K92 awards US$81M fixed-price contract for Kainantu mill expansion

K92 Mining (TSX: KNT; OTC: KNTNF) says it has derisked the Stage 3 expansion process for the processing plant at the Kainantu gold mine in Papua New Guinea. The lump sum contract, worth US$81 million, was awarded to GR Engineering Services for engineering, procurement, construction, and commissioning (EPC).

The Stage 3 expansion will increase mill throughput to 1.2 million t/y in early 2024 from the current annual capacity of 500,000 tonnes. A fourth expansion stage will be commissioned in 2026, bringing throughput to 1.7 million t/y.

K92 says it has separately awarded all long-lead-time equipment contracts, and they, too, are fixed-price excluding freight. CITIC HIC Australia will deliver the SAG and ball mills, Jord International the filter press, and Metso Australia the tank flotation cells, flash flotation cells and high-rate thickeners.

With the award of the EPC contract and long-lead items, about 94% of the forecast capital cost has been fixed. This significantly mitigates potential capex increases due to inflation, said K92 CEO John Lewins.

Besides the expanded processing plant, the Stage 3 work includes several other activities. The front-end engineering and design (FEED) for the paste fill plant is proceeding, and the final contract is to be awarded in the fourth quarter of this year. The tailings dam lift is 60% complete and should be final by the end of 2023. The tender process is underway for various infrastructure projects including underground development, power, and transportation. Finally, the accommodation facilities are being expanded.

More information is available in the corporate presentation posted on www.K92Mining.com.