K92 Mining Announces Q1 2025 Financial Results – Record Quarterly Revenue, Net Income, Operating Cash Flow, EBITDA and Net Cash Position

Written by Customer Service on May 12, 2025. Posted in Earnings Releases And Operating Results.

VANCOUVER, British Columbia, May 12, 2025 (GLOBE NEWSWIRE) — K92 Mining Inc. (“K92” or the “Company”) (TSX: KNT; OTCQX: KNTNF) is pleased to announce financial results for the three months ended March 31, 2025.

Production

Strong quarterly production of 47,817 ounces gold equivalent (“AuEq”)⁽¹⁾ or 45,735 oz gold, 1,141,379 lbs copper and 34,085 oz silver, achieving the second highest quarterly production on record. Production exceeded budget and delivered a 74% increase from Q1 2024.
Net of by-product credit basis cash costs of $559/oz gold and all-in sustaining costs (“AISC”) of $1,010/oz gold⁽³⁾ and co-product basis cash costs of $616/oz AuEq and AISC of $1,048/oz AuEq⁽³⁾.
Strong metallurgical recoveries in Q1, of 95.8% for gold and 95.1% for copper, both marking the second highest quarterly recoveries on record. Recoveries compare favorably to the recovery parameters from the Updated Definitive Feasibility Study (“Updated DFS”), of 92.6% and 94.2%, respectively (January 1, 2024 effective date).
Quarterly ore processed of 103,449 tonnes and total ore mined of 104,052 tonnes, with long hole open stoping performing to design, and 2,494 metres of total mine development.
Head grade of 14.9 grams per tonne (“g/t”) AuEq or 14.3 g/t gold, 0.50% copper and 11.1 g/t silver. The AuEq head grade was significantly above budget, driven by higher-grade stopes from both Kora and Judd, and a positive gold grade reconciliation relative to the latest independent mineral resource estimate (effective September 12, 2023). Throughput was optimally reduced to maximize recoveries at the elevated feed grade.

Financials

Record cash, cash equivalent and term deposits totaling $182.1 million⁽⁵⁾, including a record $123.0 million net cash position.
Record quarterly revenue of $144.6 million, an increase of 142% from Q1 2024.
Record quarterly net income of $70.2 million or $0.29 per share, an increase of 2,190% from Q1 2024.
Record operating cash flow (before working capital adjustments) for the three months ended March 31, 2025, of $80.9 million or $0.34 per share, and record earnings before interest, taxes, depreciation and amortization (“EBITDA”) ⁽³⁾ of $107.2 million or $0.45 per share.
Sales of 45,886 oz gold, 1,069,373 lbs copper and 32,439 oz silver. Gold concentrate and doré inventory of 4,425 oz as of March 31, 2025, a decrease of 536 oz over the prior quarter.

