K92 Mining reports early result from Blue Lake prospect in Papua New Guinea
K92 Mining (TSXV: KNT) has intersected 175 metres of 0.28 gram gold per tonne and 0.22% copper from 259 metres downhole at its Blue Lake porphyry prospect, 4 km southwest of its Kora deposit at the Kainantu gold mine in Papua New Guinea.
The hole ended in mineralization.
The company discovered the prospect in 2017 after a surface mapping and sampling program. It completed a soil grid at 50-metre spacing over a 2-sq-km area and collected more than 1,000 samples, revealing a large coincident gold and copper anomaly.
Silicified breccias in outcrop were initially encountered in September 2017, with samples assaying up to 20 grams gold per tonne and 15% copper.
K92 plans to complete a 2,400-metre diamond drill program at the porphyry prospect this year. The program will consist of six 400-metre deep holes.
Earlier this month, the company announced its decision to double capacity at its Kainantu gold mine to 400,000 tonnes a year by the end of the fourth quarter, increasing production to an average of 120,000 ounces of gold-equivalent annually over the next 13 years.
The company expects the mine will produce 68,000 to 75,000 ounces of gold-equivalent this year and 115,000-125,000 ounces of gold-equivalent in 2020.
Capital costs for the expansion are estimated to be $15 million over a 12-month period.
A preliminary economic assessment of the expansion plan completed in January demonstrated the expanded operation would produce almost 650,000 ounces of gold and 10,000 tonnes of copper over the next five years and over 1.3 million ounces and 60,000 tonnes of copper over a mine life of 13 years. The study estimated cash costs of US$429 per gold-equivalent ounce and all-in sustaining costs of US$615 per gold-equivalent ounce.
The Kainantu mine is in the Eastern Highlands province of Papua New Guinea. The property was previously mined by Highlands Pacific and Barrick Gold (TSX: ABX; NYSE: GOLD) in the early 2000s. After being commissioned in 2006, the processing facilities operated for just under a year before Barrick put them on care and maintenance in December 2008.
The 410-sq-km property is about 180 km west-northwest of Lae.
(This article first appeared in The Northern Miner)