and; the Stage 3 Expansion PEA study. The Stage 2 Plant Expansion, has already delivered a notable step-change in terms of the capabilities of the operation, doubling throughput capacity from 200,000 tpa (~550 tpd) to 400,000 tpa (~1,100 tpd). The Stage 3 Expansion PEA has outlined a Tier 1 Asset, expanding to 1 mtpa throughput with run-rate production of ~318kozpa AuEq, LOM average AISC of $362/oz Au and capital costs funded from mine cash flow at $1,500/oz.” He added, “On exploration, Kainantu doubled the number of drill rigs to 10, providing a significant boost to not only the rate of drilling but our capacity to drill multiple targets concurrently. In the second half of the year, this resulted in high-grade mineralization recorded at both the underexplored Karempe and Judd vein systems. The results from Judd are particularly encouraging with JDD0006 recording 7.25 m at 256.09 g/t Au, 113 g/t Ag and 0.42 % Cu (258.01 g/t AuEq, 5.30m true width) on the J1 vein (see November 9, 2020 press release), representing one of the highest-grade intersections drilled by K92. Importantly, underground development has supported the Judd drilling results, with the latest 65-metre development extension on the Judd 1235 Level recording an average 3.8 metres vein thickness at 18.70 g/t AuEq (17.13 g/t Au, 0.82% Cu and 37 g/t Ag) (see January 26, 2021 press release). Exploration results have increased our conviction for a higher throughput rate for the Stage 3 Expansion Definitive Feasibility Study and resulted in more drill rigs being added through 2021. Lastly, I would like to highlight that this transformational year was achieved in one of the most challenging environments globally due to the COVID-19 pandemic. The dedication and resourcefulness of our workforce have been exemplary, and the support of the government has also been a major factor in our success.”
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PNG Business News - May 13, 2021
National Airport Corporation to Focus on Redevelopment Projects
The National Airports Corporation plans to devote more resources to the redevelopment projects at Kavieng, Tari, and Mendi airports as part of the Civil Aviation Growth Investment Program. With the exception of three airports, all airports under the CADIP program are on a budget, according to NAC acting managing director Rex Kiponge. Apart from Jackson Airport in Port Moresby, Kiponge claims that the majority of the country's airports are unable to handle the newly launched F100 aircraft. “The introduction of F100 aircraft has deteriorated the condition of runways in PNG. Under CADIP, fencing and runway length deficiencies will now meet the F100 and ICAO requirements. CADIP was implemented to meet the minimum PNG Civil Aviation Rules (CARS) and the International Civil Aviation Organisation (ICAO) standards and recommended practices in all the 22 airports in the country. “The F100 aircraft require a minimum runway length of 1900 metres –– only three airports meet this requirement.” The F100 will be able to land at 12 airports thanks to a CADIP runway length upgrade. Port Moresby is now the only province that meets the operating criteria for F100 planes. Standby control, security fencing, apron parking, runway, taxiway, and apron strength, and a runway length suitable for takeoff at maximum payload are all part of the 22 airport upgrades. Kiponge recently visited the three airports and expressed his satisfaction with the development. Contractors have already finished construction on the security fence at Kavieng Airport, and work on the runway extension is going well. Once the runway extension is complete, the contractors can begin work on the terminal. He mentioned that the runway extension at Tari Airport is complete, and contractors are currently working on the apron, which will be finished until the runway extension is completed. Owing to the contractors' inability to obtain materials for the runway at Mendi Airport, NAC has requested that they redo the runway before moving on to the other areas. “Despite whatever issues within NAC, I will ensure that all 22 NAC’s airports undergoing upgrading will be completed and I will put in a lot of efforts and focus to makes certain work is done well and completed,” Kiponge said.
PNG Business News - May 13, 2021
Govt to Focus on Downstream Processing
The government is putting a lot of effort into encouraging downstream production in the region. This was said by Prime Minister James Marape during a visit to Paradise Foods Company Limited. “We are focused on downstream processing as far as going forward is concerned –– instead of exporting raw products,” said Marape. “We want to go downstream to satisfy our local markets as well as export to economies around us.” PNG is fortunate, according to Marape, to have access to 60% of the world's gross domestic product (GDP) through the APEC network. “As well as, not just the APEC network, but in the vicinity of PNG’s accessibility to markets, we have over 4 billion people from the Pacific, Northern Asia, Western Asia and Northeast Asia put together. “So to satisfy our local markets in PNG for our 8 million-plus people, as well as the opportunity of exporting to markets closest to us like our neighbouring countries.” Marape has stated that he supports downstream production and marketing of PNG's natural resources both locally and internationally. “Today, I am privileged to visit an industry that has been at work since 1945, and I’d like to thank Paradise Foods Company Limited for doing a wonderful job and feeding our country.” Marape promised that the government will help the industry and market.
PNG Business News - May 13, 2021
Mayur Discusses Power Plant Project in Lae
Mayur Resources Ltd says it has formed an ongoing relationship with the State negotiation team to discuss and finalize a power purchase agreement (PPA) for its planned power plant in Lae, Morobe. The organization was waiting for the State negotiation team's makeup to be finalized and signed off, according to managing director Paul Mulder. After that, he said, the Enviro Energy Park (EEP) project's final discussions and negotiations will begin. Mayur's planned 52.5-megawatt EEP project is an advanced power plant that will produce more efficient and cheaper electricity than current solutions by combining conventional thermal energy (sourced from the company's wholly-owned Depot Creek project), solar, and biomass woodchip, while also supplying co-generated steam to nearby industrial users who were burning diesel for their steam needs. The EEP, which is near Lae, will also have steam as a by-product for local industrial uses, and potential dual fuel systems will allow for the use of diesel. “The energy park would balance the need for new environmentally friendly technologies and reliable energy,” Mulder said.