K92 Mining Inc. (TSXV:KNT) has multiple, near-term catalysts expected in Q2/20
SmallCapPower | March 3, 2020: In our December 17, 2019 article, 4 Junior Gold Stocks That Could Make Big Moves in 2020, we highlighted K92 Mining Inc. (TSXV:KNT) as one of our top junior gold stock picks for 2020. Since then, the stock has rallied ~36%. Today we highlight why this stock could see further upside from here.
Read: 5 Junior Resource Stocks to Watch During PDAC 2020
K92 Mining announces drill results from Kora. On February 20, 2020, K92 reported assays from 25 surface and underground holes drilled on the Kora North Zone at its Kainantu Gold Mine in Papua New Guinea. Drill results showed an average grade of 6.4 g/t Au + 15.9 g/t Ag + 0.9% Cu (8 g/t Au eq) at 2.4m. With hole KMDD0167 hitting 22.7 g/t Au at 29.7m, it indicates the potential for large-scale mining where the Kora Link vein connects the K1 and K2 veins.
Drill results follows F2020 production guidance. KNT expects to produce between 115k and 125k in gold and gold equivalents, roughly a 68% increase over F2019. Updated guidance is on the back of blockbuster drill results from the Company’s Kora mine, which featured one of the highest-grade drill intersections to date at 13m with 288.73 g/t Au. These were also the third best drill results recorded on the TSX and ASX in F2019.
Upcoming catalysts. There are several catalysts that could lead to share-price appreciation over the next six to nine months. These include a resource expansion to ~5.0M-8.0M oz/Au and a PEA suggesting a ~ 300K oz/Au per year mine (expected Q2/20). The Kainantu Gold project has shown high-grade drill results recently, which could make the Company a takeover target. The resource was originally owned by Barrick but was put into care and maintenance in February 2009 due to market conditions where it remained until 2014, when it was bought by K92. If K92 Mining can demonstrate a meaningful porphyry discovery, we believe it could be a potential takeover target.
Operations
Current mining operations are focused exclusively on the Kora deposit extension, referred to as Kora North (highlighted in orange Figure 2). During 2018, ~70% of production came from the K1 vein and ~30% from the parallel K2 vein, with 70% of production from cut and fill stopping and 30% from development. Mining is mechanized using twin and single booms Jumbos; 517i, 1700 and 1300 LHDs, and; 20, 30, 40 & 45 tonnes trucks. Material is trucked ~6 km from the portal to the Process Plant by 20 tonne road trucks.
About K92 Mining
K92 Mining is focused on exploration and development of mineral deposits located in Papua New Guinea. The Company’s main asset is the Kainantu Gold Project, consisting of two gold deposits. The Kainantu property covers a total area of approximately 410 square kilometers and is located in the Eastern Highlands Province of Papua New Guinea ~180 km west-northwest of Lae.
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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