K92 Mining delivering to the PNG community
K92 Mining Ltd. the operator of the Kainantu Mine in Eastern Highlands Province, is pleased to provide information on a number of community initiatives and milestones achieved, which are part of its long-term commitment to the prosperity and development of Papua New Guinea.
Review of Memorandum of Agreement (“MOA”): Highly productive discussions were held in mid-July in Kokopo, East New Britain, with all parties to the existing MOA present including Honourable Johnson Tuke, Mining Minister and local Member of Parliament for Kainantu and Honourable Peter Numu, Governor of Eastern Highlands Province. From the weeklong discussions, an agreement in principle was reached, including plans for a 5% interest in Mining Lease 150 to be acquired by local landowners and the Eastern Highlands Provincial Government; additional funding commitments, community infrastructure, and; multiple business development initiatives. Steps to advance the MOA review further are underway.
First Payment of Corporate Tax: The Company achieved a major milestone in July with the payment of the first installment of corporate tax, representing K17.6 million (US$5.1 million). This was made possible by the Company achieving profitable operations at Kainantu in just over two years after achieving commercial production and despite major capital expenditure over this period to significantly expand operations. This achievement is well ahead of schedule and reflects the commitment of the Company to ensuring the sharing of economic benefits from the success of the operation, which also includes payment of a 2% royalty and 0.5% levy to the Mineral Resources Authority.
Local School Fee Reimbursement and Tertiary Scholarships: K92 strongly believes that education is of paramount importance to our local communities. K92 launched its school fee reimbursement program for local schools, with the first school receiving funding in July and continued its scholarship support for 49 tertiary students from local communities.
COVID-19 Assistance Fund: The Company was proud to be able to assist the Provincial Governments of Morobe and Eastern Highlands as well the National Government through the establishment of its K1.5 million Covid-19 Fund. The first monies from this fund have been drawn down by the Morobe Province and further drawdowns from the Eastern Highlands Province and National Government are expected shortly. The Fund is intended to assist the Provinces and National Government to strengthen their efforts in ensuring the health and safety of its people during this challenging period. By all working together K92 strongly believes that we will ultimately prevail over COVID-19.
Infrastructure Work for Local Communities: The construction of the first of three culvert bridges at Aiyamontena on the main Konkua Road from Kainantu to many of our local communities has been completed. The company is now building two other culvert bridges along this road to provide safe and all weather access.
K92 Mining Ltd CEO, John Lewins, in making this announcement said that despite the challenges of operating during the COVID-19 pandemic, K92 remains committed to advance the Kainantu Mine while also continuing to deliver economic benefits to the people of Papua New Guinea. Mr. Lewins also added that the long-term outlook for the Kainantu Mine remains very positive. On July 27, K92 announced the results of its Stage 3 Expansion Preliminary Economic Assessment. The economic study envisages the mine increasing its Stage 2 Expansion throughput of 400,000 tonnes per annum to 1 million tonnes per annum. Mr. Lewins expects Stage 3 to bring substantial economic benefits to Papua New Guinea, including:
significant new capital investment;
increased employment opportunities;
increased metal production for greater royalties;
increased tax revenue, and;
additional business development opportunities.
The Stage 3 Expansion project is advancing towards a Feasibility Study and is expected to be completed in mid-2021. Concurrently, exploration activities are also increasing, focusing on further realizing the multi-generational mineral potential of the region.