Tag Archives: Kainantu mine

K92 mine dealing with new commitments in review of agreement

Clarissa Moi | The National aka The Loggers Times | March 14, 2019

THE review of the memorandum of agreement (Moa) between parties to the K92 mining project in Eastern Highlands is expected to be completed by the end of this year, says chief executive and director John Lewins.
He said all the parties wanted a new Moa so the review would include new commitments.
“We’ve had very good support from the Mineral Resource Authority (MRA) in moving to completing the review,” Lewins said.
“At this point in time, we are certainly confident that we will be able to sign an updated memorandum of agreement by the end of this year.”
The agreement was last reviewed and signed between the parties and former operator Barrick (PNG) over 10 years ago.
K92 Mining Inc is the new party.
The other parties are the Bilimoia Interim Landowners Association (Bila), National Government, Eastern Highlands government and affected local level governments.
Mining Minister Johnson Tuke said the ministry had prioritised review of the Moa and anticipated to recommence review by end of this month.
“Memorandum of agreement is the most important vehicle,” he said.
“That is an agreement between the industry and the State.
“Many a time, government as well as industry are passing the buck at each other.
“And who are the recipients? The people. We need to have in place a vetting process.
“I want see many of our memorandums-of-agreements to be captured.
“That has not been captured many times.”
Tuke said those Moas had to be vetted, fully captured and fulfilled by parties.
Meanwhile, Lewins said the memorandum of agreement recognises two landowner groups of the project:

  • Bilimoian landowners – mining lease (ML) 150; and
  • associated infrastructure groups (ownership of areas where mine infrastructure is built- lease for mining purpose (LMP) 78, ME 80 & 81).

Lewins said as part of their focus for this year, they had:

  • established a number of joint-ventures with the community for transport, security, camp and ancillary mobile plan;
  • introduced scholarship programmes for the 2018 academic year for 11 students being expanded this year;
  • a number of other projects like water supply and others; and
  • A big focus on training and employment programmes.
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K92 Mine An Ideal Project

Matthew Vari | Post Courier | March 13, 2019

Kainantu Mine has been a medium sized underground mining project that is not one to hit the headlines in the country.

This project, however, has been described as a mining developer’s dream project, when it comes to developing mines in the country’s vast and hard to reach mineral resource deposits.

K92 Mining CEO John Lewins made the comments following the announcement of the company’s Kainantu Gold mine expansion plans.

“It is from our perspective about as good a place in PNG where you can find a mine.

“It’s got all of the elements that we are looking for in a mine. It has got fantastic geology.

“It has got a very supportive Member; we have got a sealed road that comes up from the port of Lae up the Markham valley, right up to 6 kilometres from the mine.

“We have got grid power from PNG Power from the Yonki Dam, we have got an airstrip right next to it.

“All of the elements that you could possibly want for a mine have all come together in Kainantu.”

He made reference to the history of the mine and the lack of faith put into it by previous operators was indeed a blessing for the K92.

“One thing that it missed we think was somebody who believed in that mine, saw the opportunity in that mine and committed to bring that to the fore,” Mr Lewins said.

The mined was first discovered in 1992 and the construction of the mine started in 2004 to 2005 and commissioned 2006 and 2007.

Previous owners, Highlands Pacific, then sold it to Barrick in 2007 and after a short period of operation Barrick then placed the mine on care and maintenance in early 2009.

“So the mine had never actually achieved its designed production before it was put on care and maintenance.”

“6 or 7 years after it was put on care and maintenance, we acquired the mine from Barrick and we refurbished the plant and rehabilitated the underground and spend about K200 million on the refurbishment and rehabilitation underground and we commenced mining operations on the Irumaphimpa deposit in early 2017″.

Lewins thanked all involved in the project’s development, giving credit to a collective effort from the company, political will, and regulatory oversight.

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Minister blames mining company after Kainantu violence

Minister issues warning to companies after attack

The National aka The Loggers Times | January 24, 2019

Mining Minister Johnson Tuke has urged all exploration and mining firms to conduct due diligence when it comes to affected landowners in project sites.

Tuke issued the warning following an incident at the Kainantu gold mine, Eastern Highlands, where one person was reported killed, 70 houses destroyed and 50 people injured following a conflict last week.

He told The National yesterday: “This is exactly what happens when certain exploration companies do not conduct due diligence when it comes to considering landowners.

“I am telling all companies to behave diligently, to accommodate landowners, communities.

“Companies should be the ones to conduct social mapping.

“This issue (Kainantu gold mine) was provoked by the K92 (K92 Mining Inc).

