RE:RE: Annual MD&A 2020 Reporting Period Ending In: 2020-12-31My review of Annual M&A 2020 Report may be useful to colleague BB posters:
K92 Mining
had previously reported production numbers for Q4 2020 at slightly lower production that targeted and
had announced that they had “
successfully completed commissioning of the Stage 2 process plant, doubling throughput capacity from 200,000 tonnes per annum (“tpa”) (~550 tonnes per day (“tpd”) to 400,000 tpa (~1,100 tpd).”…. page 4 of 36
A few "significant" selected extracts from the Q4, 2020 and Year 2020 report M&A document
- “The increase in gold production includes deliberately lower grades being processed to minimize potential gold losses during commissioning of the Stage 2 Plant Expansion.”
- “Cash costs averaged $651 ($639 in Q4 2020) per gold ounce in 2020 versus $532 ($498 in Q4 2019) per gold ounce in 2019.2 The increase in cash costs per ounce is partially due to a decrease in feed grades of 14.0 g/t Au in 2020 compared to 20.8 g/t Au in 2019.”
- “In addition, the Company incurred costs related to the COVID-19 pandemic, including
- additional pay for employees completing longer rosters at site
- additional costs related to the movement of personnel and supplies, and additional safety and medical related costs.
- The Company also incurred higher labour costs associated with increasing the labour compliment necessary to build up production to the higher levels planned for the Stage 2 Expansion.”
- “All-in sustaining costs averaged $782 ($768 in Q4 2020) per gold ounce in 2020 versus $686 ($658 in Q4 2019) per gold ounce in 2019 as a result of the higher cash costs noted above.”
- “Development of the twin inclines continues to progress well with over 300m advanced (#2 incline at 6m x 6m and #3 incline at 5m x 5m). This large capital project will provide the major mine access infrastructure for increased production capability required for Stage 3 Expansion and potentially beyond to further expansions”….. page 7 of 36
- “see the Company’s news release dated January 26, 2021 for latest results on the Judd underground development program.”
- “The Company reported its first six drill holes of the Karempe Vein System, with intersections recorded in multiple veins. The results are highlighted by the KA1 Vein, with KRDD0005 recording 2.45 m at 39.82 g/t Au, 6 g/t Ag and 0.19% Cu (40.18 g/t AuEq, 2.30 m true width), including 0.75 m at 125.40 g/t Au, 12 g/t Ag, 0.13% Cu (125.75 g/t AuEq, 0.68 m true width). Approximately 100m down-dip from KRDD0005, hole KRDD0006 recorded 3.20 m at 17.50 g/t Au, 20 g/t Ag and 0.34% Cu (18.28 g/t AuEq, 2.45 m true width). Both holes recorded mineralization that is invariably associated with massive sulphide (pyrite[1]chalcopyrite) and crystalline quartz, encapsulated within broad zones of strong sericite alteration. A total of 3,635 metres were drilled at Karempe in 2020. Drilling also recorded significant mineralization along the KA2 Vein, highlighted by KRDD0002.”
- On November 20, 2020, the Company entered into zero-cost collar contracts whereby it began purchasing gold put option contracts and selling gold call option contracts with equal and offsetting values at the inception of each contract. The details of the commodity contracts as at December 31, 2020 were as follows…. See page 21 of 36
Subsequent to December 31, 2020, the Company announced a number of positive COVID-19 cases identified through containment measures, contact tracing, quarantine procedures and routine testing.
Ref. page 6 of 36 The Company has on-site quarantine facilities, which were significantly expanded during the last year. Additional protocols have been activated. The Company’s priority is to protect the health and well-being of its personnel and local communities.
The Company is engaging with the governments of Australia and Papua New Guinea through the Papua New Guinea Chamber of Mines and Petroleum to ensure protocols are in place that will allow the resumption of travel following the suspension period. The suspension will result in a reduction in expatriate staffing levels over the short term, but is not expected to significantly impact production, although some non-production-related activities may be impacted.
Peace,
Good Decision-making to All,
ElJ