Growth

On the Stage 3 and 4 Expansions, 75% of growth capital has been either spent or committed as of March 31, 2025. Construction of the 1.2 million tpa (“tonnes per annum”) Stage 3 Expansion Process Plant is rapidly advancing, and subsequent to quarter end, installation of the grinding circuit (SAG + Ball) was completed, which is the critical path for the mill construction schedule. K92 remains on track to begin commissioning of the Stage 3 Expansion Process Plant in the second half of Q2 2025. For the paste plant, all long lead items have been ordered and the award of the construction contract is well advanced. Underground, the two raise bore rigs are operational, with reaming of the first raise (5 m diameter) completed to upgrade ventilation to the main mine. Development of the first waste/ore pass connecting the main mine to the twin incline to improve productivity in material handling has been completed and is expected to be fully operational in mid-2025.
Reported results from the fourth set of drill holes from the maiden drill program at the Arakompa project, bringing the total number of holes reported for the year to 43. The 13 recent holes confirmed two significant thick high-grade veins, AR1 and AR2, extended the strike 150 metres south, and expanded the bulk zone, now defined over 900 metres of strike length and to a vertical depth of 650 metres. Drill results to date indicate an average bulk zone true thickness of 48 metres, reinforcing Arakompa’s strong bulk mining potential. Exploration activity has ramped up from one rig in Q1 2024 to now up to four rigs operating, with a new compact heli-portable rig scheduled to arrive in mid-2025. This new drill rig will significantly enhance our ability to efficiently target Arakompa’s northern extension, unlocking a new front for exploration. K92 plans to deliver a maiden mineral resource estimate for Arakompa in the second half of the year. Key highlights from the fourth set of drill results include:
- AR1 and AR2 veins have been defined to a depth of over 500 metres and at significant strike lengths of approximately 675 and 775 metres, respectively. Both veins are open in multiple directions, recording a substantial average true thickness from drilling to date, of 3.14 metres for AR1 and 2.94 metres for AR2, with highlights including:
  - KARDD0033: 11.10 m at 5.93 g/t AuEq or 5.37 g/t Au, 8 g/t Ag, 0.29% Cu (AR1 Vein)
  - KARDD0035: 11.10 m at 4.93 g/t AuEq or 4.50 g/t Au, 10 g/t Ag, 0.19% Cu (AR1 Vein)
  - KARDD0042: 2.60 m at 11.91 g/t AuEq or 9.06 g/t Au, 41 g/t Ag, 1.48% Cu (AR1 Vein)
  - KARDD0038: 14.50 m at 17.33 g/t AuEq or 17.17 g/t Au, 4 g/t Ag, 0.07% Cu (AR2 Vein)
  - KARDD0044: 12.00 m at 5.26 g/t AuEq or 5.18 g/t Au, 2 g/t Ag, 0.03% Cu (AR2 Vein)
- Bulk tonnage drilling highlights include:
  - KARDD0038: 65.00 m at 4.15 g/t AuEq or 4.04 g/t Au, 3 g/t Ag, 0.05% Cu
  - KARDD0035: 85.30 m at 1.19 g/t AuEq or 1.00 g/t Au, 4 g/t Ag, 0.08% Cu, including 29.90 m at 2.49 g/t AuEq or 2.09 g/t Au, 7 g/t Ag, 0.20% Cu
  - KARDD0042: 50.40 m at 1.90 g/t AuEq or 1.58 g/t Au, 6 g/t Ag, 0.15% Cu
  - KARDD0033: 57.70 m at 1.44 g/t AuEq or 1.28 g/t Au, 3 g/t Ag, 0.08% Cu
  - KARDD0044: 59.20 m at 1.27 g/t AuEq or 1.21 g/t Au, 2 g/t Ag, 0.02% Cu
  - KARDD0036 (~100 m southern step-out along strike): 47.70 m at 1.02 g/t AuEq or 0.74 g/t Au, 4 g/t Ag, 0.14% Cu
  - KARDD0039 (~150 m southern step-out along strike): 33.50 m at 1.06 g/t AuEq or 0.85 g/t Au, 5 g/t Ag, 0.09% Cu

See the Company’s news release dated February 20, 2025 for additional details.

The Company’s interim consolidated financial statements and associated management’s discussion and analysis for the three months ended March 31, 2025 are available for download on the Company’s website and under the Company’s profile on SEDAR+ (www.sedarplus.ca). All amounts are in U.S. dollars unless otherwise indicated.

See Figure 1: Quarterly Production, Cash Cost and AISC Chart
See Figure 2: Quarterly Total Ore Processed, Development Metres Advanced and Total Mined Material Chart
See Figure 3: Gold and Copper Recoveries Chart

John Lewins, K92 Chief Executive Officer and Director, stated, “K92 has delivered a strong start to 2025, continuing the positive momentum from the second half of 2024, with robust operational and financial results across the board. Q1 marked our second-highest production quarter. Combined with the record gold price environment, it resulted in record revenue, net income, EBITDA, and operating cash flow. This considerably strengthened our balance sheet, ending the quarter with a record $182 million in cash, cash equivalents, and term deposits, including a record net cash position of $123 million, while also investing significant capital into the Stage 3 Expansion.

Importantly, construction of the 1.2 mtpa Stage 3 Expansion Process Plant is progressing well, with the SAG and Ball Mill installations completed in April. Commissioning of the new plant is expected to commence in the coming weeks, marking a major milestone in K92’s transformation to a Tier 1 Mid-Tier Producer. As at the end of April, 77% of Stage 3 Expansion capital is spent or committed, and the process plant is 87% complete.