“There was one death, 60 to 70 houses burnt because of the involvement of the company to engage one faction of the landowners.

“The other faction put up an argument and eventually they ended up fighting.

“A similar case was earlier reported in Southern Highlands when an exploration company failed to address that.

“Now it has happened again in Kainantu.

“It’s not a good thing to see landowners fighting against each other.”

K92 Mining Inc is focused on advancing the Kainantu gold mine.

The Kainantu property covers a total area of approximately 410sqkm and was previously mined by Highlands Pacific and Barrick Gold from 2006-2009.

After being commissioned in 2006, the processing facilities operated for a cumulative total of approximately 7000 hours (292 days) before being put on care and maintenance by Barrick Gold.

Barrick continued this care and maintenance of the mill until the sale of the project to K92.

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Kainantu profitable and will have long mine life, says K92 CEO

A core from Kainantu’s Kora deposit Source: K92 Mining

David James | Business Advantage | 4 December 2018 

Canadian miner K92 has found new ore and is ramping up its operations at its Kainantu mine in Papua New Guinea’s Eastern Highlands Province. In this exclusive interview, Chief Executive John Lewins tells Business Advantage PNG that the company is now profitable and has an anticipated mine life of over 15 years.

New ore discoveries are at the heart of Kainantu’s current health. When the mine was bought by K92 from Barrick Gold in 2015, John Lewins says the focus was initially on restarting mining operations on the Irumafimpa ore body.

The expectation in the previous owners’ original design was that this would yield about 20 grams of gold per tonne, but it was closer to 8.5 grams.

‘It was still pretty good but, when you are expecting 20, it is not so good,’ he tells Business Advantage PNG.

‘It was recognised that this ore body was also relatively difficult mining, in terms of narrow veins, clay and other technical issues.

‘It was therefore the intent of K92 to bring the previously unmined Kora ore body into production.’

Kora and Kora North

In mid-2017, K92 drilled the first diamond drill hole from underground, looking for an extension. Attention then turned to the Kora ore body, closer to the existing underground workings, which proved to be more prospective—and ultimately profitable.

Lewins says the initial discovery hole had yields of 11.7 grams of gold per tonne, 25 grams per tonne of silver and 1.2 per cent copper.

‘We developed out to this extension area, designated “Kora North” and mined a bulk sample which was treated through the existing process plant in October 2018, achieving recoveries of 92 per cent copper and gold from that sample.

‘So, we switched our mining to basically focus on Kora and in January of this year we were 100 per cent Kora.

‘At the end of January, we declared commercial production and made a profit. The first quarter for us was profitable, the second quarter was profitable, and the third quarter is not out yet but it is definitely positive cash flow.

‘So, for the year we will make money.’

Costs

Lewins says K92’s cash costs are ‘running at around’ US$560 an ounce (the current gold price is US$1213 an ounce).

‘All in sustaining costs, bearing in mind that we are developing a brand new mine effectively underground below US$800 an ounce.

‘We are giving (production) guidance this year of 42,000-46,000 oz. We will make that.‘

Lewins says the original Kora deposit contained an estimated resource of at least 1.65 million ounces of gold, and an additional Kora North is expected to be over one million ounces.

‘We are looking at a 15-to-20 year life for an expanded operation, treating 400,000 tonnes per annum and producing over 100,000 ounces per annum. And (production of) 400,000 ounces per annum, not the current 200,000 per annum.

‘We are planning an expansion that will cost about US$15 million to double throughput,’ says Lewins.

‘We are continuing to drill the Kora and Kora North deposits from underground, with a target of doubling the resource. All of this has been underground drilling.

‘We have a third rig coming in to extend the drilling.’

Lewins says the company will conduct a preliminary economic assessment by the third quarter of next year, and expects to have an estimated total resource of five million ounces (including Irumafimpa). K92 is also planning further exploration of the Kora ore body outside the existing mine lease.

Share price

Lewins says K92’s share price has doubled in the past year.

‘A company like ourselves, having five million ounces at relatively high grades at 12 grams per tonne—and in production in a market where quality assets are in short supply—is an attractive investment.

‘From a shareholder perspective that is positive. We have started delivering.’

K92’s share register is 45 per cent institutional investors and 40-45 per cent retail investors, mainly out of Canada.

Lewins acknowledges PNG is a challenging environment.

‘We are in a better position than most. We have got grid power, for instance.

‘We have got a sealed road, a highway which runs from the port of Lae to about 8 kilometres from the site.

‘We have a government airstrip right next to the road as well. We have good infrastructure.’

