Since the discovery of Kora North in May 2017, K92 Mining has hit the ground running and it’s not stopping. There is expansion potential for gold and copper surrounding its flagship asset in Papua New Guinea.
K92 Mining (TSX—KNT)
K92 Mining is a producing gold company focused on its Kainantu gold mine located in the Eastern Highlands province of Papua New Guinea. The Kainantu project (acquired from Barrick Gold Corp.) – is the land where Kora North sits.
Discovered in May 2017, commercial production commenced in February 2019. Since its discovery, its stock value has soared well over 1,000 per cent.
K92 Mining is working towards increasing its mill throughput as part of its “Stage 2B” mine expansion to 500,000 tonnes per annum later this quarter, Haywood Securities’ analysts Geordie Mark and Shubham Trehan report. Encouragingly, the plant modestly beat the analysts’ throughput expectations of 99,000 tonnes with 99,600 tonnes processed. Its mining ventures delivered 100,100 tonnes for the quarter.
While Kora is the primary focus, the company also has an extensive land package that holds significant potential for both epithermal gold and porphyry-style gold-copper mineralization.
This includes the adjacent Judd vein and the Blue Lake porphyry project (a 1.5-kilometre-wide soil geochemical anomaly with several holes intersecting broad zones of low- to moderate-grade copper-gold mineralization). The discovery of a large-scale porphyry would likely garner significant interest from copper producers, the analysts highlight.
They add first-quarter 2022 operations show its plant uprate is ongoing, but production quarter-over-quarter is lower due to the timing of its stope grade. K92 Mining reported production of 28,200 GEO (gold equivalent ounces). Specifically, it was 24,200 ounces of gold and 1.52 million pounds of copper making up the total GEO.
This was lower than the analysts’ production forecast of 31,000 GEO for the period. On the plus side, demand was strong as sales exceeded production at 29,700 GEO, or about 26,500 ounces gold, and 1.25 million pounds of copper.
Messrs. Mark and Trehan reiterate a “buy” recommendation and target price of $14 per share. They retain a “high” risk rating, cautioning there is no assurance that exploration expenditures made by the company will result in new discoveries and/or resource expansion.
But if a discovery is made nearby to Kora North, then expansion would allow K92 Mining to squeeze more gold and copper from its flagship operations.
This is an edited version of an article that was originally published for subscribers in the May 6, 2022, issue of Investor’s Digest of Canada. You can profit from the award-winning advice subscribers receive regularly in Investor’s Digest of Canada.
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Investor's Digest of Canada •6/14/22 •