K92 Mining (TSX-V: KNT) CEO John Lewins on “Incredibly Exciting” Initial Drill Results from the Blue Lake Porphyry Prospect in PNG
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO of K92 Mining (TSX-V: KNT)(OTC: KNTNF), Mr. John Lewins. Good morning, John. How are you?
John Lewins: Good, thanks. Yourself?
Gerardo Del Real: Excellent, excellent. Thank you very much for asking. Every time that I get an update from K92, it seems to be one of two things, or a combination. You're either executing on the production front or executing on the exploration side. You had some news this week that was pretty important, I believe, in regards to your Blue Lake porphyry prospect.
It looks like you're onto a new discovery. The headline number is 175 meters of 0.28 grams per tonne gold and 0.22% copper. But I think it was well highlighted in the release that the reason this is important is because of the mineral package and the fact that it appears to be proximal to a very large and robust gold-copper porphyry system. Can we talk about the news a bit?
John Lewins: Yeah, certainly. Thanks for that. I think many of your listeners would be aware of us as a high-grade operating mine. What's not so perhaps well known is that the exploration ground around us was considered extremely prospective for porphyries. Why are porphyries important? Porphyries produce 50 to 60% of the world's copper, almost 95% of the world's molybdenum, and they are also in their own right major producers of gold. The biggest deposits in the world are basically porphyries. Now, you'll find porphyries all along the West Coast of North and South America and along the Southwest Pacific.
PNG is actually the host of quite a number of porphyries, including the Ok Tedi Mine, which is currently operating, and the Panguna, which is historical mine. Wafi-Golpu, which is being developed right now by Newcrest and Harmony. And Frieda River, which has the feasibility study completed. It is one of the premier locations in the world for porphyries. And just across the border from PNG of course is Grasberg which, as many of your people would know, is historically the largest gold mine in the world and currently the second largest copper mine in the world. These are big, big, big deposits.
Now, when you look at Blue Lake and the results that we've just announced, this is the very first hole that we've actually drilled on this prospect. It was found by our own people in 2017 out there doing good, basic geology, getting on the ground and as a result of that, we've now found what we believe to be a substantial porphyry. Whether that porphyry has mineralization or not, of course that is still something that we have to work through. But the very first hole drilled, as you've said, 175 meters of mineralization with both copper and gold and the ratio of copper and gold is pretty attractive, as well.
Certainly from our perspective, this is incredibly exciting, I think is a reasonable term to use for it. We're obviously continuing our drilling program. Over the next few months, we'll be drilling another five holes. This is an initial program of six holes. Then, following on from that, there is a second program of holes already being planned, which will be more targeted, based on the results from the first holes that we get.
Gerardo Del Real: Excellent. Now, I understand that the 175-meter intercept of mineralization was intersected from approximately 259 meters, and that hole bottomed in mineralization. Is all that accurate John?
John Lewins: That's correct, yes. The hole went down to 434 meters, so just under 175 meters at 0.28 gram per tonne gold and 0.22% copper, 2 gram per tonne silver and, as you said, it finished the mineralization. Some of your listeners may be saying, "Well, why not continue drilling?" At the end of the day, we've got an initial program of six holes planned. Each of those being drilled 400, 450 meters and what you're trying to do is establish where you sit in the system and identify where are your best targets then for doing even deeper holes than those itself.
It's very exciting from the perspective that we don't know what's below it, but potentially, there is more mineralization continuing below it. But this is very much the first pass, if you like, of drilling and highly unusual, I think, in drilling porphyries to have a hole that comes out as good as this one has as a very first hole that you've drilled in looking for that porphyry.
Gerardo Del Real: Just to provide a little context, I understand that the Blue Lake target is approximately 4 kilometers southwest of the Kora Deposit. Right?
John Lewins: That's correct. It's in fairly close proximity to Kora. It's one of a number of porphyry targets that we have by the way on our exploration ground around our mining lease. So we've got about 400 square kilometers of exploration ground around the ML150, which is the mining lease that contains Kora. In fact, Kora is believed to be a mid-sulfidation vein system, which has come off of a porphyry.
In fact, one of the other targets that we hopefully will drill later this year, it's called A1 Headwaters and that's thought to be the potential source of the mineralization in Kora. Within our grand package, we have quite a number of porphyry targets. Blue Lake, we believe, is probably our number one target, but very close to that is A1 Headwaters as our number two target. We've got some extremely, extremely good and prospective ground that sits around our mining lease, both for porphyries and for high-grade vein systems, many of which, of course, are actually associated with porphyry systems.
Gerardo Del Real: You have a published target of 5 million ounces of high-grade gold before the end of the year. I know that's something the company's talked about in the past. You are cash positive. You're producing. You just announced a doubling of production, the plans to get there and now, you've added a discovery to that.
Again, congratulations are definitely in order. I think K92 shareholders are among the few in the space that over the past 12 months have been rewarded for their speculation into this high-risk, high-reward endeavor that we dabble in. I have to commend you and the team and I look forward to more updates. I get the feeling this isn't going to be the last of good news from Blue Lake and from K92.
John Lewins: Look, I think this story has a long way to go, many pages to be written. Certainly, our exploration team are extremely excited by what they've seen today, not just in terms of the assay results, but being geologists, looking at the rocks and the rocks tell a story and right now, that story has, let's say, a very, very interesting first chapter.
Gerardo Del Real: Well, I love that you found it the old-fashioned way, by getting the boots dirty and getting out on the rocks and looking for stuff, as opposed to just modeling it behind a computer screen. Kudos to you guys. Congratulations and again, I get the feeling, we'll be chatting again soon. Thank you, John. I appreciate your time.
John Lewins: Thank you and good talking.