K92 Mining

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Oh OK, ladies and gentlemen, for our next presenter we have Mr. John Lewins, CEO and director of K92 Mining Kento. Thank you. Well, thanks for that and good afternoon everyone, So K92 mining, Growing production transform transformative discoveries which I hope you'll you'll get by the end of it. as always, forward-looking cautionary statements, you'll be. You'll be distributed a questionnaire at the end of it to make sure that you've read all that so that we cover ourselves with the TSX. So canine 2 mining, very much a unique tier one opportunity. Why? Rapid near-term growth to tier one mid-tier producer towards 500,000 ounces. We commissioned our stage 3 expansion which takes us to 300,000 ounces. That plant is actually designed to be able to take us up to 400,000 ounces over the next two years. An experienced team with a proven track record in Papua New Guinea. We've been operating in Papua New Guinea for almost 10 years, and in that time we've grown the Kanantu mine from a mine that was on care and maintenance acquired from Barra to the mine that it is today. Strong balance sheet at the end of last year I think we had in excess of $230 million US dollars in cash. Despite the fact that in 24-25 we spent $350 million US dollars in capital and and paid in excess of $100 million US dollars in corporate tax to the government. It's a large high grade resource, significant growth potential from multiple deposits, so the high grade resource currently is 7.1 million ounces at around 9 g per ton. In addition to that, we've got a significant lower grade resource of over 14 million ounces from a porphyry. All of that, I think you can see can lead us to a significant rerating potential ahead of. The execution and during the execution of of those expansions. ESG focused. We're we're on grid power, which is hydro power. We've got a strong relationship both with the government, community, and the workforce. In terms of our evaluation, you can see we're around 30% below our peer average, and if you look at our production growth between 25 and 28, it's about 130%, so very significant, not just potential but potential that's actually being realized already this year. We're amongst the highest grade, lowest cost operating mines globally. Reserve grade currently 8.5 g per ton. In 2025 we mined at 10.3. And, as you can see, our forecast all in sustaining costs around 1300, which is elevated as we are in an expansion phase, which actually we've been in for about the last 8 years. 2025 very much a transformative year for canine-2. We completed the construction and commissioning of our stage 3 expansion process plant, so that was a brand new plant built. On site, it's a flotation plant with gravity gravity recovery. So you can see there, that was the official opening on October 16th. That's the that's the Prime Minister there. shaking my hand by the look of it, hopefully., together with, with our chair and what have you. So in terms of our operational guidance for 2026, 1900 to 225,000 ounces, so that's very much ramping up our underground to meet our surface production capacity. On a by-product basis, cash cost of 710 to 770 and ASIC of $1250 to $1350. If you look at it on co-product basis, that's 980 to 1040 and $1480 to 1580. Again, all in sustaining costs significantly higher than cash costs because right now we are doing significant development underground which is designed to open up and sustain the operation. To ultimately 1.8 million tons per annum, 400,000 ounces a year. Significant investment in exploration. Last year we spent a bit under $20 million. This year we're looking at 31 to $35 million. We're the largest explorer in Papua New Guinea. Roughly 1 out of every $2 spent on exploration in Papua New Guinea is spent by canine mining. So we've very much been a company that has been in expansion mode basically for the last the last 8 years. We completed our stage 2 expansion, 400,000 tons per annum during COVID. At a time which we couldn't bring a single outside contractor consultant into the country, so it was all done in-house by our own people. Having successfully completed that, we then moved on to stage 2A to take us to 500,000 tons pern. That was all upgrading our existing plant. Stage three was then the new plant, which I spoke about, taking us to 300,000 ounces. The new plant, the front end of it, the crusher of the mill, etc. designed to be able to go up to 1.8 million tons per annum. So with about $20 million expenditure on the flotation and filtration, we get to 1.8 million tons per annum. All fully financed. And as you can see there, as of the end of the last quarter, 96% of our expansion growth capital had either been spent or committed. I make the point it's the first time in the history of PNG that a plant has actually been built. In budget. You can see the benefit of expansion on expansion on expansion as our production has grown since we declared commercial production in the first quarter of 2018. And obviously in order to support that growth in production we've increased material that we process. We've increased our total development meters. First quarter of this year was a record for us, the first