Up in smoke?

One challenge is entirely unforeseen, however.

‘Something that is totally out of left field is the legalisation of marijuana,’ says Lewins.

‘This has created a massive marijuana boom in Canada.

‘Hundreds of millions of dollars are going into investment in marijuana and that money is coming out of the mining sector.

‘If you look at the TSX and the ASX (Australian Securities Exchange) over the last 18 months; for the first time in living memory, the ASX has actually been outperforming the TSX in terms of the junior mining sector.’

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Tuke Calls For Transparency On K92 Deal

Mining Minister Johnson Tuke

Post Courier | August 22, 2018

Mining Minister Johnson Tuke has appealed to parties to the K92 mining project memorandum of agreement to be transparent when negotiating benefits of the project.

The Minister was speaking to parties on Tuesday during the review of the MOA which is taking place in Lae this week.

“Mi laikim state imas tok tru, mi laikim line agencies blo gavman mas tok tru, kampani mas tok tru na ol landowners tu mas tok tru (I want the State to tell the truth, government line agencies to tell the truth, the developer company must tell the truth, and the landowners must tell the truth).”

Tuke said it was important to be upfront on issues and in that way, all stakeholders could achieve their objectives in a timely manner.

He urged all parties to have understanding and respect for each other during the negotiations.

The Minister raised issues with the fact that Kainantu District has not seen development as a result of the mine’s operations so far.

Mr Tuke said as long as he is the Minister for Mining, he would try to ensure that all parties, especially landowners of all mines in the country, receive benefits through their various MOA.

He said the National Government has reviewed the Mining Act 1992 in efforts to better the way government regulates the mining industry in the country.

“This is part of the government’s intervention to ensure that the country’s aspirations and interests are captured sufficiently,” Mr Tuke said.

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Kainantu Mining Put On Notice By Landowners

Post Courier | March 28, 2018

Landowners from the K92 Mining Limited in Kainantu, Eastern Highlands province have raised concerns over 18 years of being left out of spin-off benefits from the Kainantu mine operation.

The groups from Kainantu in Eastern Highlands and Markham in Morobe are calling on the operator to back pay them over no spin-off.

Pomasi and Unantu groups from Kainantu and the Watarais and Marawasa groups in Markham said since the establishment of the mine, they have not been part of any spin-off activities.

Chairman of associate infrastructure group Aigdevco Limited, Sonny Maraba, said the groups have missed out on royalties, enclave allowances and employment from the mining operations.

“The four mentioned groups and five others have been left out from the development stages to the construction and actual progress of the mine and not in any way received royalty payments, and compensation payment for the damage done to the environment and even have not been given spin-offs,” Mr Maraba said.

He said the mine commenced operation in 2000 and since then the groups have not received anything.

“The Markham landowner groups have been ignored for 18 years now,” he said.

He added that the groups want the mining operators to calculate 18 years of no spin-off benefit and pay the agreed 30 percent benefit.

“We have been spectators to the benefits for so long and as the new chairman I want to make it happen for my people,” he said.

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K92 first production ready for shipment

The National aka The Loggers Times | November 16, 2017

THE K92 Mining Inc says the first concentrate from the Kora production in Eastern Highlands has been transported to Lae to be shipped overseas.
This is pursuant to a new off-take agreement, with the provisional payment (90 per cent of total value of shipment) received by K92.
According to the company, the new off-take agreement included a provision for a funding of US$15 million (K47.04 million) in non-dilutive financing from one of the world’s largest commodity trading groups, to secure the long-term off-take for production from the Kora Deposit.
The financing is subject to a number of closing conditions, which the two parties have started pursuing.
Prior to the removing of these conditions, K92 will ship the Kora concentrate under an agreement with interim provisions facilitating the same.
K92 expects to use the US$15m to target an expansion of the mining and processing rate to a level envisioned in the preliminary economic assessment.
K92 chief executive John Lewins said the off-take agreement “allows for immediate shipping of concentrate that K92 is producing from Kora”.
“At the same time, it provides a potential path for a non-dilutive financing to target significant production expansion,” he said.
“The off-taker is one of the world’s largest commodity traders, is very active in Papua New Guinea and familiar with K92 and our operations.
“The discovery of the Kora extension area adjacent to our current mining area has been game-changing for the company and we are continuing to drill and mine in this area.”
K92 Mining has begun gold production from the Irumafimpa gold deposit, which together with the Kora gold deposit, is part of the company’s Kainantu gold project located in the Eastern Highlands.
Kora remains open for expansion in every direction and strongly mineralised at the extent of all drilling.

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