Exploration activity is also ramping up meaningfully, particularly at Arakompa, where recent drilling recorded multiple significant high-grade intercepts and extended the bulk zone strike length to over 900 metres. With a new heli-portable rig arriving mid-year to target the northern extension, and two additional surface drill rigs recently ordered, we are well positioned to aggressively advance Arakompa and pursue additional regional targets. We look forward to providing further updates as the year progresses.”

Mine Operating Activities

	Three months ended March 31, 2025	Three months ended March 31, 2024
Operating data
Gold head grade (Au g/t)	14.3	6.4
Copper grade (%)	0.50%	0.55%
Gold equivalent head grade (AuEq g/t)	14.9	7.2
Gold recovery (%)	95.8%	90.7%
Copper recovery (%)	95.1%	91.9%
Gold ounces produced	45,735	24,389
Gold ounces equivalent produced ⁽¹⁾⁽³⁾	47,817	27,462
Tonnes of copper produced	518	655
Silver ounces produced	34,085	35,650

Financial data (in thousands of dollars)
Gold ounces sold	45,886	27,996
Revenues from concentrate and doré sales	US$144,601	US$59,798
Mine operating expenses	US$12,149	US$12,465
Other mine expenses	US$15,544	US$20,942
Depreciation and depletion	US$6,444	US$7,482

Statistics (in dollars)
Average realized selling price per ounce, net ⁽²⁾	US$2,739	US$2,016
Cash cost per ounce (net of by-product credit) ⁽³⁾	US$559	US$934
AISC (net of by-product credit) ⁽³⁾	US$1,010	US$1,366
Cash cost per ounce (co-product) ⁽³⁾	US$616	US$1,027
AISC (co-product) ⁽³⁾	US$1,048	US$1,412

Notes:

(1) AuEq in Q1 2025 is calculated based on: gold $2,855 per ounce; silver $31.73 per ounce; and copper $4.26 per pound. AuEq in Q1 2024 is calculated based on: gold $2,070 per ounce; silver $23.34 per ounce; and copper $3.83 per pound.

(2) The average realized selling price per ounce is net of metal payabilities for both concentrate and doré.

(3) The Company provides some non-international financial reporting standard measures as supplementary information that management believes may be useful to investors to explain the Company’s financial results. Please refer to non-IFRS financial performance measures in the Company’s management’s discussion and analysis dated May 11, 2025, available on SEDAR+ and on the Company’s website, for reconciliation of these measures.

(4) AuEq exploration results are calculated using longer-term commodity prices with a copper price of US$4.00/lb, a silver price of US$22.50/oz and a gold price of US$1,750/oz.

(5) During the quarter, the Company drew $20.0 million from the Canadian Credit Facility and repaid the PNG Credit Facility in full. As a result, the Company no longer holds any cash designated as restricted cash for the purposes of security under the Loan with Trafigura.

Mineral resources that are not mineral reserves do not have demonstrated economic viability.

Conference Call and Webcast to Present Results

K92 will host a conference call and webcast to present the 2025 first quarter financial results at 8:30 am (EDT) on Monday, May 12, 2025.

Listeners may access the conference call by dialing toll-free to 1-833-752-3535 within North America or +1-647-846-8278 from international locations.

The conference call will also be broadcast live (webcast) and may be accessed via the following link: https://event.choruscall.com/mediaframe/webcast.html?webcastid=SsGUqtX4

Qualified Person

K92 Mine Geology Manager and Mine Exploration Manager, Mr. Andrew Kohler, PGeo, a qualified person under the meaning of Canadian National Instrument 43-101 – Standards of Disclosure for Mineral Projects, has reviewed and is responsible for the technical content of this news release.

About K92

K92 Mining Inc. is engaged in the production of gold, copper and silver at the Kainantu Gold Mine in the Eastern Highlands province of Papua New Guinea, as well as exploration and development of mineral deposits in the immediate vicinity of the mine. The Company declared commercial production from Kainantu in February 2018, is in a strong financial position, and is working to become a Tier 1 mid-tier producer through ongoing plant expansions. A maiden resource estimate on the Blue Lake copper-gold porphyry project was completed in August 2022. K92 is operated by a team of mining company professionals with extensive international mine-building and operational experience.

