K92 Mining Inc.
TSX VENTURE : KNT
OTCQB : KNTNF

K92 Mining Inc.

May 24, 2017 12:50 ET

K92 Mining Discovers High Grade Extension of Kora Deposit in First Completed Exploration Hole

VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 24, 2017) -

  • 5.4 metres at 11.68 g/t Au, 25.5 g/t Ag and 1.33% Cu including 0.75 metres at 71.94 g/t Au, 168.7 g/t Ag and 8.51% Cu intercepted in first completed exploration hole targeting extensions of the Kora Deposit
  • Intersection reported is above the average grade and thickness for the Kora Deposit and is approximately 500 metres along strike and 150 metres down dip from the closest point of the currently defined Kora Deposit
  • Kora is a large and high grade deposit, open for expansion in every direction and strongly mineralized at the extent of all drilling, with a current Inferred Resource of 4.36 million tonnes of 7.3 g/t Au, 35 g/t Ag and 2.23% Cu

K92 Mining Inc. (TSX VENTURE:KNT)(OTCQB:KNTNF) ("K92" or the "Company") is pleased to announce the first exploration hole drilled in a program designed to test for extensions of the Kora Deposit has intersected high grade gold mineralization.

The intersection is approximately 500 metres along strike and 150 metres down dip from the closest point of the currently defined Kora Deposit Inferred Resource (see Table 3 and Figure 1).

This intersection, recording 5.4 metres @ 11.68 g/t Au, 25.5 g/t Ag and 1.33% Cu and a gold equivalent grade of 14.1 g/t AuEq is typical of the Kora/Eutompi mineralisation. The current Kora/Eutompi Inferred Resource is 4.36 million tonnes at a grade of 7.3 g/t Au, 35 g/t Ag and 2.23% Cu or 11.2 g/t AuEq (see Table 3).

The diamond drill hole, KMDD0009, intersected what the Company interprets as the Kora/Eutompi Vein System 154.1 metres down hole or approximately 130 metres from the Kora drive. Given the results from this hole, the company is now accelerating exploration drilling and has 9 holes planned from the initial drill cuddy, targeting an area of approximately 200 metres along strike by 200 metres on dip.

The interpreted strike length of the Kora/Eutompi Vein System is approximately 1,100 metres at surface, but potentially based on limited drill testing to date, this reduces at depths greater than 200 metres to 500 metres strike length, although it is open for expansion both at depth and along strike in both directions. The deepest intersection in hole BKDD0023 is 900 metres below the surface outcrop of the Vein System and almost 500 metres below the deepest Inferred Resource (see Figure 1). The KMDD0009 intersection is approximately 700 metres below the surface and 500 metres along strike from BKDD0023.

The Kora 5m x 5m drive is designed to provide access to the Kora deposit, where K92 is assessing the commencement of production in First Half 2018, while also providing the Company with the ability to drill test between Irumafimpa and Kora from underground drill cuddies. This area has not been previously tested due to topographical challenges associated with drilling from the surface and is considered highly prospective given the current interpretation of Irumafimpa and Kora being on the same structure.

Table 1 Kainantu Gold Mine - Significant Intercepts from Kora Extension Drilling
True
From To Interval width Gold Cu Silver Gold
Hole_id (m) (m) (m) (m) g/t (%) g/t Eq
KMDD0009 117.80 122.00 4.20 3.74 0.80 0.52 8.08 1.70
including 117.80 118.40 0.60 0.53 2.11 0.03 15.50 2.37
including 121.40 122.00 0.60 0.53 1.58 3.34 31.40 7.10
KMDD0009 154.10 154.80 5.40 4.81 11.68 1.33 25.46 14.06
including 155.25 159.50 4.25 3.79 14.63 1.68 32.32 17.64
including 157.15 159.50 2.35 2.09 23.60 2.90 57.27 28.82
including 157.15 157.90 0.75 0.67 71.94 8.51 168.70 87.25
including 155.25 156.00 0.75 0.67 8.77 0.09 2.60 8.94
Gold equivalents are calculated as AuEq = Au g/t + Cu%*1.52+ Ag g/t*0.0141.
Table 2 Kainantu Gold Mine - Collar Location and Orientation for Kora Extension Drilling
Hole_id
Collar location Collar orientation EOH
depth (m)
Local North Local East mRL Dip Local Azimuth
KMDD0009 59173 29973 1184.1 0 243 210.4

K92 Chief Executive Officer, Ian Stalker, states, "The results from the first hole drilled by K92 on the Kora Vein System and first drilled from underground can only be described as outstanding. Based on the interpretation of our geological team we have an intersection of 5.4 metres at 14.1 g/t AuEq from some 500 metres along strike and 150 metres down dip from the known Kora Inferred Resource. The implication is that there is potential for this high grade Kora Deposit to become much larger. With today's results in hand, we will push the Kora drive at an increased pace and with an expanded drilling program."

In addition to drilling between the Irumafimpa and Kora deposits, K92 will also be drilling down dip from the known resource to infill between the known resource and the single deepest known hole drilled on the deposit BKDD0023, which was drilled by Barrick Gold Corporation. This hole recorded an intersection of 30.6 metres @ 2.0 g/t Au, 4.8 g/t Ag and 1.3% CU, including 6.4 metres @ 5.52 g. /t Au and 8M @ 3.7% Cu from 920.8 metres, approximately 500 metres below the current resource.

