K92 Mining Inc. (“K92” or the “Company”) is pleased to provide an update on its operations and Stage 2 Expansion at its producing underground Kainantu Gold Mine (“Kainantu”) in Papua New Guinea.
Since K92 announced the formal decision for the Stage 2 Expansion on March 13, 2019 (see Press Release: K92 Mining to Expand Kainantu Gold Mine, PNG), Kainantu has undergone a significant expansion and modernization of the mining fleet. The fleet expansion includes not only an increase in the quantity of equipment but also a significant increase in equipment size. In late-2019, Kainantu received its latest major equipment delivery including:
- Sandvik LH517i UG LHD loader on site and operational
- Sandvik DL421-15C long hole production drill rig on site and commissioning
- Sandvik DD422i Platinum twin boom development (Autodrill capable) jumbo on site and commissioning
- Minecat integrated emulsion charging unit on site and commissioning
The arrival of the Sandvik long hole production drill is of particular importance as it marks the beginning of implementing lower-cost, high-productivity long hole stoping. The Kora and Kora North deposit is especially amenable to this mining method given its sub-vertical orientation, strike lengths and thickness. Cut and fill has been the mining method at Kainantu since it restarted in October 2016 and will continue to be implemented as well. Long hole drilling will focus on Kora North’s K2 Vein, and the potential for long-holing other veins is an opportunity that is being assessed.
The late-2019 equipment arrivals, are in addition to the other equipment arrivals in 2019 including:
- Materials Handling
- Two Caterpillar AD45B (45 tonne) low profile trucks on site and operational
- One Sandvik LH517i loader on site and operational
- Two Caterpillar loaders (930K & 924K) on site and operational
- One Sandvik EJC 430 (30 tonne) low profile on site and operational
- Drill and Blast
- Two Sandvik twin boom jumbos on site and operational:
- One Sandvik DD420 twin boom jumbo
- One Sandvik DD421 twin boom jumbo
- One Minecat integrated emulsion charging unit on site and operational
- Mine Services
- One Getman Underground Grader on site and operational
The mining fleet is planned to expand further in early 2020, including the acquisition of:
- Third Caterpillar AD45B (45 tonne) low profile truck expected to arrive in Q1 2020
- Third Sandvik LH517i loader with teleremote automine expected to arrive in Q1 2020
- Sandvik DS421 cable bolter expected to arrive in Q2 2020
- Jacon X5 underground cement truck expected to arrive in Q1 2020
- Modular batching plant expected to arrive in Q2 2020
In 2019, Kainantu’s underground mine infrastructure was considerably upgraded and expanded, with several key projects completed including:
- Installation of two 132 kW fans, which replaced the two 55 kW fans in December 2019. This represents a ~3x increase in fan power. To date, primary underground ventilation flow-rates have increased more than 100%, providing an immediate improvement to the mining cycle and operational flexibility.
- Main incline debottlenecking program completed in Q3 2019, with areas of the incline widened and the excavation of three bypass drives to improve traffic management and equipment efficiencies.
- New underground magazine at the 1210 mRL level 90% completed in December 2019 and to be finalized in January 2020.
- Bulk emulsion charging system implemented in Q2 2019, increasing development advance rates by over 0.5m per cut and making Kainantu the first mine in PNG to introduce full underground emulsion charging systems.
- Establishment of seven sublevels between 1150 mRL to 1245 mRL. This represents a considerable increase to mine operational flexibility. In 2018, Kainantu had only three sublevels established and the majority of production came from the 1205 mRL level.
There are several additional projects underway including:
- Construction of equipment maintenance workshop and office at portal, with completion of office expected in Q1 2020 and completion of workshop expected in Q3 2020.
- New high-tech underground communications system including wifi, personnel tracking, advanced remote equipment communications and real-time safety tracking system. Completion expected in Q1 2020.
Kainantu Twin Incline
Early earthworks for the two 3-km twin inclines have commenced with incline development expected to commence in Q1 2020. The design for the twin incline could handle production of up to 2 million tonnes per annum.
Completion of the plant expansion is in the final stages, with commissioning expected to begin in February 2019. The gravity circuit and gold room was installed in Q3 2019 and the new secondary crusher was installed in December 2019. The focus is on the installation of the flotation tanks, with foundations and tanks installed and piping and electrical installations underway.
John Lewins, K92 Chief Executive Officer and Director, stated, “The Company is moving forward rapidly with the Kora Expansion Project expected to significantly increase throughput, achieving 400,000 tpa annualized process plant run-rate by the end of 2020. In Q4 2019, Kainantu achieved record material movement rates of 120,000 t, an increase from under 60,000 in Q1 2019; and is being further bolstered by multiple positive developments including ongoing expansion to the mining fleet; the commencement of higher productivity long hole stoping in Q1 2020, and; the completion of key infrastructure projects in the second half of 2019. The completion of the incline debottlenecking program and the ventilation upgrade, in particular, has had an immediate positive impact on equipment efficiencies and cycle times.
We are also very excited to have commenced the development of our twin incline. The incline is being designed for throughputs of up to 2 million tonnes per annum. This is materially greater than the Stage 2 Expansion throughput of 400,000 tpa, and the decision was based on our view that the mine has further expansion potential as indicated from our exploration results to date.
It is important to highlight that the combination of above-budget production and below-budget cash costs has enabled the Company to fund the expansion as well near-mine and regional exploration from operational cash flow. While 2019 was very much a transformational year for K92, we expect 2020 to build on this and enable our Company to move towards the next level.”