On Behalf of the Company,

John Lewins, Chief Executive Officer and Director

For further information, please contact David Medilek, P.Eng., CFA, President and Chief Operating Officer at +1-604-416-4445

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION:
This news release includes certain “forward-looking statements” under applicable Canadian securities legislation. Such forward-looking statements include, without limitation: (i) the results of the Kainantu Mine Definitive Feasibility Study, including the Stage 3 Expansion, a new standalone 1.2 mtpa process plant and supporting infrastructure; (ii) statements regarding the expansion of the mine and development of any of the deposits; (iii) the Kainantu Stage 4 Expansion, operating two standalone process plants, larger surface infrastructure and mining throughputs; and (iv) the potential extended life of the Kainantu Mine.

All statements in this news release that address events or developments that we expect to occur in the future are forward-looking statements. Forward-looking statements are statements that are not historical facts and are generally, although not always, identified by words such as “expect”, “plan”, “anticipate”, “project”, “target”, “potential”, “schedule”, “forecast”, “budget”, “estimate”, “intend” or “believe” and similar expressions or their negative connotations, or that events or conditions “will”, “would”, “may”, “could”, “should” or “might” occur. All such forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Forward-looking statements are necessarily based on estimates and assumptions that are inherently subject to known and unknown risks, uncertainties and other factors, many of which are beyond our ability to control, that may cause our actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information. Such factors include, without limitation, Public Health Crises, including the epidemic or pandemic viruses; changes in the price of gold, silver, copper and other metals in the world markets; fluctuations in the price and availability of infrastructure and energy and other commodities; fluctuations in foreign currency exchange rates; volatility in price of our common shares; inherent risks associated with the mining industry, including problems related to weather and climate in remote areas in which certain of the Company’s operations are located; failure to achieve production, cost and other estimates; risks and uncertainties associated with exploration and development; uncertainties relating to estimates of mineral resources including uncertainty that mineral resources may never be converted into mineral reserves; the Company’s ability to carry on current and future operations, including development and exploration activities at the Arakompa, Kora, Judd and other projects; the timing, extent, duration and economic viability of such operations, including any mineral resources or reserves identified thereby; the accuracy and reliability of estimates, projections, forecasts, studies and assessments; the Company’s ability to meet or achieve estimates, projections and forecasts; the availability and cost of inputs; the availability and costs of achieving the Stage 3 Expansion or the Stage 4 Expansion; the ability of the Company to achieve the inputs the price and market for outputs, including gold, silver and copper; failures of information systems or information security threats; political, economic and other risks associated with the Company’s foreign operations; geopolitical events and other uncertainties, such as the conflicts in Ukraine, Israel and Palestine; compliance with various laws and regulatory requirements to which the Company is subject to, including taxation; the ability to obtain timely financing on reasonable terms when required; the current and future social, economic and political conditions, including relationship with the communities in Papua New Guinea and other jurisdictions it operates; other assumptions and factors generally associated with the mining industry; and the risks, uncertainties and other factors referred to in the Company’s Annual Information Form under the heading “Risk Factors”.

Estimates of mineral resources are also forward-looking statements because they constitute projections, based on certain estimates and assumptions, regarding the amount of minerals that may be encountered in the future and/or the anticipated economics of production. The estimation of mineral resources and mineral reserves is inherently uncertain and involves subjective judgments about many relevant factors. Mineral resources that are not mineral reserves do not have demonstrated economic viability. The accuracy of any such estimates is a function of the quantity and quality of available data, and of the assumptions made and judgments used in engineering and geological interpretation, Forward-looking statements are not a guarantee of future performance, and actual results and future events could materially differ from those anticipated in such statements. Although we have attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking statements, there may be other factors that cause actual results to differ materially from those that are anticipated, estimated, or intended. 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.

Figure 1: Quarterly Production, Cash Cost and AISC Chart

Figure 1 - Quarterly Production, Cash Cost and AISC Chart