Consideration will be given to extending the drive beyond the Mining Lease 150 into the adjacent Exploration Lease (EL 693) which is also held by K92, to allow exploration drilling to be undertaken to potentially extend the known limit of mineralization to the South.

K92 has filed and made available for download on the Company's SEDAR profile, a technical report titled "Independent Technical Report, Mineral Resource Update and Preliminary Economic Assessment ("PEA") of Irumafimpa and Kora Gold Deposits, Kainantu Project, Papua New Guinea" with an effective date of March 2, 2017 (the "Technical Report").

The PEA estimates for Kora, based on the current resource estimates (4.36 million tonnes of 7.3 g/t Au, 35 g/t Ag and 2.23% Cu);

  • Over a 9 year operating life the plant would treat 3.2 million tonnes averaging 7.1 g/t Au, 25 g/t Ag and 1.7% Cu (9.3 g/t AuEq*)
  • this would generate an estimated positive cash flow of US $537 million using current metal prices if 15m levels are used in mining. If 25m levels are used then net cashflows are estimated as US $558 million. This cashflow includes conceptual allowances for capital
  • production of an estimated average of 108,000 AuEq* ozs per annum over an 8 year period from Year 2 through to Year 9
  • An estimated pre-tax NPV of US $415 million for 25m levels; or US $397 million for 15m levels; using current metal prices, exchange rates and a 5% discount
  • an estimated after-tax NPV of US $329 million for 25m levels; or US $316 million for 15m levels; using current metal prices, exchange rates and a 5% discount
  • initial capital cost is estimated to be US $13.8 million, including the US $3.3 million for the plant upgrade identified in the Mincore Scoping Study but excluding the proposed Kora exploration inclines and diamond drilling. Sustaining Capital Cost is estimated to a further US $64 million spent over the life of the Kora mining for 25m levels or US $83 million for 15m levels
  • operating cost per tonne is estimated to be US $125/tonne for 25m levels or US $126 / tonne for 15m mining levels
  • excluding initial capital expenditure of US $14 million, cash cost is estimated to be US $547 / oz AuEq (inclusive of a 2.5% NSR) and AISC of US $619/oz AuEq for 25m mining levels; or US $549/oz (inclusive of a 2.5% NSR) and AISC of US $644/oz AuEq for 15m mining levels

Metal prices used were Au - $1300; Ag - US $18/oz; Cu - US $4800/tonne

*AuEq calculated on above metal prices

Kora remains open for expansion in every direction and strongly mineralized at the extent of all drilling.

The PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the PEA will be realized. The Technical Report contains a full description of all underlying assumptions relating to the PEA. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.

Table 3 Irumafimpa and Kora/Eutompi Resources
Resource by Deposit and Category
Deposit Resource
Category
Tonnes Gold Silver Copper Gold Equivalent
Mt g/t MOz g/t MOz % Mlb g/t MOz
Irumafimpa Indicated 0.56 12.8 0.23 9 0.16 0.28 37 13.4 0.24
Inferred 0.53 10.9 0.19 9 0.16 0.27 74 11.5 0.20
Kora/Eutompi Inferred 4.36 7.3 1.02 35 4.9 2.23 215 11.2 1.57
Total Indicated 0.56 12.8 0.23 9 0.16 0.3 4 13.4 0.24
Total Inferred 4.89 7.7 1.21 32 5.06 2.0 218 11.2 1.76
M in Table is millions. Reported tonnage and grade figures are rounded from raw estimates to reflect the order of accuracy of the estimate. Minor variations may occur during the addition of rounded numbers. Gold equivalents are calculated as AuEq = Au g/t + Cu%*1.52+ Ag g/t*0.0141.

ON BEHALF OF THE COMPANY,

Ian Stalker, Chief Executive Officer and Director

The TSXV has neither approved nor disapproved the contents of this press release.

K92 Exploration Manager, Chris Muller, P.Geo, a qualified person under the meaning of Canadian National Instrument 43-101, has reviewed and is responsible for the technical content of this news release.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain "forward-looking statements" under applicable Canadian securities legislation. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. All statements that address future plans, activities, events or developments that the Company believes, expects or anticipates will or may occur are forward-looking information, including statements regarding the realization of the preliminary economic analysis for the Project, expectations of future cash flows, the proposed plant expansion, potential expansion of resources and the generation of further drilling results which may or may not occur. Forward-looking statements and information contained herein are based on certain factors and assumptions regarding, among other things, the market price of the Company's securities, metal prices, exchange rates, taxation, the estimation, timing and amount of future exploration and development, capital and operating costs, the availability of financing, the receipt of regulatory approvals, environmental risks, title disputes, failure of plant, equipment or processes to operate as anticipated, accidents, labour disputes, claims and limitations on insurance coverage and other risks of the mining industry, changes in national and local government regulation of mining operations, and regulations and other matters.. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

To view Figure 1, photographs and images, please click on the following link: http://media3.marketwire.com/docs/KNT0524.pdf

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