time we've done 3000 m of development in a quarter, and that's the level that we need to be at to sustain our stage 3 expansion. That'll be going up to around 1200 m a month or 3600 per quarter by the end of the year, which is what we need for our stage four. In terms of the process plant itself, the new process plant actually averaged in the first quarter 95.1% recovery of gold against 92.6% being what the test worker actually said we'd be able to achieve. So the plant is doing 2.5% better recovery than we anticipated. That's 2.5% that you pay nothing for. You've already mined it. You've already paid to process it, so that's a significant. Impact in terms of cash flow and what have you. Copper recovery about where we expected. So in looking at the near term transformation of the mind. We've been busy with major infrastructure upgrades. First of all, there's the twin incline. Oh yeah, I can see the green. I doubt if anyone else can, but that's a white line at the bottom with the number 1 on it and 5 at the end. So we commenced in 2020 putting in a new twin incline, a 6 by 6.5, 5 by 5.5, coming in at 1125 to open up the mine and make maximum use of gravity to be able to actually bring our material out from the mine. That was completed. In 24, end of 20 beginning of 25, and so that is fully operational or pass system, number 2, so we, we bought our own. Our own equipment, our own raise bore, so we actually do our own raise boring to put in both our ventilation internal ventilation shafts and also our material movement. That does up to a 5 m diameter, up to about 500 to 600 m. So we like to control our own destiny. So rather than getting a contract to do it, we actually bought our own. We have 3 raise bores which can do various size diameters again first of those systems are in, so now we have a mine that rather than tracking material down the old. incline, which is a 4 by 4.5, we're actually bringing it down to the new or pass system, able to run larger trucks and run them, run surface trucks all the way underground to our plant. Number 3 there, Puma event incline that actually broke through in, last month, that significantly increased our, ventilation flow, about 175% increase, and that gives us life of M infrastructure for ventilation. The internal ramp system, so you've got the twin incline has come in 300 m below our operating level, so we've got to ramp down and ramp up to interconnect the two. That breakthrough was done in January, so now we have one single mine which is all interconnected. And then the 5th is Paceville, which we're busy with right now and that'll be commissioned by the end of this year. So to give you some idea about some of those things, the twin incline. You'll see there on the on the left is the existing incline to the main mine, that's a 4 by 4.5, that's the one that we that was there when we bought the mine from Barrack. And then on the right is the is the 6 by 6 of the 6 by 6.5 of the new twin incline. As you can see, it's a little bit better finished and importantly from our perspective, we go from being able to bring a 45 ton truck out of the mine going at about 10 kilometers an hour to being able to run a 60 or 70 ton surface truck at 40 kilometers an hour coming out of the mine. So as you can imagine that's a fairly major impact. In terms of the internal ramp, you can see there we had the, the breakthrough. it's always a point of trepidation when you've got a ramp that's coming down and a ramp that's going up, and you hope that your survey is right. As you can see from the picture, we got, we got the survey right, and the breakthrough was was pretty much on time and as predicted. system, so you're using gravity because this is a mine that you go up into. You're using gravity to bring it down to your bottom trimming level and then you're putting it on the tracks and taking it out again significant improvement in terms of both material movement and cost of material movement. In terms of the ventilation, you can see here our primary fans in two of 1.85 megawatt fans, so they're among the largest that you would see underground. Variable speed, variable pitch. These are life of mine installations. We actually only need one fan for about the next 5 years, and based on the current design, we actually never need two fans running at full speed. I mentioned that we're on hydro power, but we also have complete installed standby power. This has just been in the process of being expanded to 15.3 megawatts of power. To allow for our stage 4, this allows us to bring in the hydro grid power as well as our diesel power and also to bring in solar power, which is something that we're looking to put in in partnership with our provincial government. Other major area that we need to be able to increase our production is increasing our mining fronts. Originally we were operating with just what we call the current mining front, which is a bottom up mining from the 1185 level. Subsequent to that, we've been opening up 4 new levels which we've started the 2nd level which is developing again as a bottom up and then 3rd level which is which is actually coming in from the twin incline. Once we bring in our paste fill, of course we effectively double all of that