K92 Mining (TSX-V: KNT) Capital Markets Advisor Bryan Slusarchuk on More High-Grade Results & Accelerating Rate of Drilling at the Kora North Extension of the Kainantu Gold Mine
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is Capital Markets Advisor for K92 Mining (TSX-V: KNT)(OTC: KNTNF), Mr. Bryan Slusarchuk. Bryan, how are you this morning?
Bryan Slusarchuk: Doing really well, Gerardo. Thank you.
Gerardo Del Real: I imagine you are. Every time I have you on we're talking about more good news. You delivered again this morning. K92 Mining announced more high-grade results from the Kora North Extension. Let me just put in perspective some of these numbers. You had multiple intersections. Hole 124 intersected 7.45 meters of 116.49 grams per tonne gold, 17 grams per tonne silver, and 0.96% copper. You had also a 13.52-meter intersection of 7.64 grams per tonne gold, 18 grams per tonne silver, 0.31% copper, and 8.35 grams per tonne gold equivalent.
I can continue. There were a lot of nuggets in the news release about continuity and the next steps, and I'd love for you to provide a brief update on all of those things, Bryan.
Bryan Slusarchuk: Absolutely, Gerardo. There were several holes put out today, and the numbers in these several holes are just spectacular. These latest results, once again, do confirm just the remarkable continuity that we're seeing within the high-grade K1 and K2 vein systems, which are within the Kora deposit.
The hole that you mentioned, 7.45 meters at over 118 grams per tonne gold equivalent, is one of the highest grades we've recorded, and the KMDD0122, with an intersection of 18.6 meters at 11.56 grams per tonne gold equivalent, is one of the widest intersections we've recorded to date. I think what's becoming apparent here, everybody knows this is an ultra-high-grade system, and grade is really king in this market environment. What is becoming apparent is that there's huge size potential here, and also that the continuity is really quite amazing.
But most important to me in this news release is not the spectacular grade, the continued demonstration of the excellent continuity, but what's most important to me is to see that drilling is rapidly accelerating. We've now added the first of the new, more powerful underground diamond rigs. With that, we'll see the meterage move higher and higher.
I think that's important, Gerardo, when people realize the context of what's happening over there. We've, in 2018, put out a great resource at Kora North. We then dramatically expanded that high-grade resource. And now, with the drill meterage increasing rapidly, we're going to be able to target a real rapid increase of the size of that resource over the coming several months.
Gerardo Del Real: I couldn't help but notice there's also a focus on exploration drilling now that you have this acceleration of drilling. Can you speak to that a bit? Because I got to imagine with the grade of the system, which, of course, goes on to provide incredible margins, you have to be excited about the potential for new discoveries.
Bryan Slusarchuk: For sure, Gerardo, and I think exploration is really a two-fold and concurrent focus at Kainantu. Number one, you've got exploration within this Kora environment. Kora's ultra-high-grade. It's already large. It's getting larger every time we put out a news release, and there is serious exploration potential at Kora itself. Over the next several months we will be testing just how large this high-grade Kora system is.
At the same time, if you remember, Barrick, the world's largest gold mining company at the time, did not own this strictly for the Kora size potential. They owned it for the regional porphyry potential, and it's being said, Gerardo, that some of the best undrilled porphyry targets on the planet exist within this 400-square kilometer land package that K92 has. So, with production going so well, with operations very nicely cashflow positive, and with Kora drilling intensifying, the company can now also start to look at some of this regional exploration potential, and that provides just a whole ‘nother layer of excitement for investors here in 2019.
Gerardo Del Real: The company and you are obviously takeout candidates. I can't help but notice the gold space is heating up. We have a bottoming gold price. We're sitting at about $1,330, give or take a few bucks right now. Barrick, Newmont, and Goldcorp are all involved in one capacity or another, in conversations to either take each other out, merge. We'll see what ends of that. Any thoughts on that front, the heightened activity in the gold space and how that benefits the company?
Bryan Slusarchuk: Well, what I'd say to that, Gerardo, is number one, we, of course, get asked a lot about the takeout potential here. Number two, our focus isn't on a takeout. It's on building up this company, building up the high-grade production at Kora, building up the high-grade resource at Kora, starting to test some of these regional porphyry targets. That's the focus.
John Lewins, the CEO, and the team are building a business here. There's a lot of speculation around the M&A activity, what I would add is that on the K92 board of directors, you've got not only some very successful mine operators and mine builders, but you've also got some guys with incredible M&A history, some incredible M&A track records, and if – and it's an if – there ever is a time when this company is in play, I have confidence as a shareholder that the board and the management team of K92 will make sure that there's maximum value derived for K92 shareholders. Their track record indicates that we would see, in that type of hypothetical situation, just that.
Gerardo Del Real: Well, you have grade, you have margins, you have scalability with the exploration potential, and you're producing. I got to believe there's a lot of leverage there. Bryan, thank you so much. Anything else you'd like to add? What can we expect? I imagine that with PDAC coming up, there's going to be a flurry of news releases coming out.
Bryan Slusarchuk: Gerardo, I think that the important thing is that 2018 was a big, foundation-building year. We established cashflow-positive operations. Production, as people will have seen in the news flow to date, has been increasing very nicely. Q4, as you know, was a record quarter of production, and that cashflow-positive position has now laid a foundation where we can get more aggressive on the resource drilling, fully funded through cashflow of operations. We can start to look at the regional porphyry potential, and we can target what we think at Kora can be a world-class situation. So, 2018 was a transformational year, and it's laid a foundation for a 2019 that can be just spectacular in terms of production growth and high-grade resource growth.
Gerardo Del Real: Well said. Bryan, thank you for the update. We'll chat again soon.
Bryan Slusarchuk: Thank you, Gerardo.