K92 Mining’s (TSX-V: KNT) Bryan Slusarchuk on Q1 2018 Production Results, Grade Control Drilling and Exploration Drilling at Kainantu Gold Mine
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is former President and now Capital Markets Advisor to K92 Mining (TSX-V: KNT)(OTC: KNTNF), Mr. Bryan Slusarchuk. Bryan, how are you this afternoon?
Bryan Slusarchuk: Doing really well, Gerardo. Thank you.
Gerardo Del Real: Listen, congratulations are in order again. This is becoming an almost weekly theme here in the past month. I remember us having a conversation a month ago. The stock was trading in the $0.50 range and I remember saying that I didn't believe the market was acknowledging how well the team at K92 was executing.
Here we are a month later and the stock is up over 50%. Just yesterday, you had news announcing Q1 2018 production of just over 9,000 ounces of gold and 165,000 pounds of copper. Not only that, but you're cash flow positive for January, February and March. So big congratulations to the team.
Bryan Slusarchuk: Great. Thanks, Gerardo. It's very interesting what's happened here over the past five to six months at the K92 project. We put out some spectacular drill results in terms of grade control drilling, now exploration drilling. We've moved from discovery at Kora North through to the build up of an initial high-grade resource then onto commercial production, which we declared in February, and now yesterday's news which is just very, very significant for the company.
And I think it's important to note exactly what you stated. K92 in the news release yesterday, indicated that we achieved cash flow positivity in January, cash flow positive in February, cash flow positive in March. And now with that foundation, with being cash flow positive from production, people can start to focus on the huge exploration and expansion upside here and my sense, Gerardo, is that over the past six months people have been very impressed with the drill results, but there was an overriding theme with investors as to, hey, how's production going? How are you looking in terms of your cash position? And I think yesterday's news release answers that question very succinctly.
Gerardo Del Real: You mentioned exploration drilling. How is that coming along because the company has always sought to take a dual-pronged approach, right? One part production, one part exploration upside. How are things coming along on that front? Are rigs turning?
Bryan Slusarchuk: Doing really well, Gerardo. Right now we have two drill rigs turning on site. One of the drill rigs is in Kora North in a third underground drill cutting that's been established. The goal, the target of that rig is to build up minable inventory, to continue to increase the resource size of Kora North. That drill rig is drilling holes at tight spacing in order to build that high-grade resource further and further.
The next drill rig, the second drill rig, is drilling exploration holes and these exploration holes from underground are designed to target the significant size potential at the hybrid Kora deposit. Remember, Kora main was there when we purchased this project from Barrick. We made the discovery of Kora North, 500 meters along strike and 150 meters down dip from the closest point of that high-grade Kora inferred resource at Kora main and now we've built up a resource in the Kora North area.
In terms of exploration, we put out in the last 15 days our first exploration hole targeting the significant size potential in that area and we came up with just spectacular results and that was an up dip test of Kora. We're now drilling a hole down dip and we'll be drilling several holes here in the coming couple of months testing both up dip and down dip extensions of Kora. Kora's already large, it's high grade, it's wide, it's exhibiting great continuity in this Kora North area and the exploration program now can really become a focus for people because the foundation of being cash flow positive and with production going so well has been set.
Gerardo Del Real: You know, I mentioned how well the team has executed and I think it shouldn't be lost on people, no pun intended, that in Q1 of 2018 there were no lost time injuries and frankly, there weren't any for the entire year of 2017 if I'm not mistaken. Is that correct, Bryan?
Bryan Slusarchuk: That's correct and credit there goes to John Lewin, the CEO of K92 and the first-class team that he's put together on site in PNG. John has really moved this at light speed at Kora North from discovery through to resource calculation through to commercial production and now through to cash flow positivity. At the same time setting that stage for the big expansion and exploration programs and to do all of that while operating in a very safe, responsible manner, again, is just a real testament to John and the team he's put together in Papa New Guinea.
Gerardo Del Real: Bryan, thank you so much for the update. I look forward to having you back on. I'm anticipating good exploration results. I think you've demonstrated that the team has got a good handle on the system. They understand the geology, the continuity's solid, the grades, just to touch on that, the average grade treated through the process plan for Q1 was 16.95 grams per ton gold and 0.44% copper. I thought that was an important point to make there. Any comments on that there, Bryan?
Bryan Slusarchuk: Well, this system has proven an ability, a propensity to create just spectacular grades. There are very, very good, very high gold and copper grades within the system and, as we all know, Papa New Guinea is the land of large mines and this has world class size potential. So, we've got the high grade, we've got existing infrastructure, we've got production, but the real excitement here is through exploration when you're in such a high-grade gold, copper environment.
Gerardo Del Real: One last point. I know I said my last one was the last one. But the recoveries, that's important as well. Recoveries for the quarter averaged 91.7% for gold and 91.5% copper. Solid, solid numbers, Bryan. I look forward to having you back on. Thank you again for your time today.
Bryan Slusarchuk: Thanks, Gerardo.
Subscribe to the RSD email list and get the latest resource stock activity directly to your inbox, for free.
@RSDigest ON TWITTER
Small Cap Stock Digest