because then we'll be able to do we'll be able to do bottom up and top down at the same time. In terms of other enhancements, we are, we're pretty much committed to using Sandvic equipment. this is one of the 5517 loaders. And in this particular case you can see that the loader is able to be operated from a tele remote system from surface, so we can actually operate these loaders from surface. We've actually just come from a meeting with Sandvik for a couple of days in Finland looking at various enhancements for both our loader and drilling and and trucking fleet. Strong PNG government stakeholder support. We're one of the largest payers of corporate tax in Papua New Guinea. Earlier this year, in fact, just a couple of weeks back. We paid our first tax installment for 2026 to the government, which was 287 million kina, and I'm sure that I'm in Finland, sorry, I'm in Switzerland, everybody knows. All the various currencies, so I'm sure you'll very quickly be able to convert that into around about $70 million of US dollars, and that was our first of three installments for the year. The Prime Minister actually put out a one page press release to say that how good we were at paying tax, etc. etc. Which, which was some way went some way to. To overcoming the sadness of giving away $70 million. I'd point out that despite the fact that we, that we've been paying capital for our Stage 4 expansion, our cash balance went up significantly in the 1st quarter as well. Just giving you an idea of the various near-term deliveries of our stage 3 and 4 expansion. That's, you can see our, our new plant, which is on the right. Again, I don't think you can really see this, but and then on the left is the old plant which is now on care and maintenance. I'd point out. Commissioning of the plant actually went ahead of schedule. We actually shut down the old plant about a month prior to when we intended, and as I've shown earlier, it's actually running at about 2.5% points, better recovery than design. Some of the various other projects that we've been doing, including the warehouse, camp, etc. etc. I think it's the 2nd biggest camp in Papua New Guinea. It's about 1800 people. On average per night, and I think we've got about 2400 beds in the camp. Paste fill is the last part of the puzzle if you like that we're busy with, and here you can see the tailings filter plant. So we're taking our tailings, we're filtering it to produce the dry product. We then transport that with the trucks that bring down the ore up to just outside the portal and then we take it underground to actually make the final product that goes into the stos. So around 60% of our tailings actually goes back underground. Other improvement is upgrade of our roads. The roads we inherited could take a truck carrying 20 tons. That's all. And we've been operating with that since we took the mine over. We're replacing the two bridges, 3 bridges actually two bridges with bridges, and a third one with a culvert system. It's the largest culvert in Papua New Guinea, that's a 10 m diameter culvert designed for a 1 in 20,000 year event., hopefully I won't be around, and maybe it'd be good if I am, you know, I've lived a long time to actually see that, that event, but, that now allows us to go up to, up to a 70 ton load, being able to transport down, so over 3 times. Just in closing, Exploration. That's what's built this company. That's what we're focused on in many ways. That's what we're committed to being the largest explorer in the country. We've got multiple high grade vane systems and porphyry targets. If you look at the high grade vane systems, this is Core. And Core in the pink is the K1 K2 veins. Each one is 3 to 6 m wide, about 20 m apart. You can see the area below. We just put out some results which included holes as 200 m below the existing resource. And so we're now extending the resource down at depth. We're also pushing it along to the south and the north, and you can see that on a number of those holes where we've got up to 30 m at 8 g per ton, we've actually identified a number of dilatated areas. Although they are in the envelope, they are not within the resource. Judd far less drilling. There's over 1000 holes in Core. It's a parallel vein system about 100 m away. Same thing if we look down at what we call the jud deep, up to 350 m below the existing resource. You've got 8.5 m at 8.6 g per ton, so again showing that it's going down dip. It's going along strike. John, if we could finish off, please, yep. And, finally, Aracompa is just one of the many, other projects that we're working on. We'll have our first resource in Aracompa, middle of this year, An updated resource on Core and Judd at the end of this year, and that will be the first time that we've put a an updated resource on Core Judd for 3 years. So we expect to see a significant increase in the resource as well as replacing our depletion. And with that, it says that I'm now a 004 Now I'm 007. OK, so thank you very much. Thank you. sadly we're out of time. I've got lots of questions to ask on that, that growth profileo, which is quite exciting. sadly time does not permit. I'm sure John would be happy to take questions privately. Thank you very much. Thank you.